Monday, 13 October 2008

Tim Congdon has completely lost it

On the news at 1, sounding mildly crazed, he said: There was nothing wrong with Northern Rock. No, Tim, nothing but a run that would have led to bankruptcy if the Bank of England had not intervened as Lender of Last Resort. Honestly, these monetarists are so dangerous giving them a media platform at the moment is roughly akin to shouting fire in a crowded theatre.

Update. He's at it again, saying to the BBC: "The way the government is going about it, they are effectively stealing from the shareholders. The long-run result will be to destroy the competitiveness of Britain's most important industries,". Again, no. Without government intervention, the shareholders would have nothing. There would be nothing to steal. The state is in fact being very generous letting shareholders keep any of the banks. It is probably politically expedient so to do, but it isn't necessary. Without the state, HBOS and RBS would have been toast today. You can't be competitive if you are insolvent.

Update. Did the BBC suddenly declare it discredited economist month? They had Madsen Pirie on the news this morning, decrying Keynesian stimulii. Of course he doesn't want us to try it; of course the whole nauseating troop of monetarists are trying to get publicity: if spending our way out of recession does work, any vestige of reputation they might have left will disappear.

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