Differences of approach

President Obama does not seem short of things to say about the US economy and his stimulus package. Much of it seems to be (a) constructive and (b) well-received. Though, as the NY Times points out today, imposing a cap on Wall Street bonuses is unlikely to lose him the popular vote in the present climate.

Over here in the UK, it has fallen to recently re-appointed serial Cabinet Minister Peter Mandelson, the Business Secretary, to get tough with our own financial institutions’ bosses:

“Please be mindful about how this looks and what public opinion will be”, he is quoted as saying, warning that exorbitant bonuses ‘could alienate ordinary people’. Stick it to them, Pete.

Today’s headlines don’t appear to carry any comment from the Prime Minister or his Chancellor. In Mr Brown’s case, he may be keeping quiet in case he inadvertently refers to the world economy as being in “depression” again.

It’s strange to see no comment from our leaders, though, on the day the Bank of England cut its interest rate to an all-time low of 1% – the first time it has fallen below 2% in its 300-year history.

According to this BBC article, neither businesses nor lenders report a boost in confidence from the steady fall in the interest rate, and the Institute of Directors’ chief economist reckons that the interest rate has now lost most of its effectiveness as an economic lever. In other words, the outlook remains grim and the independent Central Bank can’t do much more with the tools at its disposal.

Under those circumstances, it seems that the next move would have to be a political one… which makes the silence all the more deafening.

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