It is astonishing to think that, 12 months after the bank rescue, lending to businesses is still falling.
What?
We’re in a recession fool!
That means that there are fewer decent investments to be made, that there are fewer people looking for loans to expand operations and thus that lending to business will fall.
Jeebus, and this is supposed to be the promised Messiah?
10 responses so far ↓
1 JuliaM // Oct 25, 2009 at 11:09 am
No. No, he’s not…
2 Ed // Oct 25, 2009 at 12:30 pm
We’re in this mess because banks lend too much money at too low an interest rate (i.e. they didn’t price risk properly). Now Cameron not only wants the banks to lend more but he wants the taxpayer to guarantee the loans
we have been calling for a national loan guarantee scheme. This would underwrite lending from banks to businesses
thus ensuring more mis-pricing of risk.
3 jameshigham // Oct 25, 2009 at 2:54 pm
It’s possibly not the time for messiahs right now, unless they be false.
4 Crispinus et Crispianus | nourishing obscurity // Oct 25, 2009 at 3:09 pm
[...] below was inspired by the Quiet Man, speaking of Crispin and Tim Worstall speaking of [...]
5 Adrian // Oct 25, 2009 at 4:12 pm
Not all borrowing is to fund expansion. Not all borrowing was too cheap. Don’t forget, Brown’s whole response to the recession was to borrow huge sums. Much of that was to preserve services and to pay people to avoid lay-offs.
Maybe business needs to do the same?
6 Mark Wadsworth // Oct 25, 2009 at 4:27 pm
No he’s not. The bitter irony is he is supposed to have studied PPE at Oxford, quite clearly he didn’t understand a bit of it.
7 Newmania // Oct 25, 2009 at 9:32 pm
Thank god for that No Conservative should ever want to be a messiah . For David Cameron this phrase is not about the economy its about attacking Labour Policy .
I must say Tim you make a point here that I have been inwardly screaming every time I hear the words bank lending ….why would anyone led to the credit swollen non viable business models we have created . They have to go and the problem with counter cyclical demand management is that it is only a delay on supply side reform in the market.
Aka , there is still a lot of over priced shite out there and it needs to die
8 Brian, follower of Deornoth // Oct 25, 2009 at 10:07 pm
Ah! PPE at Oxford.
That explains many things.
9 Serf // Oct 26, 2009 at 11:20 am
Come on Tim, he can’t be any worse. I know he has made a number of economically dodgy statements, but I am willing to bet that he will be a better Prime Minister than the incumbent from a free market point of view.
10 Matthew // Oct 26, 2009 at 1:19 pm
Any comment on his latest wheeze of the banning of cash bonuses above a very small level?
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