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Everything will change

Robert Peston | 01:00 UK time, Saturday, 31 January 2009

Do you want to know how bad the recession will be and what kind of global economy will be built from the rubble?

Here are a few clues. It's a short discussion I chaired for Radio 4's PM programme with Roger Carr, the chairman of Centrica and Cadbury, Richard Lambert, director general of the CBI, and Martin Wolf, the Financial Times's chief economic comentator.

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  • Comment number 1.

    the best state to be is if you have hot nothing to lose
    and to try your best be happy all day long every day
    africans will be alright europeans will weep and moan

  • Comment number 2.

    Europe should invest in Africa
    (to do good this time)
    They've got the resources
    We've got the knowledge base
    To help and not manipulate

  • Comment number 3.

    isn't wonderful.

    British jobs for British workers misses the point.

    how many protesting can speak more than their own mother tongue ?

    we have been on such a negative path where, the others will learn English, we become lazy with languages and we have so many people who don't know how to say "please" or "thank you" in ANY language because we feel they should learn the English language, our language !

    in recent years the numbers of children at school doing any foreign language subject has dropped like a stone yet the cultural effect of "trying" to speak in a tongue that we do not know gets a better response than the IGNORANT ENGLISHMAN abroad who SHOUTS "4 beers" , "4 beers" !

    can this change ?

    can we afford for it not to change ?

  • Comment number 4.

    If the majority of British banks debts on their books is based on overseas lending why not just sell on a proportion of these debts to other financial banks around the world?

    Most of the banks have been restricting credit to UK businesses but what about the overseas businesses that they lend to?
    They have been very quiet on this issue.

    We are in a situation where banks have made bad losses on American mortgage investments and instruments related to that sector.
    They are trying to claw back these losses by cutting business overdrafts, raising interest on current overdrafts and other loans for business , and refusing to do new business with startups in the UK.
    They also claim mortgage rates must remain much higher than the BOE rate because interbank lending is high but we all know that they have hundreds of billions in savings accounts to counter balance a fair proportion of UK mortgage lending on which they are paying very little interest.

    All this profit making by banks from lending out money from low savings accounts to mortgage lenders at rates much higher than the BOE rate means more profit for the banks and less money for consumers to invest and spend on in the wider economy.

    By squeezing credit terms and raising interest rates for businesses as well banks are making more profit but at the expense of businesses who have to close down, lay of workers or freeze taking on new staff. Or stop new businesses from even starting up.

    Banks should be treating foreign lending the same as UK lending and cutting lending and overdrafts and raising interest rates to offset losses made on American mortgage investments and other instruments.
    Where possible they should also offload foriegn debt when it is possible.

    UK banks should not be just allowed to squeeze UK savers,borrowers and businesses to make profits for them to cover other losses when so much of their banking is done overseas as well.

    The PM needs to be looking into this now.

  • Comment number 5.

    morning Robert and all Mullerites

    Interesting discussion. It certainly feels odd to hear mea culpas from members of the financial establishment. They are clearly shocked and a little bit scared, despite their great wealth compared to regular folks like us.

    My view (which is certainly not original) is that the slump continues to gather pace and that the authorities have had very little impact on it so far. They have failed to gain any traction against it, despite all their efforts.

    No incumbent political leader can hope to do well in these circumstances. Brown has tried to be decisive (not his nature) but is starting to struggle a bit more now and is getting caught out by the contradictions in his statements (ie about British jobs for British workers vs the dangers of protectionism). His initiatives have already been centred on trying to encourage the banks into financial protectionism, in a way.

    Protectionism is a great danger to GDP and average standard of living as it will directly result in less trade. So the established thinking is that it must be very bad. I tend to agree but would admit that there are arguments for alternatives, such as local cooperative economies, slow city and slow food movements etc; and of course negotiating and advantage against other countris (like the USA has done ever since WWII by dominating the post-war institutions).

    Let's face it, protectionist moves are going to grow, whatever we think.

    It is perhaps significant that the US $800 stimulus package that passed in the House last week included a 'buy American' clause that is worrying the Canucks a lot and is also legally challengable in relation to NAFTA. Here in Europe the strains are growing quickly, as various stries reflect.

    And can anyone really believe that the Chinese and Russians are going to be helpful at the G20 in April..........

    Given all of this it is perfectly understandable that a lot of workers at UK refineries have effectively wild-catted today. He who shouts loudest gets an advantage....... it might only be briefly, but....

  • Comment number 6.

    some interesting snippets of news from today's papers, that struck a chord with me:

    (1) LA woman who had octuplets already had SIX children! so now 14 children! how can this be justified? no need as it's been made possible by the FREE MARKET

    (2) an English person pays over £200,000 pounds sterling for a licence plate A1 or such like; for the cost of this piece of tin tens of thousands of refugees from Darfur etc could not only be fed but helped to build wells, schools etc; how sad but none of our business as it's the operation of the FREE MARKET

    (3) Merrill Lynch bankers, on the eve of their takeover by BoA on Dec 31st, were awarded over $4bn of bonuses (c. $90,000 average but much much higher for senior staff) despite ML losing $15bn in that quarter alone; and they had received a lot of US taxpayers money, which helped to pay for it: make you mad? well sorry but it's just the operation of the FREE MARKET

    (4) the chap who assassinated Che in Boliva, now old, had gone blind; he was very poor and is one of the 1.4 million people who have been given operations by Cuban trained doctors in Cuban hospitals, paid for by Venezuela: how nice but surely we must condemn it because it is the result of SOCIALISM and INTERFERENCE IN THE PROPER OPERATION OF THE FREE MARKET

    looking at the situation as of today, who is it that deserves respect ........ obviously Cuba is far from perfect but given the boycott and all their other difficulties it is quite remarkable; whilst we have achieved what exactly? ordinary terraced houses in Islington changing hands for over £1 million (pounds)

    It's time we admit to our erros and begin to make the adjustments to a less wasteful and selfish life where our consumption is sustainable; that means less material goods ......... is it poorer? depends how you measure it

    Last time I checked, it seemed that your average Cuban looked a lot happier than the average Englishman, despite hurricanes, falling-down houses and rationing

    Given that we're going to have a severe recession/slump/whatever we might want to think Cuban

    Aside from having your own allotment I can think of several other big pluses that the English could do with:

    better at dancing
    better in the sack
    better music

    need I go on?

    I rest my case

  • Comment number 7.

    Alot of Joe Public already know whats coming - THE ONE WORLD CURRENCY which will be pleaded for as things are going to get so bad.

    Has the decision been made yet on how were going to get there - deflation / inflation - who cares merely a means to an end.

    Still believe this was all an accident and accept the incompetence and blame greed - STILL BELIEVE 9 11 WAS DONE BY MEN IN CAVES - believe that flouride in water supply is good for your teeth!!!!!!!!!!!!

    alot of people warned and predicted the this collapse yet the media tells us no one seen it coming - comparrisons to the 1930,s except this time they want everything and so far they are getting it and people are swallowing it

    waiting for the next move - ITS A COMPLETE JOKE

  • Comment number 8.

    That discussion leaves me totally cold. Carr, Lambert and Wolf have no better idea than you or I about what is going to happen. They are all whistling in the wind and hoping for the best.

    I do agree that we cannot return to 2006 (I think he meant 2007 but bye the bye). However, that is true domestically as well as internationally. It was not just the bankers who were making hay whilst the sun shone - most of Lambert's members (including Carr) also had their snouts in the trough.

    Somali-Pirate is right when he says that "protectionist moves are going to grow, whatever we think. " It is a natural response to a national crisis. To stand against it in the vain hope of an immediate and strong internationalist treaty is just a waste of breath. better, in my opinion, to critically appraise what we have currently got and draw up plans to support and develop it.

    Sure GDP will be effected but it will be even worse if we continue to hold open the door whilst others look after their own best interests.

    There was a brief window when Europe could have truly united in the best interests of all of the economies and peoples. However, I believe that is now past as sovereign governments will be turned inwards. This is in no small way due to the lack of constructive proposals coming out of Brussels.

    I do understand that protectionism will have an adverse effect upon developing nations. However, we in the UK will be of no assistance to them if we are reduced to the same state.

  • Comment number 9.


    China and India are already there.
    Why would anyone in Africa look to us given the lessons of history? Recent events haven’t exactly reassured anyone that the rich movers and shakers actually know what they are doing. Unazungumza kiSwahili? Luga moja haitoshi!

    We speak only English. Luga moja haitoshi!

    Dumbing-down isn't the cause of our economy. It is an effect. How many of us had to discuss in essay form 'Football as the new religion and Consequences' as a set piece of homework? Yet the lesson doesn’t seem to have been learned. The great and the good have been so pleased since it meant they could easily tell the general population that all was well while Beckham was bending it, John Sergeant was strutting it, etc.

    Andrew Marr's History of Modern Britain reads as though he had a crystal ball sitting on his desk as he composed his text. Business leaders and politicians follow the latest trendy methods, almost like the latest fad diet, indicating to me they have no idea what they are doing, or worse have no ability to apply any critical reasoning to what the latest self-help for business best-seller tells them. Someone said, let's market these bad mortgages with a bit of polish and make a mint. They sold them. They made a mint. And now..... I’ve even seen psychological/intelligence tests (excellent marketing of bad science) to identify and screen out those deemed too intelligent and therefore unsuitable for employment (band management) as part of interview processes.

    The problem is far greater than that. As a nation we prefer not to study the difficult subjects at school and on into University - science, mathematics, engineering etc. Bankers and industry leaders have little interest in these subjects and the benefits they provide society - note how many schools have been built by business men who seem to have a desire promote religion in recent years. The press and media in general are scientifically illiterate too, although there has been some improvement but with a long way to go still. The government now has a ‘value science and understand the impact science has on your daily being’ marketing campaign. Why are we in a position for this to be needed at all?

    Yet we are facing major issues – the environment, the economy, wars, mass hunger in the third world. It is the scientists and engineers we will need to provide us with the knowledge, the tools and the insight to build new, sustainable economies.

    We need a wide range of skills and expertise and we need to learn to value them, not only in our society but in our businesses. We must understand that the decision makers who have taken us this far are unable to design and implement the fixes we need. The purported talents that brought these people to become the decision makers are not appropriate for the economies that will emerge from this mess, one day. And in this new economy, the needs of the electorate will have to be respected. If that means upsetting business leaders then so be it. They have shown they are not deserving of special privilege in preference to voters. Voters too will have to take responsibility and actually consider the issues and vote for more than immediate self-interest.

  • Comment number 10.

    Well done Martin Wolf.

    At last someone who understands whats going on and as the Financial Times's chief economic comentator, has the voice to spread the word, lets hope he has the energy to shout louder and longer.

    Go for it Martin

  • Comment number 11.

    I love listening to Martin Wolf. He's a great speaker and he says the most exciting things about the world economy. He can scare us much more effectively than Robert.

    In this length of interview he only has time to tempt us with the idea that "things must change" but, teasingly, doesn't tell us what exactly the changes are meant to be. I have tried to remedy that in the following article:

  • Comment number 12.

    9. CoralBloom :
    " #2
    China and India are already there.
    Why would anyone in Africa look to us given the lessons of history?"


    True, but it would save the UK's bacon and do some good over there too (if it was a goer)
    e.g. employment opportunities, industries, resources, education, reduce poverty

  • Comment number 13.

    everything has to change the economy as we know it is finished. i am fed up with the blame game that is taking place . there is no collective solution as individual circumstances vary so widely . debt has to be paid back not increased many will have to consider bankruptcy as their only option as we enter frightening times.

  • Comment number 14.

    we may have a dysfunctional society where so much happens too quickly it's time to cool down the pace and read the signs to decide what are values should really be about.

  • Comment number 15.

    House Prices is not a growth industry.
    They were manipulated by estate agents, home builders, mortgage and investment brokers, to maximise their upfront commissions at the expense of the public or real everyday people.

  • Comment number 16.

    People in financial difficulties should change their mortgages to interest only (not repayment) so they have LESS equity in their homes to make repossessions unattractive to creditors. (A mortgage is a lifetime of debt)

  • Comment number 17.

    I don't know about 'Everything will change' as things have a natural tendency to return to the status quo.

    I certainly agree that 'Everything must change'

    Anybody hear of Amazon Turks

    I have seen the future and it is not bright

  • Comment number 18.

    Does Davos achieve anything or is just a talking shop with nice scenery?

  • Comment number 19.


    I am at a loss as to why you think Africa would save our bacon?

    I've spent quite a bit of time in Africa. There are poor people in Africa, there are many educated people in Africa too. They are trying to save their own bacon - rightly so.

    Go to Uganda and look at the schools so many charities have built. There are no teachers teaching. The teachers are working in factories and on the land. They can't live on their salaries.

    Have you noticed the humanitarian disaster in and around Goma, DRC? There is an awful lot of coltan being ripped out of the ground and sold to make electronic goods such as mobile phones. Much of the fighting is to maintain rebel control of these mines. There are massive fields of refugee camps - they are receiving no benefit from the mines. They live in fear, real fear.

    Are you suggesting our companies and investment bankers invest, and remove the profit? That won't help the young mothers and their children.

    You aren't suggesting the fabulously talented bankers we have move over there and try again on a different continent? Why would the Congolese be happy at having to suffer the inept experts?

    The Niger delta has quite a bit of industrialisation too. Now there is a good bet for those who don't like government regulations interfering with business activities. The pollution has ruined vast swathese of beautiful land leaving the people in dire need.

    There are now those in Africa who dread a geologist identifying buried black gold.

    Perhaps you think Mogadishu would be a city worth consideration for a new office block full of investment bankers?

    And while the investment bankers are busy making friends with the locals perhaps the Africans just might teach us lot how to survive on next to nothing, a little closer to nature with some reall innovations.

    Mobile phone charging kiosks in Uganda, boda bodas - bicycle taxis just about everywhere, wooden bicycles for transportation, the common use of solar power, TV halls - most folk couldn't own a TV so in Africa there are so many pay-per-view TV halls, vegetable gardens, the real value of education - I've yet to find a word in an African language for truant - that concept is way beyond African ideals.

    We would do well to learn from the ordinary guy making a living in Africa.

  • Comment number 20.

    everything must change....well that is a no brainer but what must not happen is to go back to the way it was. However every "solution" the government comes up with is designed to do exactly that!

  • Comment number 21.

    Robert -I can't listen to this on dial up from overseas (do your moderators have time to write up?), but re yesterdays post you're telling us news that all your blogsters have been harping on about for the last 4 months - credit isn't the answer.

    As for Jamie Dillon and your comments and those such as 123. JohnConstable yesterday. What rubbish. He has worked for Citibank (major borrower from US gov, and JP Morgan (25 usd billion bailout). What credibility does he hold? where can I google him spouting about Imprudent lending in the noughties? I can find he earned £41.6bn in 2006 - 19th richest on the Fortune list. What personal money is he putting in to prop up JP Morgan (and I don’t mean buying shares)? Surely CEO's of HSBC, Standard Chartered and American equivalents - I assume some smaller US banks exist should be top of the list of people to listen to? Yes, less listen to remorseful bankers too, but I don't hear him apologising.

    On a simple level, Comments from 182. Mrs Bloggs13c2 are far more on the mark. Most UK banks have been tarnished by foolish American financial wizardry . Our major crime, as a financial centre of excellence was not researching our risk - exposing these emperors new clothes eques CDS's etc for what they are worth. Too many lavish lunches weakened our bankers ability to do their maths in the afternoons and they bought into the 'poo'. Caveat emptor anyone?

    We can't draw a line under things and move on until we have true Sirs. Knights and other titled people in the positions of power in Banking who fulfil the human characteristics that Joe Public and the Queen want and need them to display. Characteristics that these titles are assumed to carry as mentioned by others, humility, sincerity, bravery, courage etc..

    Instead we can read on 21st Jan that these same praised chiefs of JP Morgan and the like are siphoning up their own company’s share stocks at rock bottom prices, (11.5 million dollars for our Jamie) – insider information maybe that even their supporting governments aren’t being allowed to see?

    Therefore we are left to conclude that characteristics of greed, fear, insincerity and boastfulness sadly still prevail in many of these senior people to whom we’re relying on leading us out of this crisis. What they will do with all the money they make is anyone’s guess – they can’t take it with them but their legacy and reputations will remain long after the money is gone. The financial sector needs a breath of fresh air - someone with courage and dignity to encourage it to do the job it needs to do for the rest of business and the good of the common people. Who will rise to the challenge?

  • Comment number 22.

    19. At 08:19am on 31 Jan 2009, CoralBloom wrote:

    I am at a loss as to why you think Africa would save our bacon?"


    (I have only been to Kenya on safari but) I thought Africa was like a blank book open for so much potential, where there is nothing but land with few cities. To help Africa positively to reduce poverty would be satisfying to some.

    We can help them develop (e.g. send junior doctors to gain experience, as there is one doctor for thousands of people) and train them in skills.

    It may not be the right time now but in the future (5, 10, 20+ years) things will have changed. Qualified people from third world countries tend to leave to come to western countries and never go back to help their motherland, but they could go to teach when they near retirement.

    Colonialisation was a lot about the resources from all over the world and a fairer sharing method of trade should be established where both sides benefit. I don't know about current politics, but I imagine it is messy and tribal, so I don't understand the reality of implementing ideals. Maybe it would be possible for Africa to feed the world in the future.

  • Comment number 23.


    Not sure I agree that those in trouble should move to "interest-only" mortgages. They should also consider selling, renting and buying again in the future when prices will likely be lower still.

    As for "a mortgage is a lifetime of debt" - I'm not sure. You can debate whether 20/25 years is a lifetime, but there also doesn't seem to be a massive difference between a 20 year mortgage and saving for 20 years then buying a house outright.

    The latter is cheaper in the long run, but the former gives you 20 more years in the house.

    The problem is that credit was given too freely, allowing house prices to rise uncontrollably, not that mortgages per se are evil.

  • Comment number 24.

    It is a routine. We been through the same situations ages ago. And we proved our selves 'THE BEST' being a great country to live through out the history.

    This is the reason people still willing to come to briton for their rest of the life.

    The QUESTION is how to get throgh safely and securely.
    ANSWER is not in the future but its in past. We set up industries. produced cheap clothes and othe products with A class quality and sold them to world. We all had work. hardly few were un-employed. We earned money from the entire world by saling our skill and products.

    In current days, we have no product to manufacture and sale to the world. The factories like FORD and others, they just do assambley of the product while actual production is being done in china or india (which are the most developing countries because of their ability for manufacturing)

    Ohh...... i am tired now . sorry not use to with writing a lot. But the rest you can think your self. chears...............

  • Comment number 25.

    19. At 08:19am on 31 Jan 2009, CoralBloom wrote:

    "We would do well to learn from the ordinary guy making a living in Africa".

    Some ordinary guys working might have to do an initial 3 months probationary period for free before they get offered a definite job. They leave their families and work away from home for a month before they get time off. UK companies could improve their standards of life by implementing fairer employment

  • Comment number 26.

    #12 and #19

    Regarding extraction of minerals from Africa:

    The price paid to the African countries is the raw material price only. Take diamonds for example.

    The cutting and polishing only takes place in the Developed countries with the abject excuse that only trained educated people can do it. Shades of Colonial Imperialism still is prevalent.

    The main market for the finished product is Belgium, Amsterdam and London. The word market is used in the loosest sense. In reality it is a fixed price cartel. In the current credit crunch have you seen huge discounts on the highest quality stones? Thought not.

    The profit margins between the uncut stone and the cut and polished is enormous. The price paid to Africa is a pittance, and even then it rarely benefits the people as it either ends up in some dictators Swiss bank account, or some rebel faction appropriates it for their little "war".

    By rights Africa ought to be the most prosperous continent in the world, but white man whether acting as a colonial power or as a Commissioner from the EU will always ensure that it is not. Third rate politicians will then salve their conscience by handing out a few GBP millions for Aid and Development, much in the same way that early colonists would hand out mirrors and other baubles to win the trust of the natives.

    I have never been to Africa, but was born and brought up in Brazil which is also rich in minerals and the wealth certainly does not trickle down to all the people there either!

  • Comment number 27.

    The world needs to a train up, from its brightest young people a global diplomatic corps trancending the national and religious self interests that have dominated international institutions in sofar as they have been set up. in order to deal with the huge problems and tensions from the coming retrenchment that will last for decades .

  • Comment number 28.

    Yes, the increasingly worrying thing about this crisis is the extent to which our political elite, of all persuasions, fails to grasp the fundamental nature of the problem and, moreover, the remedies needed to fix it.

    We're over-indebted; spectacularly, breathtakingly over-indebted. Individuals. companies and the State have to pay off their respective debts. We have to learn to live within our means, including levels of borrowing/lending that are sustainable within the context of sustainable economic growth (tricky enough as mankind's era of cheap energy is about to draw to a close ... but that's another [scary] story).

    The problem is that our politicians don't know how to break this bad news to the voters, nor how to handle the potentially ugly consequences (let's be honest, coming down from Gordon Brown's tower - a debt-fuelled high life - is going to be agony for some folk). Furthermore, ironically, the Government is, er, wracking up public sector debt to unprecedented levels which - hey ho - we're going to have repay at some point. Our kids ain't going to be pleased about that for the next 10/20 years.

    There's no escaping the fact that our economy and, so, our society and way of life all have to be restructured. However, our political elite lack the substance, skills, knowledge, attitude, experience and - above all - courage to develop and implement strategies for dealing with a wholesale restructuring of our way of life.

    It's this continuing political cowardice that I find so shameful.

    British politics has been ravaged over the past few decades to the point that both the 'trivialisation' and 'professionalisation' of our political system could be our undoing. Today British politics is hard to distinguish from the dire, shallow, headline-grabbing, get-rich-quick, 'celebrity culture' that fascinates so many of us. Today, we have no statesmen in politics.

    Hence, the piecemeal, inconsistent, half-baked, tactical nature of Government initiatives (for that is all they are ...) thus far. The exhortations for us all to go out and borrow like hell again to buy new cars and consumer stuff is ludicrous: it epitomises our politicians' abject failure to front up to our predicament.

    For as long as we lack a politician with the courage and will to tell it as it as and gird his - and our - loins for the unpleasant, restructuring task ahead then the situation in this country will get a whole lot worse, before it gets better.

    We're still heading down fast.

  • Comment number 29.

    The world has, in my opinion, NOT yet got the seriousness of this crisis nor the cost or consequences of the solutions.

    We, as a global people, have some soul searching to do as to to what we believe
    abundance and prosperity are - what is the Good Life?

    Material wealth is OK, even good, in balance but we over consumed and did so on credit and in a way that was not sustainable.

    The 'New Capitalism' which is to be born MUST take into account at its core, environmental concerns and also social principles so that products and services are in harmony with the environment whilst still allowing companies to make a profit and individuals and families to flourish.

    Resource efficiency, labour efficiency, global welfare and some (but probably never full) wealth distribution are required, to allow us to live in harmony with the planet whilst still creating wealth and prosperity and allowing for human ingenuity and entrepreneurialism.

    Idealistic I know - that is why I feel there is still more pain to come.

  • Comment number 30.

    Interesting interview Mr Peston.
    It looks into the future.
    But we must not forget the past.
    Runaway property spirals must never happen again.
    They always crash.
    The U.S. one crashed.
    The U.K. one crashed.
    When will we ever learn?
    And to what extent was bankers' possible negligence, fraud or reckless incompetence involved.
    David Cameron is demanding an inquiry, (not the FSA, but police or fraud squad involvement).
    It's not rocket spirals always crash.
    But this one has ended with one big difference...tens of thousands of super-rich bankers.

  • Comment number 31.


    A blank book!


    The large expanse of land that is all green, that's the jungle. Looks a bit untidy doesn't it? Yeah, cut down the trees and build a car plant. Honest, carry on... The reduced concentrations of oxygen in the air won't be a problem, obviously.

    I'll not continue.

    Try tuning into the BBC World Service Radio for a few weeks. You'll learn.

  • Comment number 32.

    Martin Wolf reflected so much of what has been blogged here over the months. The problem is one generated in the English speaking world and based on debt.
    At the same time the person in charge of this English speaking Union of countries says all that is required is "confidence to get us through".

    I would suggest that what will get us through is a major rethink of the size of government and welfare in the UK. The private sector will never get its costs down to compete in a world economy until the government starts taking a very drastic reduction in the available cake.

    That is something that Gordon Brown can never have the ability to deliver as he still he cannot admit that his policies and those of other English speaking countries during the last 11 years have been the cause of the problem.

    He and his philosophy is irrelevant to the economic future of the UK.

  • Comment number 33.

    I only agree with one thing: that the world changed on August the 9th and there's no going back. What comes next will be different and in some ways, radically different.

  • Comment number 34.

    Unfortunately all moving along as expected.

    Politically - Fear then anger, sullen resistance. Resigned struggle soon. Brief blip up due to tribe huddling around leader before realising leader useless in face of problems. Targeting of migrant workers operating legally. Xenophobia. Brown and the Brown Ring slowly realising no manipulated economic salvation. What to do with 3 million unemployed, 'voluntary' work on less than the minimum wage. Still no effective focus on buffering impact for individuals to help transition to new landscape. New government in 2010 if present one lasts that long. Civil unrest from those who have not lost their jobs but think they might. Due to disappear as they lose their jobs or feel safe. Little unrest from those who have lost their jobs, neutured. Public resistance to Big Bro policies to grow as they realise that what they didnt really object to in the good days might be used against them in the bad days. Problem - it is easier to resist at the start than at the end. Similar processes in other countries.

    Economically - Establishment waking up to process. Bubble gone, Blub blub. Inkling of downsizing needed, no option. Old school values starting to come to fore. Growth in due course to come from higher efficency, ie less overheads, high tech driven. Prospect of reduced tax revenues from rduced size of economy and move to ditch overheads, but nobody dare talk about public sector reduction yet. Financial stimulus not to be effective till 2010. Residual economy functioning, in growth in some areas. But must endlessly concentrate on bubble brains problems. Bubble brains and bubble driven businesses still in lobotomy. 3rd world to suffer. Old world and New world to lose a few toys but still be fed. China to concentrate on domestic situation and tech knowhow growth and reject bizarre idea should help Old and New worlds. Emissions reducing as global economy reduces.

    No, still all moving along. Process unstoppable. Unfortunately.

    Media attention on 15 percent of population, not 85 percent of population.

  • Comment number 35.

    #6 Somali-pirate

    I read in this months Country Homes & Interiors that you can buy a bath with gold leaf exterior for £5,750. Also FT still printing How to Spend it. Way to go yet Somali-pirate.

    Oh and another plus we could do with – better weather

    #9 CoralBloom

    I went to uni to study plant science – I was going to breed crops and feed the world – I gradually realised it was not the lack of good science and ability to provide cheap food that was the problem – it was the political and social will to do it – the food is there – the food was there in Ireland in the famine – there was just not the will to give it to the feckless Irish – and now we would rather sell arms to Africa

  • Comment number 36.

    That's my point. You don't find a diamond dealer in Europe living in a tent, his kids out dragging drums of water back home.

    The greedy folk at top seem to never notice the human tragedies left in their wake.

    Diamonds, gold. The free-marketeers insist the trickle down effect exists.

    Does it?

    And while the jolly goes on at Davos, the economy disintegrates, and the greedy will look for new markets.

    It just has to stop. We need accountability, a decent mechanism of redistribution nationally and globally.

    Davos should be co-ordinating this for the benefit of everyone. Not just for friends on the ski slopes or on a round of golf. No more tax havens, no more easy money spirited awa from weaker countries.

    This economic mess is a disaster for so many. It is also a massive opportunity to make sure the new economy is a good, balanced economy.

    It won't happen. This mirrored Animal Farm is just to comfortable for some people.

  • Comment number 37.

    2 things I would like to discuss - protectionism and governments ability to fight recession.

    I'm watching coverage of the former on BBC news right now. They are all hanging on the 'British jobs for British workers' and things are getting emotional. However with the European open labour market to which the UK subscribes, such sentiments are both against globalisation and may even be illegal. Also I noted with interest yesterday listening to a protestor interviewed on radio 2, when asked 'so you think that even though a foreign worker can do the same job as you at the same quality but cheaper, you should still get the job?' - after a long pause the response given was broadly about giving british jobs to the british etc.

    We need to be mindful that this work went out to tender, businesses from all over Europe applied and the best was selected, an open and fair process. What the protestors need to remember is that if by some protectionist measure, the refineries are forced to use more expensive British contractors, costs will rise and ultimately redundancies will result.

    Can the government fight recession? only in a limited way. Notice that Gordon B and company are 'drip feeding' little packages of help here and there. In my opinion these efforts are designed to slow the speed onset of recession, but that it will still happen. Traders on the FTSE also seem to be trading very carefully to prevent further collapses with the FTSE 100 hovering around its new level of about 4000 points. We need to be mindful however that we are at the very beginning of a recession, much worse is to come and the government cannot halt a global tide. I think Gordon Brown knows this and is comming to the end of what he can reasonably do to halt the tide.

    Talking it up is the remaining weapon the government has but again this can only change sentiment in a minimal way. The plus for Gordon is that even in the deepest part of the forthcomming recession, he can claim that if he hadn't done all the things he did, things would be even worse. A good catch 22 as it will be impossible to prove either way.

  • Comment number 38.


    Sounds like Affluenza to me.

    Has anyone told Oliver James his data analysis is standing up?

  • Comment number 39.

    32 skynine

    Brown is trapped in his history. His policies were not sound but he cannot admit it and stay in office. Yet that is quite clearly what he wants to do. His policies were clearly unsound from the simple fact if there was a Take 2 there would be different ones. Therefore we face a botched job until a GE. Obama has the advantage of not being tied to past decisions, he remains human so in the face of the problems the honeymoon may be short. At least he is dismantling some of Bushs policy. Brown is not correct to say history is not destiny. He cannot escape his history so it is his destiny, it is a continum.

  • Comment number 40.

    To me a global solution should be inclusive for the whole world's benefit not cherry picking or exploiting the other half, otherwise the new world order is just a rerun of the past.

  • Comment number 41.

    Very slightly off-topic, but Gordon Brown's gushing guff in today's Daily Telegraph epitomises the extent to which he is out of touch with the realities of this crisis and the nation's mood.

    Does Gordon Brown really believe that he can rally the British people around him with appeals to our 'Spirit of the Blitz'? Is he mad?

    In no other walk of life would someone even begin to get away with Brown's arrogance. It's like a general having crafted a plan that ended with the massacre of his army then standing in the middle of the battlefield appealing to his remaining troops to rally behind him for another go. If the general didn't leave the battlefield at that point, there'd be a mutiny.

    Can Brown not realise how utterly ludicrous he looks and sounds these days as he spews out abstract nonsense about the situation and how he/we are supposed to be dealing with it? I just turn off the wireless/TV whenever he appears; the moments I do attend to make me cringe.

    Hardly the stuff of victory over adversity eh? If the situation was not so terribly serious, I'd laugh at him.

  • Comment number 42.

    #6 Somali Pirate

    Enjoyed the post, lots of points resonated in there, entertaining too.

    The system needs to be re-balanced, it looks pretty grotesque at the moment as illustrated by your post.

    I think it needs to try to take the best from both systems though, there is no doubt that capitalism brings technological advance and innovation better than more social systems. But in the extreme it looks very ugly.

    Socialism on the other hand in the extreme looks very bland and stale.

    It should be possible to capture aspects of both fundamantal systems such that there is both opportunity for technological advance and diversity and social justice.

    I think the key will lie in a fundamental re-appraisal of 'what is prosperity'.

    Is it a gold plated bath and owning 3 huge homes?

    Or is it something else...I have my own ideas about this...another day maybe.


  • Comment number 43.

    For supercalmdown

    is this close enough to nationalisation of the housebuilders for you?

  • Comment number 44.

    37 cdc280

    'We need to be mindful that this work went out to tender, businesses from all over Europe applied and the best was selected, an open and fair process.'

    That is why Brown can do nothing than give hot air out, his comments - such as british jobs for british workers - lack substance. The UK is a member of the EU so EU migrants can work here. The only real weapon is the current low value of Sterling. The importing of skill bases external to the UK however can lead to the collapse of the domestic skill base damaging the UK. On a good day the problem is obsured because there is enough work around, on bad day the work moves to the cheapest quote, usually outside the country. The only move other than currency is to restructure the EU so the differentials that can be exploited are limited, a nightmare. Currency is the easiest solution. Being poor helps. The migrant issue has been happily exploited in the good times. The licences issued for non EU migrant workers continues to be high and the only solution is making the education proicess easier for key worker skills, which the government has failed to do. It is quite simple - a bursary sytem is needed, the cost is low compared with importing workers and putting UK kids on the dole. The issue is continually ducked because it requires grasping hold of elitism. ie not all training and eduction is equal so not all funding should be equal.

  • Comment number 45.

    When we start coming out of this mess Germany will still have Siemens, Porsche and all its other great industrial companies and the Finns will still own Nokia and the French will still own Alcatel and Renault.

    Britain on the other hand will come out with nothing.

  • Comment number 46.

    A big part of the solution to this crisis lies in ignoring Robert Peston and the other self obsessed financial commentators. These idiots fail to realise that despite the unforgivable mess the speculators and politicians have made for us all to flounder in, it has been made infinitely worse by the endless reworking of the problems in the national media. They've never been in business, never had people relying on them for their livelihoods, never been faced directly with the prospect of opening up against a backdrop of negative speculation about the future. I suspect RP's fan base are sheltering behind a similar screen to the one he enjoys at the BBC. These people have got to be gagged for the national good. In the name of free speech they have irresponsibly created a collapse in the confidence of business and individuals; it's criminal. Any fool can be a commentator, try rolling up your sleeves, Robert et al, and ry to do something useful, then you'll feel what it's like at coal face and believe me it's frightening. So grow up and start acting with some consideration for the vast majority who don't benefit one jot from your cosy blinkered musings, you're irrelevant.

  • Comment number 47.

    That was indeed a fascinating discussion, and reinforces a message that has been emerging with increasing clarity of late - the need for total change.

    In the West, the big change that we need is a move away from the assumption of credit. Government (and almost everyone else, thus far) seems to think that we need to restore prior levels of credit. This is mistaken. On the contrary, we need to move away from the assumption of credit.

    When someone wishes to purchase, say, a car, the assumption is that he or she will borrow the money to buy it. When someone decides to start a business, the assumed first step is to approach the bank for a loan. This has been reinforced by a tax system which favours debt capital over equity, because interest expense is tax-deductible whereas dividends are not. The extreme case of this preference for debt over equity is represented by 'private equity', a euphemism which means 'no equity at all, total debt'. Government borrows even in boom times, albeit ascribing this borrowing to investment rather than current spending.

    It was not always like this. If someone wanted to buy, say, a car, or a refrigerator, he saved until he could afford it. When starting a business, a person would put his own capital into it, and perhaps raise further capital from family members, then reinvest profits and grow on an equity basis.

    We need to move away from thinking that you cannot start or run a business without debt, or that the appropriate way to fund a major purchase was credit. We need to encourage new business formation based on accumulated equity.

    And the only way in which this will happen is if government stops taking away most of the surpluses that small businesses generate - this starves them of the ability to accumulate equity capital. So the best step that can be taken right now is to introduce big tax allowances for SMEs provided that the accumulated earnings are retained in the business rather than spent by the owner of the business. Time to get back to saving and to equity.

  • Comment number 48.

    Do you want to know ...?

    Well here are a few predictions. Some things getting worse before they get better. Others presenting opportunities.

    It was ever thus.

  • Comment number 49.

    Did Martin Wolf predict the crash. NO

    Why listen to him now. He works off the wrong premise and he is an apologist for NuLabour. Stopped reading his 'Stuff' ages ago.

    He's as bad as that Samuel Britain.

    Nothing but deluded scribblers.

  • Comment number 50.

    I agree with Dread @ #2

    We need to invest in poorer countries and increase the flow of credit . I think only nationalised banks can do this.

  • Comment number 51.

    re 15

    you hit the nail on the head !

    if the commissions were paid over the length of the mortgage, perhaps the urge to send prices up would relent !

    those payments can only be justified when the loan has finally been paid and not before.

  • Comment number 52.

    It appears the UK aims to be a leader in purchasing 'toxic debt' for the sole reason that GB wants his name writ large when history is written as being first in solving this depression.

    Can we as taxpayers and concerned citizens get them to slow down until they actually know what they are putting on to the bulging UK's liability list?

    Read 31/1 Times and there is the spectre that some lucky mortgage holders will be paying £0/month because of some ill thought out small print clause in some mortgages.

    How many other small print get out clauses and exceptions are there in the £4.5 Trillion worth of debt on the banks' books?

    I am sure that 'due diligence' is being thought of as an 'optional extra' to be sacrified on the alter of GB's wish to be first.

    The UK can not afford to waste any further Billions until we actually know the forensic details of the toxic debt that is being unloaded by the banks.

    Sanity says it is surely better to know exactly what we are getting than just be possibly right and first?

  • Comment number 53.

    Oh dear spetmologer, what world are you travelling in?

    Obviously you've never been involved in social care. If you did you'd realise that foreign workers don't speak English very well at all, and have even less understanding of British culture.

    Better than nothing, but I'd rather see proper rates of pay and a skilled English speaking woorkforce. Wait until you get old and then you'll see.

  • Comment number 54.

    I see GB is saying today there is no point in targetting currency levels.

    Sterling was on an upward trend, what now?

  • Comment number 55.

    203. kikidread

    Sorry if you have been offended by my previous post , it was not the intent nor was it intended to be negative hence the apposite in the comment.
    My mind is boggled at the eclectic selection and fit of lyrics to seemingly unrelated subject matter - thought provoking.

    It's an interesting diversion, though for those I don't immeidately recognise it would be nice to know who wrote them in case I would like to explore their work further - lyrics maketh the music for me.

  • Comment number 56.

    They said "there will be no winners" - how can this be?

    It is basically a zero-sum game. Money changes hands from one person to another - it is not destroyed. E.g. if you buy some junk bonds and then find out they are worthless, you can say you have lost your money. However, the person you bought them from has now got the money so that to total amount of money in the system remains constant: you have lost, but they have gained.

    When billions are pumped into banks and businesses, we should ask where is it all going!?

    I think someone is profiteering from this whole thing, but they are obviously keeping it very quite!

  • Comment number 57.

    Robert everybody seems to have missed the fact that the Chinese leadership is comprised largely of Professional Engineers.

    Engineers create the means for wealth to flourish whilst others maintain it. For China this requires infrastructure building and its 'political' Engineers are pragmatists.

    Contrast this with the rest of the world and their political leadership. They are all maintainers of wealth resting on their laurels.

    This will no doubt mean little to you as you fall into the category of wealth maintainer or observer, you simply don't get it.

    Everything WILL change when we too see our own political Engineers at the helm rebuilding our crumbling infrastructure. It will never happen!

  • Comment number 58.

    Interesting stuff Robert but I think you could have been more inquisitorial.

  • Comment number 59.


    Yesterday you requested a new ring tone on radio5, I think my suggestion could do for both you and GB.

    How about 'Always look on the bright side' maybe GB will adopt it as the UK's secret USP to get us out of this mess?

    yours irrelevantly..

  • Comment number 60.

    # 47 Friendlycard

    Yes, yes yes...

  • Comment number 61.

    I asked this question on Stephanie Flanders's blog as it is strictly an economics question, but nobody seems to have a rational answer, huge apologies for cross posting, but perhaps you guys and girls can give me an answer.

    When will the adage "when in a hole stop digging" come into play?

    The whole World seems to have undertaken to dig faster when everyone acknowledges that the aim is to be out of the hole.

    At sometime the digging has to stop.

    (for those of you not following my point digging equates to transferring the assets of the prudent to the profligate [and downright fraudulent?] or from savers to 'banks'.)

    The nirvana that is aimed at is increased savings ratios in a balanced economy, but the incentive to save is being crushed faster and more furiously now than it has ever been in history(? - possible exaggeration.)

    Answers on one side of A4 - if you can get it right you will make oodles of dosh!

  • Comment number 62.

    Tigerjay / somali pirate / alexander Curzon / Rahere / many others (you know who you are)

    Re starting a political party.

    A part of me would love to do that Cromwellian style and shake up the establishment, hence my enthusiasm.

    Somali pirate has a point though which does bring me back to earth.

    The pragmatist engineer in me away from the idealist suggests a more measured course, an extension of what we are doing anyway by way of our and many others (you know who you are) regular contributions.

    My suggestion is not a political party but a formalised lobby group.

    There are many intelligent and more importantly experienced people here who are ahead of the curve and the media in terms of analysis of what is happening and what would be sensible to do next.

    Time and time again I see posts here that are realised a few weeks or a month or two later, analysis that I do not see in the news.

    I also get a sense sometimes that ideas expressed here seem to emerge from the mouths of politicians a few days later..probably just co-incidence / people thinking in similar ways but it would be nice to think otherwise.

    Both politicians and media are hamstrung to see what we can see by their very nature, they are professional politicians and journalists. No undeserved disrespect to them but you have to be on the ground up to your armpits in grease to 'feel' what is going on.

    The politicians ambitions within fortress Westminster and the journalists 'impartiality' detract from that required level of ' grease up to your armpits' understanding.

    A formal lobby group, a collection of 'wise men and women if you will' should enable us collectively to do much more than we are currently trying to individually here, noble though that it, it is not very effective.

    Although I would like to think we are making some kind of difference in a small way as we are, I am sure with a bit of organisation we could do more.

    I have a full time job and I have my young family also, I don't have much spare time beyond those commitments to do the 'nuts and bolts' of creating a formal lobby group, otherwise I would.

    I would hope somebody out there has different circumstances and is better placed to take that on.

    It could be the cyber equivalent of the bohemian 'cafe' culture of the early 1900's.

    We could meet up for real also, agree press releases of some description by consensus between us etc rather than spraying our views 'machine gun' like all over the net. No doubt some of the bullets hit but one large precision guided weapon is usually much more effective in achieving its goals.

    On a lighter note in order to get some publicity, modern society being what it is one of us would need to marry a premier league footballer or dress up as superman and hang from the hands of big ben or look good in a bikini / trunks or pretend we were deranged in some way and go onto big brother or hook up with Paris Hilton or Jordan in order to get general attention.

    Anybody like to volunteer to be Paris Hiltons new best friend fot ITV? AC maybe.

    I will post this on Paul Masons blog also, as shamefully, considering his insight comments are less cluttered there.

    A volunteer who's circumstances permit him / her to look into setting up a formal lobby group would be a good starting point a core of 2 or 3 people could then communicate 'off blog' to get the ball rolling
    (there goes the engineer in me again).

    Hope to correspond and maybe even see you all soon.

    If we want to get a message out there (as we clearly do or we would not spend the time we do here) may as well do it more effectively dont you think?

    Just a suggestion.


  • Comment number 63.


    All credit to the dedicated posters on this blog. There's anger, yes, but there are contributions that should be heard. Afterall, we are being led through a national emergency not seen in generations by a Prime Minister who had no elected mandate for the job and a Business Secretary who frankly admits that he doesnt have the answers. The Chancellor comes across as functionary but not much more.

    Shoot me down in flames but I dont think I heard your contributors give any real time to the issue that got us into this mess. I think Martin Wolf said briefly that the financial system had failed badly but all was moved swiftly forward to the 'big issues' - get credit moving ( yes, ofcourse), protect the emerging economies, rebalance the world output, dialogue with the Chinese, defeat western consumerism, change everyone's habits - you know, all those things no one is going to wave the magic wand at for years.

    Take China - they have their own massive problem of redistributing wealth to their huge peasant hinterland. They need to create a truly open and free market with which we can all trade with. They have social and democratic constraints, all of which create unequal competition. You cannot change all of this overnoght. Otherwise, there would be revolution.

    What can be done now ( other than the stimulus and fire-fighting) is to address the issue that got us here - the irresponsible intermediation of global capital through Wall Street, The City and the Banks. Put right the regulatory incompetence and lack of oversight so that confidence can be restored. If it was bad and irresponsible business for foreign reserves to be filtered to feed an irresponsible US/UK housing bubble, talk about responsible lending and lack of due diligence in the intermediation process.

    In the 30s everyone learned the lessons from greed - we should be doing it now, as well as making those responsible account for their actions.

  • Comment number 64.

    Fascinating stuff. I find myself nodding along with the idea that we need a completely different model for the economy, but I'm not at all sure I can free myself of the old assumptions. We mocked Brown for thinking he's abolished boom and bust - so we weren't surprised by the bust. But do we now really think he was right, and that there will be no boom? My guess is that there really will be winners: companies starting up now, not burdened by debt, which will spawn the next generation of billionaires (temporary or otherwise...)

    Like so many other people, I thought house prices were crazy - but now find myself wondering what kind of a mortgage I should get when I next buy a house. We've developed our attitudes to property, for example, over generations, and I'm not sure we will ever kick the habit of feeling we need to 'get on the ladder'. And if we don't make that change then prices will, one day, rise, and bying a house on credit will (for a time) turn out to have been a good idea. I can't help feeling we'll be listening to people boring on about house prices rising in, say, 2022 - and hearing them moan about a slump in 2025.

    Let's just hope not everyone is as stupid as me. Then again, watching the pace at which businesses are closing down, perhaps society as a whole needs a few useful, debt-loving idiots to keep it afloat.

  • Comment number 65.

    Lessons going forward for us in Britain to learn:
    #we are (and have been for a long time)living beyond our means and cannot afford to do so any longer
    #politicians have failed us but with our tacit blessing provided they maintained the image of prosperity
    #we need to properly invest in our children.
    #our welfare state is too generous and bloated and cannot be sustained at current levels
    #we are not a world power anymore, nor have been since half way through the second world war, so stop acting like one. Fight our own battles not everyone else's
    #America and Europe are not allies but competitors (remember France and the USA debating whether to help us or the Argentinians during the Falklands war?)
    #China and the other returning economic giants have no interest in bailing us out and will seek to bury us economically if they can
    #if we want to maintain British jobs then buy British for goodness sake
    #we cannot compete with low tech manufacturing countries unless we are prepared to have their living standards too
    #invest heavily in high tech manufacturing (together with our children) to focus on what the developing nations cannot (yet) do eg aero engines, gas turbines, power generating, sophisticated chemical and drug manufacturing etc
    #Invest in infrastructure, roads, public works etc which will last generations (and don't subcontract the work abroad)
    #lose the public sector gold plated pensions (another ticking time bomb every government has been too afraid to tackle)
    #hold a public enquiry into the current banking scandal, bringing the key players to book and fully expose the failings of not just the banking CEO's but the FSA, BoE and the Chancellor (like that will ever happen) Heads must roll our we will see it happen again
    #forget about social engineering and political correctness, let society evolve naturally
    #pass laws to make our politicians personally accountable for the mess or prosperity they leave behind them
    #be proud to be British, we can improve
    #thrift and hard work should be rewarded, spendthrifts and shirkers left to their own devices
    #our current political system has failed (how about a lottery for the second chamber from the electorate between 18-80 years old? That way we get a true cross section of society, black/white, Christian/Muslim, straight/gay, male/female in direct proportion to the real world. If selected you have to serve)
    #Government expenditure to be no greater then total tax revenue in any year

    I could go on but until we are prepared to take to the streets nothing is likely tpo change. Heaven help us and our children if we don't wake up and smell the coffee.

  • Comment number 66.

    61 John from Hendon

    When will stop digging?

    Following GE. Brown trying to support history, trying to not destroy his policy to date, ie modify not scrap. Has to be new broom, not tied to old policy and storylines. Brown determined to stay until bitter end.

    Re money, not interested in loads of money. What is the fascination with loads of money. To earn loads of money means expansion of trading base, ie steadily higher risk, plus employing boatloads of people, corporation structure, and associated loss of flexibility and responsiveness. We still are in strong growth here but will limit voluntarily.

  • Comment number 67.

    Why are we still referring to the recession in the future tense? As far as I know we've been in one for some time, which is a good thing, because logically speaking, it will end sooner.

  • Comment number 68.

    #34. glanafon:

    So true and so sad.
    It is a real disappointment to me as to how slight the scratch has to be for that most British of diseases, Xenophobia to rise to the surface.

    My wife who happens to be identifiably non caucasian though a EU citizen since birth and resident here for 25 years (tax and NI paying but unable to vote in UK elections, not eligible for many state benefits in the event of unemployment or illness contrary to perceived wisdom) was treated to a union rep at her company opining that British jobs were for British people and that her and a number Spanish and Polish collegues were to blame for the ills of the UK economy and should go home.

    It's racism pure and simple given a wafer thin veneer of patriotism in a tough time.

    That way lies protectionism, fascism and the concentration camp.
    It is an interesting point of history that the BNP/union agitators may like to think about, that concentration camps were also used for labour organisers to prevent disruption of the national Socialist state machinery.

    #53 - what you desire would be nice. But until as a nation we understand that providing care to our relatives is valuable and therefore costly to provide, which will mean that instead of a more nice holidays, more gadgets and working out where we want our 2nd home when we sell grannys' house, we will actually have to pay more for it either though taxes or savings.
    Costs of services are heavily dependent on wage costs - if we want more and better we have to get used to paying for it again and doing without to provide.

  • Comment number 69.

    I thought Martyn Wolf was spot on in his analysis of Britain's position but it doesn't seem to get much of an airing on BBC.Is it because we are now supposed to do the 'positive' thinking which is the PM's latest wheeze?I wonder how long it took the spin doctors to come up with the optimism message. They probably think we're all daft enough to believe that any truthful outline of the UK as the most vulnerable of the G7 countries is unpatriotic. Anyone who disagrees is 'talking the country down.'
    If it wasn't so depressing it would be funny.

  • Comment number 70.

    55. At 11:50am on 31 Jan 2009, Whistling_Neil wrote:

    "203. kikidread

    It's an interesting diversion, though for those I don't immeidately recognise it would be nice to know who wrote them in case I would like to explore their work further - lyrics maketh the music for me"


    The first place to go to should be Lee Scratch Perry's website and listen to the podcasts

    He was the producer who invented Reggae music and taught Bob Marley to sing slower so people could understand him. Most roots reggae is a cultural conscious meditation and positive vibration.

    The lyrics sound much better with music although they may be heavy on the drum and bass for your listening pleasure

    (most rap lyrics are on the web if you google them)

    No offence taken sometimes people bang each others head a little bit when suggesting different views and idea's

  • Comment number 71.

    68 whistling neil

    I'm white anglo saxon so are the rest of the family. That means we are immigrants, just not recent ones. The rise of comments against migrants or those seen as not mainstream culture etc is one of the most disturbing things coming to the fore. Those who should know better dwell on the issue because it is easy pickings and emotive. Does not solve anything.

  • Comment number 72.


    Like the list generally but one missing part of the NWO is the removal of our seeming obsession with rights.

    Blair talked about Rights and Responsibilities but in reality all we got were an endless steam of rights - our responsibility seemed to end at making sure we knew our 'rights'.

    To my view what we need to review as society is the concept of:

    Responsibilities leading to Rights.
    e.g. I have the responsibility not to cause harm to others and in return I get the right to be protected from being harmed by others.
    If I choose to harm others then my associated right is voided.

    Eye for an Eye which lead to the principle of moral hazard.

    So for Bankers - their responsibility to society is to sustainably provide funding for fair growth and fair profit - and in return they get the right to bonuses. When the abrogate this responsbility then their right to the fruits of that labour are forfeit i.e. all they obtained as a result is forfeit to society (bonuses, property, cash and shares). Failure to live up to the responsibilities needs suitable penalties otherwise there is no incentive to not do it again.

    No complete but a thought,

  • Comment number 73.

    Part of the problem is that the best strategy for countries which have vast natural resources and little true need to import, apart mainly from oil, is isolationism (at least on the IMPORT side) . Viz China, Russia, USA, Australia, Canada etc. Thus these countries will attempt to keep exports going ... which they will manage because the chinese in particular have wiped out our UK suppliers in many areas. They will however block imports by every conceivable means (a la france). This means that a poxy island trading nation headed by one G. Clown is whistling in the wind about keeping global free markets moving ... forget it!

  • Comment number 74.

    Well there we have it folks, at least they saved the banks!

    More civil unrest to come, as the recession deepens I'm willing to bet something nasty happens to the boat they are all staying on.

  • Comment number 75.

    Oh dear .. British jobs has been the last thing on a corporate executives mind for decades now.
    Corporate shareholder pleasure, has always chased lower costs which more frequently than not targetted labour.

    We now have the situation where there is next to no manufacturing in the U.K as that was off-shored in the 80's.

    We have next to no raw material export because appart from expensive to dig up coal, we have nothing to export. That was the 80's and 90's.

    We have little of a personal service industry now because it is all too cheap to have off-shored call centres, off-shore back office support and processing centres, and off-shored information systems development and maintenance. That's the 90's and 00's for you.

    And now that great saviour of all things GDP, the financial services sector has been shown to be a hall of mirrors and has like the proverbial house of cards, collapsed in a heap.

    And apparently the politicians in their "we didn't see this coming because we are idiots" fashion, want us all to shy away from any protectionist thoughts, even though they are doing it by the Billions of bank notes they are injecting into whatever they deem to be of critical (read highly political) importance.

    Globalisation was a devaluer of domestic worth and a devaluer of quality. People do not want quality anymore, they have become accustomed to cheap.

    Ask yourself this, do you really feel better off in your 20 quid jeans these days than you were 20 years ago in your (adjusted for inflation) 100 quid jeans.

    Most I speculate would say a clear no.

    But with such little exportable business conducted within the U.K now, surely for us protectionism should be a God send. The whole World could slap tarrifs on all products and have not one impact on the U.K since we do not export any of them.

    This is what poor governance over the last 50 years has done for Britain. We consider Margaret Thatcher to have been one of our greatest Prime-Ministers, and yet how much of the British economy declined as an exporting force. Thatcher saw the creation of a World financial centre in London as key to a 'new economy'. Well, looks as if that 'new economy' is going to bankrupt us, and leave many millions of us with no stake in our society.

  • Comment number 76.

    #70. kiki_dread

    Thanks for the info and link, off to explore.

  • Comment number 77.

    #66. glanafon wrote:

    "When will stop digging?
    (ans: ) Following GE"

    But the probable alternative government will be made up of people from a party even more wedded to consumerism and in consequence debt and under whose watch the matters that have got out of hand were instigated!

    I could say: which general election? 2009/2010 or 2014/2015? Frankly David Cameron frightens me just as much as Gordon Brown!

  • Comment number 78.

  • Comment number 79.

    From one of my favourite columns

    "...Goldman Sachs, whose research finds that the best way to make money in the stock market recently has been to hold stocks only on the day after the market declines.

    If you had bought the S&P just on days following a down day, the cumulative return since the beginning of 2008 would have been 36%. If you had only held the S&P on days following an up day, you would have lost 58%. (This ignores complications such as transaction costs.)
    ...Goldman's researchers found that this anomaly was the most pronounced in its records, which go back to the Great Depression. In other words, the trend has not been your friend....
    OTHER ILLUSIONS ARE BEING disabused. Among them is that the economy isn't as bad as you might think; it is decidedly worse..."
    And, a biblical reference
    "As former Federal Reserve Chairman Paul Volcker pointed out in a speech last year, the execs don't have to give back any of that money in years of mega-losses, so they grab what they can and let those who follow deal with the risk. Before Wall Street firms were public corporations, partners would have to leave most of their earnings as capital for cushions for bad years, often until retirement.

    In the Bible, Joseph earned the Pharoh's favor by urging him to set aside grain from bumper crops to prepare for the inevitable famine. Then again, the Egyptians didn't have anybody to bail them out."
    Where was Joseph when we needed him? Well, actually, he was still with us as recently as 2003, but who was listening?
    "AT THE HEART OF JOSEPH’S STRATEGY was a simple lesson: In a world of changing fortunes, long-term survival of an individual or a country can often be achieved by saving during the good years. This is a profoundly conservative strategy, one that must have evolved along with the development of agriculture, which from the early days was largely based on the planting of annual grain crops.

    This lesson has been ignored in more recent history. In the 1920s, times were good; during the postwar boom many people believed prosperity would last forever, and they spent lavishly on every kind of luxury. Then, in 1929, came the crash, followed by the Great Depression, a shattering experience for millions. Personal and corporate bankruptcies were legion, and survivors lived the rest of their lives obsessed by the need for savings and insurance.

    In 2003, a new generation is repeating the mistakes of the ‘20s. We have an administration that calls itself conservative, yet countenances with equanimity a rising tide of bankruptcies and unemployment, and a deficit of more than six trillion dollars......"
    Don't say we weren't warned.

    Providence and Fair Shares

  • Comment number 80.

    77 john from hendon

    Which GE - 2010

    You have to live in hope. Books will be bad so will concentrate minds. Hopefully. Otherwise emigrate. PS I'm not being cocky when I say ok here. Has to hold up, and we had a kicking in the last recession. Mood generally likely sullen in 2009 dont let it get to you.

  • Comment number 81.

    This whole thing has been driven by banks greed and exporting dodgy debt / risk to insurance companies. This is not the time, but in about 18 moths time governments around the world and particular in the UK & America should say to the banks, if you lend anybody more than 3.5 -4 times their annual income and the debtor cant pay tough!!! We (the state) will not evict people via the courts and then after rehouse them. You (the banks) will have to enter into an agreement with the debtor based on their real income.

    Radical i know but overnight banks and jumped up building societies will return to sensible lending (3-4 times over annual income) and we will hopefully see and end to boom bust built on bankers greed.

  • Comment number 82.


    The trouble is we do yet have even an Agenda to discuss what must change, why and what are the priorities?

    Here I place just a few topics which will be thought about by many, but probably not discussed, never mind implemented.

    The background to these thoughts is that I believe it is now inevitable that the "public will awake" and that Nationalism and stuff globalisation will be big themes, when it it comes to British Jobs for British Workers. We are after all, an island so strongly roused to Nationalism, if push comes to shove.

    1) The Public Sector ( particularly Qungoes) needs radical and massive finanicial surgery to the tune of at least bringing costs back ( considering inflation first) to 1997 levels

    2) National Insurance needs to be abolished and a simple income tax regime brought in which is transparent.

    3) Anyone claiming benefits for more than six months must report for social work in the Community. Anyone not working for over 12 months must wear special orange overalls. Interesting?

    4) All those on index linked pensions in Parliament and the Civel service have them capped and stopped where they are now, no more index linking

    5) Cut Parliament down to 300 -400 MPs all with completely transparent CVs and finances

    6) Place on Pubilc trial all Bankers and others who have called for rights issues, knowing that their Banks were either going down the pan, or insolvent

    7) Scrap the IT scheme for the NHS, scrap Trident and the rtwo big Navy aircraft carriers planned

    8) Bring back National Service, male and female

    9) Ensure new laws to keep women from having 8 embroyos born, after having six children already.

    10) Make accomodation available for single Mothers with one child to live with other single Mothers, not go o the head of the housing list.

    11) Allow Councils to build as many more Council Houses, not for sale, as possible

    12) New work or employment only to resident British people first.

    13) Cut any benefits or other payments after a max of six months to anyone who has the opportunity to return to their country of origin, if they have insufficent funds to survive here

    14) Massive change to schools and Universities to encourage degrees in sciences and IT in subjects which are required by Employers. No more social design on education but use education to allow the young to become truly marketable in any work place of the future.

    15) Have a reforendum in Scotland to consider full independence, then stop the Barnet formula

    16) Insist that the Olympics can only proceed by having a financial levy on all Countries taking part

    17) No third runway at Heathrow

    18) Demand an election and a Government of National Unity if hung.

    19) Sort out the Lords and give back the true sence of "Honourable Member"

    20) Jail any Politicians who take bribes or sleaze in any shape or form

    21) Identify, then fire then take pensions from the Senior people in the BOE, the FSA and the Treasury who caused this debacle. We must have accountability and real "political blood" if ever this broken society can strart to rebuild

    22) Any immigrants must speak English and swear allegience to the Crown. Help all those of other races now here and paying their taxes, to integrate with the British Way of Life and participate, white brown and black together. We need a felling of National spirit, pride and hope and Gordon Brown does simply not cut the cake and must go.

    23) Have a reforendum on joining the Euro, or getting our Sovereignty back. The British have truly lost the way and no longer know who they are, particularly the English.

    24) Kill off Political correctness, particularly in Social work and in Town Halls

    25) Change the tax system back to supporting hetrosexual marriages, male and female, supporting their own children.

    26) Build a tax free zone of innovation for New Entrepreneurs in places such as Newcastle or Glasgow or in South Wales. Really TAX FREE for first five years.

    27) Cut BBC licence fee in half, but make it totally independent once more from Government Politicians.

    28) Fire Jonathan Ross

    29) Bring, morals, decency, justice, fair play and local empowerment back to our Society.
    We need someone to trust and we have no one left in Leadership anywhere, who we can consider. Our politics has to "trust" at the grass roots again , local decisions by local people, de centralize completely.

    I could go on............

  • Comment number 83.

    Still No Clues of a Bottom for Stocks

    "Perhaps no other public official in memory has so well telegraphed his stances and intentions, and then adhered to them, as has Bernanke. Going back to 1999, he has made clear that a government facing deflation and a liquidity trap (Japan then, maybe us now) can essentially never go too far in dumping money into the system, penalizing risk aversion and, ultimately, raising prices and asset values (see

    When one of the levers he eventually pulls actually has the intended effect, the market will be caught off-guard. And, with money-fund assets at a historically high proportion of stock- market value and having risen at a 52% annual clip in the past 13 weeks (says Ned Davis Research), the fuel is there to move the market fast and far."

  • Comment number 84.

    I share relanceman's (52) concern at the amount of toxic debt that the UK government has taken over on behalf of taxpayers. When Roger Carr said words to the effect that there was an increasing understanding of why it was necessary to underpin the banks by taking over the risk of their bad debts, he was whistling in the wind. I think that the opposite is true.

    These debts will be a dead weight on the UK economy for years to come. As private debts the UK government did not need to take over the risk. In my opinion it would have been better to have let at least some of the banks fail and to have taken over only their retail functions.

    It is unlikely that sterling will be strong enough to bear the strain, so it will not only be future taxpayers who will suffer, but savers, pension holders and anyone else who has securities denominated in sterling. Prudent savers might well end up paying for the imprudence of others, as high rates of sterling inflation return for several years.

    Iceland has been obliged to take a different course by refusing to accept responsibility for the debts of its failed banks and seeking to join the Eurozone and abandon its own currency. It will be interesting to see whether or not this alternative approach works better in the longer term.

  • Comment number 85.

    Before the government agrees to buy any CDO etc, the bank selling should be forced to provide an inventory of EXACTLY what they hold in total. This does not mean it need to be valued at this stage, merely that we can know what the holdings are before these sleazeballs go off arbitraging the market/government price anomalies, because you can bet the farm the goverment will pay too much whenever the chance arises.

  • Comment number 86.

    If there is one point in the interview that I can fully agree with then it is Martin Wolf saying that we're not going back to 2006 and that governments - I am thinking particularly of the British one here - have not yet even understood. What I disagree with is that there needs to be a replacement for IMF and World bank. Correct that these are outdated. But they just need to disappear. The least thing that so-called developing countries need is another western instrument to control them. The world will be a better place, politically and economically without stuff like that and I hope this will materialise as the world order reshapes.

  • Comment number 87.

    You have to laugh at some of the loony comments on this blog - considering all the problems facing the country to have someone suggesting that Parliament should spend time passing a law preventing a women "having eight embryos born after having 6 children already" cannot be serious - I should also point out that even if Parliament did pass such a law it wouldn't apply in the USA when this particular event happened.

    Protectionism would be a disaster for this country - in 2007 the UK exported £220 bn of goods and a further £149 bn in services, giving the lie to those who say we don't export anything anymore. Exports are absolutely vital to our economy and protectionism would lead to huge job losses.

    Globalisation is in general a good thing for the UK and indeed the world. What we have learned I hope is that Globalisation needs to apply to regulation as well as free trade.

  • Comment number 88.


    I stongly disagree that globalisation is a good thing.

    How can it be right to wear a pair of jeans which cost 4 quid from a major supermarket when the maker lives on less than a dollar a day.

    How can it be right that strawberries are delivered by a plane so that we can eat unseasonal fruits at enormous cost to our planet.

    How can it be right that 20% of the planet consume 80% of its resources.

    How can it be right that non-elected huge global companies have more power over a country's people than governments.

    How can it be right that pensioners die of cold whilst global energy companies post huge profits.

    Stand back, it's not right!

    Think local, not global !!!

  • Comment number 89.

    Once again we have 'experts' telling us where we have gone wrong and where and how we are going to suffer. Why should we believe ANYTHING they say? These are the 'experts' who let this situation arise in the first place. Why weren't they screaming at the bankers to stop doing what they were doing?
    Growth, growth, growth, more money to their mates, the bankers. Must get back to how it was or their kids won't be going to public school anymore and they'll have to sell the second home in France.
    A great lesson for any kids watching - grab as much as you can, screw everybody else and the victims will thank you an bail you out.
    Where are the opinions of the ordinary folk or Trade Union Leaders?
    We need to get on the streets.

  • Comment number 90.


    "Globalisation is in general a good thing for the UK and indeed the world. What we have learned I hope is that Globalisation needs to apply to regulation as well as free trade."
    No, but if we must have it, yes.

    Britain has declined in food self-sufficiency from 72% to under 60% over thee last decade or so, although government figures must always be taken with a grain of (imported?) salt. I suspect the present figures are likely to be optimistic, noting the methodology was changed by NuLab ten years ago resulting in an upward revision (who's surprised?)

    So, at least GB "needs" the global market until we can feed ourselves again. Maybe the sinking Pound will make growing food here "viable" again?

    Meantime, enjoy your Peruvian asparagus (if you can ignore the jetfuel aftertaste)

  • Comment number 91.

    #35 grannyfrom...

    yes warmer weather would be welcome but forecast is for snow even here in London (anyone want to buy a shipload of LNG by the way)

    I think the chance of the UK happily adopting a Cuban approach to anything is slim; it's a shame IMHO but we don't have the rhythm anyway

    It would be nice to think that we might at least see the sense in moving to a more German/Scandinavian approach of social capitalism, which clearly works better than our under-regulated Anglo-American approach

    #62 jericoa yes I suppose you're describing a new kind of 'think-tank' - one that isn't dominated by the usual suspects or vested interests; it is tempting and might even be some use, but I'm leaning towards trying to set up a rural local economy idea based vaguely on things like the slow food or 100-mile economy ideas; there are a lot of interesting ideas gaining credence, with most of the people involved having decided to do their own thing and forget about mainstream political and economic systems

    the only pertinent legislation that our parliament could pass would be a law to abolish the current legislature - both commons and lords - and hold a national debate on what to replace it with, followed by referenda etc; a kind of political Come Dancing competition

    it would have been fun to have an alternative Davos though, either as a virtual web-based one, or as a real day conference in a hired hall; it's the sort of thing we used to do as university students; some uni students still very active in issues like the environment but have generally given up on mainstream stuff; it would be fun to set up an alternative G20 conference for April, I must admit

    could call it the geesh20 perhaps

    afraid I wouldn't be willing to consort with Paris Hilton in order to gain publicity but would be willing to date Kirsty Wark or Stephanie Flanders at a pinch

  • Comment number 92.

    Wide awake,

    "Stand back, it's not right!

    Think local, not global !!!"
    "" pre-industrial country towns and city neighborhoods, the people who needed each other lived close to each other. This proximity was free, and it provided many benefits that were either free or comparatively cheap. This simple proximity has been destroyed and replaced by communications and transportation industries that are, again, enormously expensive and destructive, as well as extremely vulnerable to disruption."

    "a people who are entirely lacking in economic self-determination, either personal or local, and who are therefore entirely passive in dealing with the suppliers of all their goods and services, including political goods and services, cannot be governed democratically -- or not for long."
    -- Wendell Berry. "Search for Common Ground." Home Economics, 1987.

    Common Sense
    Peace and Localism

  • Comment number 93.

    88, wakeupbritain:"How can it be right that strawberries are delivered by a plane so that we can eat unseasonal fruits at enormous cost to our planet."

    90, Ed Iglehart: "Meantime, enjoy your Peruvian asparagus (if you can ignore the jetfuel aftertaste)"

    These are only the extreme cases! The area where I now live (southern Spain) produces tomatoes, peppers, aubergines, cucumbers etc for UK supermarkets all year round. Delivered by truck rather than by plane admitedly. So we have the lunacy of transporting what is mostly water from this arid land (the "spaghetti westerns" were made down here) to the UK.

    With the pound buying less euros now - can anyone believe that this produce can NOT go up in price?

    As Ed says "Britain has declined in food self-sufficiency". The answer from the experts? Stockpile more cars!

  • Comment number 94.

    And then there's the matter of flying in the chopped-off genitals of plants to decorate our rites of passage....not even edible flowers

    Sanity will prevail (or not)
    Slainte! ed

  • Comment number 95.

    #92, Ed Iglehart:
    Excellent link - thanks!

    This is a classic -
    "Our model citizen is a sophisticate who, before puberty, understands how to produce a baby, but who at the age of thirty will not know how to produce a potato" -- Wendell Berry

  • Comment number 96.

    Crash's idea of globalisation is the UK financial services sector providing the credit for us to buy everyone else's goods.

  • Comment number 97.

    There is a fascinating possibility opening up where a clued up US president might actually be of some use to the world. I believe that in recent years humans competitive spirit has been hijacked by banking.

    Clever graduates have followed the money and got into finance. All very well. It made perfect sense. Loads of non essential folk making a living and keeping them out of mischief. Until it all went wrong. They have bitten the hand that feeds them.

    So what we need is a competitive system that keeps everybody busy but does not lead to financial ruin or war.

    Tall order? Not really. What we need to do is indulge ourselves in fundamental science. We could have clever folk in their ivory towers or garrets beavering away till the early hours coming up with hypotheses that need to be experimentally verified. We could then have whole university departments dedicated to teaching the fundamentals to up and coming brains. Then the results of this blue sky research would need to be checked out. Loads more scientists and technicians needed. Schools needed to teach folk how to do real things.

    And where does the competitive element come in? Between countries. Between universities. Between researchers.
    Once the dead weight tax of bankers is lifted from society then we would be able to afford all sorts of fundamental research. There would be all kinds of spin off along the way too.

    And here is the real clever bit. Universities would not be allowed to exploit the results of their researchers. Lets face it. All researchers want to do is research. That is where they get their kicks.

    Commercial enterprises should be allowed to raise money and exploit the results. Separately from the universities. If the universities are allowed to do this themselves then all that happens is that state funds end up being used to out compete existing companies.

    There. That sorted the banking system out and kept everybody alive and in work.
    For my next trick I will see what can be done with the worlds population explosion.

    Apologies for the lack of apostrophes by the way. This blog does not allow them..

  • Comment number 98.

    Recession? what recession.. .. there is no recession

    how much it is going to cost us(taxpayers!) for WEF, that including Robert's visit to Devos?

    New mantra --> Do business and earn bonusess on taxpayers money.

  • Comment number 99.

    The UK, in common with the rest of the developed world, is in a mess. Gordon Brown seems to be comforted by the thought that he was not to blame for the sub-prime mortgage fiasco in America, and if only that had not happened, his vision of a new golden age, with sustained improvement in living standards across the globe, would surely have come to pass during his watch and he would have been able to look forward to a retirement as the UK’s most successful ever PM.
    Even now, he is still talking about the current meltdown as if it was a minor hiccup during the birth pangs of his new golden age, which demonstrates that he has learned precisely nothing from recent events, and that his claim to have a grasp of the really serious economical issues is without foundation. If our current situation is not one for a novice, it is most certainly not one to be handled by someone who is incapable of facing the facts.
    GB clearly believes that the problem is only to do with our banks’ inability to lend because they got their fingers burned by becoming associated with the dodgy lending practices in the USA, and that all he has to do is get them lending again and everything will get back to normal.
    I have just watched the interview he gave with Christiane Manpour of CNN at the Davos Meeting, and I have to say he appeared to be much more relaxed, answered questions directly, with no sign of his usual defensive and dithering performance in the Commons, and was altogether more impressive, and very much a fish in his element. He made some very valid points about the need for change in the regulation of financial activities to become a global responsibility and for the threat of financial protectionism preventing this.
    He then expanded his thoughts toward creating what he called “Sustainable Globalisation”, which included not only financial systems, but marshalling concerted global action to combat global warming, and global poverty. It sounded like a new United Nations, but with teeth.
    I was almost swept along by his enthusiasm as he warmed to his task, until he let slip what he really thought this would be about when he turned his attention on the emerging market nations and said that they were adding to our problems by holding back too big reserves, thus depriving the world of consuming power.
    From this it is clear that his mission in life is to promote continued expansion of consumerism throughout the world, and that he has no concept of the inevitable consequences of continued expansion of any system in a finite world, whether it be banking, employment, air traffic, food consumption , car production.......etc.
    Sadly he seems to be having some success in persuading the rest of the world to follow suit.
    Sustainable Globalisation should be about maintaining quality of life across the globe. The big challenge should be about how to achieve this without requiring an ever increasing global GDP, which is clearly a mindless and unachievable ambition. The longer it takes the GB’s of this world to realise this, the bigger will be the ultimate disaster to the human race. Not the least of our problems is population growth, which is too sensitive a subject to even be mentioned, but it is intimately connected to all the other factors
    To end on a lighter note, I will always associate Gordon Brown with a new word which he has introduced to the English language..............”GLOBAL-DE-GOOK”

  • Comment number 100.


    point number 30. make toothbrush moustaches and the roman salute compulsory perhaps


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