Last week, this blog listed five bad ideas to which
politicians are giving too much consideration.
However, the intention is not to be negative.
To balance the criticism, and following on from the suggestion
on fixed costs, here are some positive proposals as to what our leaders
could and should be doing in the cash crisis.
1 Take a Long Holiday: this is just not
the usual wish that politicians would stay out of entrepreneurs’ lives. There
is a strong case for saying that their panic reactions, and their doing things
simply for the sake of being seen to do something, are prolonging the crisis.
The markets remain volatile in part because of the uncertainty about what
governments will do next. If governments made it clear that they will do
nothing until the markets settle, then the markets will settle.
2 Review Debt and Insolvency Laws: there
is simply no avoiding the fact that a lot of businesses and people are going to
go under. It is no longer about deterring bad borrowing. The priority must now
be to endure that both debtors and creditors – at least those who have acted
honestly – should be able to draw a line under the past and resume making a
positive contribution to the economy as soon as possible. Keeping productive
people in limbo delays recovery.
3 Share the Burden: it is particularly
disgusting when those with safe public sector salaries and pensions lecture the
rest of us on the need for sacrifice. The recession is being used as an excuse
to increase taxes on the private sector to expand the public sector.
Politicians should lead by example and start the sacrificing with some