In a crisis, when decision-makers don’t know what they are doing, time-wasting becomes an art form. In Europe, austerity has more to do with politics than economics. The same applies with the debt in the US: political gridlock is about disguising the fact that the politicians are frightened and don’t know what to do about the bankruptcy of their nation.
In the UK, we see that all the huffing and puffing over the regulation of banks is a way to fill in the time as the fate of the nation unfolds. The IMF has revised downward (yet again) its forecast for UK growth. Ditto for the Eurozone.
The growth in jobs in Britain is not to be celebrated as the steady state condition idealised by ecologists, because living standards of people in work continue to slide.
Meanwhile, the Bank of England valiantly promises to prevent housing bubbles by stiffening the rules that govern the capital requirements of banks. This is supposed to reduce “exuberance” in the housing market, which is how grown men (those on fat City salaries) explain the last property boom/bust.
These are all techniques for filling in time. Like Prime Minister David Cameron’s promise for an in/out referendum in five years over the UK’s future in the European Union. None of this is going to make the slightest difference to the outcome of current trends. The new business cycle is painfully reasserting itself. Yes, with variations on the theme. But it is business as usual. Except that, next time, the bust will be even more painful.
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