Friday, November 12, 2010

21st Century Jubilee

Steve Keen:

We should write the debt off, bankrupt the banks, nationalize the financial system, and start all over again.

We need a twenty-first century jubilee.

[We’re going into] a never-ending depression unless we repudiate the debt, which never should have been extended in the first place.

If we keep the parasitic banking sector alive, the economy dies. We have to kill the parasites and give a chance to the real economy to thrive once more and stop the financial [crooks] doing what they did this time around ever again.

Chifley was right. We need to nationalize the banks. But the time to do it is when they become bankrupt in a depression, not twenty years later when they have recovered their strength. The coming financial crash in Australia is an historic opportunity to achieve this.

The provision of finance and credit in the economy is an essential public utility - it cannot be left to the inherently corrupt and inefficient private sector based on some delusional cargo-cult ideology of "the free market always lands the goods".

The issue becomes clearer by the day and maybe will come to a head. The Giant Vampire Squid of the financial sector (like some monster out of the imagination of Clark Ashton Smith) needs to be ripped off the head and neck of the real economy where it has been feasting and poisoning, and stamped repeatedly into the ground until it is completely lifeless.

But Steve Keen does not say what Michael Hudson does: that rents and surpluses also need to be nationalized or socialized because those are the income streams that become pledged to banks as interest in the financialized economy. Without doing that, we will be on the treadmill again to another crisis 18 years down the track. This is a far more radical and permanent solution than what Keen proposes, which looks almost mild in comparison in spite of its shocking directness.

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