Capitalism, too big to fail?

So, virtually every taxpayer in Europe is to shell out for the failure of capitalism. Irish capitalism, British capitalism, Spanish, Portuguese, Greek….the list goes on….and on.

More than two years after the worst financial crisis in our life times we tax payers remain vulnerable to the private closed-door decisions of bankers, dealers, speculators and spivs. Why?

We are in the midst of a cascade of failure, our democracies appear to be powerless in the face of capitalism’s might. What did we learn in 2008?

Look at the pound this morning at a high against the Euro, a low against the dollar. For those of us who are relative financial ignoramuses, is this the financial world of the madhouse?

We are bailing out the Irish because the British banks we are also bailing out managed to make the crazed error of exposing themselves to £83 billion of rotten debt.

How did RBS, and Lloyds manage to do it? Was hunting down seriously dodgy investments a full-time job? Ireland was a dream for investors. The political, property, banking, investment, dealing, horse-betting, fraternity – yes mainly good ol’ boys was and a close knit bunch. They all mixed together, went to rugby matches and horse-racing gigs together; drank and dined together. I know a few of them.

I talked to Ireland’s richest man in Haiti the other day. His riches were garnered in offshore investments. He was under no illusions as to how dire the crisis is in Ireland – and that was well before the bailout request to the IMF and the EU.

We can ask who allowed people to borrow six times their salary to buy homes they could never seriously afford – the regulator and the government beyond.

We can ask who thought the boom times and growth would simply go on and on… and then spent the money on the basis it would keep coming forever – the last government.

But raking through the past for blame achieves little. Raking through the past to learn lessons… it seems few are doing.

And actually breaking up these banks that are too big to fail? Even now, here in Britain there is no consensus. And now there is no time. So what’s to be done?