A wunch of bankers

(One more rant. I'm sorry. I promise I'll give it a rest - just after I get this off my chest.)

Back home, the Royal Bank of Scotland has announced the biggest corporate loss in British history. That's - my bank, since it swallowed up NatWest early in its greed-fuelled acquisition spree. And last year it lost £24 billion. That's more than General Motors. Its share price has dropped more than 98% in the past two years.

Impressive as these sums are, they're barely the tip of the RBS iceberg. The truly breathtaking number here is the amount of debt that the RBS has asked the British taxpayer to underwrite: £300 billion.

Three hundred billion pounds.

It's an unthinkable amount of money. If we simply printed it out and distributed it equally to every single man, woman and child on earth, they'd each have enough to buy a brand-new DVD player.

Three hundred billion pounds.

To put it in context: it's half the annual government budget of the UK. In other words, enough to give the entire population a six-month tax holiday. It's 20% - one fifth - of the country's entire GDP.

Three hundred billion pounds.

How do you lose that kind of money? How do you get it in the first place? If you're a bank, of course, you don't - you just pretend you've got it, lend it out to other people, and hope nobody asks for actual cash. Then you write the whole thing up in your books as a record profit. Added value? - don't make me laugh. Ponzi schemes look honest by comparison.

Three hundred billion pounds.

That's over US$420 billion - equivalent to more than half of Obama's entire stimulus package, swallowed up by one company. Truly, British banks are world-class. If the British economy were steaming ahead at full throttle, such a blow would probably be enough to put it into recession all by itself. With the economy already in recession...

I shouldn't complain - as an ex-pat, erstwhile depositor with the bank, I'm more beneficiary than payer. I'm just glad I got my money out. No, the losers are people like poor ol' former CEO Sir Fred Goodwin, who finds himself jobless and probably unemployable at the tender age of 50, with nothing but his half-million-a-year pension to fall back on...

Surely - surely - the time has come to abandon the pretence that "banking" is some kind of industry. "Industry" implies a process whereby inputs of land, labour and capital are translated into goods or services of greater value than what goes in. When companies find themselves unable to do that, they go out of business, so that their land, labour and capital become available to someone who has a fucking clue about what they're doing.

None of which, evidently, happens in banking. Taxpayers, it turns out, are underwriting the losses. So where was our share of the profits?

The conventional answer to that was that banking was essential to "fuel" economic growth, which benefits everyone. But what should we conclude, now it turns out that most of that growth for the past ten years has been an illusion - that the banks have "improved" our living standards only by running up our debt? Without asking us?

As far as I'm concerned, there's only one agency that's entitled to spend my money on my behalf without giving me some kind of option to veto each transaction... and that's my government. If banks are going to be doing that, then they need to be openly and accountably run by said government.

I'm not so naïve as to think that will make us any better off. But at least it'll stop Sir Fred and his cronies from being role models. They'll still be robbing us all, and no doubt they'll still get knighted for it, but they'll be seen for the idiotic, wasteful bureaucrats they are.