So the real culprit was economic growth

The new chief executive of RBS, Stephen Hester, interviewed by Robert Peston on this morning's Today Programme (4 November 2008) blamed the years of good economic performance for the excesses that led to the tidal waive of bad debts. This links in an interesting way to Saturday's Guardian Review and the book by Niall Ferguson The Ascent of Money. It would seem that there is a point at which the financial markets detach from anything resembling real economy. The knee jerk reaction to this is evident in politicians of the left who now queue up to preach the gospel of manufacturing, failing to notice that cost profiles make this a pipe dream for western economies. Yet the answer is not the focus on financial services from which we are now all reeling. It boils down to finding new ways to add value.