The bail-out was predicated on a hoax

Finally someone from the mainstream, Dan Baker – http://www.guardian.co.uk/commentisfree/cifamerica/2010/sep/20/tarp-bailout-banks-wall-street has been published stating what many of us knew to be a reality – the banking system was not in crisis, the bankers were!

There is a very strong case for splitting up the casino-type activities of the banks from the commercial activities. The case rests on two key points:

  • Customers deposits are guaranteed by the Government and provide banks with a huge source of capital with which to go and borrow and play at the tables of the casino
  • The core activities of banking that is essential to the economy – managing money and lending to consumers and businesses

There  is only one argument against that I give any credibility

  • If we hamper our banks in that way then a sector that accounts for 15% of tax revenues and 10% of GDP will disappear

Over the last 30 years there has been such a brain drain into financial activities that add no value at all to the society that I would have no fear for its future if the financial sector shrank considerably. I long for the day that an engineering graduate or a maths graduate actually have a wider choice of potential careers. one thing is for sure, they would have more of chance of adding value to society if many of the casino-like activities of the financial sector disappeared.

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