The government has finally been forced to nationalise Northern Rock after months of dithering. They have wasted more than £55 billion of our money – to no purpose.
The ‘geniuses’ who ran the Rock as a capitalist bank made a total hash of it and lost billions of pounds of other people’s money. It’s not just the bank’s management who stand indicted. The whole capitalist system is shown to be based on swindling and gambling.
But Northern Rock management are all right, Jack. Chief Executive Applegarth resigned in November, leaving his prize collection of vintage sports cars untouched, and a huge hole in the accounts of the bank. Remaining managers were busily selling off prime assets right up to the moment nationalisation was announced. Why were these boll weevils left in charge so long?
The ‘rescue parties’ such as Branson’s Virgin Group and an in-house management team were unable to broker an acceptable deal. No surprise there. They were only hanging around because they thought the government would hand out free money to private owners, since they would be so grateful not to have to nationalise the bank. Eventually even Darling (looking more like an undertaker than ever) was forced to accept that the rescuers were really sharks.
Then there are the shareholders. They can’t accept they’ve backed a loser. Shouldn’t they have monitored what management was up to? That’s what shareholders are supposed to do. They want the government to nationalise the bank’s liabilities and leave the assets in private hands. They’ll be whining for compensation, snivelling about their ‘human rights’ and threatening legal action. What about our human right to keep their hands out of our pockets? The shares were worth £12.50 a year ago. Now they trade at 90p. They would actually be completely worthless if it wasn’t for government guarantees, pledges made with our money of course.
Many of the present shareholders are not little old Geordie ladies with a couple of quid they scraped together. They are hedge funds who bought the shares cheap after the run on the bank in September, in search of a quick buck. These sinister and secretive institutions know full well that New Labour is a soft touch that cannot help itself from throwing our money at the rich.
There is just one group of people in this who are completely innocent. They are the workers in the Rock’s branches. So guess what? Brown and Darling have decided that they should get it in the neck for the failings of others. Under nationalisation the first thing to do is to slim down the branch structure and sack thousands of the workers. Not if we can help it! New Labour’s golden rule is – hurl money at the rich and to hell with the workers.
The Tories say nationalisation takes us back to the bad old days of the 1970s. Really it is their system that has failed. So nationalisatioon is back from the dead. They are all at sea. OK – it was the Tories who nationalised Rolls Royce in 1971. Then Margaret Thatcher took over the failed Johnson Matthey Bank for just one pound in 1984. She did so in the interests of capitalism as a whole. Major also took over the failed National Mortgage Bank in 1994. The Tories are moaning about losing money. The government has already thrown our money away in their efforts to prop up private ‘enterprise’. This is the only way we might get it back. Really the Tories would have had to do the same.
As we said last month, "The government will probably end up nationalising Northern Rock, after they’ve wasted so much of our money. It’s time to take over all the banks!"
If the banks are always to be bailed out because they are so important to the economy, then we need to take them all over. They have vast resources. They can easily pay for the losses at the Rock out of petty cash.
There’s another lesson here. Nationalisation is not just the only way to deal with this mess, as even this craven government has come to accept. It’s easy! It takes about fifteen minutes of parliamentary time. Next time a firm goes bust and workers’ jobs are threatened we know what to demand.
A socialist Labour government would take over all the banks. They are a conduit through which everyone’s money is channelled. If we want to plan the economy we have to own the banks and control where the money goes.
We will compensate small shareholders, but generally the banks have had their hands in our pockets for long enough. No compensation to the fat cats who’ve fed off us for generations! Under capitalism the banks can never lose. And we can never win. Let’s take them all over, eliminate their power over us and use the resources they control for the good of working people.