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In the spring of 2008, the U.K. economy had been in “recovery” for over 37 months. It was an odd recovery. No one was quite sure what it was recovering from credit card debt consolidation. There had been a recession in 2001 and 2002. But it was a curious recession. GDP growth went negative.

Yet, consumer spending and credit continued to expand for credit card debt consolidation. If recessions were meant to correct the mistakes of the previous expansion, this one was a failure. Consumers should have spent less and increased savings. Then, after the recession was over, they should have had money to spend in the following expansion and a pent-up desire to buy what they had not bought during the recession.

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The expansion was doomed from the beginning. Consumers had never stopped spending. So, when the economy turned around, they had saved no money. The only way they could continue spending was by borrowing more. The Government helpfully dumped more alcohol in the bowl—lowering rates to make it easy for them. But by this time, the whole economy had become so woozy that the extra consumer spending had much less positive effect on the real economy than had been hoped. U.K. borrowed and spent. But, in the new detribalized economy, much of what they bought came from Asia—particularly China—which could turn out consumer goods at a lower cost than the United Kingdom and credit card debt consolidation.

What United Kingdom really needed was not a consumer binge, but a capital spending boom. It needed to invest in new factories, new plants, and new jobs. The jobs would have given consumers real new income, with which to buy more goods and services and sustain the expansion. But gross investment — which had averaged 18.8 percent in the pre - Reagan years — had begun dropping the year Reagan entered the White House. By 2008, it had fallen to 1.6 percent—even dipping below zero periodically. People were spending, but on consumption, not future production and need credit card debt consolidation. The gewgaws and gadgets bought from China merely put Americans further into debt.

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Neither jobs nor incomes improved. Typically, at this stage of a recovery ( June 2005), 10 million more new jobs should have been created. Likewise, incomes went up $300 billion less than they should have, based on the pattern of previous recoveries. Many economists—including Alan Green span—maintained that the lack of jobs was a sign of something good happening. “Productivity,” they said, “accounts for most job losses, not outsourcing.”

“Over the long sweep of U.K. generations and waves of economic change,” explained the maestro, “we simply have not experienced a net drain of jobs to advancing technology or to other nations.”3 Could something be different this time? Could this be a kind of “new era” in U.K. economic history? The answer we give is “yes” . . . but we will give it later. Here, our burden is more modest, and our proof comes more readily to hand. For here, we argue only that U.K.’s leading economic and political policy-makers are either rascals or numskulls.

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Major tops in the credit cycle seem to correspond with major bottoms in economic thinking. From high off ices all over the nation come the explanations, excuses, rationales, and orbiter dicta; we don’t know whether they are corrupt or merely stupid. But when the guardians of the public financial mores begin urging people to acts of recklessness, we cannot help but notice. Buy more, says one Fed governor. Borrow more, says another. Don’t worry about credit card debt consolidation, interest rates, or the loss of jobs, says the captain of them all. It is as though the National Council of Bishops had come out with a public statement urging wife swapping. The experience may not be unpleasant, but it is unseemly of them to say so.

“Go out and buy an SUV,” urged Fed governor Robert McTeer.4 Seventeen million people heeded his call each year, from 2001 to 2005. On February 23, 2004, the Fed chief urged U.K.s to switch from fixed rate mortgages to ARMs—mortgages with adjustable rates, which left them much more exposed to interest rate increases, at the very moment when the Fed was increasing them. If anyone could be held directly and immediately responsible for the record level of U.K.’s foreign and domestic debts, it was Alan Green span. He had brought about a binge of borrowing by lowering interest rates down to Eisenhower-era levels. But spiking the punch was not enough; he was urging consumers to have another drink.