Let the banks go bust / The honest copper

Let the banks go bust

There's little that demonstrates better a communist critique of capitalism than the current banking crisis.

Events are clearly showing how business sucks the lifeblood from people through their surplus labour, but then also purloins public money as well.

The Chancellor of the Exchequer, as first reported by the BBC’s crime correspondent, is planning a daring daylight robbery on the Treasury tomorrow. The planned proceeds of this heist - £50bn - will then be ‘invested’ in Britain’s banks.

I’d imagine they’ll make him Chair for Life of RBS, etc., when he retires from politics; maybe they will even rename a shopping centre, or town that they own, after him.

Did anyone notice the banks gifting billions to the public purse when they were flush with cash?

I have no doubt that the banks' PR machines are working overtime to get across their message - For the good of Britain, pay us the fucking money - although maybe they're working on saying that with a bit more subtlety.

£50bn is getting on for a grand from everyone in Britain. Can I put in a request to Alistair Darling for £1000 for the Southpawpunch website - or just for my holidays?

This £50bn is also proportionally very similar to the £400bn ($700bn) giveaway, sorry ‘investment’, that the US government has just bunged the US banks (the American economy is 7x bigger than Britain’s).

Of course billions have been given away there, here and everywhere else already. And will doubtless be so again in future. Once a burglar has worked out you don’t lock your back door; he’ll keep on returning.

In Brown’s banana Britain there’s not even a parliamentary debate about the £50bn ‘investment’ before it's gifted - as happened in the US Congress about the $700bn, and where legislators even dared to reject the bail-out, for a few days - although I’d imagine they’ll chew over the deal in the UK - after it has been done, of course. I can imagine already the pained look of angst on the face of Diane Abbott Portillo or John McDoughnut in the parliamentary committee.

It's ludicrous to see this gifting megabucks to businesses as 'socialism', as some American rightwingers have claimed, but nonetheless I was kind of hoping that these 'pure' free market advocates, who are using such a term, would have put up more of a fight for their politics. If you're going to argue for capitalism, it's only reasonable you accept its flip side as well.

Jump!

I’m so far a bit disappointed that no bank directors has yet made use of that readily available commodity in Canary Wharf - height - to toss themselves, 1929 style, from the top of one of the buildings.

It may well be the sealed windows in the skyscrapers there that defeat them (is that the real reason why they don’t open?) as these types are often a bit thick (as I know from school). So can I suggest that they could chuck a chair through first; and then quickly follow?

I'm enjoying the meltdown spectacle but I also think it's instructive about the often random nature of capitalism. That system’s defenders will pretend it to be the most rational system but it’s all clearly just wild and unpredictable. It’s ludicrous that an company can, just like that, become worth half or what it was worth the day before - it’s not as though half its buildings have burnt down overnight.

British Banking Corporation

The British state broadcaster, the BBC, is super loyal to the British ruling class at the best of times. But it turns to bootlicking at times of ‘crisis’.

Today we had - the City, that “symbol of this buccaneering island spirit” from Nick Robinson, Political Editor and a summit today between the banks and government to agree the £50bn deal was described by Robert Peston, Business Editor as “the meeting to rescue our banking system, and the British economy”. And of course the money being injected into the banks is being “invested”. Lickspittle, lapdog journalism.

Will the banking system 'collapse'?

You pay a mortgage (or payments on a business loan, or other) to RBS and they go bust; you then find yourself paying the same to the China Overseas Bank after they buy your bank for £4.30.

You have savings of £3000 with RBS and you get a compensation cheque from the government when they go bust. You then move this to a new Mittal Bank.

The Channel Tunnel went bust (or nearly did). It didn’t mean it stopped working, or evaporated, but it did mean that whoever took it over acquired an asset without the debts incurred in building that link. They maybe got a bargain in the process. Imagine how well set a bank could be getting lots of paying mortgage holders (with the defaults taken care of elsewhere) at a knock-down price.

Britain used to have a car industry and a coal industry. It has been cleansed of both as these industries collapsed - but people still drive cars in Britain and some of its power stations burn coal.

There have been bank collapses since the first moneyman put his money out to ‘work’. Scores of these companies have collapsed before. But it's ludicrous to think the banking system, as a whole, will collapse. There’s nowhere on the planet that is cleansed of banks, nor will there be under present arrangements - if capitalists have spare cash, they will always will seek to get the biggest return, be it via a bank based in a grand looking building lending to the government or bank of gangsters' monies collecting their vig.

Sure, there'd be some dislocation if the current banks were just left to burn. Maybe rates would increase for a while and funds dry up, in part - but market pressures will come to bear, the funds will return if the return on investment is enough. The losers would be financial services workers and those who have a lot of money in troubled banks (which I presume they are now withdrawing).

The alternative to letting the banks burn and that is currently being undertaken by their agents in government is giving £Xbn (X being a very large number) to their banks. This makes a lot of bank shareholders happy (and a lot of very big shareholders, very happy indeed). The knock-on effect of this will, however, be minus £Xbn in state funds - so less hospitals, roads, fat rail companies, soldiers etc.

I can't really see one course being worse than the other in terms of the number of jobs lost; the former may even mean limited numbers lost as replacement banks pick up staff (but doubtless more 'efficiently' - e.g. not picking up bank employees at the top of their grade).

A variation on this strategy seems to be governments taking a stake in banks, that stake often just being the losses, but not always. So a forced nationalisation of a company - a bank - that will be obliged to act like a bank when the market returns? Very socialist.

Other variations on this appear to be such as has happened with banks like Fortis (whose arrogance was personally very apparent to me, not long ago, during a job interview. I don’t suppose there’s much point me putting in a belated travel expenses claim now.) They were bought up, in large part, by governments who then appear to have sold this Benelux bank to one of its rivals. Lucky BNP Paribas.

Lucky other banks as well. Lloyds TSB have taken over HBOS. This would have been rejected as ‘anti-competitive’ in ‘normal’ times but when this deal was recently announced it was also stated that they had been in talks for sometime before (for how long? even before the crisis, when such a deal would not have been sanctioned?). How very convenient for Lloyds TSB; I read that they will now have 30% of the British mortgage market.

Slumpism

There’s a cod form of communism that indulges in 'primitive slumpism’. Its proponents think ‘the worse it is, the better’ (just ask your local anarchist - oh dear, there’s none left). I’m opposed to such thinking because, for example, more unemployment will make strikes harder (a greater reserve pool of labour) - but then it was hardly sparking during the boom time either.

So, thinking the playing of a joker or two, even if just to break up the monotony, may lead to unexpected opportunities. I’m just wondering whether we should welcome the appearance of, say, modern soup kitchens (Pot Noodle kitchens sponsored by Golden Wonder, maybe?) and the like, as a harbinger of depression and more - which may yet lead us to be able to inherit the ruins, like the 30s repeated but with a different epilogue?

So to that end, can I start a web rumour right here (supposedly a lot of this starts from such baseless rumours). Goldman Sachs is in secret talks to be taken over by a Wrexham based chain of pound stores and Merrill Lynch’s board will, next week, reveal themselves to be really be the Twelve Apostles of the Age of Aquarius.

Sell, sell, sell!

So what we should do?

Now could be a great time for communists to organise against the ravages - current and soon forthcoming - the capitalists will be sure to try and force us to pay for their crisis.

We should go on the offensive and argue for -

Expropriate (i.e. seize, don't buy) the banks - pay compensation only in the case of proven need.

Not a penny to businesses, no bank bailout - let them go to the wall.

The state to provide banking services (mortgages, etc.) to those requiring such.

A workers government to execute all present and former directors of FTSE100 companies, and all individual shareholders holding 5% of more of these companies, as well as those having assets currently valued at £10M plus.

Demo

Some public minded citizens are getting together a posse to try and run the Bank Bros gang out of town before they do over the main safe. If I have time, I will be there with a placard saying ‘Jump’.

March on the City
We won’t bail out the bankers
Friday 10 October 4-6pm
Assemble at the Bank of England, Threadneedle St, London EC2R

(demo details from Socialist Worker - I don’t know who is organising the protest.)

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The honest copper

“I don’t think anything went wrong”. - Response at the inquest when Jon Boucher, who had been Anti-Terrorist squad officer in the control room at Scotland Yard, advising Cressida Dick, was asked about the events including the holding down and killing of Jean Charles de Menezes on a tube train by a police execution squad.

"And equally, I pray it doesn't happen, but it is possible that an innocent member of the public might die in circumstances like this" - Cressida Dick, ‘designated senior officer’ in charge of the operation.