Tuesday, February 24, 2009

Not a time for “swingers”

While it is relatively rare for me to agree with Jeffrey Sachs he has a point in a recent piece – and plenty of others are chiming in – when he says that stable, credible medium to long term policies are what we ought to be pursuing in any interventions to deal with recessionary conditions.

I have made this point as well in discussing confidence. Wild swings are not helpful in restoring confidence for at least two reasons. First they appear to attest to the absolute mess you were making before – which might or might not be the case. Second they generate expectations and fears about what the next swinger might look like and third they lend weight to the growing suspicion that all this might be just a shade ad hoc – which of course it is.

Dull is currently good. Silence may be close to golden. No amount of blathering about “extraordinary times” justifies joining the global swingers club right now.

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