Defaulting and 'compensation.'

Did you listen to Bob Diamond, CEO of Barclays? He's been all over what's left of the media in Britain between its attacks of the vapours over the G20 meeting. You and me get benefits, or pay, or maybe a salary. He gets 'compensated'. He told one interviewer that he was 'compensated' to the tune of "over a million" annually PLUS, he modestly added "whatever the Board see fit to add."

We've got it wrong. I think the rest of us, the 99%, should be compensated too. For having to live on the same planet as Bob Diamond. The original diamond geezer.

In his interview Bob D said that we should never stop banks from failing. No more bail outs. It turns out that we all agree on something. Perhaps diamond Bob would like us to take another step forward together. The step I had in mind would solve the peoples' economic crisis and give it back to the people who caused it. We should de-nationalise the debt.

After a year of chaos Argentina defaulted on all its debts nearly 10 years ago. Today its economy thrives and wages and services are among the best in Latin America. Iceland defaulted; and deflated its ballooning banking system at a stroke. Icelandic people are no worse off than the rest of us - but do not have a mountain of debt to pay for the next decade. As we wrote in an earlier blog, Greece should default - not just by the 50% allowed to them in the latest EU package - but by 100%. It should then enter into direct negotiations with the Chinese over stakes in a nationalised and re-capitalised shipping industry (very dear to Chinese hearts.)

I hear diamond Bob again. What will happen, he quivers, about the poor pension funds and small savers? The government should certainly nationalise those accounts and back every penny. Those accounts effect the people. Iceland defaulted but nationalised certain bank debts like those of European Local Authorities who had invested (following government guidance) in Icelandic banks. The government (or at least a government with a strong stomach and unafraid to act for its people) should reverse cherry pick from the bank's liabilities, selecting to meet commitments only on those holdings that serve the people (and not those organised around the principle of the highest short term profit.)

Diamond Bob would be aghast. But what if everybody, every country did it? You would need an entirely new banking system. Exactly.