Monday, June 02, 2008
We used to be very worried about rising house prices and new buyers not being able to afford to buy a home - now house prices are falling (albeit moderately).
We used to be very concerned both about global warming and on our dependence on oil - now the price of oil has gone up (though faster than had been planned by governments).
Food prices are of course different and genuinely worrying as to their global impact as well as their impact on inflation
For an alternative to the 'up and down' of capitalism there is always the option of Central Planning (though it is far from clear that planned economies escape from the business cycle, certainly from inflation). Planned economy has not proved popular in Western Europe and didn't work well in the Soviet Union when it was tried over a long period and China's mix of communism and capitalism is prone to overheating and therefore also recession.
Capitalist economies have always over and undershot in a cycle, with severe downturns frequent. 'Business cycle' in Wikipedia.
The only thing we can ask of our politicians is to dampen (rather than feed the excesses of the 'market economy' as the Tories often did) and Gordon Brown has been quite good at that over the past decade.
The capitalist economy has rarely been anything other than turbulent. That's not likely to change now.