Sunday, 18 January 2009

At Last!

The current economic crisis has been continually blamed by world governments and particularly by Brown's Government on (a) the US sub prime issue and (b) evil bankers seeking fat cat bonuses through reckless lending. Both are fatuous and wrong but the media just won't expose this blame shift and write the truth.

It is clear what the problem was: too lax a system of Government regulation within which the banks operate. This lax system allowed them to lend too easily, thus stoking up the residential market in particular to crazy levels of growth. They lent too easily to people who could not afford the loans. In fact it was worse. Governments pushed banks to lend to poorer people so they could boast that they were "attacking social injustice" and "creating social mobility". And in fact it was even worse than that. Governments - ours in particular - built up their own unaffordable debt to carry out all their social engineering policies. The regulators had gone native.

How do the media allow the Government to get away with this blame shift?

Even today, when finally a Government Minister admits that Government regulation caused the problem (see here, I guarantee that the media will not pounce on it and run with it on every bulletin.

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