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Superman Obama

Robert Peston | 10:19 UK time, Monday, 8 December 2008

During assorted meetings with hard-bitten business leaders and politicians last week, I was surprised by how star-struck they are with Barack Obama.

Barack ObamaIn these fraught economic times, the world needs a hero. And whether he likes it or not, the floundering global elite appears still to be looking west, and to the US president-elect in particular, for the white-hatted cowboy who'll save us all.

You can see these hopes and expectations in the way that stock markets soared across the world after Obama announced on US television that he plans to invest in US infrastructure on a scale not seen since the US highway-construction programme of the 1950s.

Although he gave more details of his proposals than is normal in these transition weeks - making it clear that his first priority is to stimulate economic activity and that reducing colossal US public-sector debt will have to wait - the reaction of stock markets is largely emotional.

As I write, the German and French markets are up well over 6% and the London Exchange is 4.6% higher.

Also, sterling has recovered slightly, which may be more rational in that the UK's vast and rising indebtedness looks trivial in absolute terms compared with the ballooning borrowings of the US. But sterling's resilience may not last, in that the more the US government under Obama has to borrow, the less appetite and capacity there may be among investors for the colossal sums our government has to borrow.

The big and obvious point is that an extraordinary, frightening responsibility is being placed on Obama. At a time when most would say that globalisation has undermined the power of most elected politicians, there appears to be a widespread belief that one newly elected leader will have near-magical powers.

And he looks strikingly relaxed, in spite of an economic reality that's dire.

Here in the UK, that's confirmed (yet again) by a CBI survey this morning showing that the contraction of the UK's all-important service sector is accelerating.

The next big decision for politicians in the US and UK who actually have their hands on the reins of power, rather than one about to take over, is how to help the devastated motor industries.

What's being discussed in Congress looks awfully like direct state control of GM, Ford and Chrysler, as the price of any financial rescue.

Here in the UK, the Treasury and the Business Department are also assessing requests for loans from car makers.

I'm absolutely certain they - or rather we, as taxpayers - will provide succour.

What ministers and officials will wish to do is simply fill the financing gap created by the malfunction of the banking system and of financial markets, rather than propping up lame ducks.

Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different.

Comments

Page 1 of 2

  • Comment number 1.

    THE MUPPETS BELIEVE WHATEVER THEY

    WANT TO BELIEVE LIKE LEMMINGS

    AS Cantona said

    "gulls follow the trawler" (or similar)

  • Comment number 2.

    What ministers and officials will wish to do is simply fill the financing gap created by the malfunction of the banking system and of financial markets, rather than propping up lame ducks.

    Its one in the same thing Robert.

  • Comment number 3.

    "Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different."

    Capitalism is a gamble - when investors place a bet on a business by buying its stock, they stand to gain or lose. Gain they should when the business prospers and lose they must when the business fails. The problem for Government is that it cannot countenance losers amongst its voters, hence the wrong decision making. A business has to restructure itself during a recession, firstly to survive and secondly (and most importantly) to be in pole position for when the recession ends. Political interference, merely prolongs the agony when a lame duck is propped up. What should happen is that capacity is mothballed, costs cut and investment in better, newer, more appropriate products is stepped up. A properly managed business will tell the Government to go forth and will explain to its stock holders that the gravy must wait for the good times to come back.

  • Comment number 4.

    the US banking industry has owned the UK banking industry for a long while now

  • Comment number 5.

    they didn't really know what they were buying but wanted a foothold in europe

  • Comment number 6.

    It would be bizarre if the Treasury and the Business Department decided in favour of providing taxpayer's cash to these US owned car manufacturers because of course that would provide them with a competitive advantage over European companies and the few cottage industry type companies we have in the UK.

  • Comment number 7.

    crowdedisland, #3 that is all very well in the theoretical world of the free market in which the decision is made by the invisible hand. But the hand is not only invisible but also blind to the political and social consequences of its workings. If we are to follow the course of allowing the market to find its way then we have to be prepared for a deflationary slump which will throw millions on to the dole and wipe out the wealth of the most vulnerable whilst almost certainly protecting the holdings of those at the top of the pile. The market is not a neutral and timeless thing but a product of a particular social system at a particular point in history and it benefits a particular form of class rule. The only way to prevent the social dislocation associated with a slump like the one we are now entering is for the state to intervene in order to do what it can to support 'lame ducks' which are in many cases only lame because they have had their legs chopped away by the way the market (mal)functions. Capitalism is indeed a gamble but one in which those of us who have never stepped foot inside the casino, nor have any desire to pay the price for any losses while the gamblers go on cashing in. This may be an old-fashioned view but it is essentially a class problem and therefore a political rather than a purely economic issue.

  • Comment number 8.

    State control of this, State control of that, massive infrastructure projects here and there and everywhere.

    If you have lost your shirt it is very difficult to roll up the sleeves

  • Comment number 9.

    Regretfully the U S of A has no choice,

    the motor industry will have to be supported

    Detroit is already part wasteland.

    A full closure would be a catastrophe.

    The yanks need to make cars people want

    to buy,and need to be in a position to do it

    by the time things settle down.

    Closure means the ability to recover goes

    down the DRAIN.

  • Comment number 10.

    Shouldn't we be frightened about these plans when he doesn't even know that Tim Berners Lee, who invented the internet, was British...

    From yesterdays's report on his plans:

    The president-elect said that broadband internet connections in the US should be available to schoolchildren and hospitals.

    "In the country that invented the internet, every child should have the chance to get online and... that's how we'll strengthen America's competitiveness in the world," he said.

    Ho Hum - back to presidents with more power than competence...

  • Comment number 11.

    From the Bobster:
    "Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different."

    Indeed,we might even be getting a tad sweary and throwy at this point in the "game".

    Always a frown....with Gordon Brown

  • Comment number 12.

    "Governments normally get these judgements horribly wrong"

    and the "invisible hand" of the market has got things so spectacularly right over the last 18 months ?

  • Comment number 13.

    Is it not the case that for the last ten years or more, there have been to many car manufacturers producing too many cars? The largest of these (Ford, Chrysler, GM, Toyota) have followed a business plan that is viable -just- in times of plenty, but is doomed to fail when times are rougher, as now.

    The companies, like superankers, are too big to change course in a hurry and at least one of the above must be allowed to fail.

    This is what the free market is all about.

    Governments must not used increased borrowing in times of recession to prop up ailing or outdtaed industries or to fund over-production of goods for which there is no demand.

    By all means borrow, but use that money for infrastructure investment or to underpin and stimulate employment in businesses with a future.

  • Comment number 14.

    Robert in the same paragraph you describe the UK's indebtedness as trivial and colossal,which is it?

  • Comment number 15.

    if the peoples prez makes a few mistakes and draws criticism then every one will be happy.

    ..It's bigger than hip-hop

  • Comment number 16.

    #10 perterj42

    Tim Berners-Lee did not 'invent the internet'

    He created much of the language and the communication protocols that enable it to function.

    I am sure Obama didn't know this either, so your point is well made.

  • Comment number 17.

    10. At 10:59am on 08 Dec 2008, PeterJ42 wrote: "Shouldn't we be frightened about these plans when he doesn't even know that Tim Berners Lee, who invented the internet, was British..."

    As ever, the genesis of the Internet was more complex than that. Tim Berners Lee invented hyper-text, a crucial ingredient of the Net. However, DARPA (the US Defense Advanced Research Projects Agency) invented TCP/IP, another crucial ingredient. It is like the invention of the motor car - no one person or group can claim to have invented it.

  • Comment number 18.

    What a great position for Obama to be in. After all it will be really difficult to make things worse! yet there is a good chance of coming out of this in 5 years time looking like a hero.

  • Comment number 19.

    Governments from around the world are acting to reduce the severity of this economic downturn we now find ourselves in. Whether or not the policy is 100% effective is almost irrelevant, the fact that they are trying to do something about it is important and given the behaviour of market participants, any rejuvinisation plans will be a success.

    Mr Peston is again finding something positive and turning it into something negative. After his Northern Rock scoop, he now finds himself in a position of power, and with power comes great responsibility. Does he want all of us to be financially shafted or will he make a stand and act for the better of mankind???

  • Comment number 20.

    PeterJ42:
    Tim B-L did not invent the internet. He invented the World Wide Web, which is a system that uses the internet - there are many more such systems, the web is the most well-known. This is not just techy pedantry: the 'net was going many years before the web.
    Look up Vince Cerf for the (US) bloke who is often called the 'father of the internet' because of his research which led to the TCP/IP protocol which is what allows all those bits (including these) to be shunted around. Obama is quite right.

  • Comment number 21.

    in the real world it's just people with idea's
    It's still bigger than hip hop hip hop hip hop hip
    It's bigger than hip hop hip hop hip hop hip hop

    [Verse 1]
    Uhh, uhh, uhh
    One thing 'bout music when it's real they get scared
    Got us slavin for the welfare
    Aint no food, clothes, or healthcare
    I'm down for guerilla warfare

  • Comment number 22.

    The Car industry is the next crisis waiting to happen...

    Its all very well "filling the financing gap", but when is the Banking system going to get itself properly back online again ?

    The answer is never, because they've got to do things differently in this brave new world of responsible lending...

    Which means we're probably going to get a state bank by default, because Government has now got the dilemma of filling the "financing gap" or allowing parts of the car industry to fail...

    What we really need though, is for the Governemnt to get the 2-3 million unemployed back into work, so that we've got money to spend on new cars.

    I think they're throwing money at the symptoms rather than underlying illness. Pain relief instead of operating on the cancer...

  • Comment number 23.

    First Term: Rampant deflation.
    Second Term: Rampant Inflation.
    Best if he enjoys being a hero now. He's read his history and knows what happens to heroes.

  • Comment number 24.

    7. At 10:57am on 08 Dec 2008, citizenthompson wrote: "The only way to prevent the social dislocation associated with a slump like the one we are now entering is for the state to intervene in order to do what it can to support 'lame ducks' which are in many cases only lame because they have had their legs chopped away by the way the market (mal)functions"

    That is all well and good, but who picks the winners? The experience of the 1970s showed that Government is very good at propping up terminal cases at vast expense, whilst potential winners can go hang. Some lame ducks may indeed have had their "legs chopped off", but if there is a viable business underneath, then surely private investors should be at hand to pick up the pieces. Take the example of Woolworths - a defunct business is a diminishing retail sector - it had no real future, recession or no recession - throwing tax payers money at it would be a total waste. On the other hand, an innovative company with good potential should be saved - but by whom is the billion dollar question.

  • Comment number 25.

    Hmmm.

    I remember John Major being depicted in cartoons, with his underpants outside his trousers....

  • Comment number 26.

    Obama is already showing that he is as stupid as his predecessor - and he hasn't even entered office yet!

    He talks of creating 2 million jobs as if that he can fit a whole lot of square pegs in round holes. This is ridiculous in the extreme. He has obviously been a follower of Brown's job creation scheme.

    He then compounds this idea by suggesting that a bailout to the US car industry will be based on them changing their ways and becoming like the Japanese.

    Firstly, if I was being charitable, this is the right solution to the wrong problem. GM, Ford and Chrysler may indeed be produce poor cars, but that isn't why they are on the verge of collapse. Honda, Toyota and Mitsubishi - to name a few - are also in trouble. The reason is because the public have no money and no amount of propping up these companies will get people to buy more cars. The forecourts are already full of new cars unsold. What will they do - produce more cars to sit alongside? Pay workers to sit twiddling their thumbs? And if it is really about just keeping people in their jobs - surely every business make the same claim for subsidy?

    But secondly, Obama is deluding himself. These firms have had 20 years to change - does he really think that a) they are capable of changing, and b) that that can be done in 6 months, a year or 5 years. It takes a generation.

    If Obama really wants to throw even more money down the drain he'd be better off just giving the money direct to the consumer to spend or better still give them all free cars.

    To be honest, it makes absolutely no difference what Obama does. The system is beyond repair and will collapse sooner or later.

  • Comment number 27.

    Robert, you sound a little nervous and shaken here. You know full well that things can only get worse. Superhero or not Obama can only put a few bandages over the gaping wound. Take it from me, worms are the next big thing, those slimy things that help nourish our soil. We'll all be digging for Britain soon so good quality worms are what're required. Invest in a a wormery. I suspect that you've already done this though, being the canny economic forecaster that you are.

  • Comment number 28.

    The short term problems of the car industry are caused by the credit crunch - people are reluctant to buy large ticket items in a recession and the squeeze on credit means that loan availability is severely restricted for individuals to be able to buy cars even if they want to.

    The problem with the state coming in to help alieviate the short term problem, is that it allows the car industry to delay dealing with the long term issues of the product and the people problems in the industry, making them even more uncompetitive than they are now. Getting the short term/long term balance right will be very tricky and probably beyond the management of the car industry.

    Chapter 11 bankruptcy might be better in the long run for the USA car manufactorers, allowing these businesses to restructure, but as Keynes remarked "in te long term we are all dead" and the short term effects would devastate huge swaths of the American industrial landscape.

  • Comment number 29.

    Actually, I wouldn't mind buying a new Dodge Challenger, if it there were a dealership, spare parts and servicing easily available over here.

    It would be a much more interesting way of wasting fuel than a 4x4 ...

  • Comment number 30.

    Is it true that the paln is to create a new car company called "American Leyland" and that they have high hopes for th new Allegro and Marina models?

    You're all doing very well !!

  • Comment number 31.

    The stock overhang - there has not been much comment on this. Politicians everywhere are trying to bribe and cajole people to spend more money. Supposing they have some success in this area and (for instance) new car sales notch up a peg or two. I don't see this helping that much really, since we all know that thousands upon thousands of unsold cars are parked wherever there is space to park them. There is far too much capacity in the industry, increased consumer spending may reduce stocks, but will not encourage production (at least not in the short term), therefore the only logical conclusion has to be that the less profitable production centres are closed down (probably for good).

  • Comment number 32.

    Obama's the man
    Revolutionary but Gangsta

  • Comment number 33.

    Of course it is a tricky decision as to which industry should be supported and to what extent, but I am making a political rather than an economic point. At this juncture in history what is important is not whether a company is viable in some esoteric economic manner decided by a patently dysfunctional market, but what is necessary in order to keep social and political stability intact. This means that it is necessary to support some industries which might, ceterus parabus, go down the drain if sent there by the market. Once we are out of the slump, perhaps normal market service can be resumed but then only if the state agrees to regulate the workings of the financial markets and to re-embed them into the social pact. A lot of criticism has been thrown at Germany recently, for example, for not reflating the economy in a Brownite/Obama fashion. The point, however, is that they don't really need to (and don't see why they should) because they didn't fully follow the ideology of the Wall Street Consensus which got us into this mess in the first place. It is not workers or trades unions or anyone at the bottom of the economic system which caused this crisis, but a determined and class-conscious effort by a ruling group on wall street to change the terms of debate so that the state and any regulation of the economy became the greatest enemy. This is the root of the problem and if this slump does one thing it must lead to a disenfranchisement of these Hayekian disembedders.

  • Comment number 34.

    The really interesting statement by Obama was, "this is going to get worse before it gets better". Add this statement to what he is prepared to do for the failing US car makers and you have the basis for a very protectionist
    US presidancy.

    Wake up Europe or you will get caught with your pants down.

    Globalissation is dead - thank goodness!!!

  • Comment number 35.

    PeterJ42 at 10 says the British invented the internet.

    Mr Obama is in fact right. The internet was invented by the US military and academia, about 20 years before Tim Berners Lee invented HTML, or the so-called WWW.

  • Comment number 36.

    Hyper inflation beckons.

    The tax liabilities on the Western societies will (without hyper inflation) take decades to re-allign to a sustainable level.

    Society can not afford decades, hence the only alternative is hyper inflation.

    If manufacturing is undermined again (after decades of abandonment), then there will be no hope for the U.S and the U.K.

    There will only be a consumption economy.

    The dream of high-value service exporting to the manufacturing 3rd World has been dashed, turning into a nightmare as the 3rd World has discovered quite rightly it can do those high-value services for knock bottom prices.

    The I.T off-shoring drive of the last 5 years has demonstrated that the U.K economy has nothing left for it to rely on.

    The transfer of back-office services, and even call-centre management to off-shored cheaper labour has further eroded the Western nations earnings.

    Now the financial services industry is shot through the heart too. All these complex investment vehicles have come unstuck. The lending explosion has broken the back of the this other (Margaret Thatcher originated) dream.

    Where now then Mr Brown? Politicians have systematically undermined the U.K's capacity to generate wealth, such that now, it can not.

    I would advise that if you want to start, perhaps some major works capitalisations should be undertaken. Invest massively into R&D, developing the new products of tomorrow. Also, take businesses like Dyson, and amputate the owners hands as punishment for turning their backs on the workers that turned their dreams into a successful and profitable reality.

    Clearly as Robert has commented on above, Globalisation is not very popular at the moment, not now we can see the flip side all too clearly. We don't like it.

  • Comment number 37.

    Yay! Here come the cavalry, just like the best Hollywood Movie

    Everything is going to be all right, we survived. Much whooping and hollering, and throwing of hats into the air.

    Lets hope Crash Brown wasn't in charge of weapon procurement

  • Comment number 38.

    To get where Obama is today required a big buy-in, followed by a massive sell out. There's no other way to get to be the figurehead of all that power and wealth.

    The measures he now speaks of taking, in slightly more halting and stumbling words than usual, are the measures the US government would take whoever the president (to be) was.

    It will all be done with an Obama slant though and I'm sure he'll do the best he can with his obvious political skills and aspirations.

    Fortunately for him the Internet was invented in the US, so the petty sniping is off target for the moment. Early days.

  • Comment number 39.

    A question on picking winners. Given that most business bank lending is approved by a a weighted regression equation "the computer said yes" and now presumably the weights have been changed to restrict lending "the computer says no" why does the government banks just go back to the ot the old weights? the loans to smes and larger were sound, this was not what caused the problem the algorithms worked well. So the reason that the government can now pick winners is that the now have the maths to back them up. I recommend Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart: Ian Ayres: as Xmas reading on why this works

  • Comment number 40.

    Re: 30

    Actually, Sir Alec Issigonis's Mini was a British success story and if you are being fair, the subsequent derivatives of that idea Austin 1100, 1300 and Allegro, plus the Landcrabs, Maxi's, Marinas, Dolomites, P6s, SD1s, Princesses were ubiquitous in the 1970's. Even the Mini-Metro wasn't that bad really and was to be seen wherever you looked in the 1980's...

    True, those cars are derided today, but technology and designs-standards have progressed. Computer-controlled engine-management technology, electronic-differentials, ABS, catalytic converters, air-bags, seat-belt tensioners, cup-holders, sat-navigation, hybrid-engines simply were not available for BL to use on mass-market motors in the 1970's.

    It was the stupid politics of the car industry that was the problem really, not the cars which (apart from the Allegro's square stereing wheel) were OK for their time, but suffered from poor quality control because of the politics...

    So politics was the problem (as always), and the British disease of knocking its successes probably didn't help either...

  • Comment number 41.


    33. At 11:49am on 08 Dec 2008, citizenthompson wrote: "they didn't fully follow the ideology of the Wall Street Consensus which got us into this mess in the first place. It is not workers or trades unions or anyone at the bottom of the economic system which caused this crisis, but a determined and class-conscious effort by a ruling group on wall street".

    The situation is more complex than that, but let's take your argument as a given. Given that Brown was Chancellor for 10 years and PM since then, why did he go along with this "Wall Street conspiracy" instead of properly regulating the UK economy and planning for the inevitable crash?
    Why was Brown deficit spending for years, when he should have been building up a war chest to fight the downturn?

    Thanks to Culpability Brown, this country is worst placed to deal with the current crash, whereas Germany, with its strong industry and balanced Budget is in a much stronger position than us.

  • Comment number 42.

    WE WERE RIGHT!

    About 2 years ago I worked somewhere in the 'money' industry and there was a joke going round when Greenspan cut the Fed rate.

    We used to call it the 'Greenspan PUT' as the cuts in base rates (or lack of increasing them) seemed to serve no logical purpose for the US economy at the time.

    Wel, well, well, I see in this morning's paper that an academic study in the states has found that 'interest rates were TOO LOW'

    When you account for the inflation rate at the time, the people of America were actually BEING PAID TO BORROW in real terms! The M2 money supply was rising by 10% following the successive cuts.

    This madness was the source of the global financial crisis. A small ripple back then has caused a Tsunami ready to flatten the world.

    There has been no such study published here yet, but if one does get out you will find the same story.
    Conveniently the Government has found new ways of calculating inflation which serves to confuse the public and hide the truth.

    If you want to have any hope of running the economy well, the first thing you must do is clarify the source of your information to make sure it's correct and valid.

    We still haven't got a figure for inflation yet, we have about 3 at the moment and they're all useless.

    Seriously though - it's like flying a plane a long distance without a fuel guage. To judge how much is left you periodically land and peer into the tank and shake it about a bit and have a stab.

    Hardly accurate is it?

    This is how they get it so wrong every time.

    If the Government want something to spend money on to stimulate the Economy this christmas (reccession), how about a massive investment to create schools of economics and data gathering centres to finally find out what is the most accurate reading is and how to obtain it.

    Maybe then we can avoid this ridiculous guessing game that we collectively describe as 'management of our economy'.

  • Comment number 43.

    Judge him afterwards guys.

    This blog is starting to attract an awful lot of 'old school maverick' types that are a little full of themselves and a little too disparaging of the masses. Don’t forget ‘pride comes before a fall’

    PS - if you’ve got a footballer as a philosophical reference point don’t shout too loudly about it!

  • Comment number 44.

    #36 - Well said. You've pretty much summed up the situation. The UK produces nothing now the sham of the financial services sector has been exposed. Financial services was 20% of GDP. How much will it be now? 10% sounds optimistic. So where is the other 10% going to come from to stop the economy from collapsing?

    It was only the asset bubble, financial services and huge public spending that kept the UK out of recession for the past decade. Even looking at the growth figures, they never got about 2% annually. Now vast sectors of the economy have shut down - financial services, housing and associated hangers on, and public spending - there is nothing to stop growth for turning into a contraction that will make the recession of the 80s look like a slight downturn. I predict annual contraction of 3-5% for the next few years, vastly more than the 1.5% optimistically stated by the BoE and the treasury.

    What people are not realising is that we are now at the point where the west's dominance of the world economy is over. It is now the turn of the Far East and india. Now financial services are stuffed, the west produces nothing and it can't live off its own taxpayers money.

  • Comment number 45.

    Robert I think you may be wrong about our government providing tax payers money to the car industry.

    We do not have one to support.

    Jaguar & Land Rover is owned by Tata in India.

    Bentley in Crewe is owned by Volkswagen in Germany.

    Mini is owned by BMW in Germany.

    Most of the rest in Japanese.

    The problem is we do not need 43 different car manufactuers producing several thousand different types of car. How many washing machine manufacturers are there?

    You must have heard the old joke about GM being a bank with a poor car manufacturing division.

    The car industry needs to be rationalised globally and instead of wasting huge amounts of money to produce more gas guzzling 4x4 that no one needs now, why not spend the money of public transport infrastructure. This could create huge numbers of jobs and reduce the terrible emisions and pollution everywhere.

    It will not happen because politicians are unlikely to have the courage to face short term pain and job losses on a large scale even to make a better future. Shame on them.

  • Comment number 46.

    As others have said, in various ways, Tim Berners Lee created the World Wide Web, and the Hyper-text Transfer Protocol that went with it (www and http). He did this in the surroundings of the Internet which had been in existence for many years beforehand.

    I, along with millions of others, was using it for email, Usenet (discussion groups), transferring files, and web predecessors like gopher before the WWW existed.

    The Internet, effectively the TCP/IP family of network protocols, *was* created by the Americans, not TBL. And was originally called the Arpanet because the research that created it was funded by ARPA.

  • Comment number 47.

    I haven't had shares in a car company since British Aerospace purchased Rover. I suppose I will have to look forward to owning Vauxhall in the not too distant future as I can't see the US government bailing out GM & Ford car plants in Europe.

    I think too much expectation is being imposed on Obama. He is just another ordinary guy who I have no doubt will do his best but he cannot walk on water although he might enter Jersualem at some point.

    It is quite apparent that the tools available to the political class to deal with this recession (slump?) are limited. In some countries the political leadership is also limited. Maybe this is why so many hopes are being placed on Obama.

    I just wish him luck as he will need it.


  • Comment number 48.

    I have to say that, having read your column for some while now, I still can't see a recession when I look out of my office window onto Trafalgar Sq. It all looks pretty good to me.

    Still, what would you rather worry about at Christmas. A modest reverse in UK growth or the end of the world as we know it as a result of irreversible global warming?

    One of the truly great things about the current credit crunch is that it has taken boring climate change out of the minds of politicians and the media. And the result? Well it's suddenly got colder and we are having a real winter - just like the good old times.

    If it gets really cold, then maybe we will forget about the supposed recession too - I just love newspaper photos of snow scenes and stranded vehicles.

  • Comment number 49.

    didn't the us car industry relocate to south america already?

  • Comment number 50.

    "Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different."

    Well it depends on your definition of "wrong", I suppose.

    I'd be of the opinion that, at just about any time in history, the judgement of the mainstream has been wrong. Wrong in the sense of being massively over-weighted towards maximising the near-term, and massively under-appreciative of the negative consequences that present-augmenting policies have on well-being in the future.

    But then, who am I to say that we should give more consideration to the future in determining our present policies? Most people either don't agree with me, or else they're not prepared even to give it any thought. Perhaps I should recognise that we're irredeemably selfish, and that it's absurd to think that we have the capacity to value much beyond self-gratification in the predictable future.

    However, this isn't how I've been brought up to think, so in my view governments get it wrong when they succumb to the irrational fears of the general public, and they get it right when they overrule them. Clinton and Blair's destruction of genuinely representative democracy through Third Way politics has made it much more difficult for governments to get things right.

  • Comment number 51.

    And cars will be made until there is no place left to park them, and then what?
    People maybe have got real. They do not need a new car, it just took a whole big dose of bad media and rampant capitalism to make them realise.
    Cars are just the start as they are the biggest target after houses. People have realised that they really do not need to move house.
    Of course this can be dressed up entirely as hard times but I do not think that is the whole truth or even the major part of it.

  • Comment number 52.

    33 Citizenthompson:

    Pheewee, that's quite a mouthful you've posted there. Methinks you're spending too much time reading dry and dusty academic 'texts' my friend. I have to say, there's little hope of your 'class' analysis taking root if those you align yourself with find it impossible to understand what you're writing. Just say what you need to say, there's no need to wrap it up in abstract academic claptrap.

  • Comment number 53.

    thinkb4 post 43

    Guess you didnt get my post.

    Eric Cantona isnt a bench mark for me,but

    seagulls following a trawler sums it up.

    They all expect something but only a few

    will get what they want (SCRAPS).

    The LOAD of responsibility/expectation on

    Obama is incredible,no individual however

    talented would ever be able to deliver the

    EXPECTATION.

  • Comment number 54.

    There is nothing wrong with temporary state takeovers of important chunks of industry.

    A classic case where this worked well was with Rolls Royce in the early 1970's. If the Heath government had not acted in this way, which was entirely contrary to its ideological principles, the UK would probably no longer have an aircraft engine manufacturing industry.

    It is a pity that the Thatcher did not follow Heath's example in the 1980's. If she had, the UK might still have more advanced technological industry.

    The market is not a perfect mechanism for controlling the economy, so rational intervention is necessary from time to time.

  • Comment number 55.

    Hi All,

    What we are experiencing is nothign to do with Fulfilling debt mountain, in time all wil be revealed . Barack Obama is an incredible spiritual being ,therein lies the answers. We hold fear and block ourselves because of this we get into confusion , delusion, and negative thinking , but positivity can push through barriers and it will .


    Read this

    " What you will see over the next few months, are firm indications of the direction in which you are going. You will also become aware that a pathway is being created, that will allow for the eventual introduction of proof of our presence. It will be accompanied by a flood of disclosures revealing how successive governments have hidden the truth, and tried to create a fearful image of us..." from galacticmessages.com ...

    Dont FEAR THE DARK bring the Light within you and Blossom , You will experience everything and day to day you will find it becomes a breeze and wont get bogged down with the silly , boring , -ve news stories.

    Lightworker

  • Comment number 56.

    Hi All,

    What we are experiencing is nothign to do with Fulfilling debt mountain, in time all wil be revealed . Barack Obama is an incredible spiritual being ,therein lies the answers. We hold fear and block ourselves because of this we get into confusion , delusion, and negative thinking , but positivity can push through barriers and it will .


    Read this

    " What you will see over the next few months, are firm indications of the direction in which you are going. You will also become aware that a pathway is being created, that will allow for the eventual introduction of proof of our presence. It will be accompanied by a flood of disclosures revealing how successive governments have hidden the truth, and tried to create a fearful image of us..." galacticmessages ...

    Dont FEAR THE DARK bring the Light within you and Blossom , You will experience everything and day to day you will find it becomes a breeze and wont get bogged down with the silly , boring , -ve news stories.

    Lightworker

  • Comment number 57.

    Bears are pessimists, bulls optimists, neither price the market correctly, as their profits come from floating bubbles past the marks and fleecing those who hop on. Yes, to recover will take gung-ho optimism of exactly the sort Obama deals in, but the simple economics of the third world mean either the West takes a knock of monumental proportions enduring a rebalancing or it takes a knock of monumental proportions enduring a trade war. Heads we lose, tails they win.

  • Comment number 58.

    Has Obama had a chance to look at the Bush / CIA files or COINTELPRO (COunter INTELligence PROgram), the progam that was created by the FBI in order to stop the progress that blacks, hispanics, and women had been making in the 60's and 70's.

  • Comment number 59.

    Of course politicians make a difference. Obama would appear to best man to be elected in the USA for 40years or more. Why all the doom and gloom on here what about all the good news, retail sales this weekend ahead of the same weekend last year, oil down to a 5year low (which really will boost the western oil dependant countries)
    House prices down only a modest 10-15% which should have been easy to manage for our banks if they had not gone on a huge casino stile business model for up to 75% of their profits.
    This is now ended by government intervention.
    The world economy will rebound fast we should be thankful politicians around the world are willing to take decisive action nothing is cast in stone.
    Goverments have the power to smooth out the peaks and troughs of economic cycles.
    I think this downturn will be much less severe than many commentators so confidently predict.

  • Comment number 60.

    It seems to me that massive contraction of western economies is unstoppable. The movement of innovation around the world means that the market will dictate that goods are manufactured in the cheapest location, so unless western labour is prepared to work for third world wages, there is no way goods can be manufactured in the west at a competitive cost.

    What it all boils down to, is a massively deflationary economic environment for a prolonged period. Stoking continued inflation, solely through consumption based on debt is unsustainable and guaranteed to result in precisely the opposite effect to that which western governments are trying to achieve.

  • Comment number 61.

    The saving of the car industry has more to do with 'friends in high places' than anything else.

    Looks at what Obama has said recently. The US cannot really embark on a massive Government led re-building programme, because in the states there isn't much that needs rebuilding.
    Obama has replaced this with a 'massive government efficiency programme', to reduce the cost of Government and to reduce the US's reliance on oil.

    So why save an industry which you're about to doom anyway? If the jobs go today or tomorrow, they will need to go at some point. The car industry has had nearly 50 years to get it's act together - and hasn't.

    One of the underlying problems of western economies is the fluctuations in oil price - which effect inflation more than any base rate cut. This makes it very hard to control inflation and consequently why it cannot be measured accurately and why the Governments tinkering with rates is not having much effect.
    The deflation fears have been triggered following the fall in the price of oil - a price which OPEC set and control.

    Therefore it's OPEC who ultimately control inflation and consequently the world. Interest rate changes only really affect homeowners (because they're the only rate changes bank's pass on). I have watched successive record rate cuts but my partner business loan and my credit card are unchanged. However the price of fuel affects EVERYTHING.

    The reluctance in the past for the car manufacturers to stop using oil products leads me to believe they had some sort of agreement with the oil producers.

    Therefore I can conclude that GM and the others should be allowed to go to the wall - the sooner the better.

    I am also confused as to the attitude of the US - the free market rules say the car manufacturers should be absorbed by competition, the threat of the loss of jobs is plain and simple blackmail.

    The engagement of the car industry to talk about a rescue package is breaching the most famous US policy of them all - NEVER NEGOTIATE WITH TERRORISTS.

    ...it's just sometimes the terrorists are homegrown and appear where you least expect them....

  • Comment number 62.

    # 41

    I don't know who told you Germany has a balanced budget, but whoever it was has hopefully woken up now. Germany's deficit is bigger than the UK's. It is suffering just as big a recession (2% on an annulaised basis from Q3 numbers) as the UK. The reason for the recession may be slightly diffferent, and it will be helped by the weakening of EUR, but don't think Germany's swanning through this crisis as if it doesn't exist. They're not.

  • Comment number 63.

    I think governments have woken up to the situation and there seems to be a consensus generally on the way forward.

    Hopefully this approach works because with this Tsunami of money being made available, I hope there is consensus on when to slow the money taps down.

    However my observation is that money is not the main issue now but confidence in all parts of the world economy.

    Having a President like Obama, an intelligent and charismatic man, is vital for confidence. He's the man to lead us out of the mess of the Bush years.

  • Comment number 64.

    What's happening is that the US and British governments are substituting themselves to banks, insurance companies and some car makers and retailers as debtors. As long as people throughout the world believe they're solid, it'll work. Being seen as solid, for a state, requires it to be able to provide social and political stability. This also means it has to provide some economic growth and a pattern of wealth distribution that people in that country can live with. Spoiled Americans will not find anything but spending 105% of what they produce satisfactory. (That's what they've been doing in the last 20 years.) In fact, they should start spending 95%, to make for past indebtness. Obama's nice but there's not a thing he can do about it. We won't see much economic growth in the US in the next 5 to 10 years. Dropping banknotes from helicopters will only result in a combination of more inflation and more imports, and that only as long as the Rest of the World (it does exist, my American friends!) is willing to support American over-consumption.

  • Comment number 65.

    #39

    I'll read Super Crunchers over Xmas, if you read The Black Swan by Nicholas Nassim Taleb.

    I suspect that it is precisely because we have relied on quantitative risk assessment models based on regression equations that we have got in this mess.

    A computer can't spot a sucker. Or prevent a lender from being a sucker.

    If only Poincare were alive today:

    http://en.wikipedia.org/wiki/Henri_Poincar%C3%A9#Philosophy

  • Comment number 66.

    #48 Well said re the non problem that is so-called man made global warming.

    Europe and North American ski resorts are experiencing some of their largets snow falls for 30-40 years - funny that when the World's getting warmer!!

    Satellite readings have shown no global warming (more recently it's cooling) since 1998.

    I wonder what the next 'scare' will be that the media, politicians, academia and special advocacy groups dream up

  • Comment number 67.

    Just picked up a great story on eFinancial News. Apparently credit derivatives prices now suggest that the UK government is now more likely than HSBC to default on its debts.

    Not sure if theis says more about the UK government or the credit derivatives market!

  • Comment number 68.

    Rationalisation of the car industry? Well maybe but what the industry really needs is a complete rethink about what it's producing.

    A few years ago I bought a sports car called a Suzuki Cappuccino which has a 3 cylinder, twin ohc, 12 valve 657cc turbo charged engine. It will do the ton (just) but also does 55mpg.. It probably produces about as much CO2 as a small dog with the trots and is really great fun....

    Although nearly 20 years old these types of car are the way to go as indeed are the new Norwegian electric cars... Yes - Norway has an electric car company...

  • Comment number 69.

    "In the country that invented the internet, every child should have the chance to get online and

    Not only the country that invented the internet but the man who invented the internet. Al Gore.

    Not content with inventing the internet he has now been so successful in tackling global warming that we've just had (absent global thermonuclear war or final explosion of the sun in the next fortnight) the coldest year in a decade.

    Way to go Al Gore.

    I say we get Al Gore to turn his colossal mind to curing cancer. Any guy who can invent the internet and defeat global warming should have no trouble with a trivial thing like cancer.

    Although with Gordon Brown at a bit of a loose end after single-handedly saving the global economy I can see the race to cure cancer getting a bit competitive.

  • Comment number 70.

    To the many well intentioned and intelligent people on this blog:

    If you are interested, even in only the most casual of manners, in having some input on effecting change in our political/economic system, we have a grassroots movement going and would love for you all to get involved.

    The main intention of this movement is to work with or pressure politicians into rebuilding a better Britain, such as many people on this blog have called for, for the good of the majority of people in Britain, regardless of class, gender, race or any other demographic, denomination or affiliation.

    For our Jobs, our Businesses, our Communities. For Ourselves, our Children, and our Childrens Children.

    Am i sounding Utopian? Join us, inject some realism.

    To get involved just click my name and check my prior posts for how to email me. I will respond.


    Rebuild Britain 2010

  • Comment number 71.

    I continue to wonder about the choice of language in this blog - 'dire...extraordinary, frightening...'

    My question - what is the motivation of the BBC to promote the (recurrent) use of such emotive terminology?

    Off to read the Economist now.

  • Comment number 72.

    Ohh God the forum has become invaded by pedantic inter-nerds.

    Any hoo good luck to Obama whatever he does, lets face it George W Gump has no credible ideas whatsoever

  • Comment number 73.

    The reality is that much, if not most, of the boom in 'services' in the UK has been essentially fraudulent as it was based on an asset market that was driven by excess liquidity driving up prices well above long term sustainable levels. We should not be surprised that the services sector is contracting.

    The next few years would have been painful anyway, but my fear is that the stoking up on the deflating bubble by zero interest rates will prolong the slump and the agony to nobodies advantage.

    As I have remarked many times before until and unless borrowers pay a fair cost for their loans and savers get a fair return; the economy will remain in a deep, and an even deepening, depression and deflation. All of this froth in the media about instant bounce backs is nonsense.

    I have to agree with the developing German view of how to fix the problem, not the British and French view. I still want to see the back of the men who gave us this bubble and I fail to understand why there are not more demands in the media for the firing of the Governor of the Bank, the Head of the FSA, the whole MPC and head of the Treasury.

    The US Auto industry must restructure, but I will not be able to do so so long as it has the enormous burden of retired pensioners to finance whilst it manes a few unsaleable cars. Obama, must grasp the nettle and radically restructure the car industry and reconstruct the balance sheets of the companies as well as force them to produce more 'European' lower emission smaller cars.

  • Comment number 74.

    My feeling's that BO will let Chrysler go down as they are the smallest and owned by a private equity group who are still the bad guys at the moment. It'll create more breathing room for GM and Ford who can pick up some of the slack, thereby lessening some of the presure on them as well.

    Investors are trying desperately hard to find anything to cling onto at the moment - is it any coincedence that a large proportion of the biggest percentage and points swings ever recorded have happended in the last 3-4 months? Sooner or later they are going to realise that an awful lot of the money they were chasing was never really there in the first place - take this as an example.

    Just over one year ago, RBS completed the purchase of ABN Amro for £100 billion. Based on current values, that amount would today purchase:

    Citigroup
    Morgan Stanley
    Goldman Sachs
    Barclays
    Deutschebank
    Merrill Lynch

    and they would STILL have around £8 billion in change. Oh dear.

    Yes hindsight is 20/20 and all that - but did anyone ever stop to think 'what if?' or 'should we look at the downside'?


    .....apparently not.

  • Comment number 75.

    #68. Wee-Scamp wrote:

    "..Suzuki Cappuccino which has a 3 cylinder, twin ohc, 12 valve 657cc turbo charged engine. It will do the ton (just) but also does 55mpg"

    What about a small 5 door estate car that does 53.2 mpg (actual not claimed!) 90 bhp diesel - well over a ton (untested) 1600cc with the climate control on. (Peugeot 207 SW Sport 90 bhp diesel - 119 gm/km) Auto lights/wipers, electric windows, glass roof etc. etc.. A proper 5 seater and you don't need to suck you knees either! Even average sized Americans can sit in comfort - but unfortunately Peugeot do not import cars into the USA.

  • Comment number 76.

    #45 "The problem is we do not need 43 different car manufactuers producing several thousand different types of car. How many washing machine manufacturers are there?"

    At the moment, TWO (2) !! Haier, near Shanghai and Guangdong Gelong, near Guangzhou (Canton) !! All those machines are "badge engineered" in England (e.g. Electrolux) !!

    It is rumoured that Dyson will be coming up with an all-singing, all-dancing new machine but I've not seen it yet !! They will probably be manufactured in their factory in Malaysia !!

  • Comment number 77.

    #49 "didn't the us car industry relocate to south america already?"

    Actually much of it is in *Southern USA* i.e. below the Mason-Dixie line, not South America, as in Latin America (Samba, Tango, Mardi Gras, Hand-of-God, etc.) !!

  • Comment number 78.

    How about making the final leap in non petrol cars? Compressed air cars are almost there as are electric.

    At the same time we could fund more research into renewable energy generation and build more tide and wind farms. Then we could power our cars from carbon free electricity.

    We could also encourage people to buy solar panels and small windmills stuck on to the side of their flats or houses.

    Then we could eventually stop attacking oil rich countries and live in peace and harmony.

  • Comment number 79.

    The whole premise of Obama’s stimulus plan relies on being able to fund the stimulus. At the moment as all corners of the globe look like seeing a equal downturn then investors will opt to support large countries like the US. If China and the US as I suspect fare worse economically (due to currencies not adjusting naturally) then that outside funding may begin to dry up. The US printing presses are on standby to buy debt but if their timing is not spot on then they risk a heavy dose of inflation.

    The bailout of the American car industry is almost certain to look protectionist in some quarters. What is to stop Toyota or Nissan pulling all production from the US as a consequence or Italy putting an import tax on US goods. All of the Auto industry has pretty much relied on government subsidies for some time so who knows what the real answer is.

    There is probably a very good reason why the credit markets continue to deteriorate while equity markets go up and judging by how the credit markets are usually right while equity markets are not, things don’t look good. The key indicator will probably be US unemployment figures and mortgage arrears percentages. A half a million jobs lost in one month in the US and a very conservative (extra 90 days allowed before mortgages classed as in arrears) 1 in 10 US mortgages behind or in foreclosure things are not looking good over there. Economic fundamentals are likely to have there say despite the Obama's actions.

  • Comment number 80.

    #55 Blessings upon you and "May the Farce be with you" !!

  • Comment number 81.

    #65 Thanks for the Poincaré link.

    This picture by Escher Angels and Devils, is based on Poincaré's version of non-Euclidian Geometry. Stunning, and quite appropriate for our situation at the moment?

  • Comment number 82.

    77
    my bag, I thought though ford and someone else moved manufacturing plants to brazil and mexico. Anyway don't yank's buy japanese cars now for quality

  • Comment number 83.

    Brilliant article Robert.
    "floundering western elite"...spot on.
    Sometimes the worst pessimists are right.
    This is one of those times.
    Many, many countries will overtake us in the next 10 years.
    The BBC noted that the Lebanese government told its banks 2 or 3 years ago, not to have anything to do with US sub-prime or bundles of US mortgages, and not to lend more than 70% on property, and to hold 30% of all assets in cash.
    Good regulation, good government.
    Lebanese banks are in top shape now.
    Shame the UK gov was asleep.

  • Comment number 84.

    The immediate problem is a recession (possibly even a depression) caused by the developed world's over-indebtedness ... in turn creating the credit famine that we're experiencing today. Amongst other things, people can't afford to buy cars; or rather they can't secure the debt needed to buy cars. This will be the case for next 2, 3, maybe 5 years to come.

    The problem just around the corner is Peak Oil. Just when we expect to pull out of this recession, we'll hit the period when conventionally-powered motor cars will become ever more costly to run; the price of petrol and diesel will tend towards prohibitive; the car industry as we know it will have to change dramatically, or die. Honda has twigged this; hence its decision to walk away from F1 racing. Watch F1 die over the next 5 - 10 years.

    Pouring billions of taxpayers' dollars/pounds into the car industry will prove to be a catastrophic waste of money. Like everything else our politicians are doing at the moment, all they're doing with the motor manufacturers is delaying the inevitable - in this case, the inevitable demise of the internal combustion engine.

    There is no chance of taxpayers' ever seeing their money back from the car makers; we'll just be adding it to the national debt and burdening our children with the crippling payback.

    Which dinosaur industry will be next to go cap-in-hand to the government, I wonder? And just how long can we go on sustaining this ludicrous economic perversity? The Germans are right to refer to us as lemmings and to refuse to follow the herd.

  • Comment number 85.

    You can't blame Obama for trying but this is only seeking to maintain an overinflated bubble with another.

    We look at a few large companies and panic but where did the 500k of jobless numbers come from?

    Like in the UK it is the small and medium soded firms that employ the lions share and they are being crucified by mad meddling and over zealous government ministers who have never done a proper days work but know how to protect their parliamentary pensions alright.

    Contraction never hurt when it protected the foundations that had been under stress. The spending announced will be wasted as it always has been and the ordinary taxpayer will be ripped off as they always have been.

    This is no more an extraordinary time than any other downturn save that the banks went for broke and they certainly got it!!.

    What we don't do right now is get meddling politicians who haven't a clue involved.

    We need a clcear out of the old management that condoned the greed thinking boom and bust were over and and replaced by those who care abiout responsible management and discipline.
    To try to say that the very same people who created the mess are the only ones capable of sorting it is insanity.

    The plans for state spending ow are demented in extreme as the one thing we all know is that this government couldn't organise a tea party without it costing £5 billion and even then that woudln't be the final wasted bill

    These spending plans can't work simply because the foundations are not there to support them!!

  • Comment number 86.

    Stock Market up, unemployment down, pound rises - Petson leaves the BBC!

  • Comment number 87.

    #75 John_from_Hendon wrote

    "What about a small 5 door estate car that does 53.2 mpg (actual not claimed!) 90 bhp diesel - "

    Yep ... why not.. The 207 is a neat little car.

    #78 BpbbyBasbo wrote

    "How about making the final leap in non petrol cars? Compressed air cars are almost there as are electric. "

    No probs with this tech for City/Local use but the only way forward for longer distance work is Methanol... Build lots of coal fired power stations and collect the CO2, add a pinch of Hydrogen produced by using some of the electricity in electrolysis systems, chuck in a spoonful of CO and bingo you have Methanol which is a high octane liquid fuel.

  • Comment number 88.

    Purely, because it was mentioned, early UNIX progs (pre gates) acknowledged ARPAS.
    ARPA Services.
    From Wiki

    'The ARPAnet (Advanced Research Projects Agency Network) developed by ARPA of the United States Department of Defense, was the world's first operational packet switching network, and the predecessor of the global Internet'

    Researched for defence comms in the US.

    TBL developed html as we know it, so he was a primary facilitator.

    The first Turing machine was german and the next American. C' est la vie. We had the ideas then ham-fisted the development.

  • Comment number 89.

    Defining the difference between the US and the UK is so obvious.

    Obama is fresh and new and has the advantage of being able to deny any responsibility whatsoever for the economic crisis which is so bad now that he will be able to take the people with him whatever the pain.

    They need something or someone to believe in.

    Essential to limit the inevitable social upheaval.

    Unlike our PM who has presided over the mess and appears to be pushing the country into some form of police state to deal with any form of dissent.

    The complete opposite to the US.

    Like it or not each individual country will be looking after its own needs and those relying on others will be left behind

    Angela Merkel has already made that point.





  • Comment number 90.

    #66 - Sorry Bickers, are you saying that the worlds resources are infinite?

    Maybe you're right and Global warming is a ruse - but if it scares people into reducing their waste then it can only be a good thing.


    ....Or do you know something the rest of us don't?

    I don't necessarily believe in Global warming being man-made either (me thinks it's the sun), however most green issues are about reducing the needless waste that Capitalism requires to keep functioning and growing (what else will the shoppers do with all that tat they're buying the the shops at the moment except throw it away next year??)

    We're already at war over oil and fish - what do you think will be next?

    The need for constant growth is a capitalist feature and it is also co-incidently the quickest way to human extinction.

    Despite what you're taught at school:
    Growth = BAD

    ....when the world is full, where will 'grow' to next? or do the capitlaists think we'll all just start withering away quietly?

  • Comment number 91.

    In summary DOOMED & BUST!

  • Comment number 92.

    TGR Worzel - Sir Percy.

    Old chap, really, did they let you out of the gentlemans club TV room to play on the computers again?

    Really sir, I have to assume that you have stolen the key to the port cabinet...

    The Austin Allegro a good car?

    Haw haw haw haw, jolly hockeysticks!

  • Comment number 93.

    RE: 58. kikidread

    "Has Obama had a chance to look at the Bush / CIA files or COINTELPRO (COunter INTELligence PROgram), the progam that was created by the FBI in order to stop the progress that blacks, hispanics, and women had been making in the 60's and 70's."

    Unlikely. Those particular documents are buried under the the secret zoo where "they" keep the unicorns and yetis.

  • Comment number 94.

    So the players are showing their cards:

    1. US - zero interest and money printing to kill off debt to Arabs/Chinese. Support manufacturing with currency devaluation and loans. Invest the borrowed and printed money to replace run down infrastructure and reduce dependence on foreign energy.

    2. Germany - strong Euro, protect domestic savers and try and displace US $ as world reserve currency. Export and cash in on other countries stimulus.

    3. China - same tactics as before: hold currency artificially low, protect home market, ignore intellectual property laws, cheap energy from brown coal - give exporters maximum cost advantage.

    They all have a goal and are making sensible steps towards it. The UK is doing crisis management but I don't see a strategy to rebalance the economy away from property development and financial services. What there is, is spending on vanity projects - like 'leadership' on climate change - and protection of client groups.

    Which leaves the question: dollars, euros or gold because the pound does not seem like a great bet.

  • Comment number 95.

    Apparently scientists have known for years how to build huge carbon-dioxide absorbtion plants (probably neuclear powered).
    We're a pretty clever lot...why dont we build them?
    Very useful infrastructure projects, just when they're needed.
    Also, oil shortage is probably not the problem many think it is.
    The US has more crude oil reserves than the rest of the world put together. (The Green River reserves.)
    They simply choose not to use them at the moment.

  • Comment number 96.

    Austin Allegro


    I think it won Square Wheel Of the Year Award in 1974 or 1975.

    MGB GTV8 then that was a Car!!

  • Comment number 97.

    post94 tomedinburgh

    UK plc goes from one ELECTRIC SHOCK to

    another.

    Sorry i forgot there are not enough Power

    Stations to deliver the shock.

    As theres no tangible Energy Policy except

    a windmill or two.

    MAGIC ROUNDABOUT ANYBODY??

    OR


    MUPPET THE DONKEY??



    GORDY???

  • Comment number 98.

    94. tom_edinburgh wrote:

    "2. Germany - strong Euro, protect domestic savers and try and displace US $ as world reserve currency. Export and cash in on other countries stimulus."

    Seems a better idea than ours (UK)! Competitive devaluation seems to be the UK's way ahead! There is doom! At least the German ideas seem to be a medium term strategy rather than the panic actions of the UK Government - I wonder when the next UK panic action will be, last weeks did not seem to do any good at all and has already been forgotten. Mid January, surely not before Christmas?

  • Comment number 99.

    No 66. Bickers.

    Thanks for your comment. Unfortunately the 'point' about global warming is the quantity of CO2 in the atmosphere in parts per billion.

    The *fact* of this increase in CO2 is that global temperature averages have increased by about 0.75 degrees C over the last 50 years.

    Not much hey? But the effect is to affect exponentially the *extremes* of weather we experience.

    Slowly slowly, imperceptibly.

    And the major contributor? the car.

    And here I support Clarkson.

    DONT BAIL OUT THE CAR INDUSTRY.

    I live abroad, I am English, bail ME out please. NOT foreign owned corps.

  • Comment number 100.

    93 Hants_GWB
    Unlikely. Those particular documents are buried under the the secret zoo where "they" keep the unicorns and yetis.
    -
    Don't worry you can buy a copy from amazon.com

    The COINTELPRO Papers: Documents from the FBI's Secret Wars Against Dissent in the United States (South End Press Classics Series) (Paperback)
    by Ward Churchill (Author), Jim Vander Wall (Author) "A picture, as they say, is worth a thousand words..." (more)
    Key Phrases: New York, Los Angeles, Pine Ridge (more...)
    (6 customer reviews)
    List Price: $22.00
    Price: $15.14

 

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