We pay the banker, we should call the tune

[Thinking Man's Idiot]

We pay the banker, we should call the tune

(Wednesday 26 November 2008)

by LOUISE NOUSRATPOUR




THREAT: Bank of England governor Mervyn King announced that the full nationalisation of the banks could not be ruled out.



UNION leaders and left campaigners demanded that banks be nationalised and made to serve the public on Wednesday after a senior minister accused bankers of breaking promises made in exchange for the £37 billion bail-out.

Economic Secretary to the Treasury Ian Pearson said that the banks had not honoured commitments that they would maintain the flow of lending to small businesses and homebuyers.


He told the Treasury subcommittee that it was "unacceptable" for bank chiefs to give assurances to senior ministers which were not then reflected in their lending practices.


"We will continue to want to hold the banks' feet to the fire to make sure that they do the right thing by small businesses and by people who want mortgages for the future," Mr Pearson declared.


Bank of England governor Mervyn King said on Tuesday that the full nationalisation of the banks could not be ruled out if they did not resume normal lending.


He warned that the economy faced a "steep recession" unless individuals and firms were able to get access to the credit that they needed.


Mr Pearson said that ministers expected the banks, particularly those which took advantage of the government bail-out, to offer "competitively priced lending" to the mortgage market and small businesses.


But he appeared to reject Mr King's nationalisation threat, insisting that ministers were not seeking to prevent the banks operating in a "normal commercial way."


Unite joint general secretary Tony Woodley argued that, if banks continued to refuse to help the economy recover, then ministers must consider state ownership as "the only way forward."


He added: "There is simply too much at stake to allow the banks to continue to operate to their own rules, irrespective of the terrible damage they are doing to jobs and communities across the country."


The GMB union exposed nine north-east mortgage lenders, including the Newcastle Building Society, which are yet to pass on the recent 1.5 per cent interest rate cuts.


North-east organiser Julie Elliott called on those banks to "pass on the rate cut immediately."


Communist Party of Britain general secretary Rob Griffiths called for a move "from capitalist nationalisation to a democratic nationalisation" to force bankers to serve the interests of the wider public.


"We need sweeping changes in the banks' management and policy," Mr Griffiths argued.


"Nationalisation of the finance system is necessary to ensure that banks serve the broader social objectives, including assistance for low-income households, small businesses and investment in productive industry."


Respect MP George Galloway said: "The government and even the Bank of England now recognise that just handing over public money without asserting public control is the worst of all worlds.


"There are dark mutterings from the Treasury and the bank about wholesale nationalisation of the banking sector. I believe that will happen sooner rather than later.


"The whole lesson of this economic crisis has been so far that measures which one minute were laughed at as too radical are then adopted by policy-makers."

[Thinking Man's Idiot]

Banks don't fear Brown

(Wednesday 26 November 2008)


BANKING bosses are clearly in no fear of the government, believing that Gordon Brown does not have the bottle to take financial institutions into public ownership.

They probably think to themselves that, if the Prime Minister has allowed serial offenders like the train operating companies, energy monopolies and water firms to continue scalping the public without restraint, they have little to fear.

And a feeling of impunity must be why the banks feel that, even with a constant transfusion of public funds to restore the liquidity that they themselves squandered, they can ignore ministerial calls to extend credit to small businesses and homebuyers.


The bankers have no compunction about saying: "Yes, minister" to Peter Mandelson and Alistair Darling and then ignoring everything that has been said.


Mr Brown and his acolytes ought to realise that bankers are not boy scouts. Truth and honour mean nothing to them. What matters is maximisation of profit.


When they are offered low-interest government loans, they take them. The same goes for direct state subsidies in return for government shares but not boardroom influence.


But, if the government then expects them to help kick-start the economy by making loans available on a reasonable basis, forget about it.


Borrow cheaply and lend extortionately is the name of the game. It doesn't matter if it's financing dodgy derivative deals or offering high-interest credit cards to people who can't really afford it, these high-return, if slightly risky, schemes will take precedence over boring lubrication of essential economic activity.


Don't expect anything different. This is a scandal that will run and run until a government finally plucks up the courage to nationalise this scandal-ridden sector.


Unwinnable

THE revelation that the government plans to spend an astounding £8 billion on the unwinnable US war in Afghanistan next year indicates that there is no new thinking taking place in Downing Street.


Chancellor Alistair Darling's timid plans to reflate the economy through a mixture of marginal tax cuts and more substantial subsidies to business have been accompanied by calls for "greater efficiencies" in the public services and local government.


These calls will translate into a squeeze on living standards and employment levels in the public sector.


They also presage adoption of the Tory demand for a freeze on council tax, which, while it may appear attractive to council tax payers, will herald degradation of local authority services and attacks on the pay and conditions of council staff.


At a time of escalating public debt in response to the storm clouds of recession, the government is looking for areas to trim expenditure. The war in Afghanistan has to be among the first choices.


Growing numbers of Afghans are opposed to the occupation - even the US-installed "president" Hamid Karzai wants to set a date for it to end.
The Taliban control larger areas of the country and British generals are lining up to pronounce on the futility of the conflict. A quarter of all Afghans don't have enough to eat.


There is nothing positive to say about the invasion and subsequent occupation. It should be curtailed without delay and Britain's troops brought home.

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