PRESENT TENSE:HERE WE are. 2009: the least anticipated year in decades. On Monday, the country will finally return to business as usual. We'll tiptoe back, cowering a little in anticipation of the pain to come, writes SHANE HEGARTY
We know we're going to be slapped in the face, but we're wondering if we're going to get kicked up the backside and kneed in the groin at the same time.
Maybe 2009 will herald a new dawn. Gordon Brown certainly thinks so. This week, the British prime minister talked about 2008 as being the year in which "the old era of unbridled free market dogma was finally ushered out". Such gentle language. It's like saying that the Twin Towers were "ushered out" in 2001.
That's exactly the kind of chutzpah needed when you are promising to save the world from a mess that you've been partly responsible for creating in the first place.
In his assessment, Brown also joins those who claim that the current crisis is so momentous it will lead to a paradigm shift, a fundamental alteration of the global financial system. It would be comforting to believe that if any good is to come out of this, it is that things are so bad it will never be forgotten, that this will become a bedtime story used to scare future economists.
But that will probably prove a vain hope, because you can be sure that whatever cunning scheme the human race comes up with, we'll ensure it contains just enough escape clauses to allow us to screw everything up again at the earliest possible opportunity.
There are a couple of interesting pieces on the subject in the December issue of US magazine, the Atlantic. One looks at the way in which research using artificial trading has shown time and time again how people will inflate an economic bubble. Chastened by its eventual collapse, they will moderate their behaviour in future cycles of trading. Unless certain conditions are changed, when they'll re-inflate the bubble all over again. It is among the reasons why real-world experience has yet to lead to fewer and fewer financial crises.
The other piece is by a former stock analyst, Henry Blodget. He admits that during the original dot-com boom he spotted that it was a bubble, warned people that they needed to be cautious and then proceeded to ignore that instinct and, in his own words, "missed the top and drove my own clients right over the cliff". That last crash, remember, was as recent as 2002.
In the scapegoating that followed, Blodget's reputation was eviscerated - which is how he ended up in journalism (we'll take anyone). "What the hell happened?" he asks of the latest economic catastrophe. "After decades of increasing financial sophistication, weren't we supposed to be done with these things? Weren't we supposed to know better? Yes, of course. Every time this happens, we think it will be the last time. But it never will be." Bubbles are inevitable, he points out, as long as human psychology and a market economy mix.
Blodget concludes by observing how governments will insist that it shouldn't happen again, they'll put regulatory structures in place and people in jail (that's what they do in the US) and that the memory will be searing for a time. But, gradually, things will improve, the memory will fade, and the regulation will be loosened by future administrations. Everyone will believe that this time things will be different, but it won't be. Boom will inevitably lead to bust.
Cheery thoughts. However, if the current "econoclypse" has taught one harsh lesson to those of us who are financial lay people/economic illiterates, it is this: trust no one. Those who claimed to know how to manage the world's economy turned out to be slightly less qualified than an infinite number of monkeys with an infinite number of calculators.
It would almost be more comforting to believe that they were being wantonly reckless. That would at least give us a sense that they had some control over things.
In the end, human nature got us into this mess and human nature will no doubt propel us into another disaster in five, 10, maybe 15 years time.
Or maybe several in that time. And when the bubble begins to inflate again, the apprehension that grips us right now, a couple of days before we all go back to work and face whatever nastiness awaits, will be reversed. It'll be gold rush time again, and we'll all jump in for fear of missing it, and hang in there for fear of getting out too early.
And those who are supposed to know how these things operate, in whom we trust to remember what went wrong before and to prevent it from happening again, will suffer the worst case of amnesia ever to hit anyone outside of a daytime soap opera.
shegarty@irishtimes.com