Nationaliz….Nationalis….What? It’s Rubbish

By October 15, 2008Economy

Simon Jenkins, not a conservative, writing in The Guardian, “The end of capitalism? No, just another burst bubble,” hence the historically attuned invective, spellt with an s, not zed, attacking the journalists and politicians celebrating socialism as again “cock of the walk, capitalism mugged by reality.”

It is rubbish, total rubbish. Market failure has been compounded by brain failure of the discredited profession of economics, overwhelmed by journalistic wish-fulfilment and glee.

The banks have not been “nationalised”, just deluged with money. They remain pluralist and competitive institutions, with independent boards. Their workers are not civil servants. Investors retain their shares. The bonus culture will revive. The impresarios of greed have been punished, or at least a few of them. But this is not socialism in our time, just public money hurled at the face of capitalism.

Guardian writers and Labour politicians have been drooling all week over what they call the “collapse of the free market model” of a modern global economy. They are simply wrong. All markets required regulating. It was regulation that failed last month, not the market economy. When a car is driven too fast and crashes it does not invalidate motoring.

And it appears the run-up to collapse in Britain was similar to that in the United States:

The toxic loan scandal began with politicians mesmerised by house-buying. MPs even expected taxpayers to pay their own mortgages for them. Mortgage splurging became so politically correct that nobody dare associate it with loan sharkery.

Bracing clarity. (Hat tip: Andrew Stuttaford)

 

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