The US Federal Reserve
has lowered interest rates. The Bank of England is giving commercial banks a
five thousand million pound overdraft.
Say what you like
about them, at least the authorities are aware of the dangers of recession and
are trying to do something to prevent it.
However, their focus
on cash liquidity may be too little, too late. The current cash crisis is just
a symptom of an economy that it weaker than it pretends.
Any entrepreneur – if
anyone asked us – could tell governments the three things they need to develop
an enterprise culture strong enough to weather a downturn:
1 Lower taxes – the most efficient way to put
money into the economy;
2 Reduce regulation – the most effective way
to encourage new businesses;
3 Make insolvency laws less favourable to
creditors – the best way to prevent irresponsible lending.