Nationalisation

There has been much coverage in this country of a lecture and interview by one Mr Diamond, who is the head of Barclay's bank. He has clearly set out on PR offensive. At least that implies that they have noticed we are not happy with bankers, so I suppose that is some progress. The lecture is a disgrace. It is patronising and it is full of lies of omission. if we fall for this rubbish we deserve all we get. To me its content is further evidence that we should nationalise the banks; because with attitudes like this there can be no further belief that these people will ever change.

The full lecture can be found here:

http://news.bbc.co.uk/today/hi/today/newsi...000/9630673.stm

Mr Diamond says that the focus for banks now must be on helping to create jobs and economic growth. He sort of acknowledges that has not been part of their thinking till now: and yet he then arrogantly goes on to affirm that he and his kind can prescribe policy for nation states. There is no change in the underlying anti democratic belief system: there is a transparent attempt to persuade that all of us have been equally irresponsible and all of us must pay a price: but there is no acknowledgement that those very same failed policies and prescriptions were rooted in the neoliberal economic theory which he admires and espouses even now.

He goes on to pretend that banks now are like banks were in the past. He carefully explains, as if to a child, what a commercial deposit bank is for. Since banks are nothing like that this is a mere insult to our intelligence.

Mr Diamond points to the the indebtedness we now have: he says


In face of this he says that government deficits have to be reduced, and that inevitably entails cuts to public spending. His reasoning is that if deficits are not cut then countries will have to pay high interest rates for borrowing and that will be disastrous. You are not expected to notice that this prescription means that of the four bodies said to have indulged in excess borrowing only two are to pay a price: governments and consumers. Interesting.

You are not supposed to notice either, that his views on interest rates are entirely at odds with another part of his thesis: that banks need to regain our trust and act as "good citizens". He claims he is strongly committed to a change in the culture of banks in that direction: yet it does not cross his mind for even one moment that they could best do this by charging low interest rates, and so sharing the pain he says is necessary for the rest of us. Not he! Mr Diamond says


What would a good citizen do, Mr Diamond? A good citizen who is in a position to set the interest rate charged to that same government? Interest rates are not physical laws. I do not think "good citizen" means what you think it means.

I presume if this was put to him he would make a lot of noise about the banks' responsibility to ensure that the depositors money is safe. He has a lot to say about balancing responibiities. But that did not bother them when they ran the banks into insolvency and had to be bailed out by the tax payer. They took that money and gave nothing back at all. Mr Diamond says they made mistakes: he regrets that he cannot turn the clock back: he can only ensure they never happen again. Perhaps we are not expected to notice that this is self-serving poppycock. What he is effectively saying is that they took ludicrous risks in pursuite of private profit in the past: the were bailed out by the taxpayer on the understanding that they would use the money to stimulate the economy through increased lending to busines: they kept that money and did not lend to businesses: and now they are sadly unable to lend to the government at a manageable rate of interest because they are newly risk averse. He thinks your head buttons up the back.

There are two possibilities: this is pure PR and Mr Diamond is serving his bonus (he got £9 million in remuneration last year) and his shareholders: that is what he is supposed to do, so that is likely. Alternatively he is too stupid himself to see that the whole problem was caused by his faith in neoliberal theory; and too blind to even think there is something wrong with his mindset and with the system it supports.

Either way: he is not fit to have influence over the economy and he is certainly not someone who should govern the state behind the scenes by dictating policy in this way.

If we do not nationalise the banks this will continue. They serve their own interest and the protestations are cosmetic. They didn't make any mistakes: they deliberately pursued their own interest in line with what their theory says we all do: well I don't think we all do that all the time. But it is somewhat self fulfilling, that notion. So for now let us pursue our interests and nationalise them.