meltdown?

There is a decidedly very gloomy tone to London these days. And I don't think it is just the usual grey weather. This week's newspapers are laced with the stench of financial crisis and Bush pleading for a substantial $700 billion bail-out. I am starting to wonder whether I should pack up and head to Cuba for those adventurous years I never lived out in my twenties.

I have never been as interested in the inner workings of banking institutions as I am now, which must make me a pretty typical Joe. The past two weeks have driven me to the business dailies trying to piece together what exactly a credit crisis means. My ability to recognize patterns is somewhat curtailed in this area, however from the little I have been able to understand is the fact that the current meltdown is not just the fault of greedy bankers (as much as we might relish the idea of hanging them by their suspenders from London Bridge and/or Brooklyn Bridge), our present financial turmoil is the responsibility of central bankers who took their eyes off of regulation and to a large extent allowed what we are experiencing to happen. Another piece that I have uncovered is that changes in the supply of money and credit have been the main driver of economic cycles and booms and busts. To a large extent, it is mistakes in monetary policy which have driven every major recession in 20th and 21st centuries.

I am not sure that understanding or knowing any of this relieves the current states of stress we are all undergoing, and that I am certainly feeling. As I travelled to work on the bus today, I could hear a Carribean accent explaining to his mate that Bush was begging for a bail-out when the Americans have all of the money they need in their pockets. The tone was not one of sympathy but of can-you-believe-the-hootzpah that Bush would expect to be saved by global bystanders struggling to feed their own families.