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The State Of The British Economy


An oft-noted observation people like myself make when they spend time in the USA is the myopic nature of the news on TV. A 30 minute news show will typically have about 12 minutes of national news from around the US, 5 minutes of local news, 2 minutes of weather, 47 minutes of adverts and 13 seconds of ‘world’ news detailing the world outside the US borders. Okay, those numbers don’t quite add up but you get my point – very little of ‘interest’ happens outside the US. You can watch BBC World instead but that seems to show you world news for everywhere except the UK.

However the current economic crisis affecting the UK (and rest of the world of course) is completely taking over the news coverage, particularly of the BBC, and it’s non-stop and as though there’s nothing else happening in the world. Or at least that’s how it feels.

They’re tracking every single layoff in every geographic region of the UK, tracking companies that might be laying people off soon, interviewing people about how worried they are about their jobs, how they’re coping with being laid off, how getting laid off was the worst thing to happen to them, how getting laid off was the best thing to happen to them, how the banks are in trouble, how the shops in the high street are going under, how the pound is incredibly weak, how car manufacturing is in trouble, how us tax payers are bailing out the banks, and on and on and on. I’m getting recession overload and if another Labour politician comes on and starts deflecting questions about how it’s not their fault and that it’s a “global problem” I think I’ll scream. But personally I take everything I see on the news with a pinch of salt now.

The pound falling against the dollar

You see, I heard a very interesting interview on the radio with an American economist who was asked the simple question: “Why is the pound so weak against the dollar?”. His answer surprised the presenters to such an extent that they were lost for words.

He said that investing in UK government bonds is considered just as risky as investing in the Royal Bank of Scotland – a bank that was in such a bad state that it had to be bailed out by the government in December. UK government bonds are supposed to be rock-solid, safe investments that you can depend upon. To compare them to a British bank run into the ground by greedy men in suits doesn’t say a lot for the opinion of the outside world on the UK government. He also went on to say that outside the UK there’s a real belief that the UK government itself could go bankrupt. Since our current Prime Minister was the Chancellor for 10 years and used to exclaim that “the days of boom and bust are over”, it’s particularly ironic that he was in fact setting himself up for a fall. Instead of saving in the good times, the government appears to have spent like billionaire bankers and left the economy in such a fragile state that the credit crunch could well finish us. And yet until then I’d never heard this point of view – a point of view originating outside the UK – mentioned.

A lost lambI know that “no news is good news” and ultimately they’re trying to get as high ratings as possible, but the 24 hour news culture and US-style approach to sensationalist, on-demand, instant-coverage, soundbite-based reporting just makes me want to switch off. Whatever happened to one or two news shows a night where there was actual analysis of what was happening instead of a constant drone of uninformed, knee-jerk, twitter-style noise? All noise does is confuse people and if you need people to act sensibly and behave in a way that might help a country out of recession the last thing you need is more confusion. Individually people are pretty smart but collectively they tend to act like sheep, and sheep confuse easily. Baaaaa! 😉

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Creator of John's Background Switcher. Scotsman, footballer, photographer, dog owner, risk taker, heart breaker, nice guy. Some of those are lies.

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  1. On some fundamental level I don’t really understand how Capitalism is supposed to work. My Dad was an accountant and he always used to say “Neither a borrower, nor a lender be”* and that’s how I was brought up. Fortunately for capitalism, others had different ideas, otherwise without borrowing or lending the whole concept wouldn’t have got off the ground!

    Where was I going with this? Oh yes, so even now I find the idea of spending more than you earn to be quite shocking (my mortgage excepted) and yet that seems to be considered the norm now and not just on a personal level; every country is in debt to every other country. Even the U.S, the only remaining global superpower and for so long the powerhouse of capitalism has a national debt of (at the second of writing) $10,633,588,627,721 and it turns out that $320 billion of that is owed to the UK! The numbers are so large as to be meaningless and you wonder who keeps track of it all and enforces it, but I do remember hearing the other year that the U.K. had only recently finished off paying its WWII debts to the U.S, so there obviously are arrangements in place for these debts to get paid back.

    So we have a system where every country is hopelessly in debt and yet life generally carries as normal. What sort of model is that? If I were to get hopelessly in debt as an individual then eventually bailiffs would come round and start taking my possessions away and I could end up in prison, but no-one seems to mind when you scale that problem up. The other thing that surprises me is that lots of people seem genuinely shocked by the current crisis, even though history shows time and time again that these things are cyclical. It’s all doom and gloom in the media at the moment, but you know damn well that house prices will be rocketing upwards again in about five years.

    So Capitalism doesn’t really work that well and Communism wasn’t much fun. The sad fact is that if as a species we could only “get over” money then there are more than enough resources for everyone in the world to have a comfortable life. I guess we’re not ready for a Star Trek existence yet.

    Oh, I could’ve have written this response on my own blog. Damn!

    * I’ve just looked up the origin of “Neither a borrower, nor a lender be” and it turns out to be from Hamlet!


    • Ha ha, my first thought was that you could have written this as a blog entry yourself! 😉

      You’re right though, the attitude of buy now, pay and think about it later seems to be the norm but personally I prefer to save up for things first and buy them when I can afford them. Maybe that makes us dinosaurs but it’s just common sense to me. So if Communism doesn’t work and neither does Capitalism, and we’re agreed that the Star Trek world is some way off yet, then what does that leave? Anarchy? Some might argue that the warning signs are already there…


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