605 - alert and alarmed
I have clients now mentioning the “economic downturn” on a daily basis. The state of Wall Street is only tangentially linked to why they consult me. It sits on the far outskirts of our professional solar system and technically speaking, should not have any impact on the here and now.
But we are being taught to be afraid, be very afraid, and so we are.
Prior to this week’s Reserve Bank interest rate cut, our glorious leader already gave the banks a get out of jail free card. He signalled that it would be ok for them to not pass on any reduction in rate in full to their customers. Right on cue, most lenders are holding back 20-25 basis points of our whopping 1% drop.
We have effectively been dumbed down and instead of being outraged, feel gratitude about paying out a little less on the mortgage.
At home, discussions about the economy have segued from “recession” to “depression” citing various definitions of the “d” word. We consider ourselves fortunate for so many reasons and even with a limited income between us, our individual little piles of debt are quite manageable. However, even if I can get out of debt before the storm hits, my business is based on people having spare cash to take care of themselves and the Not Boyfriend, well he is an emerging artist. Enough said.
The thing that makes me maddest about all this is that we are being manipulated. Naomi Klein’s primer in disaster capitalism sets the scene so brilliantly for the recession or depression that we had to have. If you aren’t up to reading “The Shock Doctrine”, search for her on YouTube (or the likes) or spare 17 minutes to watch this interview with John Cusack (now that’s a dynamic duo, talk about thinking people’s crumpets!)
The take home message is this crash is predictable but there is much worse to come – further privatisation of resources, lower expectations of government and reduction in political accountability.
Only a revolution is going to save us all now. Or can we all jump ship and sail for Venezuela?