Sunday, February 17, 2008

Banking, Part 2

I wrote before about the apparent ability of big banks to persuade governments to engage in grand larceny on their behalf. It seems this isn't simply a North American phenomenon - in Britain, for example, much the same thing is going on with the burning hulk of Northern Rock. This particular bank stupidly borrowed enormous amounts of money from American banks, even more stupidly dumped it all into the British subprime mortgage market, and famously lost it all a while back, creating a run on the bank.

In the name of the free market, Britain's government responded by bailing out the banking system, absorbing a fucking ludicrous $200 billion in bad debts and liabilities from Northern Rock while it lets the Virgin group buy up all the remaining assets for a song. The bizarre role of government as legalized banditry is best summarized in this asinine paragraph in the CBC analyst's report:

"But though a Labour prime minister, Brown was nonetheless terrified of being tagged as a statist and a nationalizer and so decided to leave the bank private and feed it money, with the government announcing it would guarantee all the deposits."

Assuming CBC is right about that $200 billion figure, basically the government and the banking sector have just stolen about $3000 from every woman, man and child in Britain. Apparently "thief" is a title preferable to "statist."