As the world teeters on the brink of who knows what, and the leaders of the G7 discuss it all on a conference call, here’s a few ideas for them:
Some statecraft is needed here: we need to leave behind the discredited ‘orthodoxy’ (epitomised by the extremist views of the swivel-eyed terrorist-Tea Partiers but followed in one form or another by most western governments) and wake up to the fact that the markets are a madhouse fundamentally at odds with the interests of the vast majority of the real world, and need to be reined in and chained down like a mad dog. After bailing out the banks in 2008, and then mismanaging the sovereign debt that ensued, world debt is now three times world GDP. So either we have calamitous defaults, or we print money and stoke up enough inflation to make the numbers add up. When world GDP is equal to or greater than our debt – in numbers at least – we can settle down and balance the books again. A litre of fuel may cost a fiver, rather than £1.40, but it’ll still be a litre of fuel.
Most importantly, we must wake up and realise that there is no ‘wisdom’ in the markets, only savage and feral self-interest that needs to be caged, tamed and closely monitored with robust and thought-through regulation that has not been written by the likes of Goldman Sachs.
Like it or not, the eurozone probably needs fundamental no-quibble fiscal union – effectively turning it into the United States of Europe with strong local government. And that means Germany picking up the bill for a while. They’re scared of it now, because its been their ambition for 150 years to dominate Europe again (for the first time since the collapse of the medieval Holy Roman Empire) and having gone the wrong way about it twice they’re baulking at having it given to them on a plate. But its the only way forward now. [STOP PRESS – first moves toward this now underway]
Here at home in the UK, I have to say the man still making most sense is Vince Cable. The rest of the coalition don’t seem to get it at all, and Ed and his crew have a lot of ground to make up yet before I’ll be convinced they’d be any better. Probably the best way out here would be fundamental Land Reform, enabling us to tax the 0.36% of the population that own 2/3 of the land of the British Isles.
And do I think it likely that the G7 leaders will take this advice? No. I bet they’ll all just batten down the hatches, declare even more austerity, and run the world economy into the ground. Having a meeting without China, is, after all, part of the hubris that brought about the problem in the first place. “What we are witnessing is not just the decline of the US but the decline of the west.”
Soon, then, will come the defaults, and the rioting will really get under way.