The Age of Austerity?

Of course, the economy is struggling at the moment and people are angry about it. Those financial institutions which are at the centre of the media narrative about the economic crisis are probably bearing the brunt of the vocal criticisms from protesters the world over. But when things calm down and the protesters go home, and the finance ministers of the world step back from the void and find some other plaster to slap over the utter mess that is the global economy, we should remember that the media narrative about the big bad banks only tells part of the story. The banks were aided and abetted by complicit government regimes who often backed, if not demanded, some of the more extravagant lending decisions that have now created such headaches. Furthermore, those governments were the ones who rushed to the aid of said banks when they began to flounder with fistfuls of the taxpayer's cash. But the banks and the government were only responding to the demands of millions of people who wished to live beyond their means. You want to know why banks offered 110% mortgages? Because people were willing to take them on. And yeah, you can argue for government regulation to stop people from doing so and yeah, you can argue that banks should not have offered anything so ludicrous from a business point of view. But it was just the government and the banks that brought us here; it is we the people as well. Substantial numbers of the 99% that the occupy protests (falsely) claim to represent.

The reality is that people, government and banks were all irresponsible, and now it has reached a point where they are going to be forced to take responsibility for the implications of that lack of responsibility. And yeah, it is unfair that we all have to pay for it, and that our children (well, your children if you already have them/are planning to have them) will also have to pay for their/our mistakes. Yeah, to some extent the falsely created, inflated and maintained boom of the past two decades or so has changed things for the worse not just for us, but for the next generation as well. But there is something positive that can be passed on to the next generation well as being heeded by this one. And it all boils down to that one word: responsibility.

We need to make governments responsible for their actions. If they create unreasonable expectations with the services they claim to be able to provide, then they should be punished at the ballot box. If they spend billions part nationalising failed banks, then they should be punished at the ballot box. And if they studiously refuse to accept responsibility or learn from their mistakes then - you guessed it - they should be punished at the ballot box.

Then we have business - financial institutions or otherwise. Again, they need to be responsible for the outcomes of their own choices and decisions. To some extent all business is a gamble - sometimes taking a risk will really pay off, other times it will be a disaster. And businesses of all shapes and sizes need to realise this. But crucially, they need to understand that if they take a gamble and it doesn't pay off (and they don't have the funds to cover that gamble) they need to understand that the government - or, more properly, the taxpayer - will not be there to bail them out. If your business fails, then it fails; there is no recourse to the public purse.

And finally we the people - we have to understand that, collectively, we cannot always get what we want. That money, those homes, those mortgages are not rights - rather, they have to be earned. And when all this is understood, we need to get out heads around the idea that the state does not exist to make up for any shortfalls between what is in our wallets and what makes up our expectations. Yeah, the government is going to have spend less on public services. A whole host of things that people had started to take for granted will no longer be there unless they have the cash to go out and get them for themselves. Which will be deeply disappointing for some, but a true return to reality for all.

It will be interesting to see how the history books end up describing the era we are now entering. So often, I hear it referred to as another age of austerity. Yet I can't help but wonder whether it will one day be seen as the return to reality; that, far from being an aberration, it was actually the return to normality after a rather ludicrous era when all sorts of outrageous claims, such as the supposed yet largely impossible end to boom and bust, were not only made, but also widely believed.  That the myths of a comprehensive and ever more extensive welfare state were exposed, and the idea of people, businesses and governments being responsible became acknowledged as common sense once again.

Whether or not this happens is largely dependent on the people; on you and me. It is about whether we allow ourselves to be deceived by business and government on an ongoing basis, and whether we allow self-aggrandising politicians to again sell us the most improbable myths in return for votes they blatantly do not deserve. But above all it is about whether we are going to invest so much time and energy again in allowing ourselves to be deceived by ourselves, or whether we face up to a reality where the future isn't always better, and where we can't always have more and more. It's about, in short, whether we are going to face up to reality.

The coming age - of austerity, or reality, or whatever you want to call it - is going to hurt, and its going to hurt some more than others. But we can avoid a repetition of that pain in the future by keeping our feet on the ground and by making ourselves and those people and institutions around actually responsible for what they say, promise and actually do.

We can make the age of austerity into a return to reality - and in doing so, witness the ressurrection of the idea of responsibility in all of our lives.