I have been struggling to come up with a suitable metaphor for the state of the economy at present; however, I literally fell into one this morning.
It’s my habit to awaken at 5 AM on weekdays to go running; as pedestrians and passing motorists tend to be unkind to joggers, this is an ideal time to avoid meeting anyone in particular. The late night drunks have usually passed out, are drooling on park benches whilst clutching empty cans of cheap lager or are recovering at home. Also, it’s generally too early for morning deliveries and the odd stares of van drivers. Today, after the first few steps, my shoe caught on a fissure in the tarmac and I fell over flat on my face. My glasses were knocked off and landed a yard askew, and my hands and left knee received some minor scrapes. The injuries themselves were relatively insignificant; it was the shock that hurt most of all. After a couple of seconds lying prone on the cold surface of the street, I gathered up my wits and my eyesight and pulled myself up. I felt a thin trickle of blood ooze out of my wounds. I cast a quick look at my front door: should I go back in and wait till tomorrow? Should I carry on? Too dazed, perhaps, to think straight, I proceeded.
The jog itself was slow and painful; my left knee let me know that there was a bigger problem than a scrape, and my hands were sore. However, I managed to complete the run with something of a sprint to the finish. At the moment, however, the knee is still bothering me, and my scrapes, while having been treated, still ache slightly: it’s likely going to be a while before I feel like I’m fully back to normal. I will go out there tomorrow with much more trepidation and care. I will probably again be sluggish in my efforts too. Indeed, I imagine I will be more wary from here on in. In the blink of an eye, things changed.
While the comparison is not direct, the present recession has been for most people like a sudden fall; those who warned that a boom based on a credit expansion was unsustainable were in a distinct minority. Most people believed the assurances of leaders like Gordon Brown, who insisted that the cycle of boom and bust had been abolished. If the economy showed any signs of trembling, people heeded the advice of George W. Bush after 9/11: go shopping. The good times were not supposed to end: politicians, central bankers, economists, financial journalists, academics, and the demi-gods of Wall Street were supposed to be looking out for us.
But here we are with the economy flat on its face. Its capacity to run fast and free has been hobbled by the injuries it has sustained: credit is not flowing as easily as it once was, and the banks are using the spread between their interest rates and central bank rates to make a killing. Unemployment means that consumers neither have the capacity, nor the will to spend their way out of recession. Furthermore, the burden of government and personal debt remains a subtle portent of doom lingering in the back of everyone’s mind.
Yet, the economy runs on. Most essential goods and services are still being provided: one can go into the shops and buy milk, bread, toasters, a new pair of shoes and a garden shovel. Some of the prices are being slashed in order to attract customers, some of the shops have been forced to close. A Woolworths near where I live was a prominent example: yet the economy continues to function, in a way. The building has been bought out by Boots the pharmaceuticals and cosmetics retailer, who will turn it into a “mega-outlet”, thus closing two smaller stores. Is this good? Probably not; the renovators have put together a makeshift airlock sealing off the site, which makes me suspect asbestos is involved. More pertinently, I’m not convinced the energy use of one “mega-outlet” will be less than two smaller ones.
What is truly sad is that policy makers didn’t use the opportunity to stop and think. In retrospect, I should have stopped, tested the knee, perhaps washed off the scrapes, before I continued running. However, at that moment, the greatest priority for me was to get back up and to carry on as normal. I didn’t analyse what made me fall until later, and I endured more hurt as a result of running in spite of what had happened; my left knee is arguing with me as I type this. Thoughts that occur in retrospect include: perhaps I should do exercise that’s more low impact, I am getting older after all. Perhaps I ought to get a treadmill. Perhaps I should avail myself of my university’s facilities. Perhaps I should invest in a better pair of running shoes, or wear elastic braces around my knees. At the time I stubbornly just got back up and tried to be normal. Policy makers want us to do the same: their present emphasis sounds rather like a Warren G. Harding campaign slogan, a “return to normalcy”. But “normal” turned out to lead to the state we’re in. While all falls are not avoidable, it’s a function of sanity to take rational steps to evade them.
Policy makers should be using this chance to realise that no, we can’t trust the bankers, the economists, the semi-dieties of the financial services industry: in pursuit of their own interest, they nearly destroyed us. Furthermore, many of them are still collecting outlandish bonuses; this was an ugly fact of life when the bonuses came from private hands. It is totally unacceptable in an era in which the financial industry owes its ability to draw breath to the taxpayer. In return, we are not being helped to our feet: while much of the press lately suggests that the worst of the recession is over, unemployment is still rising; we are still bleeding, hobbling along, trying to convince ourselves that we are what we once were. Symptoms scream at us and we ignore them.
I should add that we could have tried to re-cast the economy in a more environmentally friendly way. While much verbiage has been wasted on hailing the dawn of the new “Green” economy, there is little evidence of that happening. The only wind turbine factory in the United Kingdom has been allowed to close, in a period of rising demand for new energy and particularly the clean sort. Indeed, if nothing is done about power generation, Britain may run short on its electricity supplies within the next few years. In America, the “Cap and Trade” scheme proposed by the Obama Administration appears to be in the process of dilution by Congress. At the core of our global economy there is still a caveman equation: we burn stuff to light, to heat, to cook or to do much of anything else.
The best hope is perhaps that the individual citizen has learned something; maybe the pain of the present period will increase wariness. No, the future is not necessarily a march of progress, and economic growth isn’t always a good measure of how we are doing. Numbers, which look so clear and hard when printed on paper or the computer screen, can seem as if they are an immutable calculus of our well-being. However, it may be that how little they actually tell us is now becoming apparent.
Personally, it’s my intent to continue to solider through the rest of the day; I’ll perhaps leave early, and later, take a hot bath sprinkled with Dead Sea Salts. I’ll extend the knee and tend the wounds, and relax by reading Anna Karenina. I’ll be fine. It’s a pity that the subject of my metaphor can’t find respite so easily, for all of our sakes.