In this article
in the Financial Times yesterday, under the sub-heading “Keeping zombies alive”
he refers to the fact that QE saved some uneconomic banks and other financial
firms from bankruptcy. Plus he says that criticism of those attempts to keep
lame ducks alive “amounts to demanding still deeper depressions”.
Well excuse me, but
shoveling money into the financial sector is ONE WAY of minimising a depression,
but if that involves “keeping zombies alive”, it’s not a very GOOD WAY of doing so.
If one sector of the economy
has over extended itself, it needs to contract: a few bankruptcies are in
order. Obviously that will have a bit of a depression inducing effect. But that
undesirable effect can be minimised by GENERAL STIMULATORY MEASURES: to put it
bluntly, feeding money into Main Street.
But of course millionaire
bankster / criminals devoted huge amounts of money and effort to persuading /
bribing politicians into channelling money to Wall Street and the City of
London rather than to Main Street. And that persuasion / bribery works for the
most part.
No doubt keeping zombies alive
is a QUICKER way of escaping a depression than closing down uneconomic firms
and re-allocating the relevant labour, land, etc. In the SHORT TERM, the
British government doubtless managed to stop unemployment rising in the
Midlands by keeping British Leyland alive for a few years. But LONG TERM, there
is no question but the best option is to let zombies die and apply as much
general stimulus as possible with a view to stopping unemployment rising too
far.
No comments:
Post a Comment
Post a comment.