If the pink papers are to be believed then we are in throes of an economic crisis again. Which is strange cos it seems just like a year ago that we came out of it. Oh, wait. It was a year ago. Comparing something to 1929 makes for good drama but what is really dramatic is when you compare on crisis to a one just a year ago. And the one a year ago was called the Biggest That We Have Ever Seen.
Fact is, indeed stranger than fiction.
It seems what happened in 2008 was basically banks and business` putting their debt on to the books of countries. Wait a minute. Whats a country? A country is its Citizens. What are Citizens. The ruddy tax payers.
Ok. So basically a Ferrari driving investment banker messed up, then went crying to the Government because he really needed a Porsche Cayenne as a second car and the financial crisis was causing his bank to talk about giving smaller bonuses. The government read all that there was to read about big business colluding with big business and decided to continue the tradition.
Money gushed in the system like waves gushing about the Titanic (and we know from our knowledge of applied maths that IF SYSTEM = TITANIC, then WE = _____ ) and all was well it seems. However like any decent self respecting iceberg, the trouble was actually only partly visible while the rest lurked beneath sea level fattening itself like Bertie Wooster at one of Anatoles dinners.
This rescue by money printing became quite a trend and spread across the world like the latest Harry Potter book and most Governments gave in to its magical powers. However, it is for a reason that JK Rowling cautioned against using magic with muggles. Our central banks are no Gringotts and even though some of our central bankers look like Goblins, they are hardly as steadfast in their approach.
Thus the global oceans roared in giant waves of cash which only went to the banks and big businesses via the banks, low tide or high tide. However, with all this money a strange thing happened, no one was getting rich. It is a matter of fundamental disbelief for many people and they wonder where all this money went if the banks are still crying.
I`d require to be a wizard myself to answer that, though the amount of salaries some of these folk get may point to a direction. But you know what, banker bashing aside, the sums of bailout money were so enormous that even bankers well machined digestive systems would`nt be able to wolf all of it down.
So now we are in a situation where the top 50 of the worlds nations have a problem of too much debt. Some like India have too much debt and too much inflation. Some like China, have too much debt, too much inflation and too many bubbles. And this goes on like a game of drumsticks where for each country you can add another problem.
Add to this slowing growth in each of the countries except maybe Indonesia and Estonia and you have a problem that even the mighty Jeeves would not be able to solve by pacing the corridor or using his fish fortified brain.
So whats to be done? Well, a chap cant just Right Ho and go back to work when there is a problem of this sort on your hands can he? So one of the classes I dropped in at Harvard asked its students to sort the global financial crisis using systems thinking. I was intrigued… till the time the students started playing racquetball with hackneyed “bankers shouldnt be greedy” etc. instead of using any fresh thoughts. Our generation is a child of growth and we are nearly genetically incapable of dealing with a situation such as this.
Like the Austrian saying goes, The Situation Is Hopeless, But Not Serious. Becuase no one is serious about solving this.