‘Alistair Darling, the chancellor, had announced that he was relaxing his proposals to tax more heavily one group of immigrants – the so-called non-doms (non-domiciled residents) who were mightily wealthy and used London as a tax haven… it was hard to see why it was thought that a good way of bringing foreign money into the UK was to let rich foreigners live here without paying taxes so long as they kept most of their money overseas.’ (The Gods that Failed, Chapter 1)

Yesterday, the House of Lords reported that this tax decision had damaged the UK’s global competitiveness. Read Larry’s article here.

‘Voters had supported the increase in spending; they had been unhappy at the shabby state of the public realm in 1997 and wanted to see extra investment in the services they needed and used. Understandably they wanted to know what had happened to all the money.’ (The Gods that Failed, p.150)

On the front page of today’s Guardian, Larry reports on the growing inequality in Britain - while the rich have been getting richer, the poor have been getting poorer. The Labour government’s high-profile bid to end child poverty seems to have come off the rails. Read the article here.

In Chapter 9 of The Gods that Failed, Larry and Dan point out the strange frequency of the phrase ‘perfect storm’ in the media - no longer just a meteorological term, it is now the official tagline of crisis in general.

 ‘The state of the global economy in the first half of 2008 made it a prime candidate for the “perfect storm” thesis… As the chief economist of the International Monetary Fund, Simon Johnson is hardly one for apocalyptic visions of the future, but in November 2007 he popped up to warn of a “perfect storm” caused by the interaction of turmoil on the financial markets and the spiralling cost of energy.’

Today, Larry Elliott and Ashley Seager report on Mervyn King’s admission that we will see more ‘turmoil in the markets,’ and his plan for improved regulation. And it seems the storm is spreading to the rest of the world. In South Africa, the national Times reports a ‘near perfect storm in housing.’

Throughout the book, Larry and Dan look at the 1978/9 ‘winter of discontent,’ with a grim nod to the present climate. Recently ‘nine porters at Boston’s Logan airport had seen their incomes drop dramatically after the airline for which they worked decided to charge passengers for bag check-in. This diverted money previously paid direct to the porters in tips to the company instead.’

Instances like these are becoming more common, even since the Telegraph drew similar parallels two weeks ago. The BBC have uploaded a video reporting on pay cuts for ground level workers, especially those closest to the City, and it seems likely that there will be pay cuts across the country.

The spectre of the Northern Rock crisis still hangs over the economy, and the bank itself is still under government protection. As Larry and Dan write in the book:

‘…European Union competition rules demanded that the competititive advantage enjoyed in the present by the receipt of state aid, had to be “given back” in the future to its competitors. In other words the firm [Northern Rock] would have to be hobbled in some way in its future activities.’

And according to the New York Times, the European Commission is launching an inquiry into the legality of the ongoing government bailout.

In chapter 6 of The Gods that Failed, Larry and Dan discuss the importance of the housing market as an indicator of the wider economy:

‘…part of the economy - the housing market - certainly seemed to be on the slide; the influential Halifax house-price index’s fall of 1.1 per cent in November was its third monthly decline in a row. Housing finance is the most important expression at the household level of the City of London’s vast credit machine, thus it was unsurprising that the credit crunch that followed the so-called subprime lending crisis of 2007, which we cover in detail elsewhere, should have choked the supply of funds for mortgages.’

Now, house prices are falling at their fastest rate since Halifax began keeping records in 1983. Read Larry’s article here.

The New Statesman has one key piece of advice for its readers: don’t buy now. For the full article, click here.

‘The excesses of banks, big business and the super-rich have shattered our economic system. In the final extract from their new book, Larry Elliott and Dan Atkinson put forward their principles for a fairer and more cohesive society.’

Read the third and last of the Guardian extracts from The Gods that Failed here.

‘Britain’s professionals are worried. Their careers and living standards are under threat. Lawyers, doctors, bank managers and postmasters face an uncertain future as faceless corporations take over their work.’

Read the second of the Guardian serial extracts here.

We’ve certainly caught the mood of the moment - today the BBC gives first-hand accounts of the human impact of unscrupulous lending. Read the article and see the Newsnight report here.

Read the first in a series of exclusive extracts from The Gods that Failed in today’s Guardian, or at Guardian Online.