A modest proposal: nationalise the bankers

what every well dressed banker would wear under my proposal

Though it would undoubtly be cartartic to enact the solution proposed by the Financial Times to the current economic crisis, to shoot the bankers, nationalise the banks, we should not let our emotions get the better of us. We need practical solutions, not rash action.

The economic crisis cannot be solved with a single act; it’s a crisis of capitalism and only radical change can solve this crisis. But we can make a start at solving two of the most pressing short term problems facing us: the need to punish the people responsible for the crisis and the need of our governments for large amounts of money to combat the crisis with.

The solution is simple: nationalise the bankers. Every banker and retired banker above a certain level of responsibility to be determined will be divested of their capital and possessions, then put on public work schemes for at least ten years or to the mandatory retirement age, whichever is greater. A portion of the funds raised with this action should be put aside to pay the bankers affected a miminum wage and provide them with a council flat, the rest should be earmarked for combatting the recession.

Naturally the bankers participating in these public works schemes will be wearing the same sort of dayglo orange now reserved for petty criminals and other scallywags.

Dutch Finance minister attacks shareholders

It’s a bit late, considering even I already argued this same point four months ago. Bos also ignores the role his own ministry has played in fermenting this crisis. After all it’s the ministry of finance, through the various insitutions it controls that’s supposed to safeguard the financial markets and which failed miserably. They completely missed the problems with the Icelandic banks for example, gave their blessing to the takeover of ABN Amro which destroyed four banks and counting and in general stayed true to the neoliberal partyline of minimal interference as the market knew best.

The anger at the bankes is understandable, but it was the whole system that failed. The recession isn’t caused by a few too greedy CEOs, but because capitalism always encourages short term greed no matter the consequences and the measures and safeguards that were put in place after the last Great Depression were deliberately dismantled from the seventies onwards. Something in which succesive finance ministers actively colluded. The Netherlands should become more American in its approach towards the markets, with less state control and more freedom for business. The current recession is the logical end result.

Fewer Brits in Amsterdam

With some two to three million unemployed already in the UK there were always going to be fewer people taking their stagnight to Amsterdam, but the ongoing war on fun cannot help. For years now the Amsterdam city council has tried to attract a higher class of tourists, wanting to present the city as one of culture and musea rather than of hookers and coffeeshops. So far this has met with little succes, but the city has managed to alienate many of the traditional visitors. What Amsterdam has been aiming at is the high value tourist, who wants to stay in a nice hotel and eat in expensive restaurants after a day of visiting the Rijksmuseum or van Gogh museum and browsing through quaint little antique or fashion shops. To make room for those tourists the city council has been on a crusade against the traditional attractions of Amsterdam: the Red Light district, the coffeeshops and the whole infrastructure of backpacker hotels and kebab shops.

To me this strategy never made sense other than as an expression of misplaced snobbery, as Amsterdam, nice town that is, really has little to offer this kind of tourist cannot find anywhere else and better. You want culture, high end shopping and fine dining? Why go to Amsterdam if you can go to Paris, or London, or Barcelona, or Vienna or Moscow even, or…

Sure, there are plenty of other party towns in Europe as well; Prague or Riga for example, which also attract a lot of British tourists out on a stag do or hen weekend. But Amsterdam is unique in that you could party safely here: do a bit of harmless experimenting with drugs or visit a live sexshow without fear of the police. Especially the coffeeshop gave Amsterdam its reputation as a city where everything goes. For all the foreign politicians who railed about it there were hundred of young people who wanted to come over. But no more. Tourism is flagging, the Brits are staying home or moving on to cities that do appreciate them. In hindsight, putting mayor Job Cohen on UK television warning boozing Brits to stay away might not have been the smartest idea…

The reality of unemployement in Britain

The BBC has an excellent human interest article up on their website about the reality of being on the dole and trying to find a job. Some extracts:

Carl, 24, and Lauren, 20, have been together for nearly a year. They are both unemployed and receive benefits.

Lauren has been out of work for a year, and Carl for three years. They live in a deprived former mining village in the north of England where – a generation or two down the line from the pit closures – unemployment levels remain high.

[…]

Both Carl and Lauren left school at 16 without any qualifications and initially found work.

Carl drove a forklift truck at a local firm and has also done some window-fitting work. Lauren has worked as a packer at a factory and last winter had a temporary job in a pound shop.

She has also done part one of a college course in childcare.

Carl says employers usually ignore young people, and the jobs going are often so insecure and poorly paid they are not worth coming off benefits for.

[..]

“Everything that’s in the newspaper, you need qualifications. And at the jobcentre they don’t help you out much. They tell you to get a job and stuff like that, but then they just tell you to look on the [electronic] ‘job points’. I’d like them to help me out better,” she says.

Having nothing to do except search for jobs “makes you feel depressed”, says Lauren, who has two siblings also out of work.

“If I had the money and the chance I’d go back to college,” she says.

[…]

They say they had both hoped for a better life than their parents. They believe it is harder for young people now than in previous generations.

A sad indictement of Labour’s accomplishments over the pat decade. Gordon Brown boasted he had ended the cycle of boom and bust, but while he pinned all his hopes on London as the world’s number one financial centre and regenerating failed northern industrial cities with identikit city centre redevelopment schemes, he completely failed people like Carl and Lauren. People who unlike their parents and grandparents would never have a lifelong job as a highly skilled industrial worker because all the old industries were gone. People who didn’t have the opportunity or the ability to go to university to get that highly paid white collar job and escape their decaying town. Brown and Labour should’ve spent the last decade rebuilding Britain’s industry but instead decided that people like Carl and Lauren would be best of working in some call centre easily outsourced to Mumbai or selling dieet lattes to their betters. Eleven years of New Labour have been wasted for them and now the credit crunch is really starting to bite they’ll be joined by millions more.

And then the crisis hit the real economy…

A government short time working scheme set up to help companies that saw their monthly turnover and orders plummet since October reduce salary costs without redundancies was opened this Sunday and already has 64 companies applying, including the steel manufacturing giant Corus. Under the scheme a company introduces mandatory worktime reductions for its staff, with the shortfall in salary paid for by unemployment benefits. For any company hit hard by the growing recession but still viable it’s a good way to cut salary costs without compulsory redundancies of employees it might very well be hardpressed to replace if the crisis proves to be only temporarily, as economists are predicting for the Netherlands.

Unfortunately however the scheme is strictly limited in both duration and resources. It ends on the first of January and it only has a budget for 200 million euros. What’s more, to be eligible for the scheme a company has to have had a thirty percent loss of turnover for at least two months, leaving a lot of other struggling companies out in the cold. Compared to the lavish treatment the banks got in the last few months, billions spent with little oversight, this seems remarkable stingy. Yes, you need banks to keep the rest of the economy in capital, but that doesn’t mean we can let other parts of the economy go to waste.