Wednesday, August 19, 2009
The world economy grew 1.6 percent quarter-on-quarter in the three months ending June 30. Yet excluding China's 14.6 percent rise in gross domestic product, world GDP was flat or contracted slightly, according to Barclays Capital.So it is not a world recession it was a western recession except that we now know Germany & France are back into growth & that Japan has grown by 0.9% over the last quarter. Britain & America have contracted significantly, the rest of the world has grown & China has grown 14.6% (which suggests their stimulus package wasn't really needed). The Japanese figure is particularly interesting because Japan has been in almost zero growth since 1990 despite or more likely because of continuous bank bail outs & public spending increases. It should be remembered that for decades Japan's growth was world leading & thereby transformed itself to a country on track to replace the USA as the strongest economy.
If what we actually have is a recession in America & Britain, with overspill into those countries that trade with them then we should look at what we are doing different & conclude that it is wrong.
According to Santayana "Those who do not learn from history are doomed to repeat it" & the lesson of Japanese history, which it seems they have now learned, is that preventing the market working by more government spending & bail outs only entrenches the failings. I would prefer that we do not, like Japan, have 2 decades of non-growth while the rest of the world regains the world average of 5%. This would leave the world, but not us, 2.65 times better off.
The "left," or those purporting to be of the left, will reject it because of the criticism of public spending. The "right", who is supposedly all for capitalism and free market, strongly supports bailing out their cronies in failing financial institutions. I don't know how no one has accused them of that hypocrisy.
They're both at fault. But that's just my opinion.
But, however, detailed analysis in our society is reserved for sport. i.e. Trying to figure out who at Celtic thought it would be a good idea to put George Samaras (normally good with with support on the wings) up front alone against the Arsenal back line?