Can they have it both ways?

The continued talk of credit crunches and banks going to the wall really has got me thinking.

It seems as though there are some businesses that you can make as much hay as you care to when the sun shines, and when that rainy day comes you can ask someone else to cover your back side.

It reminds me of the insurance industry in the states. They have always been happyto take the money from people during the good weather, but when a hurricane comes and wipes out millions of dollars worth of property on coast of the gulf of mexico they go cap in hand for federal help.

Nice businesses if you can get it. Making money in the good times, and being bailed out by the state when things get bad.

Part of me hopes we aren’t going to be going down that route here.

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One Response to Can they have it both ways?

  1. Keynesianism says:

    Dear Editor

     

    The bail out in America with the creation of a new “Toxic bank” designed to suck out all of the financial poison may not happen her but as Robert Peston points out, banks like Barclays and Royal Bank of Scotland will be eligible for help in America.

     

    The real cost of the problems here will be felt by the likes of you and me;  dearer credit, higher taxes, squeezes on government spending, slower economic growth and reduced growth in real disposable income, possibly for years to come.

     The medium term economic future looks far from rosy and as I have said before a conservative government in power will find it hard to satisfy the demands of the electorate.  David Smith of the Sunday Times warns us to get ready for the austere years but there is some silver lining.  As a teacher of economics I find myself in demand as interest in the subject soars.  My cup runneth over!

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