should warrant its own post (as part of the unfarily neglected "Anglo Disease" series):

Since recovering from recession in the early 1990s, the UK has benefited from a favourable world economy. Commodity prices have been low, and sterling strong. Globalisation, in particular China's entry into the international trading system, has pushed down manufactured goods prices, a sector the UK had all but abandoned in the 1980s.

The results for the economy were twofold. First, a positive shift in the terms of trade, as the sale of expensive financial services in exchange for cheap manufactures made Britons richer. Second, the steady fall in Chinese prices kept inflation down, and made economic management much simpler.

The final part of the story is the independence of the Bank of England in 1997, and a spectacular increase in public spending, starting in 2000. The result: a nice decade.

Most of those forces are now absent. China is starting to cause inflation as it sucks in commodities and its people increase their own consumption. Sterling has slumped. Capacity for further public spending is exhausted. In the next decade, growth will have to be earned through higher productivity, and inflation will be harder to control.

(...) compared with importing cheap Chinese goods, this kind of growth will involve hard work, to make British workers more productive.  (...) The economy may have to rebalance a little away from financial services. But nothing is likely to make the 2010s as pleasant for the economy as the nice decade.

In the long run, we're all dead. John Maynard Keynes

Another editorial piece woth noting:

Hard labour

Gordon Brown's pledge to introduce stronger rights for agency workers - and allow millions more employees to demand flexible working - is hard to swallow. This double dose of planned legislation would mark an extension of employment laws for which there is little need. Big employers will cope. But small businesses must be wondering what they did to deserve this body blow.

(...)

Downing Street's backing for union demands to give nearly 1.5m "temps" statutory rights to the same basic pay as permanent workers, albeit after a probable qualifying period of about 12 weeks, flies in the face of its earlier opposition to European Union proposals that should never have emerged from the deep freeze.

(...)

There is a limit to how much flexibility workplaces can accommodate. As more staff request flexible hours, the bias in favour of acceptance may weaken. Workers without children may resent having to cover for colleagues' absences. Bosses could say yes to staff they want to keep and no to those they can lose.

With the economic slowdown yet to bite, and unemployment starting to rise, this is the worst moment to introduce burdensome new employment law. Mr Brown should rethink before he makes another mistake.

Remember the rule:

• when things are improving, you don't want to threaten the upwards movement;
  
• when things are doing well, you don't want to cause the economy to slow down;
  
• when things are turning south, you don't want to make things worse;
  
• when things are going badly, it's the perfect time to "reform" and deregulate labor markets - workers will be in no position to resist.

There is no good time to share wealth with workers

In the long run, we're all dead. John Maynard Keynes

The euro is showing all the signs of strain of being the new international key currency. Manufacturers in Europe complain that its rise is imposing new levels of pain. Politicians in many countries across Europe are pressing to have more influence on monetary policy. For many of their constituents, the euro has become one of the whipping boys of globalisation. The euro is a much younger currency than the dollar was in 1944 and it exists in a political environment in which the governance structures for the new currency are not clearly defined. That makes the internal stakes within Europe much higher.

Yet the external, geopolitical stakes of currency shifts are high too. Unlike Britain in the aftermath of the second world war, the US remains indisputably the world's only superpower. It will resent what it will call the deflationary impact of the Europeans and deploy a formidable arsenal of diplomatic powers to defend the status of the dollar.

In 1944 the dollar became the world's key currency because the US was both the world's leading economic and military power. In 2008, the European Union has many economic advantages but also substantial political vulnerabilities. It is not easy being the world's main currency. It is even possible that the new strains might lead to the break-up of the monetary union.

So:

• European manufacturers are unhappy (true, but Eurozone exports are still at a record high);

• the US is unhappy, and will use a 'formidable arsenal' to change that (but the main weapon in the arsenal is Europe's apparently endless willingness to bend over);

As usual with econommists, reality-making trumps reality...

In the long run, we're all dead. John Maynard Keynes

J, your excellent deconstruction may help me get back to the right frame of mind this morning, Danke.  I seem to have awoken with Bah Humbug! disease, trying to reconcile containment vessel technologies with burning piles of garbage in Naples while the firemen get stoned and the cooks want organic food and no GMOs, and mobile phones produce bleh babies.

Whatever the Op-Eds have to say, your analyses always make me smile, especially when i remember that now i'm often paid with the world's major currency.

Skennah Kowa

Does Germany still have politicians willing to express leftwing ideas? Why not!?!

FT.com  - German president complains of financial markets 'monster'

Global financial markets have become "a monster" that "must be put back in its place", the German president has said, comparing bankers with alchemists who were responsible for "massive destruction of assets".

In some of the toughest comments by a leading European politician since the start of the subprime crisis, Horst Köhler - a former head of the International Monetary Fund - called for tougher regulations and the reconstruction of a "continental European banking culture".

Germany must renew its commitment to reform.

XYZ must renew its commitment to reform.

I see that written so often and am always miffed that noone in any position to do so will ask them "at what point would you say the reforms are done?"

The true answer would be never, short of de facto slavery. (of course, if they meant environmental reform, I'd be inclined to agree with the need for ever more).

I'm all for going down fighting if going down I must, but when you are not on a clear course to oblivion, why should change, any change, be necessarily better than no rush to change?
Or indeed, should Germany commit to reform, why not consider the possibility of reforming wages upwards?

"The womb that spawned that thing is fertile yet"

As a treat for Jérôme and the rest of us, surrounded as we are by the plutocratic press, lets revisit the Bullshit Britain artilce, written by Larry Elliot in the Guardian, some time ago.

When you get down to it, this is a country that tries to make its living from talk, talk and more talk.

One way of looking at Britain is as one big offshore hedge fund churning speculators' money while asset-strippers draw up plans for the few remaining factories to be turned into industrial theme parks.

And it really would not do to say that Britain is a servant economy, even though there are at least four million people "in service" and the proportion of the population employed by the well-off to do their cooking, cleaning, childcare and gardening is as high as it was in the 1860s.

More than half of the UK's effort in R&D is spent in just two sectors, pharmaceuticals and aerospace - two sectors, incidentally, where support from the government via the NHS and the Ministry of Defence has been considerable over many decades.

This article was produced to announce the realease of the book "Fantasy Island" by  Larry Elliot and Dan Atkinson. This fact supports the idea that words close to the truth can appear in the mainstream press only by quoting someone who is not a reporter, or something written in a format other than a newspaper.

Doom seems to be such a superior strategy that Continental Europe should consider (re-)packaging and exporting it, especially to the Anglo-American market.  Others than ET, I mean.  Make it sound happy, as in "the dawn of a doom of a dream" -- e e cummins

If sanity be culturally normative, then by the norms of this culture I claim insanity.