I totally agree with Mervyn King, previously Governor of the Bank of England, who taught me when I read Economics at Cambridge.
In a piece by Liam Halligan in the Daily Telegraph last week King argues that ‘we must navigate between lives lost from Covid and the damage done to the broader economy.’
He points out that:
- Many have lost sight of the fact that economic downturns also cost lives.
- The, until recently, daily government press briefings in the UK placed too much emphasis on the health issues and not enough on the economic impact of the lockdown. There is loss of life caused by the lockdown.
- People suffering from non-Covid disease haven’t been getting the treatment they should have had.
- Many businesses have already failed and more will fail. This has a significant on the well-being of those affected.
There are also very significant broader economic effects:
- The current Covid crisis could cause many corporate defaults.
- Central banks are printing huge amounts of money and this cannot continue forever.
Since leaving the post of Governor of the Bank of England, King has written two books:
- The End of Alchemy, a searing critique of the global banking system.
- Radical Uncertainty, written with John Kay.
I have enjoyed reading both immensely and will post a review of the second, recently published, book, within a week or so.