Sooner or later there was going to be another world recession. Everything was ticking along nicely, but was it? Government, corporate and private debt has been soaring once again. Memories are very short. The Covid 19 epidemics are not the cause of the precipitate falls in the stock and oil markets but they are the catalyst of a fear which is gripping investors. Some investors are more frightened of losing all their money than their health. But, of course, losing your health is contributing to the fear. Fear is now overcoming greed and for as long as this fear lasts there will be shocks to the markets.
During the financial crisis of the 1930's we had leaders who were able to lead the world out of trouble. One such leader was Franklyn D Roosevelt, who, in my opinion, was one of the greatest US presidents; he levelled with the US public and did not lie. He assuaged the public's fears and introduced practical measures to help working people. Printing money was not enough for him. He lead the US out of recession and prepared the American economy to be strong enough to fight and defeat the forces of nationalist Germany and Japan. Without him Western liberal democracy probably would not have survived especially in Western Europe. The Soviet Union would have won in Europe and, Western Europeans would probably to this day have been subjected to Stalinist type regimes.
Today we have few Western leaders with the competence of Roosevelt. They do not have the strength of character to tell the truth or the ability to act to create economies which support the common good. Some Western leaders are either liars or bullies and sometimes both. Administrators are faced with dealing with fake news and being forced to do what they are told by incompetent leaders. This is a recipe for disaster if the beginnings of a new economic and financial crisis are not cut-off in the making.
We can but hope that someone or something will pull us through. There is a message here for Britain, which is by far the most indebted of all the G7 nations. We have left the EU, but this is not the best time to leave its single market. The EU and the UK will be best placed to work together rather than drift apart if there is a financial emergency. Let's hope that common sense will prevail but, populists are short on common sense.
A place where sceptics can exchange their views
Monday, 9 March 2020
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