It is time to cleanse this den of robbers

Something must be done and done quickly; everyone agrees that the economies of the developed world must be stopped from tumbling back into recession. Something must be done but no one really knows what to do. If you pay back your debts you are accused of bringing “austerity” into the world. If you allow the normal capitalist process of bankruptcy to apply to a nation you are accused of wrecking the economy of a significant part of the developed world. It is an odd world. Continue reading

Gordon Brown calls for global institutions to do his job

Gordon Brown has been arguing the case for reform at the World Economic Forum in Davos. He says we need greater globalisation and new global institutions to cope with global capital movement. He says that the present economic problems of credit stem from “under pricing of risk” which no one spotted due to lack of transparency. As usual he sees a big picture with distorted vision. The credit problems did not happen because of lack of transparency. I cannot believe that any bank bought bonds derived from junk mortgages without having the small print in front of them. It was nothing to do with transparency and everything to do with laziness and inadequate local regulation.   Continue reading