At a time when the world economy is contracting at Great Depression rates, you wouldn’t think that policy makers would be worried about inflation.
Month: April 2009
The financial crisis has been going on long enough now that we are starting to see a lot of serious research and policy papers addressing the various issues that the crisis has raised.
This material may be a bit more complicated than most of the reports this blog usually links to but I think some of our readers may appreciate getting a sense of the stuff that we’re reading in trying to understand what’s going on and where we should be heading.
So, here’s some stuff I’ve been reading in between my nationalisation blogging …
Peter Sutherland has an op-ed in Monday’s FT: you can read it here.
Peter Bacon’s final argument against nationalisation in his Morning Ireland interview was the following:
Also, if you nationalise the bank, it’s gone. If the bank remains there, even if it comes to pass that in some cases there is majority ownership by the government, by the taxpayer, there will be a quotation on the Irish and London stock exchanges. There will be a price every day that bank shares will trade at and that will provide taxpayers with an exit mechanism out of their ownership of the banks in due course.
Peter Bacon outlined two other arguments against nationalisation in his Morning Ireland interview. The first related to the question of transparency:
You nationalise it and then you would still have to deal with it. You would be dealing with it behind closed doors. People have screamed “let’s have transparency with this”. The only place you will find transparency is if you do this in the open market.
Given the amount of public money at stake, I couldn’t agree more with Dr. Bacon that transparency is essential. However, I disagree with him regarding the levels of transparency that would prevail under nationalisation relative to his NAMA plan.