This is the last issue of Investment and Business news in 2008. The next issue will be with you on January 5.

Maybe, then, right now is a good time to take stock.

What a year. 2008 saw ‘once in a hundred years events’, or so we have been told. Capitalism is in trouble. Social unrest is growing across the world, and governments are being dragged by their populace into protectionism.

But, opportunity lurks too. In fact, right now, the global opportunity is truly outstanding. The danger is that we talk ourselves out of seeing this.

It seems that 2008 was not a good year for the credibility of economists.

Yesterday, on BBC’s Panorama, the Bank of England’s deputy governor Sir John Gieve admitted the Bank didn’t understand the crisis, and had completely failed to realise how serious it was.

But they weren’t alone. Until a couple of months ago, very few forecasters were predicting recession in the UK or US. As for the global economy, the general feeling seemed to be that it was set to see a mild slowdown in growth.

Not everyone agreed. There were plenty of those in the media who warned things were more serious than we were being told. This publication received a number of emails from readers accusing us of being too pessimistic, of spreading woe. And indeed, on a wider scale, many said the media were talking the economy into crisis.

Ironically, it was often the very same people who talked up house prices and tried to reassure us all was well with the economy earlier in the decade, when actually borrowing was clearly out of hand, who then said things were nowhere near as bad as we were being told.

And this optimistic view of things has not gone away. We are being told the big error was letting Lehman Brothers go, that if the Fed had saved the bank, the economic crisis wouldn’t be anywhere near as serious.

And Gordon Brown tried to push the economy along by spending our way out of crisis.

The trouble is, the optimists are being optimistic for the wrong reasons.

It can make sense for an economy to spend its way out of recession, if that recession has occurred because there is a gap between potential output and demand. But, actually, in the UK that wasn’t the problem at all.

It is not that the UK couldn’t be more efficient, but that we had become too geared towards unsustainable living. The retail and property sectors had become far too important. Napoleon once said that Britain was a nation of shopkeepers. He might have said it a couple of hundred years too soon, but he was right. An economy can not be sustained by shopping alone.

As for the property boom, and the view that somehow the economy could be sustained by rising house prices, this was one of the biggest fallacies of modern times. It was never going to be sustainable, and contrary to what some people say, there was no shortage of publications which warned this was the case. And when this publication warned that the housing boom was going to create major problems for the UK in the years ahead, we received many emails from readers agreeing. Property cynics were a rare species, several emails were received by readers who said their friends laughed at their ideas about the housing market.

So when Gordon Brown tries to kick start the economy through spending, he is actually missing the point. The UK’s economy was fundamentally out of balance, it can recover only when it moves back into balance, yet GB and his chancellor are trying to prop up the very sectors of the economy that had grown too big.

Yet, on a global scale, the problem really is too little demand. It has been a problem for years. So, while the Gordon Brown fiscal push may be the wrong thing for Britain, it is the right idea if applied to the world, and the IMF is right to push for a global fiscal push equating to 2 per cent of GDP.

But the global economy had been far too reliant on demand from the US and, to a lesser extent, the UK and a handful of other economies, including Australia, Denmark, Spain and Ireland.

In some ways, it was not the Anglo-Saxon consumer who had become too reckless, it was the consumers from Germany, Japan, China, and the Middle East who were too cautious.

But it does seem there has been another force at work.

Maybe the real cause of this crisis goes deeper than just crazy bankers and reckless spending.

And maybe this deeper problem also provides the roots of the solution.

© Investment & Business News 2013