Hutton's piece-def worth a read

I was struck by Will Hutton's piece in yesterday's Observer on the financial crisis.It is well worth a read and even if you do not agree with all his proposals,I think that there are lessons in their for us all.

The past 20 years has seen an unparalleled boom in the money markets. As the free market blossomed, so too did cheap debt, huge bonuses and ostentatious wealth. Now, as our financial system lies on the brink of collapse, it is time to build a new one, based on fairness instead of naked greed, and with long-term commitment to building businesses and supporting investment

He maintains that the current crisis

has been 30 years in the making - a Gordian knot of libertarian free-market fundamentalism, unregulated globalisation, the collapse of social and political forces committed to fairness, the explosive impact of financial innovations such as 'securitisation', and sheer greed. Each has contributed to the fiasco - and all now need to be unravelled if the economy is to have a sustained recovery.

but now he says

the roof has fallen in, setting up potentially the most dangerous vicious circle since the Great Depression - and it could be most vicious of all here in Britain. The belief that securitised loans could always be sold or insured has proved illusory. Worse, too many have junk assets as security - commercial property, buy-to-let property, junk American loans and overstretched buyers in the residential property market. The debt will stay toxic until the economy recovers again.