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?