Thursday, 26 February 2009

Nationalise, Rationalise, Sanitise, Privatise ?

JKA says the Swedish strategy is working for RBS:
"So... toxic assets cleansed, cyclicals insured, all this and an 84% government shareholding. Nationalise, Rationalise, Sanitise, Privatise."

This is a useful corrective to 'chicken little' type press coverage responses which simple go 'Oh-ah - the Sky is falling in' at the scale of the losses. But I'm not convinced, not yet.

Saving RBS isn't at all the same as restoring the status quo ante. The banks may be re-floatable - although we have to see how far government support can possibly stretch in the final analysis - but that doesn't mean that it is sensible to patch them up and set them off doing what they used to do, but 'more prudently' this time.

A 'Keynesianism of the bankers' isn't at all the same as a 'Keynesianism of the people'. It's quite possible to imagine a finance sector flourishing once again - on the basis of not loaning (as much) money to small firms or wannabe home-owners as once they did. In fact, that's the 'economically rational' thing to do. Politics in the coming period is going to be about challenging that 'rationality'. I don't just mean left wing politics - I also mean the politics of people like Rob, who wants to rebuild his version of Britain. It ain't possible on the basis of the status quo ante. Harder decisions have to be taken about long term investment, and about tax rates.

The banks may, in four or five years, all be re-privatised: there is no current political imperative to do otherwise - although, if the 'Icelandic moment' spreads from the periphery to the centre, that might change. Let's not give up hope completely, even if there is no sign, as yet, of a 're-birth of the left'.

But even if we're only concerned about the future of our particular country - a national-popular moment, as Gramsci would have it - we can''t afford to let the banks let loose to simply do the same thing all over again. Tougher regulation, at minimium, surely has to be part of the deal.

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