Wednesday, March 31, 2010

Simon Jenkins mans the barricades

Simon Jenkins, the ex Standard and Times man now at the Guardian mainly because of his hatred of Blair and the invasion of Iraq has a column up at Cif bemoaning the Chancellors debate and demanding "a real Labour voice to slam this City-fearing trio"

He says we would have been better off nationalising the banks, guaranteeing customer deposits but putting the rest into bankruptcy :
More plausible, a Labour party would argue that Darling should have properly nationalised the ailing banks, in a version of what he did to Northern Rock the year before. He could then have secured ordinary deposits, up to any limit, ringfenced business lending (as the Treasury did when it nationalised banks during the war), and put the casino divisions into bankruptcy administration, dumping their worst debts on the vulture fund market. He could then have rebuilt good and bad banks, and eventually resold them.
The impact would have been traumatic, and much of the money now being extorted from present and future taxpayers would have been lost to them in some other way. Insurance and pension funds would have taken a pounding as defaults cascaded through the financial system. But much of the burden would have fallen on those who had benefited from the bubble in the first place, and the racketeers would have been hung out to dry.
Note that last bit - it would have been bad but "the racketeers would have been hung out to dry.". I see - there would have been tens of thousands of job losses in the City (a major problem for the economy of the South East of course) but at least the vengeance of the people would have been served so that's all right.

Ths rabble rousing nonsense which sounds like a cross between Seamus Milne and some mad free marketeer is taken apart by many in the comments eg :
Given that Simon Jenkins has spent most of his journalistic career cheerleading for the destruction of Old Labour, it's difficult to know whether to laugh or cry. [PeterGuillam]
Simon, will you please go back to writing about the glories of English churches and leave finance alone? You just make yourself look silly.
Darling said in his Autumn statement that the cost to the public of the bank bailouts had been downgraded from £50bn to £10bn. Tjhe £170bn a year deficit we are running is nothing to do with bailing out banks. It is to do with a profligate government running an unaffordable public sector in the face of falling corporate (and personal) tax revenues occasioned by the downturn.
Bank profits are recovering faster than expected. The £10bn cost is probably now close to zero, and when "our" shares are sold back into the market it would take a government of extraordinary ineptitude not to show a healthy profit on the whole exercise.
And yes, I'd buy back some of those shares right now: the upside is irresistible. The downside is virtually non-existent. [stevehill]
Lloyds Bank share price is now at 62p with govt break even at c74p. The shares have gone up c30% since mid February after the company said it would be back in profit this year a few weeks ago.

Jenkins is a joke and another reason not to buy the Guardian - but it seems GMG doesn't mind - at least he was with us on Iraq eh chaps?

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