Wednesday 1 October 2008

Who should suffer.

I work in the investment banking sector at the moment. It was horribly busy the week after Lehman's went down, but WaMu and Monday's crash seem not to have had the same effect. Funny old world.

Anyway, here's what I think.

Ordinary everyday members of the public have better things to do with their time than to snort the FT every day, subscribe to Bloomberg, and move their savings between banks every couple of weeks depending on market conditions. Insisting that they do so would simply lead to the collapse of the economy as no-one would ever have the time to do anything else. So it is right and proper that the government should use taxpayers' money to guarantee savers' deposits when a bank goes under.

Investment bankers, on the other hand... well, it's their job, isn't it? They are supposed to trawl through every bit of financial information they can get their hands on and assess profit, liability, and risk from one minute to the next. It's what they do. And, when they completely and utterly screw it up, it is not the taxpayers' job to bail them out, any more than it's our job to guarantee jobs for journalists who can't write or builders whose work keeps falling over or gardeners who kill everything they touch.

Bradford & Bingley were going under for a reason: they were crap. Our idiot leaders, by nationalising them, are keeping that crap alive and kicking so that its influence can continue to poison the rest of the system. Great. Only, given the track record of nationalisation, they won't just be preserving the crap: they'll make it crappier.

Bought a British car lately?

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