Terminology | 2009.01.10
Simon Jenkins: For all the wild apocalyptic punditry, recessions pass. This one will, too
So we are doomed. The boffins have tried everything yet the disease rages unchecked. Economists are retreating from the recessionary front, wild-eyed and covered in blood. The public has recourse to others, to soothsayers and purveyors of prayers, jujus and magic mushrooms. They are having a field day.
The historians are leaping up and down, warbling that things are "the worst since", variously, 1992 or 1981 or the 70s or the 30s. It is like climatologists warning that a particular year is the hottest (or coldest) since a previous one was even hotter or colder. Circumstances are never different. History obeys Occam\'s law of simplicity.
The Marxists are ecstatic. Eric Hobsbawm has returned from the ideological grave to declare "the greatest crisis of capitalism since the 1930s" and the dramatic equivalent of the fall of the Soviet Union, hardly a precedent he should recall. The website permanentrevolution.com is awash in glee. "So much for marginal utility theory and neoconservatism," cries Bill Jefferies.
The "affluenza" guru, Oliver James, is unequivocal. From the security of a successful career he declares that wealth only drives us mad. "One of the great boons of the sudden collapse of neoliberalism," he says, "is that needs will no longer be conflated with wants." Such Marxist terminology should put an end to most of the British manufacturing and service industry. People, says James, should now spend more time with their families and "rediscover their hobbies, such as sports, stamp-collecting and trainspotting".
Long-wave theorists are back in fashion. Millenarians see the dawn of a new class struggle, in which the masses rise up and shake off their oppressive capitalist debts, like bankrupt African dictators.
Philosophers are no less barmy. The normally sane AC Grayling declares the credit crunch a "classic display of non-rational behaviour", ignoring the essence of financial bubbles, that they result from individuals behaving rationally in the short-term, but without adequate regulation to marry short to long. Debt mountains may be motivated by love of money, but economies depend on postponed gratification, on profitable saving, to grow. Not Marx but Niebuhr is needed to police this boundary between "moral man and immoral society".
Grayling has one solution, to his credit. He has come across a hormone called oxytocin. Administered nasally, it is said "in tests" to double the level of trust between game players. The government should therefore line up all bankers and spray oxytocin up their noses. As a policy it could hardly be worse than spraying them with money. This is upstaged by a van spotted in London advertising "dial-a-philosopher", a 24-hour emergency on-call service "to deal with your existential angst at a moment\'s notice". The advice to sufferers in the credit crunch is "don\'t even think about it, call us". The service is available only inside the M25, and presumably as of April 1.
Bishops are having an even better time. When a crisis is a total mystery, the mystifiers are in a state of grace. A ban has presumably been put on the parable of the talents (a servant castigated by Christ for saving rather than investing). The Church of England feels we had it coming to us, though it unfortunately omitted to warn us beforehand. We are duly doomed for our debt and greed.
The Bishop of Manchester declares the "collapse of the god of materialism and consumerism" (a deity unknown to me) and its replacement by a god who apparently will "force us to think again". The bishop is clearly a polytheist.
Cardinal Cormac Murphy-O\'Connor is adamant that "the market economy will only work justly if it has an underlying moral purpose", a redundancy if ever I saw one. As for the Archbishop of Canterbury, he seems in a perpetual state of despair. We must not, he said at Christmas, go the way of Hitler. Quite so.
Last week the BBC curiously allowed a handful of celebrities to hijack its Today programme to boost themselves, their businesses and their favourite charities. One hilarious nugget was an interview in which the boss of Citibank, Sir Win Bischoff, interviewed an Olympic cyclist on what cycling could teach banking. Amid the waffle there was no mention of what had maintained both individuals in 2008: truly stupefying amounts of taxpayers\' money. There was not so much as a thank you.
The belief in the virtues of a hair shirt, but not on my own back, is embedded in Britain\'s puritanical establishment. It believes that, since the poor in some sense deserved recession, nasty medicine will be good for their collective soul. The bursting of the housing bubble, so liberally pumped by politicians, is taken to prove the sin of plebeian greed. The fact that every policymaker is straining every muscle to find a way back to wealth from recession suggests that hair shirts have yet to acquire political traction. That does not stop the moral pundits.
Just as Christmas is a time to be jolly and April Fools\' Day to be silly, perhaps a week should be set aside for completely daft remarks about the economy. Cardinals can demand moral markets. Prime ministers can take people\'s money and shower it on banks. Peter Mandelson can declare himself content with the institutional embezzlement of bonuses. Yvette Cooper can declare getting on the housing ladder "a right and a necessity" for every young person. The Bishop of Reading can advocate "putting the waiting back into wanting", just when the economy needs us to spend for dear life.
I have no idea what is going to happen over the coming year and nor does anyone else. The futurology game has been shot to ribbons, making fools of everyone. Economic forecasting has collapsed in ignominy and if there were any justice the profession would be sacked en masse. Nostradamus would do a better job than Alistair Darling\'s lot.
The only recourse is to history. History teaches that all recessions end, when people resume spending and when businesses can start borrowing against that spending. When this happens, as it will, we shall forget that 2008 marked the end of Thatcherism or the collapse of capitalism or the dawn of socialism. The cobblers will return to their lasts.
As it is, house prices are still not back to where they were at the start of the decade. Unemployment, admittedly a flexible concept, is not back to its level of 20 years ago. The third of the workforce on protected government wages or pensions are safe from sorrow - and presumably still spending.
At the time of the three-day week in 1974, which on any measure of tolerability was worse than today, a retired colonel wrote to the Times deploring the gloom then rife in the paper\'s columns. To be sure, Britain was stricken with strikes, power cuts and unemployment. It was widely thought to be ungovernable and possibly on the brink of revolution. But come on, said the colonel, Britain would do what it had always done. It would "muddle through ... yours faithfully".
It did. Likewise the present crisis will pass and the current punditry will be seen as a silly and damaging exercise in talking down confidence. But that spoils the fun.
For more information, please visit
http://www.guardian.co.uk/commentisfree/2009/jan/09/simon-jenkins-recession
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