Another bailout for banks - a good use of our money?
More than 30 billion pounds of taxpayers' money is being ploughed into Lloyds and RBS, and both groups have to sell off parts of their businesses. It's another big shake-up for the industry, this time because of European competition law, and once again, it's going to cost us.
Should our money be used like this? Are other industries more deserving of this investment? Or are the banks too important to be allowed to fail? It's the topic of our phone-in at 9 - you can post comments here or on our Facebook page, text 85058, or email breakfast@bbc.co.uk
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The bank bail-out would have worked fine if the money had been used to rationalise and stimulate lending. Instead it has gone on fat cat salaries and even higher bonuses. The government could have acted to stop this - even brought in emergency legislation to curb the excess and force lending to business - but has fumbled the ball. Again. Another failure from a washed-up, worn out, dithering, incompetent government.
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We should all be using 'social lending' and avoiding using the banks. It's is the way forward and bypasses the banks. The more we do this the more likely the banks will take notice of what people want.
Social lending bypasses the banks. You borrow money from ordinary people who have spare cash and negotiate a realistic payment schedule and interest rate. There are plenty of websites setup to co-ordiante social lending. The current banking model is flawed and cannot be sustained as we've already seen. Bailing out is not the long term answer. p.s. I don't work for any social lending company i'm a website deigner.
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This is all 'Capitalism for Dummies'!
The big myth about banks is that they don't create money or wealth. They make their profits from what they lend and borrow from wealth that's already been created from labour productivity! Banks belong to the invisible economy!
The reality was after 32 years of unchallenged neoliberal free market policies by both Tory and 'New' Labour governments the system as a whole went bust not due to banks but because the the economy as a whole wasn't growing to justify the amount of funds lent and borrowed by firms and individuals.
All the mainstream politicians, particularly Tory, supported the banks lending practices at the time because being free market politicians they knew the entire credibility of capitalism was at stake.
Consequently (and what the award winning financial journalists always avoid) the massive bank bail outs since the credit crunch kicked in, albeit a complete violation of freemarket principles were more political than pragmatic, aimed at obstructing the apathetic 'Joe Public' from realising the underlying chronic state of UK capitalism today.
This latest stunt by injecting another £30 odd billion into the banking system so that they can be broken up into smaller banks to supposedly stimulate competition and choice won't solve the original problem of low growth caused by the mad rush for profits as opposed to democratic planning and ownership of the nation's productive resources!
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So Richard. What makes you think these social lenders won't encounter exactly the same problems as the banks, ie no growth, no money!
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