This week Tony Blair told critics that he would stay loyal to his friend Bill Clinton
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This week Tony Blair told critics that he would stay loyal to his friend Bill Clinton. He didn't say "no matter what happens", but it sounded like that. Their joint annual meetings start in Washington at the beginning of next month and something ought to be in place by then.The Fund and the Bank have attracted a lot of flak over the last year for supposedly inappropriate policies They probably have made mistakes. They remain, nevertheless, the best mechanisms we have to anchor the world economy.
Each decision - do you lend money and on what terms, or do you let whatever it is go bust? - has to be taken on its merits. And some decisions will inevitably be wrong.Patching the system also means trying to find ways of giving more resources to the two organisations that have most experience in fixing global economic problems: the International Monetary Fund and the World Bank. Talk about this has helped shore up markets around the world in the last few days. If you look at the US or the UK today, the domestic case for a cut remains marginal. Both countries have probably been wrong not to raise rates more over the previous two years.
If they had, they might have chipped a bit off the top of the present boom and so lessened the danger of the future slump.Two: if the cut is not credible, it won't work, so it has to be backed- up by policies of the second type noted above The cut buys time, which is great. But it only buys time.Three: you can only do this sort of thing when you are very sure that it is right. Co-ordinated interest rate cuts in 1987, after the stock market crash, actually made the subsequent boom and bust worse.I still think there probably is a case for cuts in interest rates as part of a wider set of measures. If I breathe in I look thinner, but sadly it is merely a temporary redistribution of bulk.CHRISTOPHER RICHARDSONDirectorPleasance Theatre Festival LtdLondon, N7. Sir: Henry Rothschild has alerted us to the risk that Janet Leach's unique and important collection of Bernard Leach's work and documents are in danger of being lost to the nation (letter, 15 September). One: a cut in rates may be right for the world as a whole but wrong for several of the countries that have to do the cutting.