Stacy Summary:  What say you on who is the bigger fool?

• We are paying an enormous price for myths that banks are too big to fail

The requirement of both Keynesianism and monetarism, that demand somehow be stimulated in a recession, was denied by a chancellor who deflated as ruthlessly as had Thatcher in 1980-81. By the end of this summer, the Bank of England reported “net flow of lending to businesses” falling faster than ever since records began, indeed by £15bn in July alone. Taxpayers’ money was being locked up in bank balance sheets. When Britain should have been spending, it was forced to save.

This explains the eccentric financial news. Indicators for output, trade and employment remain gloomy while those for shares, houses and commodity futures are booming. Banks suddenly have lots of money – our money – and nothing to do with it but speculate, this time under the cover of an implicit government. While personal incomes are relatively static, returns to gambling are soaring.