Our Bonzo Economies

Sometimes, it seems to me, the disconnect with the reality that is being reported in the media and the other reality that isn’t getting much attention can make you question your own sanity. I’m talking in particular about the state of the global economy. Not a day goes by at the moment where we don’t hear self-flagellating reports of the state of the economies of Europe, followed up swiftly by news that the US economy is ‘on track’ and ‘growing’. 

Why is the US economy ‘growing’ (apologies for the quotation marks, which I find I have to use to denote verbal irony on an increasingly regular basis)? Is it because of the digital mint at the Fed relentlessly churning out computerized funny money? Or perhaps because the Americans have ‘grasped hard realities’ and are ‘taking things in hand’? Who knows? The subtext to all this reporting seems to be that we Europeans are a bunch of idle debt-junkie slackers and the hard-working Americans – led by the charismatic Mr Obama and his nice wife – somehow have chanced upon a magic formula for success.

This is of course all pig-stinking flapdoodle.

Nowhere recently have I heard any mention of energy, except in reference to the fantasy that the US is undergoing a shale revolution and will soon become a net exporter of oil. Of course, these claims don’t stand up to much analysis. The hype surrounding shale gas has brought in so much capital that it was inevitable that there would be a crash in the price of gas, thus rendering any further production uneconomic. As for the claim that the US will become self-sufficient in energy, well, that one might actually be true if demand destruction (called 'energy efficiency' by the media) in the home market continues – as it will.

And what portion of this fabled GDP growth in the US can be put down to QE? Injecting digital money into a pool of ‘money’ that is made up of 99% credit is like pouring a glass of clean water into an atrophied fishing lake choked with algae and expecting all the fish to start breathing again. They won’t. The ever clever Nicole Foss put it nicely last week on her podcast interview with Jim Kunstler (listen here) when she compared the whole credit vs assets thing to a game of musical chairs, with one chair for every hundred people. As the music plays, people don’t notice there is only one chair per hundred – they are too busy dancing to the music and having a good time. It is only when the music stops that we realise, and by then it is too late to adopt a policy of loitering next to the only chair as the others dance around you.

QE, it seems, is simply window dressing and it is being used to inflate another stock market bubble. How else to explain the rising stock market despite the falling economic activity (yes, the US experienced shrinkage in the last quarter, although this was immediately explained away by an army of analysts who said it was due to decreased spending on defence – nothing to see here). If the US economy is doing so well, why are asset managers in top Wall Street firms publicly buying shares and proclaiming their faith in recovery, but privately cashing in around seven times that amount and squirreling the money away to somewhere safe? What do they know that the media echo chamber isn’t willing to tell us? It just doesn’t add up.

Of course, we have QE over on this side of the Atlantic as well; indeed it is one of the Bank of England’s favourite policy tools at the moment. Like a doctor in a white suit, the Governor administers doses of QE to the ailing patient and then stands back to watch the result. The media pounce on any sign of improvement in the condition: More Land Rovers sold to the Chinese! Tesco had an exceptional Christmas! The alcohol and gambling industries are booming! [Hey, wait a minute on that last one, says the doctor.]

Unfortunately for the Bank’s surgeons, there is also Doctor Death, standing there in the shadows with his vial of hemlock which he drips into the patient’s ear muttering ‘Don’t worry, this will only hurt for a little while …’ in his sinister voice. Yes, the chancellor, George Osborne is busy making sure the patient never gets out of bed again with his relentless thumb-screw turning austerity measures, designed to placate the sleeping dragon that is the City of London.

Because if and when this dragon awakes, turns a cold eye over the economic landscape and decides to flap lazily into the sky and find another mountain in another country on which to roost, the true shambles of the UK economy will be revealed to all. Having off-shored a lot of the productive economy back in the 70s and 80s and de-skilled the work force to such an extent that most people can now only operate computerised systems to service the debt-strangled consumers of the fabled ‘service economy’ the only things keeping the economy afloat are a massive property bubble and North Sea oil.

But property bubbles aren’t exactly a sensible way to conduct business and North Sea oil and gas, as we all know, are running out fast. How many years left? Not many, that’s for sure. Economic policy makers are tying themselves in knots trying to find a solution to this unsolvable predicament. Interest rates are already so low they just can’t lower them further, boosting manufacturing won’t work because it tends to involve using energy that increasingly isn’t available – and anyway nobody can afford the capital - and so boosting the money supply with QE and tampering with the exchange rate are the only feeble instruments left in the tool shed. What they are praying for, of course, is that the magic Knight of Growth will ride in to save the day on his horse like a Findus ready-made lasagne in a just-in-time delivery system.

But, and here’s the downer, growth of the type we have been led to expect just can’t happen in a world economy where oil hovers at around $100 a barrel. With our entire way of life predicated to run off abundant and cheap oil, we are like flies gazing longingly at a glowing light bulb but finding our feet well and truly stuck to a strip of fly paper. Alas, this is the situation we find ourselves in, and there will be a lot of angry buzzing around us for the foreseeable future.

Of course, there’s a lot of talk about switching to new forms of energy, from wind power to thorium reactors to shale gas, in order to maintain the wasteful energy-intensive lifestyles we think of as normal. Each one of these energy plans is fatally flawed for various reasons, and in any case, switching an economy from a highly concentrated form of energy to a lower one a) Has never been done before b) Is prohibitively expensive in terms of money, energy and capital and c) Would take a minimum of several decades – or maybe up to a century if you go for a long-shot gamble with an unproved technology like thorium reactors. This doesn’t mean we shouldn’t try to salvage some form of electrical energy, but we should have started the transition thirty or so years ago, and there is still no serious talk of doing so, so we can reliably expect the lights to be going out over the next handful of years.

In fact, the policy measures pronounced by finance ministers and presidents day in, day out, remind me so much of a toy dog I had as a child. He was made of plastic, with clockwork innards, and had rough polyester fur glued onto his injection moulded body. His name was Bonzo, and if you turned a key in his belly he would emit a mechanical yapping noise and his little plastic legs would make him scamper forwards until he reached a wall or other immutable obstacle, where he would invariably fall over, the yapping noises growing ever weaker as he spent his mechanical energy on the useless task of spinning around on his side and barking.  

The UK chancellor George Osborne is almost exactly the same age as me, with only a couple of weeks separating us. Sometimes I can’t help but wonder whether out mothers shopped at the same toy shops, and whether Mr Osborne also had a Bonzo dog like mine. If so, perhaps the young George (or Gideon, as he was called in those days) sat in his cot staring at the spinning, yapping mechanical dog and somehow the image became ingrained in his world view and manifested itself decades later as economic policy.

It’s the only logical reason I can think of for the endless slew of ‘stimulative’ measures he is coming up with in the face of the sitting room wall of declining net energy. Expect more of the same until the key stops turning.

Greece: Part 2

Greece is liberally scattered with half-completed buildings and empty hotels ... but that's not the whole story

I had only been in Greece for a few days when I started laughing. It wasn’t a giggle or chuckling kind of laugh, but a deeper kind of gut rumbling, thigh slapping laugh that went on and on. I was sharing a bottle of wine with Dmitry, an ex-footballer, and we were talking about the situation in his country as bats flitted around above our heads in the twilight and the distant sound of bouzouki music wafted through the hot pine-scented air from the local taverna. We were talking about the politicians, or ‘comedians’, and the more Dmitry mentioned them the more he laughed.  

But enough of that, let me start by apologising for the piece of dramatic fiction I composed for my last post. I’ll admit that I couldn’t resist poking a bit of fun at the idea that the only alternative to economic ‘prosperity’ is total collapse and all-out lawlessness. Let's face it, that's what some in the media have led us to expect, but Greece, to all intents and purposes, is still a modern-looking European country and the casual observer would be hard pressed to notice any difference compared to a visit made a couple of years ago.

Anyway, let me get straight to what I think of the ‘Greek situation’ and be done with it. Here it is in a nutshell: Greece is okay. It’s a bit stale around the edges, like a piece of pitta bread left out in the sun, and the young university-educated career minded folks I sat on a roof terrace with in Athens one evening don’t like it one bit. This wasn't the country of opportunities they had studied so hard at university to take their place in. But it’s a country where suicide capitalism has been stopped in its tracks, leaving half-built concrete eyesores at the edge of every town and empty nightclubs and fast-food bars in places where they should never have been built in the first place. If your idea of ‘okay’ is the endless construction of new shopping malls, roads and airports, where everyone works in an office and has a mortgage and a new car every three yearsand kids are placed on a conveyor belt which processes them and turns them into worker/consumer drones, then I’m afraid to tell you that Greece is in a very bad way indeed.

But if you’re not that way inclined you might well ask what’s left now that the festering boil of suicide capitalism has been lanced. Well, the heart-breaking beauty is still there, the 1,400 islands with soils so fertile that the tables are laden with more fresh produce than people can eat haven’t gone away either, and nor have the 10 million or so adaptable souls, some of whom are actually unaware there is a crisis and still sacrifice bulls in a pagan tradition going back millennia. In fact if you view the world solely through the distorted lens of economics and power politics you might think that Greece should just jump onto a sharpened bronze spear and be done with it. But if you’re of a romantic bent and have the a bit of an appreciation of history you might just realise that this economic crisis has been whipped up by a media that is beholden to the power of what we may as well call The System, for want of something better.

It’s pretty hard to sit, as I did one evening, gazing out across Athens and the nearby Acropolis, reading a potted history of Greece and not come to the conclusion that this economic ‘crisis’ is a mere blip that will barely register on that country’s timeline. Financial doomsters may spew forth frothy talk of Eurogeddon and Grexit, but really if you can only see the world in terms of economic statistics and indicators then it probably does look doomed. True, it seems impossible for Greece to hang onto its euro membership – everyone I met said so – from waiters to a bank manager. But were they gnashing their teeth and pulling their hair out and begging to be allowed to stay in the ‘privileged’ Eurozone club? No, most of them just shrugged and said that at least they’d got quite a few infrastructure benefits from it (such as the superb Athens transit system pictured below) but now it was time to go back to the drachma. It’s the kind of intransigence that infuriates free marketers and talking heads on CNN.

A gift from the gods? Athens' super clean and efficient mass transit system

The party was over. The party was just beginning. From several people I heard it said that they had friends and colleagues who had ‘gone back to their island’. Many Greeks were turning off the office lights as they left and returning to their ancestral island homes in what Homer called ‘the wine dark seas’.  Foreigners,at least those that like to be called ex-pats, were leaving like rats from a sinking ship. They didn’t want to be in a country with ‘no future’ (although quite which country with a future they were returning to remained to be seen). Other foreigners, let’s call them immigrants, were getting one way tickets back to their home country courtesy of the police.

We, for our part (and this was a holiday, so you’ll forgive me for not spending my time cruising the back streets of Athens seeking out stories of people selling their mothers’ kidneys for pennies) stayed in Athens for a few peaceful days before driving across the Peloponnese and catching a boat to the island of Zakynthos in the Ionian Sea. Athens, if you will forgive me for being sentimental for a moment, has a special place in my heart. It was here that I travelled when I was 18 and fell in love for the first time. We had slept on a flat roof, crammed in with hundreds of other cheap-as-chips backpackers, and walked up to the Acropolis by day to sketch the caryatids (I was studying classics at the time – sorry if that sounds pretentious). Athens is now just as it was then: dirty, chaotic, ancient, romantic, and unpredictable - and still a great place in which to fall in love. It’s a mixture of the first and third worlds, and is dotted with ancient ruins and little green parks filled with snoozing lazy cats and old men playing backgammon.

On Zakynthos we stayed in almost monastic calm in a stone building on an organic farm with few concessions to the modern world. No TV, no computer, no mobile phones and no other mod-cons (except an aircon unit, which I must admit I found it very hard to sleep without as I’m not accustomed to 40 degree centigrade heat). Some mornings, before the fearsome heat of the day took hold, I would go for a walk through the nearby countryside, ogling the numerous smallholdings with their strutting turkeys and staring goats. I would reach a cliff and look down on a wide sandy beach where, if I was lucky enough, I might just see the shape of a huge loggerhead turtle hauling itself back into the sea after a night of egg laying, just as they had been doing for the last 150 million years. The air everywhere was suffused with the smell of wild herbs and myrtle, and the music of birdsong was always audible.

A typical smallholding in the early morning with inquisitive ram

It is a truly magical island, tenaciously hanging onto its charm despite the best efforts of the legions of young holidaymakers who tear around its coast during the day on quad bikes, partying all night and tolerably often ending up flying home in a black zip-up bag. Attempting to stay away from them wasn't too hard (tip: stay away from infrastructure if you want peace and quiet) and I spent quite a few days swinging in a hammock on a remote beach re-reading Homer and snorkelling with my daughters. Such a state of calm came over me that I even started writing poetry (I know, I know ...). In fact, as a survival technique for countering the toxic effects of media overload and peak oil over-contemplation I would highly recommend something similar. It doesn’t have to be a sun kissed Greek beach, just away from most humans and electricity will do.

I soon learned indeed that the island was girted with concrete and the seas filled with banana boats, party cruises and jetskis, but that the interior was more or less how it has been for centuries. Here, farmers rode donkeys, old women sat in the shade weaving baskets and people laboured in the fields bringing in melons, tomatoes and lots more besides. Roadside stalls were buckling under the weight of fresh bread, olive oil, wine feta cheese, fruit and eggs. Some had erected small signs that said ‘Supermarket’, perhaps because they didn’t know what a supermarket was.

Fresh produce was available wherever you went like at this 'supermarket'

Greeks, on the whole, are a friendly and talkative bunch (apart from the guy in the Athens souvenir shop who refused to serve us because he thought we were German). Between us, my wife and I have a good handle on eight languages, but Greek isn't one of them. So it’s a good thing that Greeks tend to be very good at speaking English and love to shoot the breeze with strangers. What most of them seemed to be saying was this: economically speaking, things are bad, but they are not half as bad as they are being made out to be in the foreign media. Madonna was a case in point, and her comments about starving Greeks did not go down well.

Still, the Greeks care about what people think of them and their country (as they well might with so much depending on tourism) and it was with some amusement that one night, on the television in our Athens hotel, I spotted a grizzled American talking about how friendly and nice everything was in the country. He looked familiar and on closer inspection it turned out to be Robert De Niro on some kind of hospitality PR offensive. Next to him sat John Travolta, who was making similarly encouraging noises. This, it was hoped, should be enough to convince jittery tourists to come back (I did speak to a couple of heavily tattooed English yahoos in a bar but they hadn’t watched the news for several years and were unaware of any ‘crisis’ or otherwise so they don’t really count).

Here’s my disclaimer: yes, I know that lots of people are hard up in Greece right now and we see and hear lots about the country on the news. We can even see people lobbing bricks and wearing face masks on the evening news (but tell me, what country in Europe doesn’t have a sizeable contingent of anarchists? – even Denmark has them). Greece has a debt problem and how did it get into it? It got into it because all sorts of dubious development was rammed down their throats in the form of loans to build the swanky new airports, highways and other things that are deemed necessary to be a global player in the 21^st century.

Yes, a lot of people were willing to swallow it and get wildly in to debt and, yes, the politicians and officials are sometimes crooked, just like they are in any other country that has passed its 500^th birthday. I’m not saying it isn’t hard for a lot of people in Greece right now, but in my opinion it’s going to be a lot harder for people in other countries soon enough. Greece, at least, still has members of what we might call a peasant class (and I’ll never tire of pointing out that peasant means ‘country person’ i.e. one skilled in making a non-exploitative living from his environment, and not a term or derision). In Denmark, for example, I doubt most farmers would even be able to start up their combine harvesters if the control software failed to boot up.

On the farm where we stayed, the owner, Dionysios (it seems almost every man on Zakynthos is called Dionysios after the island’s patron saint, including their celebrated poet Dionysios Solomos.) was a case in point. He might be a farmer, but he was also internet savvy and knew how to network with like-minded organic farmers across Greece, and I noticed an organic cooperative operating on the outskirts of the island’s main town.

Empty concrete shells were on the outskirts of many towns and cities

Oh yes, and those unemployment figures people keep talking about. What is it – 30% youth unemployment or something? Well, I can tell you that those figures are certainly wrong. Unemployment, you see, is relative and the kind that gets mentioned all the time is the kind of Anglo-American statistical unemployment beloved of economists. Greece, like other countries in southern Europe, has millions of invisible employers known as parents and relatives. No matter how idle or unemployable their offspring they can usually be found something to do stacking shelves in a shop or helping out raising children or lending a hand with the cash-in-hand cleaning business. And, yes, they probably claim unemployment benefit while doing so. Urban sophisticates in Athens would be horrified by this, but in truth it is they, when they lose their jobs, who are the truly unemployed. It must be particularly galling having left one’s family for a career in the bright lights of Athens only to find yourself coming back, tail between legs, and moving back into your childhood bedroom.

But perhaps more worrying is the rise of the far right. We made friends with Yannis, a veterinarian professor who lives in England but was on holiday in his own country, who expressed concern that the Golden Dawn party were on the ascendant. The cause of their recent popularity, he opined, was people’s fear that the destiny of their country was in the hands of foreign powers. Greece has no desire to be a client state of Germany, and neither does it go down well with the populace at large when the papers are filled with talk of selling off the islands to the Chinese. People, it seems, are being offered a choice between lifelong poverty and national bankruptcy on the one hand, or salvation in the form of foreign overlords on the other. Does it really take a genius to figure out why nationalist sentiment is being aroused?

It wasn't too hard to find signs of decay if you looked for them

So Greece has a lot of natural capital, is thinly populated, and has a bountiful supply of free energy in the form of sunlight. Why doesn’t it just declare itself bankrupt, devalue its currency, and get on with life (and get to keep the goodies, such as that nice metro system)? Life would be a lot easier without all that debt, plus the tourists would return because it would be much cheaper for them to be there. Well, the reason it doesn’t do an Iceland is because it’s not allowed to by its ruling political classes aka the Comedians, who are clients of the Eurozone central powers. Germany won’t allow it because of the feared domino effect which will result in quite a few northern European banks disappearing in puffs of smoke. Perhaps that’s why I encountered this in a field as I was passing through a town.

Putting China into the mix, it seems that the vast country hasn’t thrown in the towel over Greece either. Knowing that Greece has the world’s largest merchant fleet, China has pledged $5 billion in loans to its container shipping industry, allowing Greece to execute a coup that has left a lot of red faces in Germany. Greece sold many of its larger ships to Germany five years back when the good times were still rolling, but now Germany has no need for them because of the global slowdown in freight shipping and Greece is buying them back at bargain basement prices.  

But how long can the Comedians who currently have the power hold this act together? At the moment the crowds which occasionally gather outside the parliament building are kept at bay by the police – but when the government can no longer afford to pay them … what then?

The only thing to do is wait and see.

The Rise and Fall of the Cult of Economics

I fell into economics the way a drunk man falls into an open manhole on a dark street. Growing up I had zero interest at all in business or making money, instead taking A Levels in English literature, classics, French and, er, computer science. It was only when I began to falter in the latter that a careers adviser suggested to my father that I had no chance in hell of getting a job with my chosen subjects (this was the late 1980s) and I should study something a bit more ‘solid’.

I agreed because I had been in quite a bit of trouble with my parents at that time and decided I should try and do something conciliatory to please them. And so, at 16, I found myself trying to catch up in A Level economics.

Two years later disaster struck. My shift in subjects had caused me to drop back a year and, when the time came for all my friends to go off to university, I found myself staring at another year in a provincial town on the outskirts of Birmingham. By this point the urge to flee had become so powerful that I would consider practically anything to get me on the next National Express bus out of there. Someone suggested that a few of the universities had a number of ‘bottom of the barrel’ courses that they couldn’t fill because nobody wanted to study them. The next day I got on the phone and rang around almost every university in England, practically begging for a place to study ... anything.

And that’s how I ended up reading economics at Middlesex University. While my friends ended up in more salubrious universities, I found myself contemplating the squalid tower blocks and rising damp of north London.  

Economics, thankfully, did not start out as I expected. Both my father and the careers advisor had made the error of equating economics with business studies. It was nothing like it. The first year could more aptly be described as philosophy, and I found myself reading everything from Rousseau and Locke to Marx, Smith and even Schumacher. This wasn’t so bad, I chuckled to myself. I began to wear glasses, grew my hair long and hung around the student union drinking ridiculously cheap subsidised beer.

My fellow students were not so happy. They had thought economics was all about how to get rich. They didn’t want to know about poncey dead French intellectuals. This was 1989 and a short Tube journey away Margaret Thatcher sat in Downing Street and Harry Enfield’s ‘Loadsamoney’ was on the TV. What’s more, the Berlin Wall had just fallen and, although I didn’t realise it at the time, the very meaning of economics was about to change.

According to the text books economics (which derives from household management in ancient Greek) was all about making choices for how best to distribute scarce goods and services in the most efficient manner. By this very definition there was an implicit assumption that there may be more than one way of achieving this distribution.  But the lifting of the Iron Curtain put an end to all that. The Soviet Union had, by buckling and collapsing, revealed that there was only one prize-fighter in the ring worth backing: GDP growth driven capitalism.

My second year at university proceeded uneventfully, although the more interesting topics of the first year were now in the rear view mirror and I now had to study macro and micro economics, and other unsavoury subjects, including statistics.

And then something very unexpected happened. We were to spend our third year in the ‘real world’, at the end of which we had to write a thesis on some topical economics related matter or other. One day I went to my pigeon hole to check my mail only to discover an expensive looking manila envelope with my name printed on it in a classy looking font. I opened it, wondering what it could be, and discovered it was an invitation to spend my year working in the heart of the British government at Her Majesty’s Treasury on Whitehall.

When I’d recovered from the shock I had a haircut, went for an interview and, before I knew it, was working as an intern in the Economic Analysis division of the Treasury. It was an unusual experience, to say the least – the kind of thing for which people reserve the work Kafkaesque. There were about ten of us interns (back then we didn’t use the American word ‘intern’ we were simply ‘students’) and our job was simply to gather up huge piles of printed paper, punch the numbers into very basic green-screen computers (remember them?) and print out charts showing projected economic growth, and other things. At the end of each day we saved the data onto huge hard drives and then locked these in very sturdy safes.

The department in which I worked was where economic forecasts were formulated. Imagine a constant gnawing silence, punctuated only by the bonging of Big Ben right outside our window, with bald-headed clerks poring over charts and uttering occasional passive-aggressive curses. Occasionally a minister, or even the chancellor, would pop by and there would be a flurry of activity and much thumping of the piles of paper. My charts were produced and pored over and occasionally bits were added to them with black felt tip pens and the stressed-looking economists would get back to work again. That was what working at the Treasury was like.

To punctuate the boredom a few of us began to explore the cellars beneath the huge building, finding room upon room of dusty detritus from the days of empire. These were also Churchill’s war offices, and as such, piled up with maps and old furniture and rubber stamps. It was an eerie place but we managed to get a pool table put in one of the rooms and played sneaky games by candle light at every opportunity. The building was a huge labyrinth and nobody ever asked you what you were doing as long as you had a pen behind your ear and were holding a piece of paper.

At the time the Chancellor of the Exchequer was Norman Lamont. Our only contact with him was at lunch, and he would sometimes share tables with us. John Major had only just left the building, taking up the reins of government following Thatcher’s ousting.  At one point we were even invited round to Number 11 for a glass of wine – and I stood there wondering how the hell this had happened.

I didn’t learn anything useful about economics during my time there, although I did write a thesis about the inevitability of economic and monetary union was in Europe (a title suggested by my tutor). At least I got to see what an economist looked like (usually tired looking, bald, and prematurely aged with a wrinkled brow) and decided I didn’t want to be one. I also discovered that, as George Orwell had said of politicians, economists used language in the way that squids use ink – to obscure and confuse. Anyone who has sat through a Treasury surgery can testify to that.

At the end of my year I left to spend the autumn travelling on trains around the US, flying out the day before Black Wednesday – in which my erstwhile boss squandered billions of pounds to keep the pound from being annihilated on the currency markets as it crashed out of the exchange rate mechanism. (As an aside, I had just turned 21 and, like most of my friends, had never been on a plane before – which is quite amazing to think of today when people jump on planes as if they were buses.)

I finished up with an average degree and an aversion to economics as it was being taught. This was at the beginning of the Great Boom and in the years that followed everyone seemed to be losing their minds. Credit became widely available, house prices soared (which people treated as equity to borrow ever spirally amounts) and the BBC began to copy its rival CNN and dedicate masses of air time to analysing the minute movements of economic indicators. People, it seemed, no longer wanted to study history or philosophy at university –instead they all wanted to study marketing. Marketing, marketing, marketing. That’s all we heard! The dark art of making somebody want something they didn’t realise they wanted.

We were told, repeatedly, that we had never had it so good. Boom and bust had gone, history was at an end and all would be well if we just let the economists continue to steer the country, the scientists get on with their inevitable work of finding cures for the remaining killer diseases and the marketers get on with dreaming up new products on which to spend our plastic money which the boys in the City somehow created for us.

Economics had morphed into ‘growth’ and growth was the only way to keep the economy going.

But it was all an illusion, of course. All we had really been doing was sawing away at the branch we were sitting on. The huge range of food that we suddenly had in our shops was being grown in far flung invisible places, the cheap consumer electronics seemed to magically appear and the money we all thought we had turned out to be a mass hallucination. Ghost money, created out of thin air, possessed in turn the bodies of dotcom companies and real estate, only to be exorcised periodically.  And all the while the hidden engine of all this economic activity – oil – began to display tentative signs that it was nearing the summit of its production.

Natural gas was ballyhooed as a saviour for both the climate and the energy balance out of all proportion to reality and perhaps it was my economics degree that saw me getting a job actually trading the stuff on a computer screen, which I would describe as a bit like playing a slow moving computer strategy game against a bunch of ruthless opponents.

Could it be now, with economic growth in the west being anaemic at best and the streets filled with protestors, that we might see the crown of economics slipping? With growth figures grossly inflated by government spending and the euphemistically called quantitive easing, the system that promised so much appears to be breaking down. This could be a Wizard of Oz moment – we have already seen the grand wizard of the economic boom, Alan Greenspan, exposed for what he really is: an old man with old fashioned ideas of cornucopian invincibility.

But old habits die hard. Newspapers, obsessed with figures spoon fed to them industry cheerleaders, are having a particularly hard time adjusting to the cognitive dissonance of our age. For every article warning about the overshooting of fish stocks, topsoil, the climate, population ad infinitum, there are at least three promoting a ‘return to growth’.  It’s a bit like gravely warning an alcoholic friend that he is about to die of liver cirrhosis before handing him a bottle of whisky and saying  here’s something to make your recovery a little easier.  Note that every time there is the slightest upwards blip of a random economic indicator the television screens are filled with tame economists talking about how it is the start of a long delayed recovery (from the slump which they failed to foresee).  All they have to do is look very serious as they are saying it and when they are inevitably proved wrong they will explain in equally serious tones that a leftfield event had occurred which nobody could have reasonably predicted, safe in the knowledge that they will never be called to book for their misjudgement.

How economists have gained this aura of invincibility is simple: they told us what we wanted to hear for thirty years. In a rising tide they told us the boats were going to rise. They had their computer models to back them up, and they had oil so cheap it wasn’t seriously considered as a part of the equation worth bothering about much. All of it was couched in the kind of confusingly geekish economic shibboleths that the average Joe couldn’t care less about – just so long as his shares were going up and he could continue to live the frivolous lifestyle he had come to expect as a birthright.

But for all the advantages of being a messenger bearing good news in good times it can be a dangerous business when the news isn’t so good. The times of guaranteed economic expansion are drawing to an end, and it will be interesting to see how many economists’ heads end up on poles in the ensuing chaos. I, for one, am glad I didn’t continue down that path, even if it meant tossing away all the privileges that came with it. As such, I don’t dwell too heavily on economic news –and to do so has become an addiction for many.

This is just one of the many ways we are going to have to re-imagine our connections with the real world, and something I'll focus on next week.