Pound's fall may herald recovery not doom | Anatole Kaletsky: Economic view - Times Online
It's an ill wind that blows no good. The US Treasury's decision to bankrupt Lehman Brothers and expropriate the shareholders in Fannie Mae caused the worst financial crisis in history, but it also secured the presidency for Barack Obama and is now transforming the economic and political landscape of Britain. The dithering incompetence of Henry Paulson has, by force of contrast, restored the credibility of Gordon Brown, both as Prime Minister and as an international leader. The UK economy, which had previously looked more vulnerable to the global recession than any other G7 country, is now likely to suffer less than the rest of Europe, as a result of unprecedented policy stimulus from the lowest interest rates in history, a super-competitive currency and a big reduction in tax. Meanwhile, the Conservative Opposition in Britain has been confused, discredited and splintered by the financial crisis as badly as John McCain's campaign.
As a UK resident, I hope Mr Kaletsky's optimistic outlook is correct. I worry however, that the chain of logic he outlines doesn't seem to take account of the banking crisis at all.
Yes, the Switzerland and Iceland models work well in normal times. The problem appears to be that these are no longer normal times. Iceland is the canonical example, but Switzerland's frantic attempts to shore up UBS in a way that doesn't attract the eyes of the press suggests that something is amiss even there.
This is the second recession I have been through this decade. I have lived through 4 recessions (and I am discounting the ones in the seventies because I was too young to know what was happening) and 2 property crashes.
My father was made redundant when I was 16. I have been made redundant twice. I would have been made redundant last week but for the saving grace of moving to a job in the Netherlands.
This is all I have ever known. Money is a sign of Poverty - Culture Saying
