The Lunatics are running the Asylum.

I saw this week that the IMF have admitted to "mistakes" in their handling of the Greek debt crisis and admitted that they should have done more to arrange bail-out funds earlier than they did.  Of course, they made veiled criticism of the Greek government in their comment that "growth forecasts had been more optimistic" than they should have been - for which read, mind you our predictions were based on numbers provided by the Finance Minister in Athens. so it's still their fault not ours.

I'm sure the ordinary unemployed and skint Greek in the street was well chuffed with that.

The IMF, in the fragrant French person of Madame Lagarde, has also been calling for some relaxation in the austerity measures that her, and the IMF, have been forcing down everyone's throats for the last few years, on the basis that they have led to too many stagnant and recessive economies that are bad for the Eurozone  in particular and more generally the global recovery.

Quite right too....austerity measures will only get you so far in resolving the situation, as other countries in the world have realized and reacted on.  Austerity is fine to rein in unnecessary government spending, and tighten up the tax receipts, but sooner or later you come to a point where you simply can't cut any more without causing real harm, long term, to your economy.  Too long with half percent interest rates and next to no growth is certain, at some point, to deter entrepreneurs from starting businesses, lead to existing businesses reaching the position where they are not making enough profit to support their expenses (because sales are slowed to a standstill because Joe Punter is scared shitless to spend what savings he might have) so have to cut those expenses.....  Meaning branch closures and redundancies......and more people claiming benefits, supported by decreasing tax revenues.  Which means more austerity measures by the government to reduce costs - which will mean cuts to services like health care, and education, and infrastructure projects......and so the vicious circle continues.

The US has realized this and despite GOP objections Obama has introduced job creation measures and tax reforms aimed at inflating the economy - i.e. giving Joe Punter more dollars to spend.  It seems to be working.  The Japs have also gone to town, with the new PM introducing measures that essentially have the Bank of Japan printing money and giving it away so that Punter-san can rush out and buy the latest Samsung mobile or Toyota motor....a government-driven spending spree that will replace austerity with a projected 5% inflation, for multiple years probably.  And PM-san is quite relaxed about that, even happy.  China, India, Russia, Brazil and the other emerging market economies have basically said recession? What recession?  What's austerity anyway?  And carried right on producing and selling cheaply and inflating their economies by eight or nine percent (admittedly while leaving millions to live in poverty).

All of which means that while the rest of the world starts flourishing again, Europe remains stuck in a crisis of its own making, clinging stubbornly to a policy that is now beginning to fail miserably.  The IMF told the UK they really should boost public spending and job creation to drag its economy out of recession and into growth, or risk a further debt ratings cut from AA......  Cameron, the privately wealthy Old Etonian PM, and Osborne, another privately wealthy aristocrat and Chancellor of the Exchequer - neither of whom have done a real days' work in their lives - merely smiled smugly and politely insisted they would continue government policy.

As an aside here - take a look at Osborne's Wikipedia entry, and in particular his "work experience" prior to joining the Conservative party staff and entering parliament.  It says that, after leaving Oxford in 1992 with his shiny degree in Modern History, he did a bit of part time work as a "data entry clerk", a week at Selfridge's store "folding towels", then some freelance writing on the Daily Telegraph gossip column, before joining Central Office as an "advisor" to various departments including Agriculture.  He was also a speechwriter for John Major, apparently.  Now call me cynical, but how the fuck does that qualify him to be an elected Member of Parliament, representing (in theory) the best interests of his constituents, never mind the task of running the entire economy of the United Kingdom of Great Britain and Northern Ireland?  It is an absolute fucking scandal and says everything you need to know about the parlous state of the British political system that allows a couple of idiots who are barely qualified to wipe their own arses to run the entire country.  Ye Gods, I'm glad I'm not living in the UK any more or I would be sorely sorely tempted to do something extreme - like voting UKIP at the next election.



So anyway, in the UK the Lunatics running the Asylum are insisting that they will not change their policies, probably because they feel it would make them look stupid (which they are anyway).  But what about the other main players, the other Asylums across the Continent?

In Germany, the situation is a little more complicated because there is an election due this year.  Mrs. Merkel of course wants to win it and remain Chancellor, probably because she likes the company car and house and all the trimmings, and because it means she's the most powerful woman in Europe if not the world (that old German superiority complex again....).   So she's not going to do anything that is going to piss off Herr Punter and spoil her chances - and any relaxation of austerity measures across the Eurozone could mean that Germany, as the biggest and richest economy, might have to dip into its pockets again to fund somebody else's spending spree.  Which would piss off Herr Punter very much.  So the lady's not for turning, but for different reasons than the Divine Maggie.

France is struggling with its own austerity program.  Hollande would love to scrap it and start spending his way to prosperity, as he said he would to get elected last year, but realpolitik prevents him doing that because it would piss off the Germans.  Italy is a basket case, and really hasn't a clue what to do - it can't even form a stable government, never mind one that can figure out whether to continue with austerity or start reflating.  Spain, Portugal and Ireland are basically broke and don't have any choice in the matter anyway - they have bail out funds to repay sooner rather than later, so can't afford to piss off the Germans either, just in case they need to borrow some more.



It's a mess really.  And for once, (whisper it.....) it's NOT the fault of Public Enemy No.1, the bankers.  No, they are being hammered just as much by the austerity measures as anyone else.  I know that from bitter experience over the last few months.  My old company sells software to banks and banks alone - it has no product lines in other industries at all.  It's a one-trick pony.   For the last few years, it has hardly made a single sale in Europe, because banks simply will not spend the money on a new system costing several tens of millions of pounds when they are so much in the spotlight over (allegedly) mishandling customer funds, miss-selling products to customers not competent to understand that product, false accounting, money laundering and God knows what else.  So my old company had to save money to prop up its own share price - so it closed a number of offices, and fired several hundred people.  Me included.  And it's still doing so.  And that in turn means that the contract market, the obvious next step for someone in my position, is flooded with potential contractors with not enough work to go around.  It depresses rates, and, worse, makes it next to impossible to find something else.  I can't see anything changing until austerity becomes a thing of the past and banks start spending again.  Whenever that might be....

No, this mess is wholly and completely down to politicians, many of whom (like the Two Ronnies - Cameron and Osborne) have never done an honest days' work in their lives and are as out of touch with Joe Punter's real life and needs as a Martian or visitor from the planet Zog would be, making decisions about austerity or inflation as a policy matter....for which they have absolutely no qualification whatsoever.



A final sobering thought.  The last British prime minister, as far as I can remember, who had a recognizable career before parliament, was John Major, twenty-odd years ago, who was a senior treasury manager at Standard Chartered.  It qualified him as Chancellor more than Osborne could ever dream of.....but as a Prime Minister - well, I'm sure you can all remember how that turned out.