Mark Steyn, writing in THE CORNER of National Review Online offers us some insight into how our Mother Country is feeling the effects of the current economic crisis. Not much consolation here, but then as they say, misery loves company.
"Too big to bail. As a break from the economic gloom over here, here's some economic gloom from over there. The Times in London:
'In essence the domestic banks are largely bust. The Government’s £500 billion bailout plan is primarily designed not to keep banks lending to small firms and to homebuyers but to prevent an unimaginable financial calamity...
We should not be worrying about whether this is going to be a thin Christmas for retailers (it is), but whether Britain and the West are about to plunge into a years-long economic Dark Age – complete with mass unemployment and social unrest.'
Hey, Happy Thanksgiving! I thought the most interesting line in the piece was this:
'It suits ministers, however, to maintain the bogus claim that the bailout is about sustaining bank lending. True, that would be a helpful side-effect, but is not the main purpose. Indeed, a gentle and gradual reduction in the indebtedness of individuals and companies is still needed.'
We talk about the "credit crunch" and the calamities associated with the shriveling of credit (as in the Depression). But, in Britain and elsewhere, pre-"bailout" levels of personal indebtedness accumulated on assumptions about home value are unsustainable. In essence, we devalued the currency of credit.
Everyone knows Polonius' line from Hamlet - "Neither a borrower nor a lender be" - but forgets what follows: "Borrowing dulls the edge of husbandry." The west's husbandry has a very dull edge right now. And even Polonius' advice is no protection in an age when you can be neither a borrower nor a lender but taxed up the wazoo to pay for the debts and loans of everybody else."Sunday, November 23, 2008