Why the big four banks should be nationalised

John Rainford argues Why the big four banks should be nationalised.

Australia managed its way through the GFC in better shape than most countries thanks to the Keynesian counter-cyclical economic policies that were implemented here and in China.

In Australia these included unlimited guarantees of bank deposits and wholesale funding. This led to the big four banks that were too big to fail getting bigger.

One result of the GFC has been that banks around the world have been required to lift their capital adequacy requirements so as to ameliorate the effects of any future economic downturn.

The big four in Australia have resisted this because it takes capital away from their dodgy investments and reserves it as part-insurance against future losses. They have threatened to claw back any increase in money reserves they will be required to hold by raising interest rates.

Several countries are debating the issue of breaking up large banks. A better idea would be to nationalise them.

I am rather embarassed to say that, despite Rainbird's article, the party's policies on Nationalisation are completely lacking. This is worrying because the Socialist Alliance are campaigning, in part. in the Victorian State Elections on Why the car industry should be nationalised.

The tenor of Rainford's article seems to be that the banks are treating the regulators with contempt. Although this is true, I do not see how we can appeal to workers by taking this approach.

Regulation, to most workers (especially in the non-privileged strata), are continually oppressed by regulation. They are hassled by ticket inspectors, parking inspectors, police, HR people, Real Estate agents, local councils, etc. They spend the whole day avoiding breaking some regulation or impost.

Treating regulators with contempt is not a crime with most workers. It is an attitude born of long and frustrating experience.

That people are actively trying to avoid regulations and paying fines is also not seen as a crime. It may unjust that the bigger fish can do this more easily, but the principle is not in question.

I think the question of nationalisation should be approached in a similar way to that made in Why the car industry should be nationalised by emphasising the benefits to workers.

I do not mean just economic benefits but the political and societal benefits of workers controlling their own lives rather than living at the whim of others.