Forgive us a moment of self-congratulation.
This blog was set up to say things that were obvious to many
people actually in business, but which were not being said in the mainstream
So over the last eighteen months we said a number of things
which few others were saying at the time – indeed, we often felt like a lone
Yet many of the things we said have since become
commonplaces in the media and subjects of political debate.
Here are some of the things we got right. We mention them
not because we want to boast – well, not much – but to show why reading this
blog is better value than employing highly paid analysts.
1 A crash was coming
in 2008 – a fairly obvious prediction in retrospect, but it still caught most
of the big banks and investors by surprise.
2 Recovery would
probably begin fairly quickly, so long as no one panicked – again, not exactly
rocket science, but this obvious truth escaped panic-mongers in the media who
were talking about the end of capitalism.
3 The negative
consequences will, however, be with us for a long time to come, especially in
those countries with big budget deficits – the people who cheered the stimulus
packages of a few months ago have just seen the bill and are beginning to worry
4 The problem with
the banking sector was not too few regulations but too many regulatory
authorities – the irony of calls for more regulation is that they initiated
serious debate, which has revealed that lack of regulations was not so much a
problem as poor enforcement by too many agencies.
5 Cuts in central
bank base interest rates do not mean cuts in the interest rates paid by
businesses – which are paying higher rates for less money.
6 The bank bail-out
was necessary, and has proved a short-term success, but the contradictions
implicit in governments owning banks are proving a major headache, as managers
are being ordered to increase lending and increase capital at the same time.
7 The bail-out of
General Motors has done nothing to transform it into a business capable of
making products that people want to buy.
government schemes to help small business have had little effect on
bankruptcies and unemployment, but higher taxes, especially property taxes and
payroll taxes, are definitely having an effect.
9 Higher rate taxes
are prompting many to contemplate emigration, which will reduce the tax base
further and make fiscal problems worse.
10 The reduced
private sector cannot carry on supporting a public sector that is actually