This is Money Blog

The Gods That Failed: How Blind Faith in Markets Has Cost Us Our Future

One year ago this month, I penned a few words for thisismoney under the highly misleading heading How to get your book published.

Anyone expecting a handy guide to the ins and outs of publishing houses, literary agents, copyright law and the sort of book-jacket designer likely to give your offering that extra oomph on the shelf at Waterstone's would have been disappointed.

My 'advice' ran to four one-syllable words: get a move on.

But I did at least know what I was talking about, in terms of foot-dragging. Back in May 1998, I wrote, I, along with Larry Elliott - then, as now, economics editor of The Guardian, had written a critique of the market economy entitled The Age of Insecurity.
It had sold reasonably well, and we had great fun promoting it. There was even, improbably, a Chinese edition.

A couple of years rolled by and we decided to favour what we assumed would be a hungry public and a grateful publishing industry with a new book. Nothing much happened for a while, other than 'planning' lunches and drinks, but keeping your fans short of 'product' had worked pretty well for operators as diverse as Philip Larkin and Led Zeppelin in terms of stoking up demand. There was just one problem. It did not work for us.

Happily, in 2006, we hit on the idea of a book about the economic legacy of Tony Blair, who had sportingly announced his departure in advance. We called it Fantasy Island and it was published by Constable in May 2007.

I signed off the above mentioned misleadingly-entitled piece of last year as follows:
'Will there be a book three?
'Certainly.
'Will we get our skates on this time?
'Absolutely.
'Well, put it this way, we are having lunch in a few days' time.'

Actually, it was a dinner, in Washington, at our favourite restaurant in that city. We had two ideas for a follow up to Fantasy Island. The first was a sort of Fantasy World book, covering the huge bubble of credit that had been puffed up by central bankers. Given these were pretty well pre-credit crunch days, the idea seemed less obvious then that it does now.

The second was a book provisionally entitled The New Olympians, all about how the elites of the City and Wall Street, in cahoots with central bankers and policymakers, had been given free rein to run the world economy and, we argued, bring it to the brink of disaster.

A publisher was interested in signing us up for a new book and had quite liked both ideas. To which Larry replied that if we put both ideas together, the publisher may really like it.
Usually, this sort of 'two aspirin good, four aspirin better' thinking can get you into trouble. The sum is less than its parts.

But this time round, it worked a treat. Our new book, The Gods that Failed, was published by Bodley Head on June 5, and argues that the New Olympians are responsible for the global money bubble that is now deflating with the consequences everyone can see.

So...will there be a book four? Not for a while. This winter we are taking off - as are our wives and children, who would quite rightly not put with another six months of going for long walks at the weekends 'to let daddy get on with his work'.

But the point is this. Last year's piece may have had a misleading title, but we did take our own advice. We did get on with it. No slacking for us.

That said, the best bit about Larry's brainwave was that we were still at the aperitif stage. That meant we could enjoy our dinner without having to worry about our book.

- Dan Atkinson, Economics Editor, Mail on Sunday

TiM special offer: Buy The Gods that Failed at a 35% discount for £8.44 (RRP: £12.99)

Our man in Washington: The city with two halves

John Kennedy declared Washington to be a city of northern charm and southern efficiency.

In other words it managed to combine the worst aspects of the two halves of the American character.
With all due respect to the late president, I have long thought he was quite wrong. Washingtonians as a rule demonstrate a gentle, old-fashioned politeness quite at odds with the British view of Americans as wildly insincere people spraying injunctions to 'have a nice day' round the place in a meaningless fashion.

As for efficiency, the bartenders and waiting staff are among the best in the world, shop staff are more variable but generally good and the smaller hotels have an edge over the larger ones in terms of personnel - those working in the big places are jolly smart in their blazers and badges, and frightfully polite, but they tend to look a little terrified when you actually ask for something.
Cabbies drive large cars quite slowly and quite badly. But so does everyone else in Washington. In other words, I have long thought that the charm and the efficiency in the American capital were pretty much in the right proportions.

Until the evening of Friday October 19, since which time I have started to wonder whether the Kennedy view may not have something going for it.

To set the scene, the city was under assault from a near-tropical rainstorm that drenched everything in sight while leaving unchanged the suffocating temperature and humidity. Any Americans still doubtful about global warming ought to have been in Washington on that evening.

I was due to have dinner in the Georgetown district before returning to the city centre to join fellow journalists for a drink with Alistair Darling and his team (both he and the press were here for the annual meeting of the International Monetary Fund). The distance from the centre to Georgetown was a matter of perhaps half a mile, with a similar short taxi journey back to the venue for the Chancellor's get-together.

After about 15 minutes in which our taxi sat in gridlocked traffic, my three companions and I got out and walked. The cause of the blockage became apparent at the point at which M Street enters Georgetown - the police had closed the road.
Huge numbers of officers lined the roads, rode motor bikes on the pavement, shouted at members of the public and sat in vehicles at intersections. Apparently, anti-capitalist demonstrators had taken to the streets of Georgetown and it had all turned a little ugly, although, on the scale of protests over the years against the IMF and similar bodies, this was not a major disturbance.

Late and sticky, we fell through the door of our dinner venue, a renowned steak restaurant and one of my favourite eateries - let's call it Scott's. Here, away from the chaos outside, we could surely relax in civilised surroundings and let the superb Scott's staff spoil us rotten?

True, there was a mix-up relating to the booking, but that was our fault, not theirs, and we were happy to have a drink at the bar while waiting for a table.
True, the barmaid seemed more interested in keying details of the drinks we had ordered into a very complex looking till than in actually serving the drinks.
And true, when we inquired as to why the glasses on the bar remained resolutely empty, she replied that the drink we had ordered was 'in a different location'.

One of our party, Mr William Keegan of The Observer, quipped that what Scott's clearly needed was a side bar at which one could have a drink while waiting to have a drink at The Bar.

The wait for the table was interminable, despite constant reassurances that we would be seated very shortly. Furthermore, the police barrier made it impossible to get back to the Chancellor's get-together, thus apologies had to be sent by text through the stifling night air.

In a daze, we were finally led to our seats. And at this point, a marvellous waitress took over, cared for us, even found the name of a pub likely to be showing the next day's England-South Africa match in a city almost entirely averse to rugby, and generally restored my faith in Washington as a city of both charm and efficiency.

But here is a funny thing. As I slipped back into the embrace of the Washington I know and love, I could not help finding something vaguely comforting and familiar about the ghastly events of earlier in the evening.
The traffic jam, the noisy and over-bearing police, the hopeless bar service, the dreadful sense of nothing working properly.

Ah, yes - it was just like being at home.

- Dan Atkinson, Economics Editor, Mail on Sunday

How to get your book published (from the author of Fantasy Island)

Published writers are full of advice for people wanting to get their first book into print.
Here is some succinct advice for those wishing to do the same thing with their second book - get a move on.

Unless you are modelling your writing career on that of the late Philip Larkin, with about ten years elapsing between each slender volume, then there is no time to waste.

Any goodwill built up by your first effort will melt away like snow in the sunshine. The idea that publishers will wait indefinitely for you to get your act together is sadly illusory.

The industry has a short memory, unsurprisingly given the sheer volume of books being churned out. A brain surgeon who stops practising is still a brain surgeon. Ditto solicitors, accountants and philosophers. Stop writing, and you are not a writer.

Ten years ago, Larry Elliott (then, as now, economics editor of The Guardian) and I teamed up to write The Age of Insecurity, which was duly published in May 1998. It sold moderately well and was reviewed far and wide, mostly favourably. Indeed, given it was a critique of the free-market economy, it attracted some unlikely (but welcome) friends: John Redwood MP and The Wall Street Journal Europe.

During the rest of that year and early into 1999, Larry and I had great fun promoting the book at various events, culminating in a very jolly trip to Brussels as guests of the Tribune group of Labour MEPs. A serious dinner-debate was followed by a night of quite remarkable over-indulgence by the authors.

The Age of Insecurity went into paperback and was, improbably, translated into Chinese. We talked of writing a new book, as the old decade became the new one, naturally, but there was no hurry. Furthermore, we had other things on our minds.

Larry became a member of the trust that owns The Guardian, and was serving as a magistrate in his native Hertfordshire. I changed jobs in 2000, moving to my present post on The Mail on Sunday. My wife was pregnant with our third child, who was born in March 2001. And so on...

Not until late 2001 onwards did we seriously start trying to get a second book published, and even then we had an unfortunate habit of arranging working lunches and drinks meetings that tended to be big on lunching and drinking and not so big on working. Not, surely, that there was anything to worry about? I remember one Christmas Eve, walking with my family in the village in which we then lived to do some last-minute shopping, popping a proposal into the letter box at the Post Office, pleased that I could now relax and enjoy Christmas but also confident that wheels would soon start turning. They did not.

To be fair to the unenthusiastic representatives of the publishing industry who turned us away, I am not sure any of our proposals were especially strong. But to be fair to us, the above-mentioned representatives did seem to have a habit of asking for proposals to be re-written in such a away that they would eventually decide they did not like them.

By the middle of the decade, for example, we suggested a book exposing the huge credit bubble puffed up round the world by central bankers, led by Alan Greenspan at the US Federal Reserve Board. We envisaged a punchy book with a pithy title: The Party's Over.

The industry had other ideas, asking for the temperature to be lowered, for more thoughtful reflections on the growth of China and India, for a more discursive tone. We complied, and they decided they didn't like it. I do not blame them. I didn't like it either.

Finally, we ceased our search for spurious international gravitas. Fantasy Island would be a book about Britain and about the extraordinary legacy of the soon-to-depart Prime Minister, Tony Blair.

The proposal was thrown together at top speed and put to publisher Constable & Robinson in early September, just before we both headed off to the International Monetary Fund annual meeting in Singapore. Presumably, we should have devoted our spare time out east to refining our ideas for the book; my only memory of a serious conversation involves the two of us in a bar at Changi Airport, arguing about which were the ten best albums from the Seventies.

Anyway, an offer came through, the book was written and duly published in May.

Will there be a book three?
Certainly.

Will we get our skates on this time?
Absolutely.

Well, put it this way, we are having lunch in a few days' time.

- Dan Atkinson, Economics Editor, Mail on Sunday

Taken for a (free) ride

Let no-one tell you public transport is on the way out, caught in the nutcracker jaws of Government parsimony and the irresistible rise of the car.

A few days back, the number of buses available in the West Sussex market town in which I live doubled, at the very least. Possibly the increase was even larger. Better still, the fare level on the new buses was precisely zero.

True, the extra vehicles were on the street for one day only. Furthermore, they were driven and conducted by volunteers, bus preservation society members. And yet . . . so what? A bus is a bus, and as my wife noted, these 'preserved' vehicles were, for the most part, indistinguishable from those that ferried us round as children and teenagers in the Seventies. Possibly, they were the same machines.

Quite what the two commercial operators that run services out of our town made of it is hard to say. True, some of the free rides simply took passengers round a housing estate and back to the town centre. But one journey ran all the way to Godstone in Surrey and back again, the sort of trip for which the 'real' bus companies are presumably used to extracting coin of the realm from their customers.

It is 18 years since Graham Coster addressed the question of whether 'preserved' railways are actually railways or merely extravagant hobbies in his novel Train, Train ((Bloomsbury). If a bus or railway preservation society publishes a timetable and runs scheduled services, albeit for the enjoyment of its members, there is presumably nothing to stop the schoolchild or commuter from making use of those services, provided they go to the right destinations.

And if they do so, and - more importantly - come to rely on them, surely those services have become as 'real' as those operated by Transport for London or First Capital Connect? True, they are likely to be hopelessly uneconomic and subsidised by the free labour of enthusiasts. But plenty of public transport services are kept going by public subsidy, rather than solely by money taken in fares. What is the big difference?

Ultimately, we are sniffy with (in particular) preserved railways because many, perhaps most, are devoted not so much to the continuation of a particular line, but to the continuation of a particular form of locomotion - steam. The line is merely a means to this end.

Some years ago, my family and I were visiting a station on a preserved railway line. On the same day, the station was also visited by members of a Second World War society, resplendent in RAF uniforms and other period gear. Presumably, they were attracted by the prospect of striking poses next to steam engines of roughly the right period.

At the ticket barrier, one member - dressed as an Army officer - fell into an argument with a member of station staff as to whether his status allowed him on to the platform without paying. In other words, an Army officer (who was not one) debated with a ticket collector (who was not one) as to the privileges of his rank (which he did not possess).

This little incident doubtless tells us a lot about the way we live today.

Precisely what that may be, I have no idea.

- Dan Atkinson, Economics Editor, Mail on Sunday

Washington blog: The wet and dry economies

Dan Atkinson at the G7 in Washington...

Another five-day circus is over, and the 'moving map' on the seat-back video screen puts your British Airways airliner somewhere over Newfoundland, heading home.

The world is safe for another six months - or, at the very least, the institutions charged with guarding the world's economy have completed another hectic round of back-slapping, drinks parties and statement-making.

Twice a year, usually in Washington, once in the Spring and once in the Autumn, finance ministers and central bankers gather for a marathon sprint of economic diplomacy, with a key challenge for them (and we in the press) being to keep track of whether they are meeting at any one time as the Group of Seven rich industrial nations, the International Monetary Fund or the World Bank.

They sprinted again over the past few days.

Broadly speaking, Friday is the G7, Saturday is the IMF and Sunday is the World Bank. But it is obviously not quite that simple.

For Sunday newspapers journalists, by contrast, one day is starkly different from all the others, in the most pleasant way imaginable.
Sunday, of course.

While our daily colleagues, who took Saturday off, return to the grindstone, working for their Monday editions, we can take in the special atmosphere of Sunday in Washington, a day for visiting bookshops, reading heavy newspapers and literary reviews and arranging a civilised lunch, all in the sunshine of late Spring or early Autumn.

It is all vaguely reminiscent of an older Washington, in which bookishness mixes in a high-minded way with good food and drink, a Washington of Georgetown hostesses and martinis in the N Street drawing rooms of Senator's town houses, during which one is always running into men with floppy bow ties who all used to work for the late President Kennedy, to whom they refer as 'dear Jack'.

As I was imagining a day of such balmy elegance on Sunday, imagine my reaction to the weather warning on the radio, relating to heavy rainfall throughout DC, northern Virginia and suburban Maryland.

And indeed, the rain pounded down for most of the day, the sort of rain that treats a standard telescopic umbrella with utter contempt and manages to soak the bearer.

Back home, my wife kindly told me, the sun shone out of a blue sky.Which hardly struck me as fair, given that Washington is roughly parallel with the middle bit of Turkey whereas London is roughly parallel with the east coast of Canada.

An interesting way of looking at the world, when you come to think about it, and capable of indefinite extension to all major cities. Perhaps, I thought, as the aeroplane touched down at Heathrow, it is rather more imaginative than the IMF's division into emerging markets, developing countries and so on.

Rainy or non-rainy? Wet or dry?

The economic map may never look the same again.

- Dan Atkinson, Economics Editor, Mail on Sunday

News links...

• Comment: A positive vibration from the IMF
• Comment: Dislikeable Wolfowitz must go, and go now
• Brown hails IMF economic efforts
• World Bank boss in row over girlfriend

Washington scandals: Wolfowitz and shock-jock Imus

Dan Atkinson at the G7 in Washington...

Many moons ago, there was a fashion across the British press for a regular column from a correspondent in the United States, the tone of which was a sort of thigh-slapping well-I-never amazement at the latest eccentricity of our American friends.

Disposable lighters were bad enough - now they have disposable cameras! Some people have a television set - in the bedroom! As for the phenomenon of 'streaking'...well, I never.
Times changed and this sort of thing became old hat.

These last few days, however, I have been wondering whether a revival is due. Two scandals have had Washington abuzz in the last few days. One has directly involved the events that brought me here, the meetings of the Group of Seven rich nations, the International Monetary Fund and the World Bank. The other is about as far removed as can be imagined from the sphere of conference rooms, press conferences and official Lincoln limousines.

In the first case, World Bank presi dent Paul Wolfowitz was at the centre of accusations that he helped his girlfriend to enjoy a huge salary, paid for by the bank, on her transfer to the State Department (America's version of the Foreign Office). Mr Wolfowitz has made the battle for good governance in developing countries a key theme at the bank, which is the world's leading development institution. His conduct is being scrutinised by the bank, a process he fully accepts.

The second case involves someone of whom you have probably never heard, the broadcaster Don Imus. He was disgustingly rude on air about a women's basketball team, thus was sacked by radio and television group CBS.

All is as it should be, surely? The person against whom allegations have been made is still in his job while the allegations are looked into; the person who is bang to rights has lost his job.

In fact, all is not as it seems. For a start, Mr Imus was sacked only after the public row over his comments refused to die down. CBS's later claim that the dismissal was part of some strategy to root out a culture of demeaning speech looks like so much flannel.

Then there is fact that Mr Wolfowitz has already apologised for what he described as a mistake in relation to an aspect of the 'girlfriend's salary' affair, suggesting the inquiry can never clear him entirely.

Furthermore, Mr Imus was employed as a 'shock jock', someone whose role in life was to offend. As we have seen, Mr Wolfowitz's job was to help clean up the governance of developing countries.

So the shock jock who said something shocking has been sacked, whereas the good-governance man who seems to have fallen short of best practice in terms of good governance is still employed.

It would be tempting to see this, through British eyes, as a class issue, and there is something in that. Mr Wolfowitz, the dark-suited Washington professional, cleaves to traditional standards of minimal explanation and apology at times of trouble, and goes in for nothing much by way of wearing his heart in his sleeve.

His girlfriend Shaha Riza, a British subject with a Middle Eastern background, is of much the same restrained demeanour.

Contrast that with both sides in the Imus affair. The basketball team's coach announced the comments had constituted 'an experience that we will never forget,' adding for good measure: 'These comments are indicative of greater ills in our culture.'

Possibly, or they may simply be indicative of the stupidity and ignorance of Mr Imus. She concluded in the most overblown way imaginable: 'Let us continue to work hard together to make this world a better place.' Who is 'us' and when did this hard work, which we are to continue, actually begin?

That said, all this was positively buttoned-up compared to the behaviour of Mr Imus himself. His self-abasement knew no bounds as the fearless shock jock wheedled to all and sundry.
At one point he declared: 'I'm not a bad person. I'm a good person who said something bad.'

And he had changed. Oh yes. 'Here's what I've learned: that you can't make fun of everybody, because some people don't deserve it.'

Very profound.

On a radio programme hosted by the Reverend Al Sharpton, a leading black civil rights leader demanding his dismissal, Mr Imus even referred to his own remarks as 'repugnant' and 'repulsive'. He said: 'Our agenda is to try to be funny and sometimes we go too far, and sometimes we go way too far.'

With this abject performance from the Great Offender, the Reverend Sharpton and the rest of Mr Imus's attackers must have known there was blood in the water, and so it proved.

And, yes, this does look like a class divide. Self-control and steadiness under fire may well be hallmarks of America's power elite, whereas emotional incontinence and the promiscuous distribution of apologies identifies a certain strata in society without influence, without much money and without much in the way of education.

More cheeringly, I like to think the reason that Mr Imus was sacked and Mr Wolfowitz hung on is that, deep down, most Americans of all classes know that shock-jocking is a largely worthless activity, whereas running the World Bank is not.

That said, someone in a post calling for sensitive diplomacy kept his apology short and curt, whereas someone supposed to tear into society's sensibilities and not give a hoot about the consequences could hardly stop himself from saying sorry.

Well I never.

- Dan Atkinson, Economics Editor, Mail on Sunday

News links...

• Comment: A positive vibration from the IMF
• Comment: Dislikeable Wolfowitz must go, and go now
• Brown hails IMF economic efforts
• World Bank boss in row over girlfriend

IMF blog: Our man in Washington

You may know the scene from old, flickering newsreel footage shot any time from the mid-Forties to the early Sixties.

Under the Queen's watchful gaze, the Union Jack runs down the flagpole. Another flag is run up. An independent nation is born. The British go home.

All this, of course, was long before our current Prime Minister decided that running the flag up again in assorted inhospitable places was a good idea, but that is another story.

More to the point, this week sees our (presumed) next Prime Minister clear the way for an old-fashioned withdrawal from a piece of territory the British have occupied since 1999.

I refer, of course, to the chairmanship of the ministerial committee of the International Monetary Fund, whose Spring meeting is under way in Washington. The Chancellor could probably go on indefinitely, but not if he lacks the one qualification for the job - being a finance minister.

Funnily enough, as Washington prepared for the last hurrah of the Brown years, I was stricken with a bad case of dental trouble. It was a scene out of Graham Greene - insignificant British man on the edge of great events preoccupied with his own problems.

But the premises in which I was treated had little in common with the seediness of Greeneland. Surrounded by gleaming equipment, I was placed in the hands of a dentist who looked about 17, his eyes shining with the idealism of youth.

After treatment, I was presented with a bill the numbers of which would have been comprehensible only to astrophysicists. For the same money in Blighty, you could have had open-heart surgery with enough left over to celebrate at the Cafe Royal.

Still, the labourer is worthy of his hire, although the episode put a brighter gloss on the Chancellor's NHS spending binge.

True, it has not produced much in the way of NHS dentists, but it is the thought that counts.

Meanwhile, Britain's days in the IMF ministers' chair seem numbered. Could Brown's successor seamlessly take over, turning the position into a sort of Head of the Commonwealth role that is assumed to go to a Brit?

Perhaps. But don't bet on it.

- Dan Atkinson in Washington, Economics Editor, Financial Mail on Sunday

IMF news...

• IMF warns over £58bn UK black hole (12 April 2007)
• IMF see big private-equity hangover (11 April 2007)
• Property could slump, warns IMF (6 March 2007)
• Google News: 'IMF'

Washington blog: Day One at the IMF

Technology strides on. When first I came out here, back in the dark ages of 2002, I was solemnly entrusted with Financial Mail's one and only mobile phone capable of operating in the United States.

To get it to work, one had to change the frequency on arrival at Dulles Airport.

Now my British machine hooks up on American networks without a hitch and it is even claimed that the 0044 code is unnecessary when calling home, although I have yet to find this theory works particularly well under battle conditions.

Digital cameras snap arrivals as they leave their flights, clever machines take fingerprints and other clever devices sample one's signature. It is rather like one of those March of Progress newsreels vaguely reminiscent of Citizen Kane and full of the wonders of modern science.

Yet the triumph of technology is a little patchy, to say the least. For example, plugs in the United States are so flimsy as to be apparently constructed from silver paper. Not that this matters much because house current is so low it is hard to get the above-mentioned British mobile phones to charge.

Then there is the shower in my hotel room, a device of such feebleness as to produce a weedier jet of water than even the dodgy changing-room showers I remember from school in the Seventies.

Taxis manage to be simultaneously huge and yet cramped, possibly because of the drivers' habit of filling at least the passenger seat with personal possessions, taxi meter, bottle of water and so forth.

In all, then, the marvels of progress are spread around somewhat unevenly. Not to worry, however. The British press corps is in town for meetings of the Group of Seven rich countries, the International Monetary Fund and the World Bank. Gordon Brown is flying in for what is expected to be his last appearance.

Here is a chap who can get things done. After chairing the IMF ministers' committee for all these years, fixing showers and plugs should be a doddle.

- Dan Atkinson in Washington, Economics Editor, Financial Mail on Sunday

IMF news...

• IMF warns over £58bn UK black hole (12 April 2007)
• IMF see big private-equity hangover (11 April 2007)
• Property could slump, warns IMF (6 March 2007)
• Google News: 'IMF'

The Easter hunt: house prices madness

Just a few days to go, and the great pursuit can start afresh.

Family cars will criss-cross the country, unsatisfactory lunches will be picked at by complaining children in pub gardens and sheaves of photocopied paper will pile up on the dashboard.

Easter is almost upon us and with it the hunting season. Househunting, that is.

Vast swathes of free time, mostly at weekends, will be consumed in trailing round other people's homes. Societies saner than ours (there must surely be some) would greet the early days of Spring by doing almost anything else, whether going for walks, digging the garden, attending sports events or taking up a new hobby.

The British (particularly the English) prefer, in large numbers, to take to the road in search of alternative accommodation.

I suspect a fair amount of househunting is not only fruitless but is suspected to be so by those carrying it out. As April arrived, Chaucer's pilgrims set out for Canterbury. In our materialist age, families take to the highways and byways in search of a secular fulfilment that is unlikely to be achieved - a wonderful home at an affordable price.

Said home is just beyond the horizon, which is why every other househunter has missed it. As Philip Larkin put it in his wonderful poem Here, it is 'out of reach'. Largely a fantasy, its pursuit does little harm.

The same cannot be said, however, for that branch of househunting that actually results in the transfer of residential property. Put bluntly, Britain is experiencing a rather sickly housing boom at the moment, one fuelled with vast amounts of credit.

In February 2006, outstanding mortgage debt stood at £981.8bn. By February this year, the figure was £1,097bn - yes sir, more than one trillion pounds, a rise of 11.7%.

For the record, outstanding consumer credit expanded by a more modest amount, from £192.6 to £212.8 - a rise of 10.5%.

And the earnings of the people running up these debts? Average earnings between January 2006 and January 2007, the latest available figures, rose 3.6%.

Unsurprisingly, house price inflation is bucketing ahead, at 9.3% in the year to March, according to the Nationwide, against overall inflation of 4.6% in the year to February, as measured by the Retail Prices Index.

This is a form of madness, and some of us have to take a stand. This Easter, and beyond, provided you live in a reasonable home in a peaceful neighbourhood, do anything other than go househunting. Go to the seaside, the races, your nearest National Trust property (pictured), the museum, the pub - all are preferable.

And should you live in the above-mentioned all-right home, and yet be tempted to join in the hunting season, here is a little thought experiment.

Cast your mind back no more than a few short months to the evening of the final working day before Christmas 2006. The last cards are posted, the last presents bought. Upstairs, the children (if applicable) are in bed, although probably not asleep. A CD of Christmas music is playing in the kitchen, where two glasses of wine and a plate of nibbles stand ready. The breadwinner has finally negotiated their way home via a public transport system that is already shutting down for the big break.

Now, what was your next move? Did you riffle through the property pages of the local newspaper for possible viewings? Did you log on to the internet with the same thought in mind? Were you peeved that you would probably have to wait until the day after Boxing Day at the earliest to get hold of even a junior staff member at an estate agent?

Or did such pottiness not occur to you as you clinked glasses with your other half and prepared to enjoy the festive season? If so, just remember - it is the same house now as it was then.

And if you still need an outlet for your energies as the trees burst into life and the sap rises, there is an even more venerable property-related activity that falls due at this time of year.

It is called Spring cleaning.

- Dan Atkinson, Economics Editor, Financial Mail on Sunday

>> Latest news on house prices

Windows, monorails and cheap TVs - Gordon's legacy

Randolph Churchill, when Chancellor, jotted his Budgets down on Carlton Club writing paper.
Had his efforts compared in size and length to those of Gordon Brown, each Budget from Churchill Senior would have consumed a whole year's supply.

This is the week the long-running Brown show started to wind down. Even grudging admirers have to admit that it has been a good show while it lasted. In the manner of Bruce Forsyth, energy, determination and relentless optimism work wonders in making up for any artistic shortcomings.

That said, the act is starting to look a little tired. Too many of the themes have not changed in a decade. There is too little new material. Even the title - Building Britain's long-term future: Prosperity and fairness for families - sounds vaguely like the titles of all the other Budgets, Pre-Budget Reports and Spending Reviews.

There are more than 300 pages, but the new announcements (helpfully printed in red ink) account for a sliver of the whole thing. The rest is a great long wrap-up of what has gone before. If TS Eliot believed that every poem, in some sense, ought to contain all the other poems, so the Chancellor seems to think that every Budget should encompass every other Budget.

But then, that is unsurprising, given how much of a Brown Budget seems to be taking place in a sort of permanent very-near-future tense.

Thus public services are always just about to be ‘delivered’, we are apparently ‘building’ a fairer society but have not quite got there yet, the productivity ‘challenge’ (which is one way of describing our sluggish productivity performance) is something we are ‘meeting’ and assorted problems are always being ‘tackled’.

Not that you should run away with the idea that the Chancellor talks in waffly, broad-brush terms and eschews detail. Far from it.

Turn to page 183, for example, for this gem of micro-management: ‘The Government…welcomes the introduction of the British Fenestration Council’s window energy rating system…and will work with the industry and manufacturers to explore the case and scope for incentives to encourage the installation of energy efficient glazing.’

That’s windows taken care of, then.

On page 161, a table lists ‘public investment in the UK science base’, and solemnly records the percentage of gross domestic product accounted for by such spending in the four years from 2007-2008 to 2010-2011. In every case, the figure is 0.39 per cent, presumably a tribute to the ‘stability’ of which the Chancellor is so fond.

On page 189, the Government announces an exemption from the aggregates levy for aggregate ‘arising from the construction and maintenance of railways, tramways and monorails.’ Monorails! What monorails? Outside the odd airport and in old episodes of Thunderbirds, have you ever seen a monorail?

In his quieter moments, Brown must know that his ten-year Treasury stint will be fondly remembered, as was that period in the late Fifties and early Sixties that peaked with Harold Macmillan’s ‘candy floss summer’ of 1959.

With cheap flights, flat-screen television sets, barbecues and the rest, we have all been quite happy, in an easy-going, materialistic sort of way.  For the Chancellor, however, presiding over a consumer boom was never quite enough.

Dan Atkinson, Financial Mail on Sunday

Celebrate the pointlessness of bank holidays

Easter is coming, excellent news not only for the Churchgoing minority but also for the secular masses. It is the start of the househunting season, the DIY season and the barbecue season. For me, however, the Good Friday-Easter weekend signals the beginning of a less-remarked time of year – the bank holiday season.

I love bank holidays, and fully half of the eight annual breaks fall in the fairly narrow strip of time between Good Friday and the Spring Bank Holiday at the end of May. Many say this is a bad thing, that the holidays should be more evenly spread out, that May Bank ought to be abolished (for being too 'socialist') and that we ought to replace it with a celebration in mid-autumn.

Phooey. The four springtime public holidays are like four stepping stones marking the transition from the fag end of winter to the brink of summer. Similarly, the enjoyment of August Bank is sharpened, not diminished, by the knowledge that this is not only the last of the summer but that there is a long haul ahead all the way down to Christmas Eve.

This ought to be a golden age for British public holidays. Until now, whatever custom and practice may have dictated, their only legal status has been in relation to the treatment of banking instruments. Now, however, the Government plans for the first time to give workers a statutory entitlement to enjoy bank holidays or time in lieu on top of the four week’s guaranteed leave.

Yet at this crowning moment, storm clouds are gathering over our great national institution. First, bank holidays have an image problem. They have come to be seen as naff, as out of date. The picture is that of a grim-faced picnic in a Ford Anglia parked by a rainswept seaside. To enthuse about bank holidays is about as fashionable as to enthuse about bingo or bar billiards.

Second, they have long offended various free-market ideologues, who want them either scrapped or (in this more caring age) made 'portable', to be taken whenever they suit the individual concerned. Finally, militant secularists dislike what they assume to be the religious roots of our public holidays.

In fact, this last objection bears little scrutiny. Of our eight holidays, only two (Good Friday and Christmas Day) are explicitly religious festivals. Another two (Easter Bank Holiday Monday and Boxing Day) are not religious festivals but would probably not exist were they not next door to one. The remaining four (May Bank, Spring Bank, August Bank and New Year’s Day) are entirely secular.

Indeed, for this bank-holiday addict, at least, the more pointless the break, the better. There is something bracing about the absence of postal deliveries and banking services and the preponderance of people off work, all for no good reason whatsoever.

And given three of these four secular holidays always fall on a Monday, the exigencies of Financial Mail on Sunday’s working week mean that their pointlessness, as far as I am concerned, reaches a new peak, because they are almost indistinguishable from any other Monday.

How to explain the attraction? The progress from winter to summer is only part of it, as is the pleasure of a common, national day off, the long weekend for lunches with families and friends, or leisurely walks through city streets, or country-hotel breaks with spouses or lovers.

Perhaps the answer can be found, funnily enough, in the world of train spotting. You may have seen those railway enthusiasts’ magazines, with their train photographs captioned in loving detail (‘A Class X EMU on the up-line at Cannon Street Railway Bridge at such and such a time on such and such a day in January 1993. Note the unusual configuration of the forward carriages and the buffet car’).

I long wrote off this sort of thing as a sort of obsessive disorder, but now I am not so sure. Beneath this manic desire to catalogue precisely assorted train movements may lie a highly praiseworthy notion, that every day is important, that every moment matters, that every time is special and is different from every other time.

In their glorious pointlessness, perhaps my favourite bank holidays are not pointless at all.

Dan Atkinson, Financial Mail on Sunday

Are we stuck in 1987?

Arriving early for lunch at Racine, in Brompton Road, I took a stroll round the neighbourhood - and a trip back in time. Under a clear blue sky on a bright winter's day, I found my thoughts irresistibly tugged back two decades.

Mostly it was the restaurants - Borscht n' Tears, San Lorenzo, Brasserie St Quentin - and the chi-chi shops, but the whole area seemed to exude an atmosphere that was forever 1987.

Which, in turn, had me wondering about that period in our recent history. Specifically, whether or not it marked the start point of the time in which we are now living and which shows no signs of coming to an end.

In certain obvious ways, 1987 was the pushing-off point for our contemporary world. Mobile phones, CDs, home computers and the first stirrings of multi-channel television all started to become established features at about that time.

So did the notion that lavish amounts of credit could safely be advanced for both consumer and mortgage purposes - only the previous year had the Building Societies Association stopped publishing a 'guideline' mortgage rate for its members.

In terms of social thought, there were detectable shifts at this time. At the year's beginning, the notion that smoking in public places may one day be prohibited seemed ludicrous. By the year's end, it seemed less so.

The idea that working parents ought to be able to stick the taxpayer with some of the costs of looking after their children could have been dismissed when the year began as the sort of weirdness favoured by the recently-defunct Greater London Council. It was less easy to do so 12 months later.

This was the period in which 'enterprise' ceased to be a useful little word with a number of applications and became instead shorthand for Government-approved business activity. And, for the first time, it did not seem inevitable that the USSR, South Africa, the authoritarian regimes in South America and tyrannies elsewhere would always be with us.

There was a general election that year, in which Labour ran a slick campaign calling for support not so much on the basis of its policies but on the basis that its leader was a decent and likeable middle-class man. Sound familiar?

There was the October hurricane, the first in what was to become a series of extreme weather events. City fraud hit the headlines, with the inquiry into Guinness begun at the end of the previous year. Advertising, public relations and brand consulting became if not entirely respectable then at least renowned for being highly paid.

It was a year of endings, too. The election was the last in which it could be taken for granted that hedonistic metropolitan achievers would vote Conservative. It was the last full year in which Europe was not a big political issue. When Princess Anne became Princess Royal, nobody asked whether this would mean extra expense, or questioned the granting of the title.

The onslaught of criticism of the Royal family was still, just, in the future.
And in other ways, the future was still at bay. In hospitals, doctors and nurses still tended to dress like doctors and nurses, rather than like guests at a pyjama party. Similarly, police on the beat had yet to clothe themselves routinely in those florescent yellow jackets that resemble something worn by stewards at an event for primary school children.

A large chunk of Britain's armed forces were still based in somewhere called West Germany. Grade inflation had yet to infect our exam results. Had anyone mentioned 'reality television', it would have been assumed they were referring to some sort of worthy fly-on-the-wall documentary.

If this sounds carping, it is not meant to be. The last 20 years of British history have been marked by two over-riding features that would have seemed wishful thinking in 1986 or 1976.

The first is economic stability and prosperity, with living standards and employment glowing with the sort of health unimaginable during the years of crisis. The second is consensus. Our political parties mostly agree with each other most of the time.
If you hear someone praising public employees, it is probably a Conservative. If you hear someone praising the City, it is probably a Labour politician.

These, then, have been the 1987 years. What comes after them is anybody's guess.

- Dan Atkinson, Economics Editor, Mail on Sunday

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Oyster cards and the cycle of technical change

Those of you spared the need to visit Tube stations - whether or not you live in London - will have missed an amusing addition to the repertoire of announcements relayed over the loudspeakers.

Alongside 'mind the gap' and 'there is a good service operating on all lines' (not many actual trains, you understand, but a good service), we now have a bullying demand that users of Oyster cards who fail to 'touch in and touch out' will be charged 'the full cash fare'.

Not so long ago, of course, Transport for London (the excitingly rebranded London Transport) was dead keen for us all to ditch our cardboard and paper tickets and embrace the little piece of blue plastic that is Oyster. Then, TfL cooed invitingly. Now it issues threats.

As a resolutely non-Oyster passenger, I do not really have a dog in this race. But the whole saga seems illustrative of what may be called the life cycle of new technology.

Those in or around the age of 40 who have pursued broadly white-collar occupations - such as banking, local and central government, insurance and journalism - will have been through at least two such cycles in terms of what we used quaintly to call office automation.

The first, starting in the early Eighties, involved the expulsion of typewriters, carbon paper and the rest, and their replacement with what were effectively glorified word processors. The second, about ten years later, introduced machines with internet and e-mail links.

In both cases, the sequence was much the same. The organisation concerned would announce that a decision had been made to adopt the new technology. After a period of inactivity, a team would be appointed to oversee its introduction.

This team would have two types of members: the young, ruthless and ultra-ambitious and the amiable characters at the end of their careers.

To general derision and lack of interest, the team would publish bulletins as to its progress. It would then arrange training sessions, which would inevitably run into mass resistance and truancy on the part of the workforce.

With the machinery installed, everything the team had insisted could not happen, in terms of things going wrong, would promptly happen. Only after much persuasion and hand-holding - not to mention bonus payments for embracing new technology - would the staff buckle down.

At this point, a sea change would come over the workforce as most of its members decided, however reluctantly, that the new kit was not half bad.

All's well that ends well? Not quite.

The management would now decide the technology was just a bit too popular, and was being abused to send jolly rude messages (later e-mails), to read other people's correspondence, to access pornographic websites or whatever was the panic of the moment.

On cue, a list of terrifying sanctions would be promulgated and old hands at the new technology game would know that the circle had closed.

Oyster, presumably, is at this stage, hence the Tube station announcements. Almost reassuring, in a funny sort of way.

- Dan Atkinson, Economics Editor, Financial Mail on Sunday

>> Tube and bus fares to soar

>> Tap-and-go payment revolution

>> Dan Atkinson's Mail on Sunday column - www.thisismoney.co.uk/columnists

Hurting from higher interest rates? Hurt them back

Should you be hurting from higher interest rates, rest assured - you can hurt them back.

Them?

Well, there are the banks, who mysteriously always seem to respond to a rise in official rates with much greater alacrity than they do to a reduction in official rates.

There is the Treasury, which has been only too happy to see you borrow enough money to offset their stealth taxes and which does not appear to give a hoot now that the Bank of England is jacking up the cost of borrowing.

Oh yes, the Bank of England. Now there is an outfit that deserves something in the pain line. After all, its Monetary Policy Committee relied on consumer borrowing to keep up demand and ensure it met its inflation target. Now it fears too much inflation rather than too little, thus wants to break you of that bad borrowing habit into which it helped to lure you in the first place.

All right, you may say, granted these players deserve a kick in the shins, how is it to be administered?

The obvious method is by employing that centre-piece of our live now, don't pay later culture - the Individual Voluntary Arrangement. This is the procedure whereby a borrower pays back part of what they owe (but not the rest) in return for avoiding the stigma of bankruptcy.

In years to come, 'IVA' will stand alongside 'BlackBerry' and 'iPod' as one of the emblematic expressions of our time. But I would advise against this drastic remedy, particularly as a  tried and tested alternative is at hand. Thrift.

Consider this: the entire world-view of the Treasury, the Bank, the clearing banks, finance houses and retail industry, indeed, the whole of our domestic economic policy is based on the belief that we have an insatiable appetite for consumer goods (a large proportion of which are simply variations of assorted expensive tat) and that this addiction can be used to steer the economy.

Like the bosses of a dumbed-down television channel, they are confident in their lamentably low opinion of the rest of us.

Why not prove them wrong?

Of course, thrift is easier to talk about than to do. But that need not be an insuperable obstacle. In the right frame of mind, saving money can be almost as much fun as spending it. And there is an increasing amount of useful advice on this topic. Just check out the shelves in your local bookshop (but take care to borrow the titles from your local library).

Perhaps you have come across some of the thrift tips doing the rounds, little rules such as never buying a 'second' of anything (lipstick, magazine) simply because you left it at home, such as making up your own soft drinks and never paying for bottled water.

All excellent, I am sure, and there is no need for a ten-point plan from me. Instead, I offer just one additional piece of advice. Take stock of all the stuff you have already - unread books, unlistened-to discs, unwatched videos or DVDs, almost unworn clothes or jewellery. You will be amazed at what you forgot you had.

Finding it all again is almost as good as going on a shopping spree. Better in fact. Firstly, because it is free. And secondly, because, if enough of us do it, we will go some way to ensure the abovementioned powers will be well and truly spooked.

Dan Atkinson, Economics Editor, Financial Mail on Sunday

The debate on GMT: Hands off our clocks!

One advantage of being on the wrong side of 40 is the ability to spot duff ideas coming round a second time, one whose original demise one can just about remember.

Thus I must have been approaching my teenage years when the following turkeys were last ushered off to the great retirement farm-yard in the sky: massive airport expansion, large-scale housebuilding in the countryside, the creation of police super-forces, the notion that nuclear power was 'the future', regional government for England...oh, and the abandonment of Greenwich Mean Time (GMT).

This last turkey is back with a vengeance, squawking and strutting and puffing out its chest, apparently unmindful of the fact that some of us can recall its last appearance. It was called 'British Standard Time' and was in operation for a three-year trial period between 1968-1971.

Instead of putting the clocks back in the autumn, they were left on British Summer Time. Given this was the era of decimal currency and the abolition of the Whitsun bank holiday in favour of the anodyne 'Spring Bank', standard time did not seem an especially radical departure.

How did it go? Well, the suggestion since has been that it pitted town against country, in that lighter evenings benefit the office-working, suburb-dwelling classes, while the associated darker mornings are jolly bad news for farmers.

My family had a foot on both sides of the argument. We lived in a rural community but my father commuted to a white-collar occupation.  I have vague memories of it being dark well into the morning, and of anxiety among the staff of our village school at the prospect of children being run over as they walked [those were the days!] from home to attend their day's classes.

Now, thirty-five years after the return to daylight saving, a private members' bill from Tim Yeo MP would, it seems, take us back to the future, with an added de luxe feature. Whereas standard time was merely year-round summer time, this suggestion is for our current summer time in the winter (i.e. GMT plus one hour) and double summer time (GMT plus two hours) in winter.

Whenever this sort of fiddling about is proposed, assorted justifications are tossed about: there will be fewer accidents (but not, presumably, in the morning), it will make us 'more European' (but only in winter - in the summer we will be an hour ahead of central European time), it will save energy (again, other than in the morning) and reduce crime.

To be fair, the Yeo line seems rather more intelligent than that pursued more than ten years ago, the last time this subject was up for discussion. Then we were solemnly told that switching to central European time would give us more daylight.

On that basis, we should have switched to Hawaii time and pretty much eliminated night-time altogether. Inveterate change-mongers, the sort who love dreaming up new names for police squads, or regiments, or Whitehall departments or radio programmes, should be told in no uncertain terms that we do not want double summer-time, central European time or Tokyo daylight time.

Hands off our clocks!

- Dan Atkinson, Economics Editor, Financial Mail on Sunday

Christmas: Time to look to the future

Our great British Christmas is, famously, the product of a time gone by, and we are all happy to imagine for a few days that the past is still with us.

In the real world, a light drizzle is falling and a trainee accountant and his nurse wife/girlfriend are spending the festive season in their maisonette on the edge of Croydon, with a trip in their second-hand car on Boxing Day to visit his or her parents for a buffet lunch.

But in their heads, there is snow on the ground and a coach and four are out in the yard, disgorging jolly, red-faced, gift-bearing characters straight out of Charles Dickens.
However, there is more to our dwelling in the past than this. True, the 19th Century Dickensian Christmas is one archaeological level of the British festive experience. But there is another, almost equally powerful but, because of more recent origin, rarely noticed.

Go into any big pub in December and puts Dr Who's Tardis to shame. This is real time travel, to a period somewhere between the mid-Seventies and the mid-Eighties.
The music, the decorations, the heavy boozing...they are all there.

It is the same at office parties and in restaurants. If Dickensian imagery rules our domestic Christmas, once work is finally over and the doors are shut, then the run up to the festivities is governed more by the era of Edward Heath and Noddy Holder, not least in the near-panic buying of goods during the countdown to Christmas.

There were sound economic reasons to do so in the troubled Seventies. Power cuts hit the country in the winters of 1970/1971, 1971/1972 and, famously, 1973/1974. Food shortages in the middle of that inflationary decade cleaned out supermarket shelves.
And those pub gatherings and office parties, with their almost desperate atmosphere, made sense in the early Eighties, when the scourge of unemployment meant people could not be sure they would all still be working together in a year's time.

None of these factors still applies: no power cuts, no inflation-driven food shortages, no mass unemployment.

It is 33 years since Noddy and the boys first urged us to 'look to the future now'.
We have, it seems, still to take their advice.

- Dan Atkinson, Economic Editor, Financial Mail on Sunday

>> Christmas money

Screaming Lord Sutch, where are you?

Screaming Lord Sutch, you should be living at this hour. True, few can remember anything he actually sang, but his Monster Raving Loony Party (and, before that, his National Teenage Party) has an impressive record in seeing its ideas put into law.

Votes at 18 instead of 21, the introduction of commercial radio, the abolition of dog licences - all were Sutch-ite policies picked up by the main parties. And on Wednesday, it seemed yet another of the great man's ideas had come to fruition.

Sutch, if memory serves, asked why there was just the one Monopolies Commission? Wasn't that something of, er, a monopoly? Gordon Brown's Pre-Budget Report contained the following startling sentence: 'The Enterprise Act provided ... two UK competition authorities - the Office of Fair Trading and the Competition Commission'.

Two, eh? Tremendous news! And there is better to come.

Further down, the report boasted: '[Both] the UK competition authorities are now independently rated among the top five globally'. So our competition authorities are internationally competitive. It makes you proud to be British, doesn't it?

Of course, the OFT and CoCo do not actually compete against one another. Or at least, I don't think they do. But some time during the last decade we seem to have accepted uncritically the notion that regulation and supervision of business and finance is some sort of service industry, at which Britain needs to be 'world class', rather than a branch of law enforcement.

Then again, there is always a dreamlike quality to Brownian productions such as the Pre-Budget Report and the Budget itself. And I don't just mean the front covers, with their rambling titles (usually containing words such as 'opportunity', 'stability' and 'enterprise') and their photo-collage of smiling nurses, happy police officers and eager schoolchildren.

I mean the piffling measures dressed up as dynamic reforms - this time round, a choice example was the proposal to change the name of the UK Patent Office. I mean the prime cuts of wishful thinking, such as the non-existent 'progress' on reforming the European Union mentioned on page 39.

And I mean those problems that never seem to go away, no matter how often they are 'tackled' (but then, of course, 'tackle' is politician-speak for 'do nothing about' as in 'we will tackle street crime').

A hardy perennial over the years has been something called 'oils fraud', which is always being 'tackled'. And there it is, on page 127. What will happen if oils fraud is ever successfully 'tackled'? Presumably the Chancellor will have to move on to tackle watercolours fraud.

Dan Atkinson, Financial Mail