Mr. T's pearl of wisdom

My prediction for 2010 is in line with what Mr. T stated in Rocky III regarding his fight with Rocky Balboa: "pain". In turbulent times, Mr. T offers comforting honesty.

The third year of the (Second) Great Depression - the Year of Our Lord 2010-, will feel like receiving a credit card bill we had forgotten about. Instead of tackling the economic problems like the Irish have done, the Labour Government has simply asked for an overdraft.

In 2010 we will realise at last that the Government simply cannot bail out every failed business and every greedy borrower who took on a 125 per cent mortgage from Northern Rock. Like every addiction, the addiction to Government will not be easy to beat but beat it we must. If we understand that freedom retreads when the Government expands, we will be able to build a better future for our children. If not, the only thing we will leave them will be a trillion-pound bill for our stupidity and a country on the road to serfdom.

Mr. T's "pain" might sound tough. But the longer we delay it, the more it will hurt.

Rewarding failure

The problem we face is our short memory. The economy grows for a reason, because free enterprise have enough space to develop and success is rewarded with better jobs and lives for our families. Once we remove the conditions for economic growth, surprise, the economy stops growing and will not start growing again until we resume those conditions.

Too many people believe money can be created out of thin air (or out of credit cards) and work is only an optional nuisance. We assume that the economy will continue growing forever, no matter how big government becomes and how much we tax honest citizens to subsidize those who are lazy and selfish.

We pay so much money to "help the poor" that we have locked millions of people in the cold, soulless machinery of the state and rewarded failure to such extend that it is no longer worth working or studying hard. Why work when "the poor" get a salary and a house for life and the hard-working taxpayers who create wealth and jobs are taxed to death? Is it not just better to aspire to be poor?

Once we have taxed to exhaustion all the bankers, entrepreneurs, businessmen and anybody earning an honest living, there will be nobody left to create jobs and prosperity. That moment is approaching worryingly fast.

Another one bites the (desert) dust

Dubai has joined the Scottish Premier Alex Salmond's 2006 "Arch of Prosperity", with fellow bankrupt members Iceland and Ireland. Sheikh Mohammed’s, the emirate's alpha male, building spree ended badly when Dubai failed to back "Dubai World", the umbrella company behind all those nice hotels, because there is not enough money.

To cut it short: a teenager (Sheik Mohammed) took his dad's credit card and went on a shopping spree expecting the dad (Abu Dhabi, the Emirate with oil and gas) to pay the bill. The problem is the dad was already upset about the whole business and the uncles (Emirates Central Bank and the international credit markets) couldn't keep cheating the creditors by giving away Monopoly notes and borrowing for ever and ever.

The Dubai crisis offers some relief for the cynical: at least it was your neighbour's house burning and not yours. Next in line in Greece. And printing money and depending too much on foreign funding sounds worryingly like Britain.

Dedicated to our fellow spender Sheikh Mohammed !