Letter: King Canute games fail to bring back confidence

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The Independent Online
Sir: This Government has been far too successful at passing off myasthenic inactivity as masterful inaction. Economists and Treasury-bred politicians have yet to realise that economics is no longer driven by economic theory but by multiple business decisions. The recession is caused by the business fashion of cutting costs, which predated the recession, and a disinclination to employ more people whatever the circumstances. The fall of sterling was caused by financial officers covering exposed sterling positions in a prudent manner.

The Government now gives the impression of a typical English sports team that troops off the field happy that it has 'played the game' but been defeated by a cheating opposition. The game was an old-fashioned Canute exercise in defending political pride and an overvalued pound. At this point interest rates should be driven right down to permit economic recovery and to allow sterling to re-enter the ERM at too low a rate. A jambalaya of stout stands and whispered leaks is not a substitute for a policy sensible enough to build confidence.

Yours sincerely,

EDWARD DE BONO

London, W1

18 September

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