What to do with the bankers: guillotine or crucify?

It's been a curious week with politicians in both the US and UK queuing up to kick top bankers. In the US in particular we've seen Republican Senators frothing at the mouth over fat cat bonuses and their private planes. Clearly they think they are in with a chance of an Oscar or two, sometimes you can even believe they're angry.

Bankers have a fiduciary responsibility to their companies, which many of them have clearly failed. They need to be held to account and currently we have some show trials which are supposed to fulfill that function. They ignored risk warnings not just from a senior insider who got quietly garroted but from millions of ordinary p[eople who could see the dangers but they ignored the signs because it was not in their short term interests to do so.

Whilst the big cheeses have a legal responsibility to the profitability of their companies they have never had, and no politician has ever suggested that they should have had, such a responsibility to society as a whole. If the banks had remained sustainable by asset stripping and destroying lives there would be no tut tutting at the mega-bonuses, it's only because they broke the banks as well as people's lives that politicians are subjecting us to this charade at all.

Let's not forget that the insincere histrionics on display are largely for the benefit of the cameras to demonstrate to ordinary people that the politicos feel their pain. But we should consider that the same Republican senators who today rail against the monster-bonuses or any sign of excess, are the same senators who fiercely objected during the October / November bailout negotiations to the inclusion of any conditionality or accountability of the rich and powerful.

It does not just smack of hypocrisy it's a real hay maker. In the smoke filled rooms they advocate for the rich and deregulation, in front of the cameras they posture and rage against their pals when they do as they please. Those bankers have a right to look hurt because this is probably the first time anyone's suggested that they should be democratically accountable. This is a new concept to those on both sides of the televised spleen venting.

The attempt to scapegoat specific bankers helps prevent an assessment of the role of the banks in our economy in good times and bad. The fetishisation of high risk strategies when they thought the markets were invulnerable was not just about bankers alone - it was the economic credo of the day and even Mr Prudence aka Brown was foursquare behind the madness.

So we're in a period that is a perfect opportunity to restructure our economic institutions, and it may be my imagination but the majority of the political class on both sides of the Atlantic seem petrified of the possibility. Whilst they promote solutions that focus on encouraging spending rather than addressing debt and job security they are, in my view, not just missing a trick they're positively dangerous. Even more dangerous when they use the crisis as an excuse to downplay climate change measures as the SNP did recently.

The government is part of the economy - not some outside actor - and it is well placed to be an advocate of sustainable economics that prioritises the welfare of the population over the fetishisation of economic institutions. Some political figures get this but for the majority the financial collapse is like a natural disaster that they can't explain. As someone once said - all that is solid melts into air, all that is sacred is profaned.

Over expansion based on borrowed money is at the heart of the crisis which means that debt and spending based solutions are born of dogmas that have had their day. Restructuring is likely to happen anyway, so we need to ensure that we make the argument clearly enough for the kind of restructuring that sees social accountability, via regulation and nationalisation, that can hold financial institutions to account for their behaviour and head off a repeat performance of the current crash.