Tuesday, October 28, 2008

All about cycles

With all the talk of short term boom and bust, it's surprising that more people are not taking a longer term approach and looking back to the Russian economist Nikolai Kondratiev. Before he got carted away and shot by Stalin, he predicted that a fall in the world economy was due some time in the 1930s, having examined the previous two depressions from the 1830s and the 1880s. He also suggested the existence of long term economic cycles which last 50 or 60 years.

Well, the next global correction hadn't arrived by the late 1990s but this was perhaps due to the fact that governments artificially staved off the inevitable fall through a bloating of the credit markets. Now, with the economy sicker than ever under his ill-advised guidance, Gordon Brown wants to try and stave it off even longer by spending his way out of trouble. But we've already suffered enough from his profligate ways. As any responsible householder would tell him, if you're in a financial mess of your own making and up to your ears in debt then a bit of discipline and prudence might be the order of day.

More worrying still is that he's using the recession to bring forward even more of his reckless spending plans to coincide with, you guessed it, a general election in the next couple of years. If only he can hoodwink the electorate one last time. But let's be clear. His days of creative accounting and tax and spend by stealth are over. This is a blunderbus of the most obvious kind. Socialism in all its most self-interested misguided glory. Which at least provides an opportunity for the Tories to kill it off once and for all.

I just wish they'd stop pussy-footing around and get on with it.

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