Monday 4 October 2010

Still a modern-day Glass-Steagall is recommended, and still it isn't happening

Today I read via the BBC that another think tank, the New Economics Foundation, have analysed the banking system once more and they still find it is in serious peril, even after all the lovely lolly, in the form of the various bail-outs and back-stops that were handed out like sweets to anyone [with a banking license] who wanted them, using your money. And your kids' money that will be recovered from them in the years to come as the longer-dated government bonds come to maturity. After all, never forget it's all our money the government spends; it doesn't have any of its own. Every year there is a goverment budget deficit, that's another future year of higher taxes and lower public service spending that has been extorted from you, regardless of whether you consent to it - they can spend all they want, but one way or another it all eventually has to be repaid, by taxpayers, to the people who lent it.

Once again, the only sustainable cure proposed is the equivalent of a modern-day Glass-Steagall act -- as per the laws instituted after the Great Depression, the last time a credit crisis of this kind occurred. Now, it's a shame Mervyn King [the governor of the Bank of England] was not actually running the country's finances all these years as you might think he has been, because my first post mentioning that a new Glass-Steagall was the necessary cure to prevent it happening all over again, back on the 21st October 2009 (here), recorded Mervyn was the first person from the halls of UK financial power to appear in the mainstream media mentioning this was the solution to the problems that had occurred.

Still, all this time later, it has not been put in place and there is no indication that it will be agreed to. It HAS been discussed, but is resisted by the bankers and their lobbies at parliament because it will destroy their profit-making machine. We are heading straight into further credit strain, and nothing has been done to avert disaster.

Click here to read the article about the New Economics Foundation findings, on the BBC website.

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