The first one is the Bad Banks one. Bankers have been bad. They've cooked the books, re-sold thin-air and drawn huge personal bonuses while doing so. They've then socialised the debt at gunpoint.
It's an attractive argument and one with a lot of popular appeal. But I think that focussing on it is a mistake because it's not really that good an account of what happened, and on reflection, most people won't buy it completely. It also gives us an excuse not to deal with the real problems.
The second culprit is the politics of the past thirty years or so. This article on Crooked Timber concludes that...
"the banks aren’t to blame for the crisis; Bush is. And the solution to the crisis isn’t to fix the banking sector, either through regulatory reform or continuing to bail out the banks, it’s to stop Bush-era economic policies."It's a good line, and one we could extend to the Thatcher / Reagan era - the years when we were softened up for Bush-era economics. Certainly, the underlying problem in which household incomes have stagnated since the late 1970s with the impact being masked by ever-looser credit makes sense to a amateur economist like me.
The third culprit is democracy. Democracy has been degraded to the point at which Parliament is weaker than the well organised pressure groups. David Allen Green writing in the New Statesman today draws out the feeble grasp that many (most?) Parliamentarians now have of what Parliament is for. I know I've used this argument here before, but it's worth rehashing. As Larry Elliot put it a while ago in reference to puny attempts to rein the finance sector in….
"...the exiguous nature of current reform proposals is explained by the institutional capture of governments by the investment banks, the world’s most powerful lobbying groups."The thing is, all of these arguments are attractive in their own way. But I'd put the empasis somewhere different - somewhere that gives us an indication of what the left can offer by way of a response.
The Thatcher/Reagan era didn't just happen. It was the product of a few factors. There were the oil-shocks of the early 1970s and the subsequent downturn that affected Western economies. This, and the rapid social change that was taking place at the time allowed fiscal conservatism to piggy-back on popular socially conservative concerns (immigration, the breakdown of social heirarchies, the sexual revolution, uppity proles in the Unions, etc). All good stories to mask a ditching of Keynesianism.
But this era was also the product of an effective ideological assault led by deniable right-wing pressure groups (in the broadest meaning of the term) outside of the Conservative Party. The right wing press (even Stephen Glover has noticed now that the press is no longer Conservative, but right-wing) and the trench-warfare merchants of organisations like the Freedom Association and the Institute for Economic Affairs were able to create the circumstances in which the Conservative Party could be dragged to the right.
This tells us all we need to know about how important the manoevering of The Labour Party is at the moment. Until the left can come up with a comparable gravitational force outside of the party, it will continue to be forced to play every game away from home.