I thought I should start this blog with a look back into the past.
We’re back in the happy days of 2008. (Not so happy for me, because the Economist lost part of its data base and along with it my earlier comments.) George W. Bush Junior was still President of the United States of America and all the experts of the White House officially still agreed that even though the United States were in a bit of a rough patch, the economy was still “fundamentally strong” (as GWB put it back on August 9th 2007) and even growing, however slightly.
All that despite the fact that throughout the year there was speculation that the economy might be headed for trouble, the r-word kept popping up all over the media landscape and opinion polls showed people agreeing that the economic environment of the USA felt just like a recession. (But of course, that was just because the unsophisticated people on the street couldn’t possibly see the economy as a whole.)
On September 26th 2008 The Economist wrote an article named “A shock from the House”. It was detailing the initial refusal of the House of Representatives of the first (perfectly insufficient but then unheard of) $700bn bail-out plans of late 2008. In an eerie precedent of the near-default experience (and subsequent downgrade from AAA to AA+) that the USA went through this August. This was followed by the usual plunge of the stock markets to mark such festive occasions and a short comment of mine that so far seems to hold its promise of becoming a prediction:
“What again is the standard procedure for an orderly default of the greatest economy and provider of the most important currency of the world?
It seems like we’ll need one.”
It was only weeks before the Bush Administration finally admitted to no great surprise at all, that the US economy had actually been in a recession since December 2007.