Though this French poet and philosopher died 70 years ago, he left one aphorism that we are busily proving right even as we speak. “History,” he wrote, “teaches precisely nothing.”
That we fail to learn from ancient Rome or Saxon England is understandable. Our inability to take on board lessons taught a few years ago is rather less so. If the former failure betokens some ignorance and lack of analytical capacity, the latter is a sign of sheer idiocy and irresponsibility.
Unlike our powers-that-be, a reader of mine, a mortgage broker, can put two and two together. He looks at the way our government and banks operate, and realises to his horror that they are doing exactly the things that caused the 2008 disaster.
The practical conclusions he draws from this realisation turn him towards such practical steps as stocking up three fridge-freezers just in case. While envying his foresight, I’m too lazy to resort to such prudent measures. But I do sympathise with his reasons.
Economists agree that the principal reasons for the 2008 crisis were profligate lending by banks and promiscuous spending by governments. My reader is in an ideal position to see that the first problem is as bad as ever.
He observes banks dispensing cheap 90 per cent mortgages with the same cavalier insouciance that they displayed in the run-up to the crisis. “There is no way a bank would get anywhere near its money back on repossession,” he writes. “The mortgage pricing is sheer lunacy.”
The practice of building tottering structures of derivatives on the termite-ridden foundations of unsecured loans hasn’t abated either. At the time I wrote my 2011 book The Crisis Behind Our Crisis, the sum total of outstanding derivatives stood at an amount equal to twice the combined GDP of the whole world. It’s much higher now, which is another good way of ensuring catastrophe.
Our government, which illogically prosecutes freelance operators of pyramid schemes, runs its own finances on exactly the same principle.
Since George Osborne introduced his ‘austerity’ in 2010, much vaunted in some circles and much derided in others, our sovereign debt has almost tripled to £1.36 trillion, making it the only strengthening part of our sovereignty.
To make sure that the debt will never go down, George is consistently spending five per cent more than the Exchequer gets from taxes. Servicing this debt already costs us more than the entire defence budget, a disparity that’s guaranteed to grow because the debt will continue to go up, while the defence spending will dwindle away to nothing.
A tottering inverted pyramid barely balanced on its point is bound to do a Jericho sooner rather than later. If this coincides with the next general election, we may well be regaled with Jeremy Corbyn as prime minister, which will be the end not only of our economy but also of our civilisation.
Actually, I’ve changed my mind on those fridge-freezers. Can anyone recommend a good brand, reasonably priced?