In a welcome return to blogging, Giles Wilkes points out that there was no boom before the bust of 2008, so that morality tales of the recession being payback for living high on the hog are just silly.

He's right. But why was there no spending boom?

My chart shows one reason. It shows that growth in households' real incomes was slowing down long before the recession. For example in the five years to 2007Q4 - supposedly the boom years - it grew by an average of 2% per year. That compares to growth of 3.2% in the 40 years to 2002.

We don't have to look far for a cause of this slowdown. In the 00s, companies reduced their capital spending (relative to profits) and this depressed growth in incomes generally; investment is traditionally more a complement than substitute for labour, so investment growth usually means growth in workers' incomes.

This pattern is consistent with the "investment dearth" of which Ben Bernanke spoke in 2005; Robert Gordon's "end of growth" (pdf); Larry Summers' secular stagnation and Andrew Kliman's falling rate of profit.

It's this growth slowdown that led to the financial crisis. A lack of real investment opportunities meant that low interest rates fuelled what Austrians call malinvestments and Marxists "speculation and crises": mortgage derivatives grew in large part because there was a hunt for yield as bond yields declined. Stagnation generates bubbles, and bubbles burst.

This should be well-known to readers of this blog. Which poses the question Giles begins with: why do both Labour and Tories prefer to talk about the crisis as if it were a morality tale?

I suspect it's because they are in denial. Labour and the Tories agree upon one big thing - that capitalism is basically sound and needs only a few tweaks. But the fact that growth was faltering for deep structural reasons long before the crisis undermines this optimism.

What if capitalism can no longer generate decent increases in workers' incomes? What if conventional policies can do little about this? Such questions are off the political agenda. But they bring into question the very purpose of a politics in which the parties compete to offer higher living standards.

Perhaps, therefore, morality tales about the economy serve a useful function - they deflect attention away from the structural failures of capitalism and the inability of politicians to do anything about them.