The purpose of my intervention is to draw attention to the fact that running a major bank - or an entire banking system - is a non-trivial management challenge which politicians will tend to run away from because it could involve unpopular decisions and make them vulnerable to their electorates - who understand high finance even less.
Rather than having an ideological lets nationalise/ no you can't debate, it may be helpful to identify more precisely the dysfunctional aspects of the current system, the the parts which need more public oversight or outright control, and in particular the skills, structures and systems required to exercise that oversight/control more effectively.
The public will not want to be duped into "socialising the losses, after the profits have been privatised" and being left with the shell of a system which is poorly understood and doesn't work very well in the first place.
Long term we may well need entirely different systems and processes - on the lines advocated by Chris Cook - in any case, so now could be a very bad time to be taking on huge contingent liabilities in return for a business model which no longer works.
Ireland has Nationalised Anglo-Irish bank, whilst being adamantly opposed to nationalising the big two. The "social partners" are now going to be asked to accept major wage cuts and cuts in public services to generate a minimum saving of €2 Billion p.a. (and rising) in order to reduce our public sector deficit from 10% to 3% over the next few years.
The Unions are bound to ask for a quid pro quo- if workers are to make such major sacrifices what guarantees do they have that they will also be the major beneficiaries when the economy turns around?
Some kind of corporate partnership and profit sharing model seems to be required - and Chris would be a great person to input into that design process. I'm thinking of writing more considered piece as a LTE,op ed or other intervention into the Irish debate, and if I do I will of course also publish it here. notes from no w here
Can I point out that no-one appears to have any clue what the long term consequences of what Chris advocates would be?
I do, and I've said it often enough.
Personally, I don't think much of the long-term consequences of the existing system. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
