Sunday, 2 January 2011

Happy New Year

My daughter has been thrilled with Wii Just Dance this Christmas. 20 seconds into a neck and neck competition wrecking the front room to 'Cotton Eye Joe' or some such ditty I was forced to cede the dance floor to the four year old while I removed my fleece, high energy barn dance being beyond my limit these days. To my surprise I continued scoring points, the act of removing my garment only slightly less successful than my previous attempts at dancing.

Most people would laugh or perhaps complain about the accuracy of the game but a metaphor leapt out at me as soon as it happened. My daughter and I had exposed the Monetary Policy Committee. There was she, Mervyn King lets say, wildly waving her control, piling on the points with a deft shimmy and knee bend and there was I, more Andrew Sentance, grabbing the odd headline with an off kilter spin and there was Just Dance, for these purposes the British economy, carrying on with the barest nod of recognition. While we're 'dancing', we look like we're in some sort of control but as soon as we stop the truth is self evident - whatever we do is largely irrelevant.

Interest rates are now 0.5% and yet the effect of such a rate on the economy is imperceptible. Inflation is up because the things we buy are affected by global supply and demand not by interest rates. Unemployment is up because we no longer have enough meaningful jobs to offer our citizens, whatever the Bank of England does. Goods now queue to come into our country and money floods to leave it and mucking about with the rates is small change in such a disastrous balance.

For those of you not familiar with Galbraith, the main thrust of 'The Affluent Society' is that the time to manage an economy is when it is doing well. The wise men at the Bank of England and the wise men of New Labour presided over such a period and let the economy off the leash. With notable exceptions they preferred to take the plaudits for overseeing a credit led housing boom every bit as damaging as the de-regulated asset stripping of the eighties. There is another great metaphor for this in 'Cloudy with a chance of Meatballs' (another of my daughter's favourites) as the obese calorie addicted Mayor floats off to sea on an edible raft. The final frames have the Mayor sinking as he eats the last of the vessel, too fat to help himself avoid the inevitable. In the film it's funny, in fact the film is genius but then it's a cartoon entertainment, not real life.

Well Happy New Year everyone. My prediction is that this is the year the recession bites because this is the year that those being told to tighten their belts turm out to be the same people who sold their belts long ago and bought a shiny all in one silk catsuit on credit. They don't rent council houses or live with their parents, they own houses and pay mortgages and car loans and credit card bills, many of them because they were told to do so and many more because property was the only show in town.

I don't mean to sound miserable, although I'm more upbeat than say The Mail, but it's important to set out the back drop to my opposition to the Coalition because carols and a festive hangover or two have hardened my resolve. If you can't even out jive a four year old dancing to 'Kids In America', you have to have something or someone to blame - why not  make it Nick Clegg?

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