The Good, the Bad and the Ugly: Bye-Bye 'Buy-Buy'

For over a year now, since the financial crisis really took off, I have kept a crude, hand-written slogan over my desk which says 'An economy based on people buying things they don't need with money they don't have'. It is my way of summarizing what went wrong with the US economy (and, indeed, that of the entire Anglo-Saxon world) and why and how we got into this extraordinary mess. It is also a much-needed lifeline to simple ideas and clear thinking, in the face of reams of pseudo-sophisticated garbage that I receive in the guise of research and plough through on a daily basis.

Of course, it's a terribly judgmental statement. It's supposed to be. It seeks to pass judgment on a whole era, in which the mass of people - the sheeple - were swept up in a mania of consumption, which generated years of economic growth and made a few people very rich and many people feel rich. However, the boom was fuelled by borrowing and the longer it went on, the more it relied on borrowed money to keep it going. It was thus destined to give way to bust and so, eventually, it did.

Part of the zeitgeist of the era of plenty that has just ended was the idea that being judgmental is wrong. Fortunately, that - and a lot of other post-modern claptrap based on moral relativism - is likely to be securely stowed in the garbage can of history. The new era that we have entered may be poorer in purely economic terms, but that should make it better-off culturally by forcing it to jettison the politically-correct blather that was an intrinsic part of the culture of make-believe.

So I'm saying that most people spent the money they didn't have - an objective, albeit painful fact - on things they didn't need, which is a subjective opinion, but as near to fact as makes no difference. On the other hand, many people who did need things couldn't get them, because they didn't even have money that wasn't their own. In more professional terminology, that is stated as follows: many low-income families had no access to credit and were forced to maintain a low level of consumption, commensurate with their restricted sources of income.

Welcome, then to a blog that is likely to cover many topics, ranging across economics, business, finance, politics, sociology, demography, geo-strategy and lotsa other stuff. But I would be very surprised if the preceding paragraph doesn't prove to be the wellspring of most everything I write about, indeed of virtually everything that is happening and will happen around the globe over the next several years.

Who's got money, who's got access to money, and the relationship between the haves and the have-nots - that is what defined the boom and will surely be the defining characteristic of the bust years now getting underway.

I expect to trace this simple theme across households, ethnic and religious groups, cities, countries and regions. There is already much less money everywhere and this state of affairs is going to generate much more tension and strife between those who have, those who used to have, those who want to have more and those who want to have some. Remove the fancy terminology of politics, economics and strategy and you find that what's going on and what's at stake usually become much simpler to grasp - but, by the same token, starker and uglier.