Sean Gabb
NEWS RELEASE FROM THE LIBERTARIAN ALLIANCE
In Association with the Libertarian International
Release Date: Wednesday 8th October 2008
Release Time: Immediate
Contact Details:
Dr Sean Gabb on 07956 472 199 or via sean@libertarian.co.uk
For other contact and link details, see the foot of this message
Release url: http://www.libertarian.co.uk/news/nr072.htm
“NO BAIL OUT OF THE BRITISH FINANCIAL SYSTEM” SAYS LIBERTARIAN ALLIANCE: “LET FAILED BANKS FAIL”
The British Government’s proposed rescue of the financial system is a fraud on the taxpayers and will fail, says the Libertarian Alliance, Britain’s most radical free market and civil liberties policy institute.
[The British Government proposes to spend £50 billion of the taxpayers’ money on lending to the commercial banks in an effort to ease the liquidity crisis. Full story at http://news.bbc.co.uk/1/hi/business/7657422.stm.]
According to Sean Gabb, Director of the LA:
“Final responsibility for this crisis rests with the authorities. For at least ten years, the Bank of England – and the central banks in most other countries – has kept interest rates below the market equilibrium. The result has been an orgy of credit creation by the commercial banks. This led to an asset price bubble that has now burst.
“This should never have been allowed to happen. Interest rates should have been allowed to settle at levels that equalised the supply of savings and the demand for loans. But the question now is what should be done about it. The British Government is proposing to use £50 billion of the taxpayers’ money to buy shares in illiquid banks and other institutions.
“Since this is a state-created problem, some state involvement in solving it might be appropriate. Therefore, if there were any chance that spending the taxpayers’ money would restore stability to the markets, the Libertarian Alliance might not object.
“However, it is obvious that £50 billion will not be enough to restore stability. There are trillions of pounds of imaginary money on the markets. The fundamental problem is that no one really believes in this money today, and it just disappears whenever people stop looking at it. No government on earth can painlessly clean up the mess left by the bursting of the credit bubble.
“Governments can stand back and let weak institutions fail. This will bring on the worst financial collapse since 1931, and be followed by a nasty recession. Or they can spray vast amounts of our tax money into the financial markets, which might briefly delay the worst financial collapse since 1931 and a nasty recession to follow.
“The only real beneficiaries of this rescue will be those working in the financial markets. They have spent the past decade stuffing our savings up their noses while telling us they were invested. Now their friends in government have come up with a scheme to use our tax money to pay next year’s bonuses.
“The Libertarian Alliance denounces this proposed rescue and predicts bad times for years to come.”
END OF COPY
Note(s) to Editors
Dr Sean Gabb is the Director of the Libertarian Alliance. His latest book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, may be downloaded for free from http://tinyurl.com/34e2o3. It may also be bought. His other books are available from Hampden Press at http://www.hampdenpress.co.uk.
He can be contacted for further comment on 07956 472 199 or by email at sean@libertarian.co.uk
Extended Contact Details:
The Libertarian Alliance is Britain’s most radical free market and civil liberties policy institute. It has published over 800 articles, pamphlets and books in support of freedom and against statism in all its forms. These are freely available at http://www.libertarian.co.uk
Our postal address is
The Libertarian Alliance
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Tel: 07956 472 199
Associated Organisations
The Libertarian International – http://www.libertarian.to – is a sister organisation to the Libertarian Alliance. Its mission is to coordinate various initiatives in the defence of individual liberty throughout the world.
Sean Gabb’s personal website – http://www.seangabb.co.uk – contains about a million words of writings on themes interesting to libertarians and conservatives.
Hampden Press – http://www.hampdenpress.co.uk.– the publishing house of the Libertarian Alliance.
Liberalia – http://www.liberalia.com – maintained by by LA Executive member Christian Michel, Liberalia publishes in-depth papers in French and English on libertarianism and free enterprise. It is a prime source of documentation on these issues for students and scholars.
This news release will also be placed on the Libertarian Alliance blog – http://libertarianalliance.wordpress.com/
[…] Read the rest of this great post here […]
Sean:
What seems very difficult is getting any numbers on the size of the problem. I listened to a talk the other night where the speaker gave a figure of a $42 trillion “overhang”, of which about $13 trillion was “firmly based.” Others give quite different figures. No-one seems to know.
It would seem that we need a new “something” like PayPal to guarantee new transactions, charging a commission on the way. No overhang, and both sides _know_ they’ll get paid.
I would guess that property is about 60% oversold; shares, about 80%. But this is just an impressionistic guess. If you walk down the High Street, 95% of what is sold you don’t need to buy. You can eat for a fiver a week, but it’s kinda bland.
The NHS would save money over time if they gave away megavitamins and minerals. Newspapers are mostly just government and police press releases edited together wit a scattering of comely wenches.
Rather than “saving banks” they should encourage Co-operative banks and Credit Unions. Ine of the great crimes of the Tories was allowing cadres of covert operatives to machinate for the conversion of the building societies to “share-holder owned enterprises.” The building societies had been built over a very long time by savers, borrowers and organizers who most certainly did not want that fate. They’ve all gone down (the converted ones, that is). Pity the covert organizers haven’t met the same fate. The arrogance of “Finance Capitalism” is unbelievable.
The looter’s “privatization” scam made sure that instead of everyone getting their property returned to them in the form of shareholding certificates, in the mail, a plague of little Crony-Capitalist were created, to warehouse the shares into City institutions, where over 90% of them are now. I didn’t touch any of them; the whole thing was so blatantly dishonest.
Before removing a fence, it’s always a good idea to discover why it was put there in the first place…
Best,
Tony
I like that last comment and agree with the rest
useful comment from beernsandwiches:
http://beernsandwiches.blogspot.com/2008/10/no-bail-out-of-british-financial-system.html
I can’t tell whether it is a wind-up or not: perhaps it is. But it’s quite funny:-
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