Economic Growth

As the fissure between Keynesians and Monetarists opens, while recovery stutters uncertainly across the West, it becomes clear that they talk of two economies. One is based on borrowing driving consumption and asset inflation. The other is based on saving and enterprise driving the creation of tangible wealth. The former is in trouble, the latter is doing rather well.

This blog has recently been proclaiming that bad news is good. Falling house prices, negative lending or, as I prefer, net saving, tougher requirements demanded of borrowers, narrowing of the trade gap, improved industrial performance, all point to the re-balancing of the economy to provide a more certain route to future prosperity.

Against this a worried population braces itself for major job losses in the public sector, restricted income for those who remain, cuts in public services, reforms in welfare meaning fewer will be entitled and then perhaps to less, against a refrain from the left about a double dip recession. 

There is, in fact, no such thing as a double dip recession. What there is, and we do not want it, is an illusion of recovery bought with borrowed money, which is not sustainable without constant stoking, leading to crippling sovereign and personal debt. In the end the cost of the debt absorbs the majority of the output of both personal and national effort.

There may, however, be a compromise. I am not at all sure we should aim to sell the national stake in RBS, Lloyds and Northern Rock. We already have retained the bad bits of Bradford and Bingley and Northern Rock. Because these funds are closed and running off, they are now showing a profit. There is a powerful case for suggesting that the taxpayer should retain a competitive presence in retail banking to sponsor new enterprise loans, said to be so scarce, by allowing these banks to operate at lower capital ratios than independent competitors. In the last resort they are protected because of the Government’s shareholding.

The so called investment arms would have to be cut adrift to sink or swim and the independents would be told that if they required rescue in future their invest arms would be allowed to go bust, their shareholders would be wiped out and their retail networks would be absorbed into the state owned banks to secure ordinary depositors. This form of regulation, which is light on rules but heavy on consequences, would allow a little extra flexibility to nurture recovery, without damaging the re-balancing of the economy.

I commend it for consideration.

17 Responses to “”

  1. I got what you mean , thanks for putting up.Woh I am glad to find this website through google. “I was walking down the street wearing glasses when the prescription ran out.” by Steven Wright.

  2. Very interesting subject , appreciate it for posting . “Everything in the world may be endured except continued prosperity.” by Johann von Goethe.

  3. Ive been meaning to read this and just never got a chance. Its an issue that Im very interested in, I just started reading and Im glad I did. Youre a terrific blogger, one of the finest that Ive seen. This weblog absolutely has some facts on subject that I just wasnt aware of. Thanks for bringing this things to light.

  4. Ones web site emerged upwards during my exploration and i am stricken in what you may have organized about this subject material. I’m right now diversifying my personal seek and for that reason will not lead extra, even so, Ive book-marked your internet site and will be re-occurring to maintain up along with any specific forth-coming alterations. Simply have fun here plus thanks for enabling my own brief review.

  5. Thank you a good deal for any blog. Amazing.

  6. The business brokerages network will give you access to a large pool of individuals who’ve the details about businesses for sale and buyers or investors looking for any organization venture. By producing good use from the info you have

  7. This blog is awesome. I enjoyed reading this post. Keep up the good work.

  8. I often read your blog and always find it very interesting. Thought it was about time i let you know…Keep up the great work

  9. Great post ! I want to know when you update your blog, where can i subscribe to your blog?.It helped me a lot. I was little bit aware about it but your post gave me clear idea

  10. Hi admin, Do you ever see this review? Best web hosting Reviews http://www.goo.gl/m6QA Whiche one was the best? Make your choice…

  11. Hi admin, Your site was tooooooooooooooo slow!!!! I suggest that you should change a better one, I search the web hosting reviews from google, hope that can help you! Top 10 web hosting Reviews http://www.goo.gl/m6QA Whiche one was the best? Make your choice…

  12. Totally digg your website thanks a lot for the info

  13. Shila Sonnek says:

    If you write articles or blogs then i want to share something with you that you will definatly be intrested in. Its called The Best Spinner. It spins articles for you AUTOMATICALLY which converts into unique content. Its amazing and has so many features, check their site out for more info as i could write a whole page about this… The Best Spinner

  14. Thanks this made for intresting reading. I really like your wordpress theme, i frequently come back here and i dont know why. I just actually like your site lol… I just read something simular to this on That Are i believe they may well of stolen the blog?

  15. Drew Satsky says:

    Thanks for the intresting Blog but i would like to let you, the site administrator and everyone who gets the chance to read this about a way to get a new IPhone 4G. Its quite easy. You goto the internet site fill in your email and other details then you get the totally free Iphone 4G. You might believe its a scam but here is why it isn’t… They send you a Iphone that already has some apps installed on it so whenever you brouse the web you’ll see their Adverts. Thats IT! As well as the adverts arn’t annoying they are similar to normal ads seen on websites. http://freeiphone4g4u.blogspot.com/2010/07/how-to-get-free-iphone-4g.html. That offer is only availible in the US though, if your anywhere else you may also get a free IPad from here http://freeiphone4g4u.blogspot.com/2010/08/free-ipad.html.

  16. Why did you taken out my comment? It is in fact helpful unlike almost all the comments posted here… I’m going to post it again please don’t get rid of it as many people will discover it extremely beneficial. Hey guys i want to inform you about this great system i have been using over the last two months called Auto Blog System X. This is probably mainly for the website administrator but also everyone else intrested in making money or beginning to publish blogs. I personally made just over $3000 using this during my first month. It basically is a system that generates blogs for you personally 100% on autopilot that gets you a huge amount of visitors to your site directly from google and other search engines. Don’t take my word for this… Check their website out and i guarantee they’ll hook you in. Its just amazing 🙂 Make Money Blogging – Auto Blog System X

  17. Heya , I have been using a excellent way to make alot of money online creating blogs. I presume this is primaraly for the website blogger but there are probably more bloggers reading this. I’ve made thousands using the techniques described in the product and its only been two months. Free Money Making Blog By Blogging To The Bank

Leave a Reply