A distorted cause

Ian C

All markest are distorted by the role governments [have to] play in them. This is the one item always missing from any analysis evercarried out about any crisis.

The shortcoming of democracy is that it does not face its difficulties unless they are jammed down the throats of the politicians. It is because politicians will only finally anlayse the problem correctly when all other blameworthy causes have been attacked. This explains why the USA, as the most 'extreme' democracy, has been long regarded as the country who will get it right eventually, once all the alternatives have been exhausted.

This happened in the 30's and will have to happen again 80 or so years on - and this time it will be all around the globe as there are many more deomcracies in existence today.

Kevyn Bodman

Interesting to see an alternative analysis, 'narrative' as it is so unfortunately termed.

And the bail-out is naught but a further distortion of the market,and there was no need for it in the UK.
Of course the recession is going to be painful, but companies, shareholders and individuals who behaved imprudently should have been allowed to fail.
A big clear-out would have allowed room for a more vigorous and more rapid recovery than there will now be.
But governments like to 'do' things.And they often/usually foul things up.
The bail-out will be a huge waste, an unnecessary expenditure of taxpayers' money.
I've been extremely disappointed with the vigour and rigour of the Conservative response to the events of the past few weeks.
I see in an earlier post today that Cameron has now put 'clear blue water' between his lot and the government.
About time too.

Kevyn Bodman

And Darling's recently announced capital spending projects will distort things even further.
Here is what Dave and Boy George should do:
ditch Darling's plans, cut the ID card scheme and as much waste as they can and cut taxes to the same extent, get money circulating from private hands, spent on what people choose to spend their money on rather than what Brown and his boobies want to spend it on.

v. Worried of Windsor

We'll see how well all that risk transfer worked when the Lehman's bonds get settled tomorrow. Could get choppy, they say.

Kevyn Bodman

And here's another idea to reduce distortion in people's spending,economic and lifestyle choices,it'll cut taxes and start to change the UK's debilitating benefits culture.
It's not my idea originally but it's a really good one.
Announce NOW that no child benefit at all will be paid in respect of any child born after 31/12/2009.We can no longer afford the State to pay, and we no longer want the State to pay.
No child now alive or even conceived now need suffer, savings can be made of the money projected to be needed for this, and taxes cut accordingly.
Wonderful: cut taxes AND move away from rewarding irresponsible bahaviour.
It's only a first step but now is a golden opportunity to take it.

oldtimer

The bank bail out will prove to be another huge distorion. Time will reveal that the rapacious terms demanded, not to mention the speed with which it was enforced on the banks, will cause these distortions to be magnified. It will, I fear, be another case of decide in haste and repent at leisure.

Peter steadman

This is no revelation. Former presidential candidate Ron Paul has for many years railed against the fecklessness of the Washington machine and state intervention.

Nigel Bradshaw

If the Washington Post and the Spectator (Dennis Sewell) agree on the root causes of the current crisis who could possibly disagree? So much for the Clinton/Blair "Third Way" - look where it has led us.