George Osborne on Andrew Marr

Yesterday, on the Andrew Marr Show, Vince Cable argued interest rates should be cut by 2% in order to restore some confidence in the economy. A sound idea, and I read what he had to say in full in The Sunday Times earlier. When Marr turned to Shadow Chancellor, George Osborne, I assumed he would agree. To my surprise and dismay, he disagreed. 

I was talking to a fellow activist over dinner last week who works in the City. Both of us agreed that we wanted to like Osborne, but we had doubts as to whether he was up to the job. His performance yesterday cemented this view in my mind. 

Instead of wasting billions of pounds of taxpayers' money bailing out mismanaged banks, the government could urge the MPC to lower interest rates. It can also cut business and personal taxes for the foreseeable future. They are ways to inject liquidity in to the market, without major state intervention. If more banks go bust, then so what? The majority of savers' money is safe. The toxic debt will have to be written off and the good debt will be broken up and sold off to banks who have not been reckless in their lending. 

A cool head is what's required. The Left see this as a perfect route for more state intervention and the Right seem to be dancing to their tune.