Diary – 2 January 2010

There was something about the spectacle of the Queen grimly, and Tony Blair cheerfully, holding hands as they sang ‘Auld Lang Syne’ at the Millennium Dome at the end of 1999 that could have alerted us that the decade ahead would not be a good one. Who could then have imagined that the United States, so overwhelmingly successful after its almost bloodless victory over its only rival, would accelerate the pursuit of the most imprudent economic policy of any serious democracy since Britain under Old Labour? The Americans borrowed trillions of dollars from China and Japan, to buy trillions of dollars of non-essential goods from China and Japan while officially requiring trillions more to be squandered in worthless mortgages. With the exception of a couple of obscure contrarian economists, no one saw it coming. From Wall Street to the Nobel Prize-festooned economics faculty of the University of Chicago, the economic guardians of America were as mute and inert as suet puddings.