The Great Credit Crunch War

by Harvey Jones on 20 January 2009  |  38 comments
Tweet

Harvey Jones takes an apocalyptic look at the future of this country.

With questionable taste, politicians and pundits have been comparing the credit crunch to a war.

No question which war, of course. The War. The one Britons always hanker after in times of crisis.

Gordon Brown says the Blitz spirit will see us through, as if the banks were German high command (I won't compare them to Nazis - yet), and credit default swaps were Luftwaffe bombs.

Well, I've donned my tin hat and gas mask (bank debt is so toxic), and am doing my bit for Britain.

So that one day, when this is all over, my daughter will sit on my knee and ask me: Daddy, what did YOU do in the great crunch?*

And I'll be able to say.

Hostilities break out.

"The important thing to remember is that the credit crunch wasn't a war, although Britain did feel under siege. And we weren't fighting the Germans for once, although Spain, Italy and other eurozone members felt like they were.

"At first, nobody knew what was happening, or how bad it would get. We just sat at home in front of our wireless (laptops), desperate for news like everybody else.

"Hearing Prime Minister Gordon Brown's voice on the radio wasn't exactly reassuring. He kept pouring billions into the banks, but it didn't seem to do any good. What was that old quote? `Never, in the field banking, was so much handed over by so many, to so few.' So true.

The phoney war.

"In those early days, everybody tried to pull together. The papers ran lots of patriotic articles telling us how to save money. We cut down on takeaways. Repaired our old clothes. Drank less and tried to quit smoking. We even spent more time together as families, huddling round the TV watching Mamma Mia again and again to keep our spirits up.

"There was an air of unreality as well. Bars were still full. Restaurants did a roaring trade. We shopped.

"And me? I was lucky enough to have savings, and paid £20,000 off my mortgage. I switched utility supplier. Found cheaper motor insurance online. Shopped at Lidl and Aldi.

"We ate up all the old tinned food and packet soups that had been gathering dust in the kitchen, even those way past their sell-by date. It didn't do us any harm.

"Just like in the war - the proper war, the one we won - I grew my own vegetables. I sawed up some old planks and fed them into our wood burning stove. It was perishing cold, the winter of 2008, and fuel was expensive.

"What else? Well, I bought a pint of beer for a pound - we still had pubs in those days. I bought some CDs at the Woolworths' closing down sale (then spotted them cheaper online). We cancelled our holiday. My sister, your auntie Wendy, even took to knitting her own clothes. None of these things helped much, but it stopped us from feeling completely powerless.

Our darkest hour.

"There were early casualties. Woolies, Zavvi, Whittards, Wedgewood, but it got worse after the second banking bailout failed. Even slashing interest rates didn't help. People lost their jobs, their houses. Deflation was a constant menace. There was a run on the pound. At one point, the nation was only seven days from bankruptcy.

"Mr Brown ran a war economy - nationalising the banks was only the beginning. He was trying to pretend he was Winston Churchill, but the papers kept comparing him to Neville Chamberlain.

"People were angry. There were mass protests against the City spivs, looters and profiteers who had got us into this mess. Right until his bank was taken over, the chairman of RBS drew a £700,000 salary. Unimaginable now.

"I was lucky, I still had some work. My mortgage interest rate fell to just 3%, which helped. I chopped more wood.

"We were all spending less and less, even though we knew this would only make things worse. But the more Mr Brown urged us to spend, the tighter we clung onto our wallets.

The austerity years.

"When the financial system finally stabilised, we surveyed the damage. Millions of Britons were unemployed - and tens of millions more around the world. Property prices had collapsed. Imagine, we used to measure our wealth in bricks and mortar! But others had it worse. Greece, Italy, Spain, Russia, China and many others suffered riots and revolutions.

"We're still cleaning up the mess and trying to pay back our debts. That'll be your job, sweetie.

Goodbye to all that.

"So that's it. As you know, we still commemorate the credit crunch every year."

"Is that when we file solemnly down Canary Wharf, burning effigies of rapacious bankers?"

"Yes, although in Spain and Italy, they burn heaps of worthless old euros instead. What's up darling? "

"Daddy, this nasty boy in the playground called me a banker the other day."

"Darling, I'm sorry, children can be so cruel."

"I'm not a banker, am I?"

"No, you're not, and if it's up to me, you never will be."

"My friends all want to be teachers. It's a really important job, daddy, and the bonuses are much higher."

* Yes, I know that famous poster was from the Great War. in fact you can see it here.