John Ward THE TROIKA IS MAD SAYS THE OECD

ECONOMIC REALITY: Would that we could seek asylum from the asylum

bedlamptnetFrom the sixteenth century onwards, it was quite a treat for London dandies to take themselves plus a few ladies down to Bedlam, the infamous insane asylum, where for a few pence they could amuse themselves watching people in paroxysms of mental agony. Thomas More referred to a visit, writing afterwards how “thou shalt in Bethleem see one laugh at the knocking of his head against a post”, and a century later, the Governors of Bethlem (transmuted eventually into everyday language as Bedlam) noted “that greate quantity of persons that come daily to see the said Lunatickes”.”Swarms of People” descended upon Bethlem during public holidays, and by the 1760s it was not uncommon for a hundred people to be watching the jolly japes at any given time.

Much the same sort of sport is provided today, in that one can, by making an appointment, go and watch anything up to 620 yelling and jeering mad people in Westminster banging their heads against metaphorical brick walls. On grand occasions, one may observe the Madness of Chancellor George as he raves on about taking every consumer’s job and money away in order to stimulate an economy built solidly (but unwisely) on the deranged fantasy of infinite growth based on, um, mass consumption. At times, lucky attendees might even catch a glimpse of Fallon the Foole as he explains how society can only function effectively on the basis of 3% of citizens owning 78% of the wealth.

As far as I know, there is no such entertainment put on in the Berlin Bundestag, Brussels Assembly or Greek Parliament; but I am at a loss to know why, for they’re clearly even further off the scale of fairies and fiery chariots than our lot. For some four years now, the Brussels-am-Berlin economic strategy for setting Greece back on the road to recovery has been to destroy the wholesale food distribution infrastructure upon which tourism depends, steal its energy rights, sell it two submarines but only deliver one, fire almost the entire population, and insist on a debt repayment schedule that mathematically guarantees the debt can only get bigger.

The theory underlying the strategy (lying is, I think, a far better verb than pinning in this context) seems to run something like this: the more savings that are made, the more the bond markets will be reassured, and thus Greece’s cost of borrowing to carry on repaying the debt will fall. At this point, a miracle will occur, because workers will be so desperate that a wage of three buttons a month will seem attractive, and thus the economy will spontaneously recover as confidence returns. Exports will become dirt cheap, and in no time all will be well again.

The truly astonishing thing about this cobblers is that the Prime and Foreign Ministers of Greece – Samaras and Evangelos – also signed up to it, spending the entire year of 2013 saying Greece would recover in 2014, and from then on the three-pronged lending fork employed to jab Greece in the buttocks would leave the Stage forever. I was in Greece for long periods of time last year, and never failed to be baffled by the sound of otherwise intelligent people nodding as thinbrain and fatbelly served up this unhinged prospect week in, week out.

But then, 2014 dawned and oops, Greece couldn’t pay its debts without more help. Now the OECD has issued a report finally hinting at the fact that next time, it might not be a good idea to let the Bedlam internees run the asylum. In fact, OECD could easily stand for Organisation to Examine the Criminally Deranged bearing in mind what you are about to read.

This is the precis of disaster as described by perhaps one of the most respected institutions on the planet:

Total household income in Greece dropped by a third between 2007 and 2012, with average losses of some €4400 euros per person – four times the loss recorded in the average Eurozone country.
Between 2008 and 2013, unemployment rose by 3800 per week. Today 3 in 5 of all the 1.4 million jobseekers are long-term unemployed. (The total population of Greece is only 11 million).
At the same time, falling wages have compounded household income losses. The drop in real wages was the largest in the OECD, but the resulting reduction in labour costs has so far not reversed the 5-year-long decline in employment levels.
The number of “jobless” families has nearly doubled since 2012….1 in 5 Greek working-age adults now live in a household where nobody works.
The percentage of people saying that they cannot afford food has doubled, putting this subjective measure of economic distress at a higher level than in some emerging economies with much lower per-capita income, such as China or Brazil.
Emigration to other OECD countries has doubled. Young people in particular have been emigrating in increasing numbers, reducing potential future economic growth and further accelerating population ageing.
The percentage of people in Greece who answered “Yes” to the question “Have there been times in the past 12 months when you did not have enough money to buy food that you or your family needed?” now stands at 17.9% – double what it was when the Troika marched in to “help”.
Broadening the perspective of this piece from Greece to ClubMed, the US, Britain and China, the thing in the air that gives me the most angst is this passive acceptance of leaders talking out of their navels, evoking only benign sympathy from their electorates. My Grammar School physics teacher once told me how, when doing a teacher’s training exchange in Nazi Germany during 1937, he was amazed to hear Josef Goebbels in a broadcast declare that all Jews and Communists were Germany’s enemies, because all Jews were Communists. The next day, he searched in vain for a single student in his class who had any problem with the logic of the speech.
In Britain, George Osborne insists that, in our world today (so sadly in my view) tied to a mercantile globalist model of capitalism, Britain’s recovery is now assured. But our biggest trading partner is in economic neutral and fiscal Queer Street, and our fastest growing export market is self-admittedly heading for a hard landing slump as it stares down the barrel of a banking crisis set fair to dwarf 2008 in the US. Our last export figures (disastrous) reflected one thing with blinding clarity: we have very few manufactured goods the rest of the World wants, and with every week, fewer foreigners who are consuming anything from anyone. But this was the Chancellor’s summing up at the end of the speech – the reality is in red for the casual reader’s reassurance:
“The forecasts I’ve presented show:
  • growth up almost entirely in services
  • jobs up but hours worked massively down
  • the deficit down and the National Debt spiralling rapidly upwards

Now we are securing Britain’s economic future with:

  • manufacturing promoted manufacturing as a % of the UK economy is precisely where it was four years ago – tiny.
  • working rewarded but on lower wages across the board.
  • saving supported er, with Zirp rates.

With the help of the British people we’re turning our country around. No, you’re turning logic upside down

We’re building a resilient economy.” No chum, you’re electioneering.

Would that Dr Johnson was with us today. His account might have gone something like this….

DrJLet’s face it, we are offered a choice between neoliberals dreaming of a future that cannot work, and liberal socialists pining for a past that is no more. It’s why everything now has the air of the Bedlam peepshow. But unlike the Dandies of yesteryear, we cannot enjoy the brief acquaintance with madness and then return to normal life: for us, there is no escape from the madhouse to come.

Earlier at The Slog: Bedlam in Turkey as Erdogan bans Twitter