Tuesday, October 14, 2008

A silver lining ...

Whilst I was disappointed by the taxpayer's acquisition of toxic mortgages from B&B and the cheap sale of the savings business to Santander, I was wholeheartedly cheered by our Government's move to a buy-out rather than a bail-out response to the banking crisis. The recapitalisation of the failing banks by the Governmental purchase of preference shares through a rights issue is just what the doctor ordered.

This is a far more sensible course of action than the Paulson plan of buying toxic paper which was rushed through the two houses in the U.S. and would do nothing but to help those who least needed it and add woe to those who could least afford it. For the people, by the people ... don't make me laugh.

I'm also pleased to hear that the deregulation of the Thatcher era is finally being seen as partially culpable for the current crisis. Those who know me, know that I despise the laissez faire dogma of the Chicago "Nut-House" of Economics, as once preached by its high priest Milton Friedman. The die for this crisis was cast long ago and I'm glad to see that people are saying so.

P.S. If you want to know my economic tendency - it's A.Smith, J.M.Keynes, J.Schumpeter and J.K.Galbraith.