Knowing and Making

From the FT:  Acrimony dashes Doha hopes : Normally, the closing session of the forum displays ritualistic expectation that the trade round will be completed in the coming year, but there was little such optimism in 2009. From the BBC:  Ministers promise 2009 trade deal Trade ministers from 24 countries have pledged that they will agree a new world trade deal by the end of 2009...most of these talks in previous years ended with similarly optimistic statements Huh?

Robert Peston interviewed Martin Wolf in Davos (along with Roger Carr and Richard Lambert, but they needn't concern us at the moment; Lambert did display a useful clarity, requesting nothing but opening of the credit markets). Martin, as always, had some exciting things to say and said them in his unique way. My paraphrasing: The UK is the most vulnerable economy in the G7 because the financial sector is so important, because the housing boom was so large and because household debt is sensationally high, and we are also highly dependent on the rest of the world which is suffering a recession too. And our underlying fiscal position related to these vulnerabilities is much worse than anyone thought 2 years ago. It's interesting that the fact of a recession is the problem - that is, a reduction in GDP, rather than the actual level of output or consumption. If the UK has benefited (as it undoubtedly has) from huge growth in the financial sector and housing-related investment over ...