Global markets have been in turmoil for a month. A precipitous drop at the beginning of August was followed by a rally that clawed back much of the losses only to again see them wiped out in the first few days of September. This instability will continue until there is robust political leadership, especially in Europe which, for the moment, is ground zero for markets.
Here in the UK we are under the illusion that, apart from some local stock market turbulence, we're in no way as bad a shape as they are either on either the Continent or the US. I wouldn't be so confident.
The UK consumer is only a couple of rate rises away from total meltdown, business is being strangled by high taxation and a banking system that is locked down. The middle class, however much Clegg and his chums may hate us, are the engine of the economy and we're being hammered like never before. I have to earn for example, £1,000 a month before tax just to pay for my rail ticket to London; that's insane and unsustainable.
The thing that worries me most however, is the complacency of government. We are two steps from crisis and our leaders think nothing of taking three week holidays and popping home to take the kids to school. Exactly what planet do they live on? Whereever it is, it's an alien place to the rest of us.
The expected bonfire of the quango's and slimming down of government simply does not seem to either be happening or have any urgency about it at all. For example, the disclosure that over 100 quango heads have pension pots worth over £1m leaves me apoplectic with rage. How in the flying fuck does the head of the Olympic Delivery Authority have a pension pot of £1.354m?; the bloody thing was only conceived a few years ago. There I was expecting to see entire government departments scrapped but all we seem to get is more creative ways to asset-strip the productive members of society.
Last September, I wrote this,
"Still, while he salves his fluffy conscience there are a few issue to deal with back home. This is no time for either Cleggie or the Prime Minister to be doing photo opportunities, going abroad, taking holidays and what the whole paternity leave thing is all about I just don't know. They should be working night and day.
Just to remind them, we have a crisis here and a sense of urgency is required........ right now. Ambling along is not good enough"
The British Government have an opportunity to get on and get things done while Europe is burning. When Europe is finally squared away, and it will be, markets will turn their attention to the UK and at that point, being less bad than the worst will not be good enough.
At this point though, they are venerable to being out of touch and out of time.
If they want a starting point and guiding principle for cutting government spending here it is, (thanks to Grant Williams of Things That Make You Go Hmmm):
Pythagorean theorem: 24 words
Lord's prayer: 66 words
Archimedes' Principle: 67 words
Ten Commandments: 179 words
Gettysburg address: 286 words
US Declaration of Independence: 1,300 words
US Constitution with all 27 Amendments: 7,818 words
EU regulations on the sale of cabbage: 26,911 words