John Redwood has a good discussion going on about Banking Reform Here. It is worth a read.
There has to be a reworking of the finance system before we are faced with the meltdown that caused the fall of the Roman Empire, when successive Emperors East and West, trashed their currency by constant issuing of debased coinage.
The Keynesian economists that fill the halls of the central banks seem to content to tinker with the rigging as the ship is going down.
There appears to be very little willingness to accept that the Statist model with its targets for public servants is still taking far more priority over actually getting industry moving again. Every night on the Box it is a litany of woe because of the ‘cuts’. Last night it was the luvvies of the theatrical variety protesting that Somerset County Council has slashed the Arts budget to …. well zero. Actooors seriously did pieces to camera on how vital the Arrrrrts (intonation my dear) were to our national well being. If it was good enough for Shakespeare to find a patron and produce works that attracted paying punters, its good enough for this current lot of artistes. The Media are not impressed by industry, they want the celebrity culture. As demonstrated by some former East Enders actress saying that knife crime should be on the national curriculum, and being taken seriously. Education is about Education not Social control
There is a serious shortage of cash in the economy at the moment though I did see somebody arguing that the velocity of money in the economy is increasing at a rate that threatened inflation. Let me define what I mean by shortage of cash.
The State has been printing money to sustain itself, not to feed into the wealth producing sector, but to finance two disastrous wars, overspending by the public sector in the good years and financing the bail out to prop up the banking system. When I say system I use that advisedly, it is an oligarchy of four major banks of which two are state owned. The market is hardly in play here.
There are simply not enough entrants into the market, over regulation means that ‘banking’ is still in the hands of a very small group of bankers who are busy rebuilding their balance sheets, in activity that is just as unproductive economically as financing rafts of diversity officers in the public sector.
The State is also a guarantor to unfunded blackholes in the public sector pensions. The only way that this circle is going to be squared is by wealth producing trade, this is not going to happen by ‘State Enterprise’ (remember De Lorean cost us £100m, a vehicle that ended up in the approriately named ‘Back to The Future’). It is going to happen by massive tax cuts (a far smaller state), regional industrial and commercial banks that our remaining pension funds can invest and get a decent return on capital.
It is good that this debate has started, but I suspect not much of this is going crowd celebs off the small screen.