Their objection is based on a fundamental misapprehension of what took place in 2008. This was not a case of a few badly-run banks failing. Rather the entire UK banking sector failed. It was a systemic collapse.
The onus must now fall on those who want to maintain the manifestly dangerous status quo, not the advocates of reform, to justify their position.
There’s some interesting stuff in there. Joseph Stiglitz says that the Vickers reforms to ringfence retail banking pobably don’t go far enough. He proposes a theory on why Germany practices left-wing economics at home but right-wing economics abroad (there’s a soldiarity gulf). He also explains why China can combine high growth with high inequality.
The British public, in aggregate, paid down existing mortgages over the month, rather than taking on new home borrowing.
Does this matter for the wider economy? Interesting the OBR suggested in March that it does not.
Keynesian theory says that over hasty deficit reduction can be counterproductive. This is because cuts and tax rises depress overall economic activity and thus tax receipts. Depressed activity also pushes up unemployment and results in a bigger benefits bill.
Singapore is a prosperous place with an education system that serves its brightest students exceptionally well. It is also a socially immobile and deeply unequal state. That’s not Gove’s vision for the UK, is it?
Some economists argue that monetary policy is proving ineffective at getting us out of this present malaise because the Bank of England is failing to do enough stimulus, or, more importantly, failing to make it clear to the public and financial markets that it will do enough.
The logical conclusion from Sir Mervyn King’s reasoning is that this new UK liquidity push will be just as useless as that of the European Central Bank.I suspect this is indeed what the Governor really believes, and that he has been forced into the so-called “funding for lending” operation by a desperate Treasury.
Strange that the eurozone crisis should be “killing” the UK recovery, as the Chancellor puts it, while leaving the major economies that are actually members of the single currency relatively unscathed.
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