It is now widely recognised that traditional means of responding to the current sort of crisis have been exhausted: interest rates are near zero in nominal terms, but below zero in real terms if you take inflation into account; moreover, the world is flooded with paper money from every conceivable and inconceivable country.
Professor Tim Besley, an External Member of the Bank of England's Monetary Policy Committee, has acknowledged that monetary policy is not enough to bring Britain's flagging economy back to life. What he has said publicly is no doubt being thought privately by many others - and not only in England.
Sir John Gieve, Deputy Governor of the Bank of England, has gone further and said that what is needed is some form of new policy tool beyond the "blunt instrument" of interest rates. "We need to develop some new instruments, which sit somewhere between interest rates, which affect the whole economy ... and individual supervision and regulation of individual banks," Gieve told the BBC.
Apparently, he would not elaborate. No wonder. Tools which sit "somewhere beteen interest rates... and individual supervision and regulation of individual banks" are well known - in countries such as China and Russia. Before 1979, they were known throughout the world except for the West. Now it seems, the authorities are considering bringing such instruments in even in the West.
Welcome to a new socialist world. Now we know what we have to fight against. We can choose captivity or we can continue the struggle for freedom - for ourselves as well as for the generations who come after us.
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