World economy: banking on disaster
An economic system in need of restructuring is frozen in aspic by the very characters who landed it in crisis
“There are two ways to gauge the world economy. One is to comb meticulously through all the data. Then there is the short cut – glancing at announcements from central banks. Last Thursday alone, the Bank of England announced it would pump another £50bn into the financial system, to add to the £325bn it's already put in since Lehman collapsed. The European Central Bank cut its already low main rate by another quarter-point. In Beijing, often held up as one of the few bright spots, the People's Bank cut rates for the second time in a month. Evidently, even China is sinking too. When it comes to a global crisis, all countries are eventually in it together.
From chronic unemployment to elusive growth, the symptoms are frightening – and the chosen treatment is inadequate. Because, in their reliance on Mervyn King, the European Central Bank's Mario Draghi and the US Federal Reserve's Ben Bernanke to save our economies, governments are making a serious mistake. John Maynard Keynes once described relying on lowering interest rates to power a recovery as pushing on a string. What was true in the 1930s is true today.”…Read more:
Editorial, The Guardian, Sunday 8 July 2012
http://www.guardian.co.uk/commentisfree/2012/jul/08/global-economic-policy-failure/print