BBC News Online has a little piece entitled “US economy: What can be done to stimulate growth?”
It’s actually not so bad, with two of the four economists interviewed taking positions which aren’t 100% in favor of more borrowing and spending. Although, there is an obvious bias on the part of the online editor who chose them. The first up, Robert di Clemente (a generally sharp guy) speaks more truth than the other three combined, and makes real points about why we are where we are. The other three either say “Please, sir, may I have some more QE”, or suggest that we may as well get around to doing more of it.
Naturally, one of them is the BBC’s favorite far-Left economists not named Paul Krugman, one David Blanchflower. I’m sure many people here have seen him over and over again on the BBC (type his name in the search field on this blog).
What’s interesting is that only di Clemente says outright that Government policies on jobs and growth have failed. He also tells us something that nobody has ever said on the BBC before: 40% of jobs losses have come from three industries: housing, automotive, and finance. Think for a second about what this means, as two out of three are very relevant to the UK.
The reason for all those job losses in the housing industry is obvious: the whole thing was bloated way, way out of proportion, to an unsustainable level, by specific Government policies. Fannie Mae and Freddie Mac and the Government-sponsored sub-prime mortgage scheme all led to houses being far overvalued, and a massive construction boom by developers in the hopes of everyone getting to buy and sell and flip houses and buy-to-let, and all that. Does that sound familiar? It should. So when that bubble burst, of course there were going to be an awful lot of people out of work.
That doesn’t mean that we need to do something to raise the industry back up again to unsustainable levels so all those people can have jobs again, either. It means that many of those jobs should never have existed in the first place, and were actually based on an ethereal foundation. Things never should have gotten so out of hand. If many of those jobs hadn’t existed, it’s quite possible many of those now unemployed would have found work in other, more sustainable sectors, and would still have jobs now.
The automotive industry has been bleeding jobs for ages, and the bailout didn’t stop it from continuing. The loans and what amounted to taxpayer funding of union pensions didn’t add a single job, and hasn’t put a single person back to work. Nor can any QE scheme return the automotive industry to its former, unsustainable level. So again, Government policies did not and cannot bring back jobs.
Di Clemente also mentions the finance industry. I know what you’re thinking: “Hang on, the BBC told me that we bailed out the evil bankers so the greedy bastards who caused all our woes got off scott free and still got their massive bonuses, etc.” So how can there be unemployment in the finance industry? It certainly doesn’t jibe with the BBC Narrative.
In fact, 106 banks went bust in 2009, large and small, retail and investment. Last year, the number was 109. Some of these got bought out and absorbed into larger companies, which, or course, still means plenty of people made redundant. This doesn’t include venture capital firms, hedge funds, etc., which have also folded since then.
The other fascinating thing di Clemente mentions is that there are plenty of employers out there looking to hire, but simply can’t find the right skilled workers. Apparently all those liberal arts graduates with watered down degrees we’re churning out don’t have the right skills for real existing jobs. Does that sound familiar?
The next bubble to burst in the US is student debt. That’s another Government scheme artificially propping up an entire industry to unsustainable levels. Cracks are beginning to show, but it will be a couple years before it all starts to go south in the manner of the mortgage crisis. Watch this space, and don’t expect the BBC to tell you about it. It’s actually rather strange that the BBC has never mentioned this, considering how much energy they’ve spent telling you that student debt is terrible so the nasty Tories should abolish tuition fees like they do in wonderful Scotland. You’d think they’d be looking for some context which might back up their ideology. Only they can’t be bothered because they just know they’re right, so it’s not important.
In essence, di Clemente raises more interesting points in 340 words than an entire year of BBC reporting on the US economy. He basically blows all of Mardell’s and Flanders’ reporting out of the water. These are major issues, none of which are discussed openly and honestly by the BBC. He’s smart enough not to point his finger directly at the President, and instead blames the ideological divide in Congress. But it’s very clear from his statement which side he thinks is the problem, and it ain’t the heroes of the BBC. Why isn’t this man on speed dial instead of Blanchflower? Ah, I see I’ve answered my own question.
More damning is the fact that there are exact parallels in Britain for most of this. Yet the BBC never discusses it. Where’s the context? Why not look for lessons to be learned, BBC? Is it because you don’t like what you see and it will hurt the Narrative?