As Murray Rothbard predicted back in 1963, what Gordon wanted, an "easy credit" policy to shore up his consumptive government spending, Gordon has received. That is, an interest rate as close to zero as he can get away with to aid his non-productive consumption and a pathetic attempt to help push the current recession's effects out into the long grass beyond the next general election, i.e. the deliberate creation of a depression. His thralls in the (Ha!) "independent" Bank of England today gave him the first tranche of his desire to get down to Japanese-style interest rates.
Hang onto your hats, sports fans, because the Bank of England base rate may have gone down by a gargantuan 1.5% today, to the lowest rate since 1955, at 3%, but that still means there is 3% left to go! And what will they do when even 0% interest rates fail to revive the dying body of the UK economy? How about negative interest rates! (Which is of course what we have, because round my way, and judging by my bills, my personal price inflation rate is running at around 10-15%, and has been for some time. It really is time to short money, and fly into real values. We'll be bartering before they've finished. We may even all start using a spontaneously arising commodity money!)
I've been banging on about this so long now I don't want to burden you with any more invective. I will just leave you with the thought that what we ought to be doing right now, contrary to all of this orthodox Keynesian "wisdom" from the tax-fed class, is to be increasing interest rates to help encourage savers, to shut down non-productive consumption, and to liquidate the numerous asset bubbles and bad managements allowed to inflate under the easy credit of the last decade. Even better, would be for nobody to do anything at all, and to allow the free market to set its own freely floating interest rate, based upon the market of individual time preferences, and using a commodity money unable to be manipulated by any central planning board commissars.
If you want to know any more, please, please, please do yourself a favour and read the first few chapters of Uncle Murray's "America's Great Depression". There is a beautifully produced PDF of this magnificent book, here:
This crystal-clear exposition is as fine a piece of economic writing as you will ever see. You must read it, if you want to come out of the other side of this depression with your sanity intact. I will stop the propaganda now. Just read the book.
I will, however, leave you with just one thought. The cause of the credit crunch was the creation of an enormous asset bubble, via the machinations of the world's central banks under the direction of the U.S. Federal Reserve, creating trillions of dollars of credit out of thin air via the use of artificially low interest rates.
To think that the solution to all of this is to once again lower interest rates and print currency from thin air, until we drown in the stuff, is to have locked out the very synapses of your brain (unless of course you are an immoral debtor and you want your debts liquidated by this process). We are being sleepwalked into utter disaster and we must do everything we can to stop these imbeciles destroying our lives, our pensions, and our businesses, and then laughing all the way to their tax-guaranteed index-linked government pensions, as the rest of us downtrodden serfs are left gasping in the gutter.
Do you have a private pension? Are you relying on it for your old age? It's time for you to come up with a different plan because this pension, as it stands, is going to be absolutely worthless.
By the way, for what it's worth, this central planning board interest rate cut isn't really going to help. It may mask things for a few days, even perhaps for a few weeks, or even possibly a few months, but does a heroin addict really benefit from a pumped-in injection of diamorphine, even if pumped in by a man in a white coat? It is too late for these palliative measures. Stagflation is now the very best we can expect. And if this interest rate shredding keeps going, after this cash injection fails, even hyperinflation comes into the frame.
Welcome to the long run future of the Keynesians. C'est arrivé.