Wednesday, 21 October 2009

Mervyn speaks...

Ok. Speaking of the children, let's get back to the economy. Mervyn King had a bit to say on the children's behalf during an impassioned speech that is the news of news today.

"We shall all be paying for the impact of this crisis on the public finances for a generation."
- Mervyn King

His speech will no doubt turn into a bit of a political football, but, the essence ought to be digested in pure form. Last Autumn there was great debate on the reshaping of Too Big to Fail institutions. With the advent of a rapidly rising market and the return of credit (a bit), these kinds of discussions have fallen by the wayside. But, as noted by many, the problems within the financial sector remain. The concept of "Moral Hazard" ought not to be the residue left in people's minds from this speech. Because that is an emotional discussion. What ought to linger and blossom from this is not Mr. King's solution but the re-opening of the discussion of new models and approaches. I have not read a good proposal for a solution yet. Yet.

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