We spent last week in France. Normandy, to be precise, observing a flow of Americans towards the north coast. It was the 70th anniversary of the D-Day landings. Nobody wanted to be left out – especially the veterans, for whom this would be the last remembrance.
Among them was 89-year-old Bernard Jordan. He had risked German artillery fire seven decades ago, as a 19-year-old junior officer in the Royal Navy. He wasn’t about to let the biddies at the nursing home in East Sussex stop him from going over last week. Reports said the staff at The Pines had told him he couldn’t go. So he put on his medals and left anyway. He didn’t tell anyone he was going – not even his 97-year-old wife.
By Saturday, he was back at home, given another hero’s welcome by friends, family, and caregivers.
Meanwhile, the end of the week brought news that the ECB had taken resolute action to boost growth. The Europeans’ bank cartel lowered its key lending rate. Instead of handing out money at 0.25%, henceforth, the bank will allow members to borrow at 0.15%. We have seen what 0.25% has done to Europe. Now, we will see what 0.15% will do.
We are waiting to meet the man whose pulse rises on this kind of news. He must be easily excited, or absolutely mad. The invasion of Normandy, it was not.
But most of the news, coming into the weekend, was positive. The report in the Financial Times told us that the number of people with jobs in the US has now returned to the levels of 2007. In other words, at least in terms of employment, the economy has finally recovered – after seven years. Of course, this is not exactly true, or even remotely true.
With a population growth of about 1% per year (immigration and births), there must be about 20 million more people in the US today than there were seven years ago. That the raw number of people with jobs has returned to 139 million is hardly an achievement. Assuming about half the new people are of working age, it leaves about ten million more Americans idling on the shoulders of economic life.
But it was the celebrations back in Normandy that captured headlines and attention. All over the world, the papers reported on the activities at the D-Day beaches. Universally, this undertaking of 70 years ago was regarded as a big success. Even in Germany, the regime change initiated by the Royal Marines and US Rangers is widely applauded.
And now, the remembrance of it brings new hope and confidence. If government can successfully manage such a magnificent and grand project – involving millions of lives, thousands of ships and planes, carefully coordinated schedules, supply lines with millions of tons of material delivered to the right place at the right time – all planned and executed under the strictest wartime secrecy – surely it can manage an economy.
Yes, D-Day gives you faith in mankind’s ability to do great things on a monumental scale. Like the pyramids; Angkor Wat; Stonehenge; Hannibal’s invasion of Italy; Caesar’s conquest of Gaul; it shows we can mobilise people and resources on a large scale and get things done!
Why then not avoid serious corrections/depressions by carefully guiding interest rates? Why not keep the economy at full employment by allowing credit to continue to expand? Why not let the field marshals at central banks guide the world economy to everlasting prosperity?
Yet, as near as we can tell, WWII was the US government’s last successful programme. Every war and every project since then has been either a draw or a defeat. We’re willing to bet that the current project – the battle to stop the credit cycle – will end in complete disaster.