I’m not going to use the phrase economic crisis because we’re not in one. Everything is fine. The only reason we’re in a recession because we decided to call it a recession which then scares everyone and it becomes a self fulfilling prophecy. I would however like to throw a few ideas out there on the current economic climate.
Government’s all over the world are in the middle of nationalising banks. Like everywhere. Iceland’s Glitnir, which I’m told was a rather large bank, has recently been nationalised. Here in the UK, Bradford & Bingley have just gone. We’re still bailing out Northern Rock. Me, my tax money is bailing them out.
Point is, this isn’t how a free market capitalist economy is supposed to work. There shouldn’t be government bail outs, a free market only really works when the market is free. Companies go down, other companies take their place, circle of life and all that jazz.
Surely the way to encourage economic growth in such times is to increase the capitalist freedoms and reduce the socialist state rather than the current trend of increasing the socialist state with government bailouts and suprise taxes. Slash taxes, slash minimum wage, make it more profitable to actually generate profit than go cap in hand to the government.
We’re all moaning about these huge salaries the city big wigs are getting paid then coming to the tax payer for the bail out. Who can blaim them? That’s just common sense. They don’t lose it all when their company goes down to the toilet, most boards are remaining intact when the company is nationalised. Who wouldn’t take up that offer?
If we’re going to this whole capitalist economy (which we are, because it works, get over it) we should just get on with it. The world economy well go down the pan if government’s don’t intervene. But it will be back again. Bigger, better and even stronger than before.
Metadata
This entry was posted on Tuesday, September 30th, 2008 at 12:59 pm and is filed under Politics, Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 30th, 2008 at 2:43 pm
Here, here!
I agree with the principal that government should not be propping up failing businesses. As one of the Republican congressmen pointed out when he voted against the US Congressional aid package (paraphrased) - your run of the mill small/medium sized enterprise would be allowed to fail, why should Wall Street giants be any different.
A true capitalist economy would not allow for state bail outs, but we do not live in a true capitalist economy. The global economy is quasi-capitalist, but it is too regulated by too many state institutions to be considered true capitalist!
Even George Osbourne (Shadow Chancellor), one of my favourite neo-conservatives has indicated that a Conservative governemtn would not rule out state intervention when necessary. he did, however, say that regulation would be reduced and that national debt would be taken into consideration before any such intervention.
The only problem with true capitalism is that it requires ebbs and flows in the economy - it requires booms and recessions, when actually, an ideal economy grows slowly, sometimes very slowly, but always growing. The average member of public will lose out in a recession, just ask your parents about the 80s and early 90s. As much as I admire the changes that Thatcher made during that era, I am glad I never had to live through it as a working man.
If a state intervention prevents recession and an be shown not to cost the taxpayer in the long term, ie the assets of any nationalised organisation are worth more than the price paid for it, and any such nationalisation is a short term measure, then I would rather that than claiming a victory for capitalism whilst inflation hits double figures!
September 30th, 2008 at 8:00 pm
I agree with everything u have written Chris, very good post. Trying to debate this with the gf sparked an argument! She argues that “yes the goverment did the right thing to save people….”.
October 6th, 2008 at 3:58 pm
’slash minimum wage’ indeed. Grind down the poor even further in other words. An interesting example of how atheism leads to Social Darwinism.
October 6th, 2008 at 6:15 pm
You’re right, we should continue to pay fat cat salaries with government bail outs.