The housing bubble - the bill is due

The November US employment numbers were just awful. The economy lost over 500,000 jobs. The US economy has lost jobs every month this year. Almost 2 million jobs disappearing since January. The grim figures even forced President Bush to admit that the US economy is now deep in recession.

I get very squeamish about unemployment. It is a very nasty business, and creates untold misery to those families it touches.

Unfortunately, today's job destruction is a direct consequence of the policy mistakes of the past. The chain of events is all too clear. If it wasn't for that ridiculous housing bubble, there would have been no banking crisis. If the banks were not so compromised, a prudent and sustainable level of credit would now flow into the real economy. The economy would have kept growing, and employment levels would have been maintained.

Sadly, the same dreadful process is now underway here in the UK. Unemployment is about to explode here too. The housing bubble is about to present the bill, and we will pay dearly in terms of higher unemployment.