Thoughts on the banking system

Given that we have, for five years, been living in the shadow of a global financial meltdown, it’s difficult to understand the hesitation that some people have in doing something about it.

The right-wing media hastened to condemn those seeking solutions as populist ‘banker-bashers’, but the fact remains that since Thatcherite de-regulation, our economies have been based off flimsy agreements and soaring levels of debt. However much the former Thatcher followers might object, she certainly set the precedent for a culture of financial deregulation. When Margaret Thatcher was asked what her greatest achievement was, she replied: “Tony Blair and New Labour”. This cynical comment must come as a crushing blow to the thousands who have lost their jobs, their homes and their savings as a result of irresponsible and childish behaviour of bankers.

I won’t even pretend to understand the banking system, because saying that I did would be lying. But neither do the rich men in charge of the industry, as shown by the confused explanation of derivatives that numerous top executives have given when asked, Marcus Haupt and Kenneth Rogoff to name a few.

But what is certain, is that the financial markets had been formed into a sort of jenga column, formed with the savings of the middle class and played with by the fiendish ambition of bankers who simply didn’t know when enough was enough. The higher it got the less stable it became, it was based on debt, on promises built on promises which would never be upheld.

The consequences of having such flawed foundation to the towering drunkard that is the financial markets, is that eventually he will come careering to the ground with a crash which will last five years or more. In fact, almost definitely more.

Now in the wake of this financial crash we have politicians who seem to be incapable of decisive action, firstly in punishment for those men who ruined our country and secondly in prevention of their successors having the same destructive capabilities.

To do that, it is best to create a new system based on modesty and need rather than extravagance and greed. What is required is a banking system which lends when needed and can never again grow too large for its own boots.

Our economy is floundering, we need recovery fast. That recovery does not have to be in the form of an environmentally destructive pursuit of infinite economic growth. These people agree:

http://www.neweconomics.org/press/entry/economic-growth-no-longer-possible-for-rich-countries-says-new-research

http://www.neweconomics.org/publications/entry/growth-isnt-possible

http://www.youtube.com/watch?feature=player_embedded&v=Sqwd_u6HkMo

In my view, a steady state of normality is acceptable. But in order for that to be acceptable to the public, we need to have a viable alternative. And that is why I propose these measures to shift our economy from capital and carbon intensive, to local and job intensive. The nationalisation of these three key industries would go a long way to improving our quality of living in this country:

Let’s bring the entirety of RBS under public ownership. It can be used as an engine for prosperity, it would be a bank which offered low interest loans to the small business owners that really need them to realise this new alternative economy. The rest of the banking industry should be broken up into much smaller firms, and their should be a ceiling of net worth for banks. They should never be allowed to get that large again. I would also recommend the installation of the Glass–Steagall Act, which separated the commercial and investment arms of the banking industry, and stopped bankers from casino gambling with the public’s savings.

I would bring the energy industry into public ownership once more. Energy should be something supplied by need not for profit. And it should be sourced from renewables. Under this new alternative economy, we would see such an increase in government investment for renewable energy as would make you shudder. A 50% subsidy for homeowners wishing to purchase a micro-generator. I would pass a law that forbade the construction of new houses without a certain level of insulation and without a micro-generator of some kind.

I would nationalize the train network. Too long has the quality of our train service been downgraded year after year at the expense of corporate profit. The main component of free market capitalism, that of free competition, would never work in a situation where this is only one rail! That is so nail-bitingly obvious as to make me want to cry. We would have a heavily subsidised train network which encouraged citizens to take the train as opposed to a less environmentally friendly means of travel, like cars.

 

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