After some thought, I've come to the conclusion that Joe Stiglitz is right; we should let the duff banks fail and start again - probably by taking over the infrastructure (branches etc) at rock-bottom prices, giving jobs to the rank-and-file staff and firing the directions.
The RBS results today are a disaster and all the UK and US adminstrations seem to be doing at the moment is providing an open-ended lifeline to keep these zombie banks operating on a large enough scale to leech huge amounts of cash from the taxpayer, but not doing anything to reform the basic banking strategies. Indeed, RBS have been relentlessly taking the piss - Fred Goodwin's £650,000 per year pension (at age 50!) which RBS were NOT contractually obliged to give him according to Robert Peston (they could have sacked him, and should have done) are just the icing on a very toxic cake.
In a way, Goodwin and his ilk are doing more to advance the cause of the hard left in UK politics than anybody else in recent memory. Now that the directors of the failing banks have been seen to be taking the piss in such a spectacular manner - at taxpayer expense - the logical foundations of the current economic system, have come crashing down. The arguments for a truly radical solution to the current crisis grow stronger with each new revelation of the incompetence and arrogance of the bankers.
Maybe we need some kind of retrospective taxation on remuneration and bonus packages for the financial sector - where banking firms have subsequently collapsed, senior managers should be made to repay their bonuses and pension pots. Probably unworkable but it's hard to see what else would sort out people like Goodwin. A revolution would probably do the trick, but only with a lot of collateral damage in the process. Increases in income tax at the top end, and some kind of wealth tax (as was mooted in the 1970s) seem essential. Meanwhile, RBS should just be allowed to collapse (subject to protection for individuals with savings in RBS or associated banks) - and probably Lloyds Banking Group as well. It seems to be a choice between that on the one hand, and a liability of several hundred billion pounds for the taxpayer on the other. And I don't see why Joe or Joanna Public should bail out these wankers anymore. Time to apply some Strict Market Discipline...
1 comment:
Agree completely, but you omit to mention the Public Sector personnel (Not least MPs) responsible for failing to regulate the banking sector. Certainly a retrospective levy on probably 90% of MPs and almost all MEPs (arguably barring UKIP)would be a salutary lesson for them to try and run the country in the public's interest rather than their own.
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