Are we recovering from the Recession?

Listening and watching the news today I have heard several references to the word recovery in relation to this recession, the biggest we have experienced since the war.

The job situation was cited as an area which is showing improvement in that unemployment statistics in the UK have gone down slightly. Then in the next breath it was revealed that there were more people working part-time than ever before. It was then stated that most people's pay is not keeping up with annual inflation which is stubbornly stuck at 3% plus. A well heeled BBC 'economic spokesman' then came on and also made a reference to recovery. Well there may be one for him, I expect his services are in demand, like those who work at the Job Centres, but I don't see much evidence from my experience.

In the housing world apparently house prices reached their peak in 2007 and I read yesterday that it could be at least a decade before they regain the dizzy heights they achieved then. Ok, maybe a correction was necessary, but the outlook doesn't look too brilliant, does it?

Add to this the fact that the banks still remain largely unregulated, unwilling to lend, except to those who don't need the loans anyway, and at rates which are unrealistic to most people and it doesn't look a very rosy picture from where I stand. The bankers continue to make risky investments to raise funds (for what, some bigger bonuses?) and so we hobble along.

My bet, if I were a betting man, is that we are in for a painful double if not triple or quadruple recession. Just be thankful that I'm just a half-glass empty pessimist rather than an economist. Apparently, the economists couldn't see the recession coming, but I saw it looming and it came as no surprise to me.

Where do we go from here?

You have probably heard the news about the banks over the last few days. HSBC and Barclays have both revealed that they have made profits of approximately 3 billion pounds each in the first six months of the year. In the last few hours it has also been announced that Northern Rock, which is about 70% owned by us, has made a loss of almost 3/4 billion pounds in the same six month period.

Although HSBC and Barclays have not received direct injected cash from the taxpayer, they have been happy to receive help from the substantial funds we have given (unwillingly!) to prop up the banks in general with the creation of a large reserve fund. No doubt this has helped to increase confidence in the banks in general, who in turn are proving to be very tardy and reluctant to give any loans to those who now need them to stay in business and to maintain and provide emplyment in this once great country of ours.

In view of the above summary, I suggest that the banks who are doing quite nicely, e.g. HSBC and Barclays, rather than paying gross bonuses to their employees who are undeserving of them at this time, should give the money instead to the likes of Northern Rock and any other banks that have made a loss to get the system working again. As so many have now lost their jobs and businesses this year because of the bankers' greed then surely it should be time for the banks to pull their weight, to start lending fairly and properly and to bail out the failing banks, after all, we are no longer in the position to do this!

What is the difference between a bankers' bonus and a no claims bonus? Answer: a bankers' bonus pays out even if there is a crash!

Sadly, the above joke seems to be only too true. Although some bank chiefs have offered apologies over the last few days for mistakes they have made over last few years, we have yet to see if there is some action to follow. It is not right that they should be rewarded for failure, especially when we the taxpayers have bailed them out to avoid bancruptcy and many small businesses and individuals still can't get loans to save their businesses and homes. The bankers should be foregoing their bonuses at this time of economic crisis and be thankful that they still have jobs when many others are losing theirs and they are encouraging the process of further unemployment. Let's hope that they see reason and reinvest the money saved into creating new jobs and offering loans and help to those who really need it at this critical time.