The Royal Bank of Scotland, The Government and The Blame

Well, this is good news:

Royal Bank of Scotland came a step closer to full-scale nationalisation today as the bank unveiled a record £24.1 billion loss and plans to raise up to £25.5 billion from the taxpayer.

I’m sure I speak for everyone in saying I for one have no problem with paying more tax to fund Gordon Brown’s lust for nationalisation. In fact, fuck it. I’ll just pay my half my salary straight to the state. Bingo. And they can fritter it away on worthless shares for shitty businesses. This all sounds, well, peachy.

While the Government's shareholding in terms of votes will be capped at 75 per cent, its economic interest in RBS - its claim on RBS's assets - could rise to 95 per cent depending on its future performance.

Right, well, that’s a fucking useful cap then, isn’t it? That makes perfect fucking sense. And what great business sense as well. The government – and for government, read your wallet and my wallet – will own 95% of a business but only have 75% of influence over it. Whoever came up with that plan what’s a good, hearty kick in the balls (or fanny flaps, let’s not be sexist here).

Mr Hester also gave a strong signal that tens of thousands of job losses are on the way at the beleaguered bank. He said he "wouldn't dissent" from reports that as many as 20,000 jobs could be lost.

Awesome. Well, I suppose we’ll have 20,000 less people on the state payroll (yep, that’s your payroll and my payroll again, ladies and gents) but it does make me question precisely why the state is effectively nationalising this bank. Surely one of the points of the government taking over this bank would be to save fucking jobs, but no.

Derek Simpson, joint leader of Unite, said: "These historic and humiliating losses ring into sharp focus just how reckless RBS's former management team have behaved. The whole country is paying the price through job cuts and repossessions on a massive scale. It is time to take control and fully nationalise this bank."

With you right up to the final sentence, Del Boy. But the last thing we should do is fully nationalise this bank. Sweet holy mother of Jesus, why would the taxpayer want this massive toxic asset on their hands? Why would they want full control of a failed business that – if it didn’t have enforced contributions from the poor fucking taxpayer – would go under?

There will be some who will hold this news up as further evidence of the failure of capitalism. Which is absolutely true. If you are a total fucking moron. What this represents is the failure of RBS. Capitalism is struggling because of the constant government interventions. The market cannot operate properly if the government steps in to prop up business that have failed.

The brutal truth is that given this loss, the market should be allowed to do what it naturally wants to do. And if that involves killing off RBS, then so be it. The government should offer to guarantee any savings in RBS, but not intervene aside from that.

There is so much fucking belly-aching about bankers – including those in RBS – getting bonuses at the moment. And yeah, it sticks in my throat somewhat as well – not least since I will be part funding the fucking bonuses the way things are going. But there are two points to make here – government owns RBS now, to all intents and purposes, so is in the position to stop those bonuses being paid. But far more importantly it is the state leading the likes of RBS in rewarding people for failure. RBS and other banks have failed, and the government has bailed them out. Is it any wonder that RBS et al think it is A-OK to pay their employees for failure when the government throws money at them because of their failure?

Blame the banks by all means, but don't forget to blame the government as well. Not least because, with all this nationalising going on, the two are rapidly becoming the same thing.