Some notes on the effect of the recession and prosperity

A recession isn't actually about money per se though that's how it might
look. It's about productivity. When you get past all the figuires and £
signs it's just about that. Nations become less productive.

To drag themselves out of the Great Depression the US did huge public
projects like building the Hoover Dam. These dragged the econpomy
kicking and screaming back into positive growth. The private sector will
always play it safe and look after themselves rather than the group
however perhaps the changes in the past decade towards more corporate
citizenship and the triple bottom line (rather than the single bottom
line of profit alone) may see the private sector do more to take risks
to employ people for the good of the nation rather than protect their
shareholders.

The problem is psychology. It happens at national level too. The
bankrupcy of Iceland rocked the world. Nations are far more scared of
plunging into the sort of massive debt that spending through a recession
creates and the effect on inflation. The multinational corporations will
also fear taking risks after the collopse of Lehman brothers and the
problems with the other large financial institutions in the US. The
government has no more money to bail them out.

At the moment the hope seems to be Big Society. Ugh. A beautiful vision
but I'm jaded enough to wait to see what happens in practice. I hope
people are insane and loook out for each other more than themselves.
Perhaps this is a first step to socialist society however I doubt that too.

What;s needed is to keep people productive. The UK needs to maintain
output. It needs to be able to export. This brings money in and creates
more jobs and more wealth. This is why the Chinese and India are going
to be very successful. They'll easily be able to turn the challenge of
the global recession into an opportunity to expand their economy.
Smaller growing nations will also benefit. This may see Africa join the
ranks of the world manufacturing giants. When people are poor they'll
look to buy the cheapest goods and countries which can supply them will
profit but money will bleed out of the nation and less will be locally
produced, reinforcing the problem.

Things made in Britain cost too much to export. British goods are higher
quaity but the world needs cheap things at the moment. This will be
signifcant. The UK hasn't kept up investment in research so it doesn't
have the wealth to export technology. It's manufacturing capacity has
been greatly diminished such that there's now no major UK car
manufacturer. Times are bleak for this nation and the UN or EU report
that came out last year that showed that Britain would have the worst
outcomes from this recession in Europe seems to be coming true.

But Brtain is not a poor nation. It still hold a lot of power and has
many reserves. The North Sea oil fields remain untapped as a future
source of income as other better quality natural fuel reserves become
more expensive to explout. This is one of the piggy banks. It also has
the relationship with Ameriica and the history that come with it. In
some ways the UK is the 52nd (or 53rd?) state.

Anyone who's an economic analyst will be pretty gloomy at the moment and
their analysis will make the situation gloomier. It's just the way
things work. Self-fulfilling prophecies and all that. The psychological
effects to me are the most potent. They're what caused the Great
Depression. It was the herd mentality combined with the way the herd
reacts when in trouble. Animal instinct kicks in and everyone gets what
they can for themselves and their family. Only the insane give more than
they get.

The UK doesn't have the sort of onus on personal charity that the US
does. The third sector depend on the government. There are many generous
indviduals but there are many, more who aren't but could be. Big Society
is pushing for this sort of personal charity and citizenship, but people
in the UK have a long way to go towards that. They don't tip in bars.
They don't give enough to the homeless. Many expect the government to
look after the people whereas America has historically expected people
to look after themselves and that's how the personal charity ethic came
about (in my opinion).

How to maintain and prosper in this world of shit? Let me think and
drink again.