It's The Economy

Things are moving with remarkable speed. By next week Barclays and HSBC may be in the Government's bail-out tent, while Lloyds TSB, which was meant to be coming to the rescue of HBOS, may be more than 50% state-owned. Given that most of the banks would be bust without taxpayer guarantees I don't know why they don't just wind them up in a controlled manner, transferring assets and liabilities to the state, before beginning the process of building a case against their boards, freezing their assets and attempting to claw back their bonuses, property and pension funds - on the basis of the effectively fraudulent accounts, based on flawed asset evaluations, which have showed such huge profits over the last ten years. What would happen to a small or medium sized quoted business which inflated its assets in the accounts year on year, distributing huge dividends and bonuses until the day the assets turned out to be not quite as valuable as the liabilities ? At a minimum, HMRC would be all over their books, if not the Fraud Squad. In the States they'd do time - why not here ?

They might claim they truly believed the valuations - in which case sectioning under the Mental Health Act might be more appropriate. Their delusions have turned out profitable for them and dangerous for us.

Laban's not generally a believer in the state doing what can be done by private enterprise. But the banks are in a unique position - licensed to create money - and have been found grieviously wanting.


Only a few months back any Tory spending proposal would be greeted by Labour with cries of 'where's the money coming from', with dire prognostications of closed hospital wards and classrooms. Now Gordy's spending money he hasn't got like the proverbial drunken sailor, and the tab marked 'taxpayer' behind the bar gets longer and longer.

When the Tories stopped believing in God and Labour stopped believing in the British working class, they soon found other things to believe in. The Gods of the Market Place satisfied the spiritual needs of many Tories, while Labour returned to the Old Religion of the Pelagian Heresy - that man is essentially good and perfectible - but with a twist that Marx would have noted with a sardonic smile - perfectible only with enough teachers, social workers, Housing Officers, Funding Stream Co-ordinators, outreach workers and other Labour-activist beneficiaries of the Caring State.

Old Labour scorned the Gods of the Market, but New Labour realised that the taxes (and the party donations) would have to come from somewhere, so were quite happy to let the Market Place rip while taxing it to feed their core constituency clients - said social workers, Housing Officers etc. Indeed, for the architects of New Lab, it was but a short step from being intensely relaxed about others getting rich to being intensely interested in getting rich themselves. In this context I would recommend a read of lefty Yank Greg Palast's expose of Mandy's mate Derek Draper. It certainly dispels any illusions about the People's Flag.

Draper should have been pleased with his success. But his mood was philosophical.

“I don’t want to be a consultant,” he said. “I just want to stuff my bank account at £250 an hour.”

Blair and Gordy took the whole thing a little too far, though. Convinced that with enough social workers and Sure Start schemes, crime would fall, they didn't bother to build any prisons - and now the ones they have are full. Convinced that 'something would turn up' - like wind power - and afeared of the Guardian, they closed all the nuclear power stations and didn't commission any new ones. Now they've had to sell our energy future to the French, and the lights will soon be going out as the old stations shut faster than new ones can be built. The story of Anglesey Aluminium is a disgrace.

Above all, they spent and taxed in the boom years as though they would never end. What are they going to do now that they have ? The kitty's empty.

IMHO there's only one option open to them. They'll keep spending and start printing. Consider their position. With unemployment projected to rise to three million, they'll be worried about keeping order among the youth of our rainbow nation. No way can they let up on the outreach workers, but who will pay for them ?

The oldies will - especially those who were employed by the private sector. They don't fight. They probably voted Tory anyway. Many of their company pensions have been destroyed, but there are still a fair few impacting the bottom line with their future pension liabilities. Just print money, let inflation rip, and zap ! those future pension liabilities are halved in real terms.

That solves the problem of paying the outreach workers, it ensures more donations and directorships from grateful capitalists - and it also makes a lot of pensioners, with their pensions eroded by inflation, once again dependent on the State. It's a win for everyone - except the pensioners, but who cares about them ? They don't riot !