Some of it may be hard going for those without an economics doctorate but perhaps the Mpc and Gordon Brown should take note of at least part of it.
The ancient Greeks knew hubris to be one sin the gods will punish. When Gordon Brown, the British prime minister, announced “the end of boom and bust”, Jove must have checked his thunderbolts. Capitalist market economies are inherently cyclical. The private credit system is intrinsically prone to alternating bouts of irrational euphoria and unwarranted depression. Busts play an essential role. They clean up the mess created during the boom by inflated expectations, overoptimistic plans and unrealistic ventures. These become embodied in unsustainable household debt, productive capacity with no foreseeable use, excessive corporate and financial sector leverage and enterprises whose only asset is hope. The correction is painful, even brutal: unemployment rises, as do defaults, repossessions and bankruptcies
And this is the case that the governemnt will ahve to answer on the economy.The denial that the country could slip into cyclical economics again.Thus there was little incentive to control the surge ion house price inflation even thoiugh this pointed towards evidence of a boom.
The result as he says
was overexpansion of the banking sectors, house-price bubbles, unsustainable construction booms and excessively indebted household sectors. It will take two or three years to work off these excesses.