Whatever happened to “neo-liberalism”?

Charles Dumas of Lombard Street Research joins those who bemoan the lack of a free market reaction to Wall Street’s problems. In an article in the Telegraph he argues that: “Free markets have been abandoned in America at the crucial hour by their chief exemplars, the financial masters of the universe.”

Dumas also says that: “It seems that: President Bush and the Republicans are not just well to the left of Grover Norquist. They leave clear blue water on the left of Gordon Brown, much to the envy of Euro-lefties no doubt, who would love to ditch what they call “neo-liberalism”, and what we call free markets, as easily as the American right wing.”

In a related argument Dumas also points to the surging level of public sector debt in America as a result of the recent bail-outs. As a proportion of GDP it is now not far behind highly indebted countries such as Italy and Japan.