Entrepreneurs are only solution
BILL Jamieson is right (Business, 5 August). The reason the prescription is not working, and cannot work, is that the diagnosis is wrong.
The government’s diagnosis is that there is an overall shortage of capital, hence the injections of billions by “quantitative easing”. In theory this increases the money supply in the market, creating liquidity. In practice, financial institutions in the UK and abroad buy these bonds to strengthen their balance sheets against the expected collapse of the euro, and lending to build expansion is no better off.
The real problem is that many institutions – successful companies, pension funds etc – have large reserves, but lack the entrepreneurial spirit to find promising investments. Like the proverbial rabbits in headlights, they freeze when action could save them.
I do not suggest that it will be easy. No one sector can perform the miracle alone. But it is the job of entrepreneurs to enterprise, and that is the only solution.
Potential investors should ask themselves what assets would survive a euro crash, or an extended period of recession? What would best help the economy to move?
One obvious example is housing, but the trade still keeps ignoring the fact that the UK market is still at least 10 per cent overvalued. Planners, designers, builders and the various professions involved must find ways to build large numbers of sound houses for rent or sale at prices the market will stand.
Get people working, businesses earning profits and paying taxes, cut social benefits by reducing the numbers in poverty, and clean up the malpractices in the financial world, and we can get ourselves out of this mess.
John Smart, Lossiemouth
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