So far, our class has given the banks a trillion pounds of tax-payer support through quantitative easing, etc., and the country has lost a trillion pounds’ worth of production.
Yet the banks’ outstanding loans are still worth five times our national output – proportionately greater than in any comparable country – and these loans are backed by only £1 for every £50 lent. A further crisis is inevitable.
The IMF recently noted that ten major banks here have no capital to back the £1 trillion’s worth of the derivatives – bets they have made on the future prices of financial assets – that they hold. Barclays, RBS and HSBC still have more than 1,000 secret subsidiaries each designed to avoid tax and regulation. The bankers’ bonuses were £6 billion last year, and on top of that they increased their basic pay.
Only 3 per cent of banks’ lending in the decade before the crash went to manufacturing; three-quarters went to commercial property and residential mortgages. Investment in manufacturing industry adds to growth, investment in property doesn’t. The result? Wrecked industries and sky-high property prices.
We must stop wrecking the country to save the banks. We must stop paying the bankers’ debts. They are not our debts. Clear the decks. Reject the failed model of finance capital. Let’s create national banks for industry and for development, to lend to invest in building assets and increasing production.