Life In A Global Junkyard

With Nokia debt apparently down graded to Junk Bond status in line with a number of sovereign states, Economonitor asking “Are The Big Banks Insolvent”, including America-Citibank, Bank of America and Wells Fargo amongst others and Financial Crimes look at the figures suggesting that Barclays actually made a loss, the world is certainly turning.

Meanwhile the Murdoch Circus begs the question of where did Nellie the Elephant get to and why.  She is not replying to her phone messages.  Koo Stark has launched a legal action against Newscorp which should keep much of the media excited for a while, doubtless to be followed by any number of publicity hungry celebrities.

The fall out from all this is hitting the UK government, impacting on the Euro block and this in turn will affect the elections in the USA.  Germany it appears has a Pirate Party now contending for political support which will certainly upset the electoral system there to an unknown degree.

It promises to be a difficult summer with unknown and unpredictable events.  It is tempting to try to guess but at best it will be a wild one and with little hope of either accuracy or reliability.  Fuses will certainly blow, but which part of the global machinery will begin to grind to a halt or suffer badly is open to bets.

Meanwhile we in the UK are debating how much government spending and on what and for what purpose.  A school of thought is demanding Keynesian policies, that is increasing spending to promote growth.  Others feel that cuts are still needed to bring debt down and concentrate on what matters.

That it is possible on the one hand there might be spending that could have a beneficial effect whilst in other areas cuts are a necessity is less discussed. 

Probably, because it is difficult in that where spending may be beneficial is not much in the way of being media attractive whiles cuts or tax increase are all too likely to affect a lot of very noisy people.

There is the sloppy thinking that almost any spending is good.  This suits the politicians who for many decades and more have sloshed money in the direction of big items with the advantage of suiting their friends. 

How often have we had major spending on vast dead loss capital projects that at some later stage just about manage to have revenues covering running costs to be told that this is a “success”? 

How often has spending gone in a direction where waste and fraud is endemic that has actually had long term adverse effects or results in damage impossible to repair?

In how many areas of government does spending go up inexorably despite it being increasingly evident that it is time for the party to stop and indeed to cut back seriously on the drinks bill?

In most of the major states at present we have governments of amateurs who know little else beyond spin and spend confronted by the need for serious appraisal in a world of scarcer resources and greater problems.  Simply throwing money at it is not going to work.

Add to this by the end of the year the political scene will have changed again and more radically, but the incomers will be no better than those at present in charge.