Source: Adam Smith Institute
by Miles Saltiel
“Burnham’s Manchester model is a game of bait and switch. It uses funds obtained from the Public Works Loan Board, an arm of the Treasury, which explicitly declines to look at the uses to which its money is put. Manchester loans these funds on to local projects, also free of arm’s-length scrutiny, in effect using the national credit rating for local projects. This brings to mind other public borrowers who believed that big Daddy would keep them out of trouble (bankers call malarkey of this kind ‘moral hazard’) leading to, eg, Argentine defaults, where provincial profligacy hides behind central guarantees. The Manchester model is not yet a big thing in the UK, but Burnham gives the impression that he believes he’s found the secret sauce.” (07/14/26)