After all, the "Noughties" were plagued with financial instability and plunging asset values, beginning with the "dotcom" collapse and ending with "sub-prime".
Yet that’s not the entire story. Not by a long way. You can only conclude the last decade has been disastrous by viewing the world through a narrow lens. Yes, the so-called "advanced economies" have performed terribly. But, then again, they have been subject to self-imposed policy blunders – in terms of fiscal and monetary profligacy and the removal of key regulatory firewalls – that will make future historians wince.
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I honestly believe the likes of Alan Greenspan and Gordon Brown will be savaged when authoritative accounts of the past 10 years are written. Those who dubbed the former boss of America’s Federal Reserve "the maestro" and lauded the current UK Prime Minister as "the Iron Chancellor" will look foolish in retrospect – even more than they already do.
As we’ve repeatedly whacked the self-destruct button over the last 10 years, many other parts of the world have made enormous economic progress. Most mainstream global investors and media outlets are only now starting to realise this – and at a glacial pace. Conventional wisdom in the West remains profoundly behind the curve when it comes to grasping the extent to which the centre of economic gravity is shifting to "the rest of the world".
Over the last few months, Western financiers have, instead, been in triumphalist mode, pointing to the "rebound" in share prices on Wall Street and in the City. It’s true that during 2009, the S&P500 – America’s most watched stock index – gained 23pc while the FTSE-100 went up 22pc. These are very strong annual gains.
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This 2009 performance, though, represents only a partial recovery from the cataclysmic losses of 2008. Looking at the last decade as a whole places our recent share price gains in a somewhat less triumphalist light. Since the end of 1999, the S&P500 has actually fallen – by no less than 24pc. This is the first decade-long drop since the index began in 1927.
The FTSE-100 is also 21pc lower than at the start of the Noughties. On top of that, a major reason the UK index has recovered at all this year is that quite a few large mining companies, based elsewhere in the world, are listed in London (for now).
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It’s not just the "Anglo-Saxon" economies which have suffered, either. The pan-European FTSE-Eurofirst 300 has lost 34pc over the last 10 years. These numbers represent the wiping-out of, quite literally, trillions of dollars of wealth. They are nominal figures, so the impact of falling currencies and inflation means the actual drop in real asset values is even more profound.
Such disastrous losses have, for the most part, been incurred not by rich "fat-cat" individuals, but by the pension-funds, insurance companies and other institutional investors upon whom tens of millions of ordinary Western households depend – or thought they could depend.
The dire performance of Western assets markets over the last decade is unprecedented. It severely challenges the long-standing view that holders of equity, if they’re patient, will do well. If pondered upon, and assessed honestly, it also unsettles the assumption, hard-wired into our political and cultural mindset, that our part of the world will keep getting richer.
Contrast this sorry tale of wealth-loss with the fate of the large emerging markets over the last decade. Off the back of a manufacturing miracle, China’s Shanghai Composite Index of leading shares gained no less than 140pc over the last 10 years. India’s Sensex 30, the main index on the Bombay stock exchange, is up 249pc – the result of the country’s IT and outsourcing skills.
January 6, 2010
