Thermo-Nuclear Devices and the Economy

‘The Great British Baking Show’ Is the Key to Understanding Today’s Britain,’

wrote TOM WHYMAN DEC. 21, 2015 in the New York Times.

Tom Whyman of the New York Times, wrote, “With the (British) government apparently engaged in the project of extracting as much short-term value from the nation’s assets as possible, you worry that the very ground beneath your feet might vanish the moment it ceases to help some banker in London’s spreadsheet add up.”

That was perceptive, but being very British, Tom then goes on at length about the role of the Great British Bake Off, subverting more traditional signifiers (cricket, Pimms etc). He wonders where this is taking us as a nation. He wonders how much longer we will be a nation if banking, Pimms, and cricket give way to reality programmes on baking?

What is he on about? Nothing has changed, but Tom, being a liberal university lecturer, prefers not to call things by their proper name. He is right about government policy and spreadsheets, but having alluded to it, then is in denial about its importance. He tries to hide the relevance with some camouflage around a baking programme on TV. He wants to criticise, but not be a party pooper. He knows the party will end soon enough. Best not talk about it. Better talk about cakes. Tom is very British!

So what is the forbidden subject? The number two, or more precisely, two percent. Written “2%”, it looks insignificant, but it is huge!

In my working lifetime, the UK economy is judged to have doubled in size. (Counting cars and trucks on our clogged streets, that may be conservative). To keep the banks, politicians, shareholders happy, the economy should continue to grow at 2%. Two percent of a number plus the number, every year, is a geometrical progression. The longer the progression is, the larger the number becomes and the bigger two percent of that number becomes and thus, the rate of increase of that number is… increasing.

I can think of only one other system, which is allowed to increase as an expanding geometrical progression – thermo-nuclear bombs.

Two percent of our economy is now a huge number and cannot be sustained. Ask the poor people whose houses have been flooded at weekly intervals this winter, because we burn so much carbon to heat our economy, or look at the out-of-season tornadoes in Texas, which are flattening cities!

Chancellor Osborne needs to keep the economy growing, so heats the housing market. That makes the GDP look better and gives us a feel-good emotion because on paper we are richer every year.

OK! Thousands of families can no longer afford a roof to squat under, but if the economy is growing and international capital is still investing in the UK and the cost of families in B&Bs is socialised and doesn’t affect profits, what is there not to like?

Quite a lot.

People need to buy things, otherwise, we are never going to hit 2%, but, if people spend too much of their income on servicing their housing debt, they can’t buy enough.

“What a silly fuss,” says the banker. “Economics is easy peasy! We make borrowing a patriotic duty, and relax controls, so then people can spend. Interest rates are historically low so it’s all tickety-boo – isn’t it?”

Sorta, but not quite. Household debt is at the same level as 2008 – just before the bank crash. The US is easing interest rates upwards and…….. what happened in 2008, when the population couldn’t service its debt?

Yep! The debt was socialised and the profit remained in the private sector because capitalism works and it will create more wealth – in the long term.

We know capitalism works, because very rich people, especially bankers, tell us so, and they would not lie would they? And the chancellor says we must have growth in our economy.

Despite Tom’s worries about cricket and Pimms and our drift into baking shows, our British identity is alive and well. We know the unpalatable truth of the need for an infinitely expanding economy. We just declare it rude to talk about it.

“Something will turn up,” said Mr Micawber, that most British of Dickens’s characters. That sentence describes economic policy under global warming.

“Something will turn up.”

After 2008, I cringe at what it might be.

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