An end to boom and bust?

James Grant, the man who saw the crash coming

The Wall Street Journal gets a swipe round its chops in every other essay in James Grant's book but the targets for his most withering and unwavering censure are - as he put it in a telephone interview with The First Post yesterday - "the criminally negligent and incompetent financiers" who cooked up this mess; and "our masters in central banks and governments" who "keep making determined efforts to thwart the price mechanism as an elegantly simple instrument of deliverance" from our present woes.

Allowing that mechanism to work unhindered would, in James Grant's view, "deliver General Motors to its deserved fate - which is bankruptcy"; and, though he was reluctant to be drawn on the question, Grant would prescribe the same fate, in principle, for RBS.

"The habits of mind of central bankers are perilously close to central planning in their conceits," he said. No individuals personify those conceits more, in Grant's book, than Alan Greenspan, former chairman of the Federal Reserve Board and his acolyte Gordon Brown. Mistaking a financial boom for economic stability, they were the architects of a palace of debt, with flying buttresses of over-valuation, as fanciful as Ludwig II's Neuschwanstein Castle.