My note to the FT's Martin Wolf this morning, on reading his column, which argues (quoting Churchill Winston “The United States
invariably does the right thing, after having exhausted every other
alternative.”) that the time for a bail-out is now.
Dear Martin,
I enjoyed, as ever, your column on avoiding depression. I do wonder how much time we have (our political systems have) to negotiate the deal ... Paulson tried to tell us it needed to be done over 1 week-end; 10 days later it was not passed and the consequences are still mostly confined to the financial sector. What sets the ticking clock here? Presumably, the real economy's borrowing that comes up for renewal is the biggest deadline. And is that not temporarily extendable by central banks? Indeed, the various central bank facilities are presumably doing exactly that.
Given that decisions made in crisis are highly determinant of the shape of the eventual settlement, should we not be thinking about how to extend the window for negotiation rather than implementing a solution to the crisis?
Best wishes,
Tony
