What is the difference between a healthy British economy and the current crisis? 
Beginning with a conclusion isn't the norm, but on this occasion I will start with a summary of answers to the question above. The list below applies to the last 3 decades, but especially from 1997 to the present day.
Healthy economy Crisis, downturn, recession
Unlimited mortgage lending to people who cant afford it. Incite rampant property speculation. Much less mortgage lending than before, hope that the property buying returns.
Uncontrollable speculation in shares and financial instruments. Much less speculation in shares and financial instruments.
Little manufacturing and export, get the Chinese to do it for you. Even less manufacturing and export.
Have the media show people a share index chart that is adjusted to make it appear that prices goes up in the long term when in reality they go down. Continue to show them the same chart, which although adjusted to go up, goes down anyway. Tell them that this is temporary, shares always go up in the long run i.e. lie.
Tell people that house prices are rising and that rather than every pound being worth less than it was before, this means that you are now better off than when each pound was worth more. Cut interest rates in order to get more people to take out mortgages that they can't afford on massively over priced property, at the same time that the currency is collapsing.


In the UK, an awful lot of people are unemployed and have been for a long time. If this is the case, why have they received so little attention for so long, but when somebody is made redundant at a bank it is some kind of national disaster? Although it is true that for some individuals there is a new, shocking unemployment crisis, on a national scale there is no such thing, because it was already here since decades ago.
Do you know what business this person's employer and other banks were in?
  • Mortgage lending to people that couldn't afford it on the assumption that perpetual house price inflation meant that they couldn't lose.
  • Encouraging people who couldn't afford it to take out credit cards that would mean that they were indebted for life. As long as they made the minimum payments the bank was raking in the interest.
  • Speculating in financial markets, commodities and various exotic financial instruments, hedge funds.
 Well they did lose, because funnily enough people defaulted when they found themselves deep underwater. The banks then expected the public to provide them with payments of hundreds of billions of pounds to secure the wages and bonuses of over paid Chief Executives and a few other employees. It is not the norm for these employees to either make themselves redundant or work without pay because they performed so badly at their job.
Many firms have been run over a long time in a way that didn't make profit for the firm, but secured high wages and benefits for the Chief Executive. They are having a good time at the moment because they can use the media hype over the "downturn" to avoid having to take all the blame, and even ask for government help. Let me show you an example of the kind of thing that became the norm.  Have a look at  this.  You will note that this company, which still exists today  with a different name,  has something called EBITDA in its accounts. That means Earnings Before Interest Tax Depreciation and Amortisation. In plain English to you and me, it means "we don't make any profit".  It also has an "exceptional non cash charge" of over £1 billion. In plain English to you and me that means "we lost a shed load of money". 
This has been repeated many times over with some of the biggest household names in multi national companies which many people have long believed are super successful and profit making. Not making money became almost the norm. It is nothing to do with the downturn, credit crisis or whatever else you want to call it. It is bad management by people who didn't care or lacked the skills and knowledge to do the job correctly.
 I can remember this time period very clearly. This particular firm announced a rights issue of shares, which resulted in the share rising very rapidly. What they were doing was asking for people do give them more money because they were up the creek without a paddle.  Would you be pleased and want to buy shares in a company that was debt laden with no prospects of future profit? This is the whole nature and purpose of the Stock Market and why it is so useful to a firm to be listed so that it can turn to gullible people to bail out the company i.e. secure Chief Executive pay.
Further to this, for the purposes of illustration of the way finance works, I have tried to find a list of the original FTSE 100 companies, but I can't seem to find one. I don't actually know the original date of when it started, but it was certainly a long time ago. However, it is not necessary to go back that far to see an example of how it is adjusted to make it appear much higher than it really is. What you need to understand is that the vast majority of these companies lost all of their share value or no longer exist. What does that mean? Well it means that if you had "invested"  £1000 back in the good old days when £1000 was worth about 1 trillion of today's pounds, you would have almost non of it left. That is the reality of shares, they lose most or all of their value over the long term, but serve the purpose of allowing non profit making firms to continue in business for a lot longer than they would otherwise.
Perhaps you have seen an advertisement on the television asking you to report "benefit thieves"? Perhaps you have read a story about "scroungers" living in an extra large and luxurious council house ? Why do these people receive such attention when there are others who are theoretically working for a living but in reality are responsible for costing the state millions of times more. Such reports are intended to create resentment among those who are limited in their thinking and easily swayed by propaganda. This in turn helps to subjugate the majority and benefit the ruling elite.
I don't know where these people went to learn their trade but it is basic economics that inflation and debt is BAD.  House prices falling is not bad, the real crisis is that all this happened in the first place, we are just returning to equilibrium and it will be a slow process. Sending interest rates to near zero to try to resurrect disastrously out of control borrowing cannot possibly work, it will simply collapse the currency even further.  The new "high liquidity" proposal that is in the works is also a very bad idea. When the house is on fire you are wise to choose water over petrol if you want to extinguish it.