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My brain isn't working well at the moment, so I don't think I can help with the LTE per se.

An economy based on ever increasing numbers of lawyers, bankers, accountants and journalists may sound like a horrible idea but it has worked well for Britain.

This quote from the linked article seems very important to me. Fundamentally, the notion that "advanced Western economies" are moving out of manufacturing and into services, as they previously moved into manufacturing from agriculture seems linked to building an economy of laywers, bankers, accountants and journalists.

What we appear to be seeing is an admission that the entire model relies on the asset bubble.

And perhaps that is the key issue for the LTE. This is not just about Britain being vulnerable to swings in the global economy, after all, a country dependent on manufacturing can equally be vulnerable to a downturn in the world economy. The issue here is that the modern British economy has been founded on a particular set of extraordinary conditions (low interest rates, asset bubble) that the FT has tended to assure us were "here to stay, a new world, the great moderation" but now look to have been just a temporary circumstance.

As the oil or gas can run out for a resource dependent country, has this "natural resource" of "Greenspan low interest rates" also gone for good? Is the financial sector destined to shrink as the coal mines once did?

by Metatone (metatone [a|t] gmail (dot) com) on Mon Dec 10th, 2007 at 10:13:34 AM EST
I've used your point about the "resource" in my first attempt below.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Dec 10th, 2007 at 11:48:07 AM EST
[ Parent ]
building an economy of laywers, bankers, accountants and journalists.

The Ministry of the Plan is getting larger and larger.

All those profession are interested in planning, allocating resources, selling the  current set-up... Not actually producing "stuff" or even useful services.

But they said that bureaucracy is overblown in state-centralised planning, that it can't happen in a neoliberal utopia.

Obviously false. And as in any hierarchical system, those doing the organizing keep a growing part of the resources for themselves. Parasites.

And they have the nerve to wage a war on the unemployed, and the working poor...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Mon Dec 10th, 2007 at 02:44:32 PM EST
[ Parent ]
From where I sit, the UK economy looks like an aconomy based on ever-increasing numbers of real state agents, hairdressers, convenience stores, and digital photo printing/internet café businesses.

I wonder what will happen if the housing market freezes and real estate agents start closing branches because there just isn't the volume of sales to support all the jobs.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Mon Dec 10th, 2007 at 03:28:24 PM EST
[ Parent ]

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