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August 26, 2007

Will Hutton on Amoral Plutocrats

Something of wanting to have your cake and eat it too here:

Unbelievably, the European Central Bank has made hundreds of billions of euros available to allcomers within the European financial system at no penalty for the privilege, while the Federal Reserve Bank in the US has lowered the interest rate at which it supports distressed banks. It is as though Europe and America had announced an amnesty to the world's criminal gangs after they had gone on a killing spree because they feared the killing would get worse .

The Bank of England alone has held the line, insisting that anybody turning to it for cash as a last resort will have to pay at a rate of interest that will hurt the borrower.

So, Bank of England does the right thing.

Gordon Brown runs a government that is essentially conservative over business opposed by an opposition yet more conservative, with the Lib Dems terrified to rock the conservative consensus. Over the last few years, there has been a firesale of British assets to foreigners, together with ever-closer entanglement with the American debt markets to sustain the bonuses of the financial community. It would not surprise me if, before the story is over, at least a couple of household British financial names have to be offered a lifeline.

Somebody, somewhere must start blowing the whistle. The Americans at least take capitalism so seriously they challenge, monitor and regulate it. No such culture exists in degenerate Britain. We need a party which will speak for an interest other than self-interested, amoral plutocrats. None exists.

Given that, uniquely amongst the central banks, the UK one has done the right thing, this shows that the UK system of deaing with such things is irretrievably broken?

Well done Will, excellent logic. This is even better:

The Bank of England alone has held the line, insisting that anybody turning to it for cash as a last resort will have to pay at a rate of interest that will hurt the borrower. Good for the bank, except its stance is undermined because outside the euro-zone it cannot insist the European Central Bank follows its stance.

So if it were to move from being an independent institution, running the rules for one currency area, to being a branch office of a multi-lateral institution, this would increase its power to insist on a certain course of action? When, as we can see above all the other members are insistent on taking the not approved of action?

August 26, 2007 in Idiotarians | Permalink

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