I have just listened to a facinating interview with the legendary investor George Soros (follow link below for the full interview). During the interview with Fareed Zakaria of CNN, Mr. Soros appears to endorse the nationalisation of US banks as a solution to their problems (at 3:30). This is a particularly interesting from an Irish perspective as our government appears to completely reject this as a possible solution? In fact I believe that the steps that we are currently following will result in the ‘de facto nationalisation’ of our major banks. Would it not be better if the Irish State received significant equity stakes in return for its support of the troubled banks.
I think that we are all agreed that the country needs a healthy banking system, and that we are duty bound to support the banks given that nobody else will do it for us, however unpopular this might be. It is an unpalatable truth that we, the taxpayers, have suffered most due to the profligate lending practices of the banks and that we will now be obliged to pay to save the banks. There is an inherent injustice here. On the other hand, nobody said that life would be fair, but it would be nice to think that the taxpayer would at least have the opportunity to benefit from his/her support for the banks at this point. The government is by and large elected by the taxpayer and surely it must now have the courage of the taxpayers’ convictions to find a way to nationalise the banks rather than slavishly adhering to the perceived negative connotations of a state sponsored nationalisation policy. If the taxpayer is to be expected to pay, he should get something in return. The real challenge for the government would surely be to find administrative solutions whereby political interference in a nationalised banking setcor could be minimised. The bankers should be allowed to do the banking, however, I must vigourously object to the payment of excessive bonuses to bankers. In reality the current crop of bankers are tainted by their involvement in recent events and the question must surely be asked as to what they have done to expect these excessive bonuses.
There are many unanswered questions here. But refusing to countenance possible courses of action on what seems to me to be a purely ideological basis is surely not a wise and considered approach.