...a blog by Richard Flowers

Wednesday, January 14, 2009

Day 2936: Is it just me or are the banks taking over the government?


Call me old fashioned, but I thought that the banks were now owned by US (i.e. the Great British taxpayer).

But it seems that the directors of OUR banks think that they're going to carry on treating us with the same amount of CONTEMPT with which they usually regard their shareholders.

Far from accepting that they've trollied the economy and now ought to JOLLY WELL DO WHAT THEY ARE TOLD! and help put things right again, it appears that they have to be BRIBED to lend money.

And the Hard Labour Government are so CRAVEN that they'll cough up!

As Mr Dr Vince "the Power" Cable says:

"…the Government seems to lack the bottle to break the banks' lending strike."

The nub of Lord Mandy's wheeze is that he will put up the cash to cover any debts that go bad. So the bank can go ahead and loan out the money, and if the debt goes bad then WE will pay up.

Some people might think that this means that we take all the risk and the bank takes all the reward… and they'd be right!

Of course, the POINT of the plan is to get the banks to do EXTRA lending. But do you think that the crafty bankers are going to go along with that? Or do you suspect (as I do!) that with the right fluffy foot they will extend shiny new loans to get the benefits of the Governments free cash offer, while with the left fluffy foot they are foreclosing on as many loans NOT covered by the guarantee as they can get away with. Net effect: little or no new lending (so no boost to the economy); bankers get mink-lined one way bet.

(Did I say "mink-lined"? "Oooh, that's real cat, Mr Lord Mandy!")

That's the BAD news; the WORSE news is that this is exactly the same as the Conservatories plan. So we know it's not going to work!

Actually, the Conservatories have a fancy claim that THEIR scheme wouldn't cost the taxpayer any money, because they would allow the bank to charge a FEE for the guaranteed loan. Or "charging a higher interest rate" as we used to call it before suggesting that putting up interest rates during a credit crunch became an obvious sign of being a MORON.

Which reminds me… Mr Lord Mandy's new announcement has left young Master Gideon Oboe reduced to whinging that "Hard Labour stole my loan scheme". Welcome to OUR world, Lib-Dem-Policy-stealing Tory-boy!

And now, to add further evidence of a banking takeover, Mr Frown's appointed replacement at the Cabinet table for Lord Pigby Jones is to be… yet another merchant banker.

Never mind poacher turned gamekeeper, surely this is letting the lunatics take over the asylum!


No comments: