Though Cowards Flinch

One wonders what the conversation between Gordon Brown and his Chancellor went like when they were discussing the package that some Labour insiders are talking about as “nationalising the commanding heights of the economy”. Did Gordon say, “Darling, I’m feeling frisky today. What say we nationalize the commanding heights of the economy?” And thus it was born – a $25 billion recapitalization scheme taking in almost all the major British banks. We’ll never know.

Not that we ever want to know what goes on between Labour ministers. What goes on in the cabinet room is between consenting adults and has nothing to do with the rest of us. Indeed if you listen to John Redwood, the state should get out of finance altogether. He thinks that the state should legislate the bedroom to the max but should butt out of the boardroom entirely, even when it is in the process of being repossessed for maxing out the credit cards of the whole economy.

The whole situation has become a little absurd though. The entire economy is literally falling apart. No one knows if the British government has the capital reserves to actually spend its way through the recession without pulling the works of J.M. Keynes from the shredder and piecing them together. Far from it being the newspapers of minute Trotskyist sects running catastrophist headlines, it’s the Financial Times: “OMFG Bank collapse means world collapse – run for the hills!!!!111!”

So topsy-turvy has everything got that David Cameron is now demanding that of the semi-nationalised banks, the directors must not get bonuses. Far from tartly retorting, “Are you fucking mad, you silly Etonian oik?” Labour has said that all imposed conditions will be negotiated on a case by case basis – some banks will get more or less depending on their bonuses and dividend policies, but none will be forced to give up executive bonuses altogether. At least that’s how I understand it.

Some monetarist shibboleths die hard it would seem.

Still, you have to laugh at the irony. A government which has fought long and hard against spending a little bit more money to give teachers and other public servants a decent wage increase, which tried to break the Fire Brigades Union by choosing to staff ever more fire stations with part-timers, which has spouted Gordon’s Golden Rule for ten years, now has to spend more money than ever shoring up the banking system, exploding the national debt and the Golden Rule.

Or at least you might laugh if you haven’t lost your job, if your home isn’t being repossessed by a bank or if you’re not one of the people the government has attempted to shaft in the politest possible way for ten years.