It is 2 years since the run on Northern Rock and one year since Lehman Brothers failed. Remarkable how fast this year has gone!In that time RBS effectively went bust, Bank of Scotland was rescued by Lloyds, itself now struggling with the burden; interest rates are at all time lows, printing money is seen as a great solution to preventing financial meltdown and some £175bn has been pumped into the economy alongside the cost of bank rescues. Yet growth is nowhere to be seen.When you read the paragraph above, it brings home just what a huge hit the UK ecomony has taken, yet like a punchdrunk boxer it keeps swaying along from crisis to recovery to crisis. Optimists claim that the ecomony is growing well, pessimists wonder if a second leg to the recession is imminent.It's a question we will never know the answers to, but I wonder what would have happened if the government had not rescued the banks and let capitalism work?Morever, how will we pay for all of this desperate stuff?The Sunday Times reported yesterday that 60% of voters expect severe spending cuts alongside tax rises from June 2010 (after the general election).Some hangover ahead?
One year on from Lehman
14 September 2009