The Blurt of Richard Davies

Chapter Five

The Crises - Part One. I've just been struck by a thought. I've been writing as if my reader - whoever you may be - would understand the context of the events that I'm describing. I realise that may not be the case, especially if the subtle rewriting of recent history goes unchallenged. So here; for those of you who may not know, is a summation of how we got to our present parlous state.

Even before the Crises things were grim; though most people had no idea of just how bad the situation really was, or would become. The point at which the process leading to the state we're in began has been widely debated, with some experts tracing the genesis of the Crises as far back as the Thatcherite free market policies of the 1980s.

What most people agree on is by the mid-noughties events had reached a critical point. By then decades of deindustrialisation, overseas outsourcing, and a misguided concentration on the service and financial sectors had left the nation unable to fend for itself. The economy was artificially kept alive by the casino of financial speculation; the issuing of endless amounts of government debt; a seemingly unburstable property bubble; and the income from offshore oil and gas reserves: It was a fools' paradise. Some analysts who didn't share the collective delusion warned things couldn't go on this way, but they were ignored until the Credit Crunch of 2007/8.

The near-meltdown of the world economy should have forced some new thinking and innovative strategies to reset the economy on a sustainable basis; but a logical response to the crisis was never going to happen while the policymakers had a vested interest in preserving the status quo. So instead of a jubilee being declared on the loans raised on assets that should never have been so highly valued and the banks allowed to fail in a controlled manner - with small savers and businesses protected by the statutory deposit insurance schemes - the losses of the private banks that were 'too big to fail' were socialised to sovereign balance sheets and became the taxpayers' responsibility.

The plundering of the state finances by the avaricious banking sector didn't end there. With the world economy at risk of sliding into a unprecedented depression, central bankers around the world panicked, and jointly agreed on the suicidal policy of Quantitative Easing - creating unimaginable amounts of virtual money to throw at the problem. The state-supported banks used this money to speculate on the markets and commodities, creating large profits for themselves at the expense of those who found themselves the victims of the inflation the speculation created. They also became dependent on a constant infusion of state funds, with the markets plummeting at the mere hint of the support being withdrawn. Despite this injection of liquidity into the system, the best that could be said for it was for the short term it stopped things getting worse at the cost of stockpiling stagflation for the future.

The cost of these policies was borne by those who weren't responsible for the crisis and could least afford to shoulder the burden. Public services and social security budgets were slashed, with the poor and disadvantaged being blamed by a government inspired whispering campaign for their own plight. They became the new Jewry; responsible for all of society's problems, with misrepresentative TV programmes deliberately encouraging prejudice against them. The judgmental tabloid press leapt at the chance to latch on to any story, real or invented, about the misdeeds of the 'chav' underclass.

The government was happy to see this diversion of attention away from the problems it had created, and used the climate of antagonism for their own vindictive ends. The official policy towards those in need changed from one of indifferent neglect to outright hostility. It was far easier to condemn unemployed people for their own predicament rather than admit the intractable issue of unemployment was the real problem which needed to be dealt with: There was also political capital and real money to be made from blaming the scapegoats, so that was what happened.