The debate about Main Street vs Wall Street : whether the proposed United States Government bail-out of the latter is in the best interest of the former is an important one. However, the key issue is not so much whether the Wall Street bail-out is essential for Main Street USA, but whether it is in the best interests of the global economy, by which I mean the banking systems and, consequently, government finances of other major economies, such as our own. Here, the answer is, almost certainly, yes. This high level of co-dependency is the downside (and, yes, it is a downside !) of the most recent wave of globalisation, and, to a very real extent, we are all in this economic boat together.
This is not to say that there is no "real economy" out there in the real world, of which Main Street is a part, which could not survive a major international banking failure. There may well be. However, the consequences of such a failure, not just for private sector corporations but also for public finances would generally be regarded as unacceptable.
My greatest concern is whether the lessons of the current financial crisis will be fully learned, particularly in this country. Our economy has become more and more dependent on a smaller and smaller number of sectors, namely, banking and financial services, property and construction, and retail/distribution. These are especially vulnerable to present problems. We need to develop a more broadly based economy again. This will require action at every level of government : national, regional and local. A good place to start might be London, and I can recommend Mayor Boris Johnson some good reading : The Greater London Council's London Industrial Strategy, published shortly before its abolition by the Thatcher Government in 1986.
See also : http://witchofworcester.wordpress.com & http://janetmackinnon.wordpress.com
No comments:
Post a Comment