It might be the 6 coffees and impending fatherhood, but I’m feeling optimistic

Ok, so bad news abounds. It appears everyone is starting to agree: we have a growing economy, but only because it is being driven by the inflation of asset prices via 0.5% interest rates, and hundreds of billions of QE being pumped into the economy, and also by large population growth enabling a growing GDP number (as GDP per capita is falling). Even worse for all the newly emerging political demagogues, we can't stop flogging off our property to foreign investors, as it's the only thing stopping our balance of payments problem from exploding.

We also seem now to be nearing the start of the next recession, seemingly without many people having noticed the last seven years of ‘recovery’.

In fact, living standards have fallen month on month for almost 74 months in a row, with 4 exceptions, with even those exceptions looking a bit shaky statistically speaking (CPI ees lies! LIES!). Wages look set to keep on falling – so the economy is getting bigger as more people are moving here, but we’re mostly all getting poorer. I’m personally concerned by reports that the wages of people born in 1981 are likely to peak at 35. Bugger…

That Carney chap has also gone a bit quiet with his ‘Will we? Won’t we?’ teases on interest rates, with Haldane (his chief gimp) essentially coming out into the open and admitting that, no, rates are never going to go up, as it’s too late now and you can’t taper a Ponzi scheme. Although he didn’t quite put it like that.

One striking feature of our economy is the fact that not far off a trillion pounds is now invested in buy-to-let. In 1996, there were a few thousand BTL mortgages, now there are two million private landlords, with five million private rented properties (and about nine million people living in them). This worries me slightly, if only the fact that previous housing crashes have been tempered by the illiquid nature of the housing market: but presumably with ASTs, BTL properties could all come onto the market quite quickly in a falling market…but anyway, my housing market predictions are predicated on the fact that IT IS A MARKET when it’s clearly not anymore.

I don’t think this is unfair (‘fairness’ is a daft test of anything) but it’s not very efficient: imagine if that £1 trillion had been invested into productive parts of the economy and the bulk of those nine million renters were in owner-occupied housing, enjoying security of tenure and decent housing conditions, and there were as a consequence 9 million more financially secure consumers in the economy, rather than all that money being ploughed into buying houses that had already been built, and renting them out to people priced out as a consequence – what would our recovery look like instead?

Anyway, whatever: we now have a situation where the young generation are poorer than their parent’s generation. And they scare me: have you seen our young folk?! They are often outside the office. Neat haircuts. Polite. Soberly dressed, talking to each other about working hard at school, drinking less than previous generations - WHAT THE HELL IS WRONG WITH THEM?!

Despite what we read in the press, we have actually been here before. Quite a while ago, admittedly: but in the years leading up to the Enlightenment. This was a time when increasing wealth and living standards for a few at the top meant that infant mortality plummeted among the upper classes, whilst it remained high for the lower classes: essentially, the aristocrats started to outbreed the serfs. At the same time, primogeniture ensured that most kids from rich families actually ended up poor, and less financially secure than a lot of serfs – as only the eldest inherited anything. And yet, all the rich kids received a decent education. This led to a large group of well-educated yoof who had no money and were on the whole much poorer than their parents. This led to an explosion of, generally pretty decent, radical thought, and eventually led to the Enlightenment: an era of progress generally regarded as a Good Thing.

We have a similar situation in this country now: a generation coming up, much more educated than their parents, but overall much poorer. This could lead to great things.