We're not having enough sex. That's the reason for this recession.
Before I explain this, imagine you're driving a classic car with your partner, Prudence. This car not only looks a million dollars with its curvy lines, long bonnet and round headlights, it's a miracle of mid twentieth century engineering. And because everything was so new when it was built the driver is intimately involved in the minutiae of engine management. There are dials and gauges for everything. Oil pressure. Oil temperature. Oil level. Water. Vacuum. Voltage. Amps.
Whilst the car used to be in the garage all the time, recently it's been so reliable you've come to believe that you've finally fixed all the problems. Now you hardly even look at the gauges. But today you're driving happily along with your partner beside you and you happen to glance down and one of the gauges is off the scale. Your first thought is that the gauge itself is faulty. You tap it, hoping it will just flick back to its normal position. It stays stubbornly off the scale and you decide that it's probably not important, especially whilst you're having such a good drive and there's the promise of better still this evening with Prude. The engine seems to be producing so much more power than it used to. It's really unlikely there's anything wrong with it.
Sometime later you look down again. Now even more gauges are off the scale. Some are swinging wildly from one extreme to the other. Still, power's still coming from the engine and you confidently tell your passenger you know what to do. You tweak some controls and that makes some of the gauges look a bit better, reassuring Prudence.
Then smoke starts coming out the engine and it's impossible to pretend anymore that there isn't a problem. Later still you hear a loud knocking noise. Again, you reassure your date by confidently declaring that it's probably just a temporary blockage of fuel so you drive even faster. Eventually, you run out of fuel, the knocking gets worse, you lose all power and grind to a halt at the road side. You open the bonnet but you don't know much about cars (it's your dad's). You do have some oil in the boot but not knowing where to put it, you just confidently pour it all over the engine.
For a while, this seems to calm the smoke and you bask in the admiration of your passenger, who smiles sweetly at you from the passenger seat. You adjust your leather riding cap seductively. Seconds later, the car explodes into flame. You are miraculously unscathed but Prudence, who stayed in the car at your insistence, is taken to hospital screaming in pain from horrendous burns.
When the emergency services ask you what happened, you say, "well it all started in the instrument panel..."
This, of course, is an analogy for modern economic analysis. Everybody is focussed on the gauges, the financial indicators, and not on the things they actually represent. Saying this recession started in the City makes no more sense than saying an engine fire started in your temperature gauge.
Gordon Brown. For the last 10 years he, Tony Blair and Peter Mendelssohn have been focused on making sure that everything looks ok, that the gauges of a modern economy all say the right thing. Meanwhile, something critical has been going wrong with the economy and they've made it better not by fixing that but by fiddling the books. They've got so good at fiddling that they've even convinced themselves that that is all they need to do. They have confused the appearance of success for success. So addicted are they to managing appearance that even as smoke pours from the engine room of the new economy, Canary Wharf, the most important thing to them is how it looks.
Well what's all this got to do with us not having enough sex? The answer is in Japan.
Japan is slipping back into recession and perma-slump. Nothing the government there does seems to help. They've spent trillions of dollars trying to solve the recession of the 90s and yet the result just seems to be that they're still in recession just now with added debt.
Understanding why Japan has failed to come out of recession is the key to understanding why Brown's borrowing binge won't work. He's focussed on the symptoms of the recession, the gauges, not the underlying cause.
In Japan, the primary cause of the recession isn't anything the government has or hasn't done. It's far more fundamental.
Imagine you're the last man alive. How much then would all the gold in the world be worth? Nothing. As this thought experiment reveals, the only true value in the world is people. And Japan's running out of them. Their population is set to collapse by over 30% (from about 130 million to under 100 million) in the next 40 years. Even this apoplectic forecast masks the true horror: 30% of those remaining will be retired leaving a working population of approximately half what it is now but with even more debt. When people are the only true resource and you've got half the number you had, it follows as surely as night follows day that your economy's going to take a comparable hit. The small percentage falls in Japan's economic health that we've seen so far are only the beginning of an exponential decline that will shake the world.
Even if the Japanese started having more babies, it would take 20 years for them even to begin to turn it around. They probably haven't got that long. They have passed what demographers call 'lowest low', the fertility rate from which no civilisation has ever recovered.
In Britain we have a similar problem. We too have a problem with declining birth rates (the average for a City worker is 1.1 babies per woman – again lower than 'lowest low'). Like Japan, we seem no closer to admitting it. Like Japan our government remains resolutely focused on palliatives rather than addressing the core problem. On this basis it would be a disaster if the City recovered quickly. How on earth could it remain at the forefront of global capital if its workforce halved every generation. There aren't enough immigrants either from the rest of Britain or the rest of the world to feed it. Anyway, what dynamic, globally mobile, young people would want to emigrate to any area full of old people in a culture's that's had its day?
Unlike the Japanese, we don't work as hard. This is an additional problem (as the collapse of wealth producing manufacturing has shown) but it may also be our saving grace because unlike Japan (and countries like Greece) it's not too late for Britain. And this is what leads us back to sex. We shouldn't be too tired for it when we get home. If you love your country and you're not already too old, it's time to give your partner a bit more loving too. Bonk for Britain – and make sure you don't use a condom.