David McWilliams: We need to totally reimagine economics

Our Central Bank has unforgivably abdicated in this crisis, precisely when it was needed

The ECB has opened up the taps and indicated it will do whatever it takes to prevent a recession becoming a depression. Photograph: Lisi Niesner/Reuters

The ECB has opened up the taps and indicated it will do whatever it takes to prevent a recession becoming a depression. Photograph: Lisi Niesner/Reuters

When events change, we change our minds. Old rules go out the window and new ideas are embraced. What was once radical becomes mainstream and what was once mainstream becomes redundant. In a crisis, you run out of time. You can’t wait; you must act.

This week, the Department of Finance acted with remarkable speed, implementing what might be called the “Danish model”, soldering the link between employers and employees by subsidising people’s wages to the tune of 70 per cent. The civil servants are to be commended in how quickly they turned this around. It should help enormously. Hopefully, we will see results in a stabilising of the rise in unemployment.

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