another retrospective post. This one
appeared in June 2010 under the heading of “Jumping Beans” commenting on the
then Deputy Governor of the Bank of England and his suggestions about how we
should beat the bust.
Not a lot
seems to have changed in that time and it seems to be getting worse.
In 1961 the
year the Berlin Wall went up and “West Side Story” and “La Dolce Vita” hit the
screens, Viv Nicholson of Castleford in Yorkshire won the pools for the huge
amount of £152,000 (say 40 detached houses in Tunbridge Wells) and declared she
would “Spend, spend, spend”.
she was excoriated by the press and from pulpits. Sound and moral men told her to save,
exercise due economy and to invest wisely to gain a reliable income and by doing
so set a good example to her class and community.
she was a lady ahead of her time. Today
she would be regarded as a potential member of the board of the Bank of England
and Charles Bean, the Deputy Governor would be praising her economic wisdom and
sense of moral purpose. Vince The Mince
and Ed The Red would be hanging on her every word.
all the very obvious jokes about Mr. Bean I understand he has told us all to
loosen up on spending, take on extra credit, forget saving or run down those
you have and for that matter draw down on capital perhaps by extending
mortgages or going in for some fancy equity release caper.
All that is
missing is a big poster with the little children looking up at a pensive father
and asking “What did you do in the Great Recession, Daddy?”
should take Mr. Bean to a quiet room, play calming music (not Mozart or
Beethoven, they both died broke) and explain things to him gently in a soft
voice and gentle manner. Then I might
clobber him with the shillelagh I keep to welcome door to door salesmen and
debt collectors just to make sure he gets the message.
income has suffered steady deterioration in the last few years almost entirely
due to the relevant indexes being fiddled to understate real price rises for
the bulk of the population.
way in which major financial entities now govern how companies operate to
achieve very high and ever increasing rates of return on their highly leveraged
investments has impacted in all sorts of ways on many of our basic
and his little friends gave up the idea of regulation without realising how
they would impair basic consumer spending and saving.
despite not taking foreign or indeed any holidays recently my savings have also
depreciated in real terms because interest rates governed by the Bank have not
reflected the realities of the markets.
interest on any credit etc. that do relate to market conditions are still way
too high for any rational man to take them on.
have been on my own personal tax avoidance scheme and refusal to obey the
advice of my masters. We have simply
stopped spending on almost all goods that carry VAT or not absolutely essential
to basic functioning. Also, we have cut
our activities and therefore car and out and about expenses quite
manage quite well without all the heavily advertised consumer stuff that people
are urged to fill up their supermarket trolleys with. Yes we spend more time doing things that most
people no longer do, like eating leftovers and preparing foods by hand rather
than buying packaged versions.
and activity that were routine for earlier generations but forgotten now have
been reinstated. Threading needles and
not throwing away is now something we are doing a lot more often.
Bean, no can do. We are already closer
to the margins than we want to be. If
things go badly for us there will be no help from a shattered state machinery. If I were fool enough to do as he suggests
then I would in the same sort of trouble that so many have endured.
precisely the spending and credit ideas that he is recommending that have
broken so many families, ruined so many others, caused so many repossessions,
have put people into debt slavery for the rest of their lifetimes and reduced
so many pensioners to penury.
Is this his
vision for Britain’s
Can the expansion in the number of pawnshops and the scale
of their activity be helping “economic growth”?
We do seem to be eating more beans.