Told You So

This year is looking absolutely horrible, economically (as they like to say). I don't think people, particularly here in Australia, realise the tsunami possibly on its way.

There were people, including me I'll add without much joy, who saw all of this coming years ago. For me house prices were the danger sign, they rose spectacularly quickly and to ridiculous heights, and you didn't need half a brain to know this was rampant speculation and not based at all on the value of properties. I refused to buy, and was often thought to be a fool as a result. I'm not feeling like a fool now, but it's small consolation to have been right when the effects of the mass lunacy will impact upon the lot of us.

In typical fashion people are already starting to blame the current government for the woes. Economies are like supertankers, but much bigger again - they don't swing from boom to cataclysmic bust in the space of a year. The mess we see now is down to what was done over a much longer time frame. But as always seems to be the case, in Australia at least, it's the Labor lot who inherit the mess and then wear the blame for it for years afterwards (even the supposedly hopeless Whitlam inherited the economic woes of the previous Liberal administration, but to this day hardly anybody actually looks at the figures and says that).

I'm not a card-carrying proponent of either of the main political movements in the West these days, the conservatives and social democrats. But I think the conservatives have been hijacked by extremists, i.e. the neo-liberals or neo-conservatives, and like churches and others they will need to beware that their entire relevance isn't destroyed as a result. To this day they and their vocal supporters in the press continue to pretend that the mess for which they're largely responsible either doesn't exist or was caused by somebody else. There can't have been many bodies of thought in history that have been so spectacularly wrong and damaging, and yet continue to be heard. In science or anywhere else they'd be a laughing stock.

But that's their genius, because while their ideas are easily pulled to bits, their genius politically was to hitch them to a set of prejudices and stereotypes about individuals and society which resonate very strongly. For example they claim to be all about individual freedom and small government, but in reality their policies tend to enormously enrich only a tiny group of people, and their government spending is enormous.

The experts call this 'framing' a debate, casting it in ways which cause deep instincts in people to tick over. Their opponents have been very slow to cotton on to this, preferring righteous indignation and superior logic - those things don't win you millions of votes.

In the meantime read Steve Keen's Debtwatch for the most enlightening and entertaining guide through these 'economic' times, at:


  1. Nick, I very much agree. Here in Ireland too, the inflated and unreal house prices were a sure sign of a crash to come.
    Also agree how the so-called "boom" enormously enriched only a tiny group of people.


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