January 24, 2013

Defeatism you can really write home about

Sir, Chris Giles, in “Why Sir Mervyn has taken a walk on the supply side” January 24, considers going for more “supply side” economics and abandoning “demand side” stimulus as something “too defeatist. Frankly, he has no idea of what real defeatism is. 

Mark Twain said “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain”. The capital requirements for banks based on perceived risk imposed by the Basel Committee's bank regulators only makes real sure that bankers will be ever so more anxious to lend you the umbrella when the sun is shining, and immensely faster to demand its return, as soon there is the slightest indication that it could possibly rain.

And that my friend, that is defeatism you really can write home about.