More about the Banks
Last night Will Hutton delivered another excellent Dispatches programme on Channel 4, showing just how brazen the banks have been in ignoring the lessons of their rescue and how, as he puts it, they have become like a State within a State, ignoring government or lobbying it to do their bidding.
The most striking feature in my view was the research undertaken to support the narrative, which showed that the vast majority of all bank lending is on residential or commercial property and credit cards. Industry, upon which the regeneration of our society and economy depend, accounts for only a small percentage of the total. Industrialists lined up to report difficulties in getting funding.
This is truly appalling. It shows that the banks have not only drained the taxpayers’ pockets in their £trillion rescue and gobbled up the £250 billion of quantitative easing to fund their gambling on derivatives again, risking another potential collapse, but are the engine of the unsustainable and deeply damaging inflation of property assets which has destroyed the capacity of the economy to function as a socially cohesive force.
This new government of ours will have to sort this out. Because of its political complexion they will stop short of this, but I think the problem is now so big that nationalisation of the entire retail banking system is the best way forward with all aid, support and guarantees being withdrawn from the rest of it, to be cut adrift and allowed to sink. We now know that it is nothing but a cancer eating at our financial stability, not a vital service, and we shall be better off without it.
The Coalition will balk at such a move. Labour, dusted down with a new leader would be wise to engage it. As in 1945, public ownership of vital businesses and utilities could prove an election winner. Just as the post-war country was very different to the one which challenged Hitler in 1939, so the post-cuts country will be very different to the one which pre-crash waved plastic cards at everything it wanted, egged on by the alchemists of the City of London.