For sheer undiluted and insouciant irony, it would be hard to beat this extract from Frou-Frou Lafarge’s speech to the Economic Club of New York yesterday (my emphases):
“Five years after Lehman, is the world finally getting back on a positive path? I wish I could give you a simple answer but, unfortunately, the truth is a bit more complicated than that, and looks more like a mosaic.
The good news is that after a particularly volatile period, financial conditions are showing signs of improvement. Thanks to the actions of policymakers, the economic world no longer looks quite as dangerous as it did six months ago.”
I particularly like that last bit. Thank you indeed, policymakers: you forgave no debt, you bailed out banks which deserved to die, you trebled the cost of the Greek Establishment’s spendfest, you lied about the recovery (twice), you threw our money at a problem to get precisely nowhere, you destroyed the EU’s economy…and the result is a mosaic.
The dictionary definition of mosaic is ‘A picture or pattern produced by arranging together small coloured pieces of hard material, such as stone, tile, or glass’. But not Seagall. The hard material is called Schäuble, the stone is van Rompuy, the tile is Draghi (best terrazzo quality, goes with anything) and the glass is a carefully-blown pattern of politicians one can see through instantly. But as Eric Morecambe would’ve said, “You’ve got all the right materials sunshine, just not necessarily in the right order”.
Economics on the ground is a simple process. It is economists staring into the rear-view mirror – and then running up the backside of the truck ahead – that make it seem difficult. A simple equation:
Higher taxes + lower wages + Sovereign investment cuts = slump.
There are no exceptions to this rule. None, zero, nul. That’s it. Another simple equation:
Overspending + more borrowing + trade deficit = default.
There’s no way out of that one either.
Unfortunately, it’s where we are. I didn’t get us there, and neither did any of you…unless you’re still reading Chris Huhne, in which case “Hi”. It was ‘the actions of policymakers‘ that got us to here. And it’s a bad place to start, because there’s no way out for anyone with a tramline mind.
As Lafarge of the IMF concludes, “the economic world no longer looks quite as dangerous as it did six months ago.” And in this sense she’s right: the world always looks less dangerous when you’re dead.
The Slog 