1. First Question of the Day:
The big speech on Day 2 of the Conservative Party Conference was by Britain's Chancellor the Exchequer, George Osborne. His big idea: since traditional banks are not making loans to small businesses, the British Treasury via the Bank of England would buy bonds issued by British companies, this would allow them to expand and hire people, thus staving off rising unemployment and growing Britain's economy (it has grown by a meagre 0.2 percent over the last three quarters). The progam is called "credit easing."
No details were offered about where the government would find the money. Osborne's austerity plans are fully operational and rather than reducing Britain's deficit the government is already borrowing more than it expected to. As rising Labour Party star Chuka Umunna notes in today's Guardian, "At £15.9bn, ($24.5 billion) the Tory-led government recorded the highest borrowing for a government in the month of August." But presumably the government will have to borrow more to fund this bit of pump priming.
Fine. We are all Keynesians now, even young men like Osborne and Cameron who memorized Hayek and Friedman in their youth.
In the evening I attended a panel called "Jobs and Growth: Is Overseas Trade the Answer" hosted by the City of London and the Financial Times. (I stifled my inner wise guy and didn't say to the FT's editor Lionel Barber who chaired the discussion ... Yes, it is the answer - to the jobs crisis in Angola).
The eye-opening moment of the evening came when Xavier Rolet, CEO of the London Stock Exchange told the audience, "I don't believe in the likelihood of a double-dip [recession] because the corporate sector in the UK, as well as a in Europe and the United States continue to be in quite robust health." That is a very bullish statement. Rolet qualified his enthusiasm this way. "That must be separated from what one sees when one looks at the total numbers from the national balance sheets. There I'm not optimistic. I think the true situation there is actually far worse."
The two speeches raised this question: rather than the government priming the pump, why not a bit of private sector Keynesianism? Why should the government go deeper into hock to support businesses - with no guarantee that these businesses will hire, by the way. Why not encourage those companies in robust health to hire: apprentices, trainees, re-trainees. More regular salaries being paid are bound to have a positive effect on the economy, right? stimulate consumption, right?
Conservative's think government should be the employer of last resort. Maybe their friends and financial supporters in the upper ends of the private sector could be encouraged to use their cash hoards productively.
Private Sector Keynesianism.
You think it might work? I'm just asking. Feel free to post a serious answer - or witty one - below.
2. Second Question of the Day:
The wisdom of markets, as reported in The Daily Telegraph.
Isn't this story proof that machines don't have the requisite free will to be making markets much less be wise?
3. Third Question of the Day:
Who plays Amanda Knox in the movie? Since Demi Moore can't get in a time machine and be 21 again, who gets the role? Natalie Portman, she just became a mother and has a bit too much maturity, how about Mila Kunis, her nemesis in Black Swan? Hmmm, maybe. Probably an unknown will get the role.