Media Spotlight: The Great British Economic Disaster
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By John Lanchester
Recession is a depressing word. It conjures up images of Thatcher’s Britain - angry strikers and long queues at the dole office. Basically, it paints a bleak picture of an eternally grim economic landscape in which people scrape to get by, if they get by at all.
Of course, that’s precisely the state this country found itself in from the latter part of 2008 until January this year.
Undoubtedly, many brokers have felt the pain of falling sales and constrained mortgage supply. And yet the grim economic situation seems to have instilled a strangely calm attitude among those who have managed to hold onto their jobs.
John Lanchester mentions this better-than-it-should-be attitude in his recent article The Great British Economic Disaster, written for the London Review Of Books.
Yes, the unemployment figures have not been as bad as expected but statistics covering the year to December 2009 reveal a job loss rate of 1,400 a day. Meanwhile, a British home was repossessed every 11 minutes.
Lanchester says this has been the longest and deepest recession on record.
“But to be honest, it hasn’t quite felt like it,” he writes. “The recession has been unevenly distributed. The milder downturns of the Tory years seemed harsher and more widespread.”
He makes the point that some of us may not notice this downturn as much as previous ones as a result of low interest rates and the fact we entered the cycle richer to begin with. In other words, the decline in wealth has been from a higher base.
He goes on to examine where the country stands economically, looks at how the Bank of England and the political parties have responded and investigates the policies that will supposedly restore growth.
On the political parties Lanchester lays bare how wishy-washy Labour and the Conservatives have been on plans to tackle the public deficit, which he defines as the gap between what the government is taking in revenue and what it is spending.
Obviously, for politicians to do anything other than posture about cuts right now would be electoral suicide.
But the facts are pretty stark as laid out by Lanchester - implied cuts of 11%
across the board, jumping to 16% if we are to believe that spending on health, education and overseas development will be ring-fenced from the axe.
He cites an article from the Financial Times that drives the point home starkly.
“At the Ministry of Justice an 18% fall in budget would mean closing all the courts, and a 24% cut would mean shutting two-thirds of all prisons,” the article states.
Avid followers of Spotlight will recognise Lanchester as the author of Whoops! Why Everyone Owes Everyone And No One Can Pay, the review of which graced these pages on February 15. His no-nonsense style comes through in this article too and it functions as a topical appendix to the book.
Just as the word recession paints a bleak economic picture, so does Lanchester’s article. But as ever he makes complicated issues digestible and leaves readers better informed about what the hell it is that politicians and regulators are going on about at the moment.
Book review by natalie holt
