Imagine yourself back in the spring of 2007. Everyone was feeling pleased with themselves. The problems with our system of capitalism had been solved. We’d outsmarted all the generations that preceded us, even the brainy ones who thought they understood the dismal science of economics.
The cycle of boom and bust had been abolished, through the wonders of excellent economic management. Ed Balls had been appointed City Minister the previous year. In his first speech, he promised that “nothing should be done to put at risk a light-touch, risk-based regulatory regime”. The public was frolicking about in a bath of cheap debt.
