Free markets and lefty morons
3rd November 2008
There is still some common sense left in Britain. Pity it isn’t more widespread.
The cause of the recession is easy to identify. Too many people borrowed too much money or, if you prefer, the banks lent too much money to people who could not afford to repay it. Eventually chickens came home to roost and the excess credit now has to be squeezed from the economy. Since the excess credit has been buying goods and services for years it is inevitable that reducing that credit bubble will cause fewer purchases and a downturn in the economy. Very simple. But why did banks lend too much to too many?