13 February 2010

It's beginning to add up

I was playing dominoes with my son earlier - the old fashioned tile game, not a see-who-can-order-the-hottest-pizza competition - when it struck me what has been going wrong with the economy these last few years: innumeracy. In short, we have lost the ability to add up a row of numbers. Sure, we can usually manage the small stuff, change from a fiver, that sort of thing, but when the zeros start going on, the wheels start to come off.

It's all coming to a head in Greece right now for this very reason. Many within the Euro zone are pointing the finger at some of the less-than-truthful declarations Greece has made in the past in order to gain Euro membership, and in the present as to the true state of its indebtedness. But I reckon as the number started to rise they simply lost count - put in the best estimate, like an MP's expenses claim. Even the president of the Eurogroup, Jean-Claude Juncker, admitted no-one else in Europe had questioned the figures. If everyone in Europe has lost count of how much Greece owes everyone else, I reckon some kind of number-overload point has been reached.

On a smaller scale, I see it every day all around me - my Twitter fans (!) will know the delight I feel upon discovering supermarket multi-buy deals which are cheaper than single packets. Or take my soon-to-be-ex electricity supplier, E.ON (please). Every April they set a monthly direct debit, based upon my average consumption. Last year we started at £91 per month, until we racked up a £67 credit within 3 months. Taking it down to £81 pm, by Christmas we were nearly £100 in the black, so I was interested to receive this week notification of the proposed new monthly payments from April 2010. They'd done a lot of thinking, carefully analysed our usage, and used all their fingers and toes to come up with a new figure: £119 per month.

And I think it's obvious where this number-weariness has come from: RBS and Northern Rock. As I journeyed into London last week, past Stratford and the site of the 2012 Olympic Games, I was thinking back to 2006, and how quaint it seemed to have a political scandal about those Olympic costs "spiralling out of control" at a cost to the UK taxpayer of £5bn. Even the initial nationalisation cost of Northern Rock at £50bn seems chump change, compared to the hairy barbarian cluster-fuck that is Royal Bank of Scotland. So perhaps I should not have been surprised last week to hear that RBS was planning to hand out £1.3bn in bonuses, despite making a loss of over £7bn.

The only conclusion I can come to is everyone at RBS has also forgotten how to count. Failure to grasp reality was behind the sub-prime mortgage fiasco, and it seems to me that reaching into a pot containing minus £7,000,000,000, expecting to find some cash is the ultimate proof of this. The brain-burning size of the debt has suspended all numeracy functions, and what's more it is spreading: the coverage in the press seemed almost muted. It's such a familiar territory to us now, we couldn't really be bothered to raise a snarl. We have been utterly beaten into apathy and confusion by the sheer size of the figures involved, numbed by numbers. Pretty soon I'm going to be asking my son to add up the weekly shopping as my skull collapses with anger at the idiotic sense of entitlement by morons whose supposed talent for wealth generation has gone almost as far into the red as our savings.

Let's hope I'm not reduced to asking E.ON to count for me.

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