Sunday, September 28, 2008

Nationalised!

When someone mentioned to me that Bradford and Bingley was to be nationalised I admit I thought they must have it wrong. But no - the Scargillian spectre of nationalisation has reared its beatified head once again. Can it be too long before all of the "commanding heights of the economy" are under workers' control?

Well, yes. But we live in hope do we not?

This government has bent over backwards not to renationalise the railways on some sort of distorted face saving exercise - for which there is no damned justification what-so-ever - so when they start wheeling out such an out of favour economic devise you know things are getting extreme. Especially after the stick they got from Northern Rock.

John McFall, chairman of the Commons Treasury Select Committee, told the BBC: "We have to make a decision - do we take it [B&B] into the state, or do we play Russian roulette with people's jobs and homes?I know what I'd prefer."

The BBC business editor explained "It will mean that every building society that floated on the stock market in the wave of demutualisations of the past two decades will either have collapsed or been sold to a conventional bank." Although that might not actually make sense I think it's valid to re-examine that period of demutalisation with the benefit of hindsight.

Meanwhile $700 billion is being pumped into the financial sector by the US government to prevent capitalism collapsing - the largest US state intervention since the great depression. Let's hope this one works out a little better than last time.

Obama has insisted that the bail out includes curbs on executive pay a theme he returned to a number of times at the Presidential debate on Friday (Saturday morning here) insisting that any package not be a form of "welfare for Wall Street" but rather ensures a more generalised slide does not bring down the economy.

I think this is the right approach. Allowing banks to go to the wall may have a certain hard hearted schadenfreude to it - but it doesn't benefit the ordinary people who are worried about their ability to keep a roof over their heads. Whilst HBOS may have used bail out money to pay for executive bonuses when you're using taxpayers' money you can insist on some basic rules - like using the money for what it's given for, preventing the collapse of financial institutions rather than ensuring that the bosses nests are still well and truly feathered.

5 comments:

James said...

Hi Jim,
Following your comments on my blog about the bailout, I thought this poll analysis might interest you. I'm a sucker for anything referencing the prisoner's dilemma, too.

Whatcha think? The Pew question looks pretty loaded to me.

James

weggis said...

Since when has Nationalisation [State control] equalled worker's control?

Jim Jay said...

Weggis: well you're quite right - I was just having a bit of fun there. Whilst nationalisation can have many beneifts (economies of scale, democratic control, exclusion of the profit motive) it is not workers control by any stretch of the imagination.

James: nice link - I agree the pew question is ridiculous. It may as well ask "Your government loves you, is it right to love you?"

Given the rejection of the deal now though I have absolutely idea what happens next...

scott redding said...

I wonder how the career of the "Bradford and Bingley Bowler Hat Lady" is going to pan out. Every news article about the nationalisation has her front and centre. Won't her "brand" be toxic now too?

Jim Jay said...

You're right Scott! Unless the bailout works - and then she'll be deemed the financial equivalent of a rabbit's foot.