The government is desperate not to nationalise Northern Rock. Goldman Sachs (described by the Financial Times as “an investment bank on the make”) has come up with a plan to turn the loans New Labour have already pumped in to the Bank into bonds. In effect they are securitising the debt. This is ironic, since the collapse of the Rock is a direct result of the sub-prime mortgage scandal. What happened there was that various crooks and spivs made dodgy mortgage loans to people who couldn’t possibly afford to repay them. Then these dodgy deals were ‘securitised’ – turned into bits of paper that could be bought and sold all over the world. People panicked because they thought some of these toxic packages might have ended up as assets in the vaults of Northern Rock. So in August we saw the first run on a bank since the fall of Overend, Gurney and Co. in 1866, with people queueing all night outside the Rock’s branches to pull their money out.

If the plan goes ahead, the government waving a magic wand over the debts of the Rock won’t change anything in the essence of the matter. In effect they are just changing the name of the debt to ‘bonds’. It’s a con trick. The Bank was not a going concern before. It will still be a dead duck if and when the plan is pushed through. The plan just amounts to throwing good money after bad.

Brown has made no secret that Richard Branson is the ‘preferred bidder’ to take the Bank off his hands. British voters and taxpayers have the right to ask, what the bloody hell is Branson doing following the Prime Minister round China on what is supposed to be a state visit? Gordon Brown is acting more like a medieval monarch towards a fawning favourite than a modern PM. The King used to say, “I like the cut of your jib, son, consider yourself the Duke of Hertfordshire.” Brown has no right to give our money away to his courtiers in this fashion!

Robert Peston, political correspondent of the BBC, comments, “No British government has ever provided financial help on that scale to a business.” No wonder Rock shares soared to 91p. They are literally not worth a penny without the government guarantees. The government are bailing out the shareholders. They actually get to vote on the rescue plan. Imagine the cries of ‘show us the money’ at the shareholders’ meeting!

The vultures are circling. Northern Rock management are greedily selling off the remaining assets of the Bank. In effect they are stealing everything that isn’t nailed down. By the time the Rock is in new hands, there won’t be anything left worth having.

The government are guaranteeing the mortgage holders. They are guaranteeing the value of savings in the Rock. And they are ‘guaranteeing’ to waste billions of our money on a Bank that’s gone belly up.

All capitalist governments have to regulate finance capital in view of its importance to the economy. In an anarchic capitalist economy only money links people and firms together. As Trotsky says, “the banks concentrate in their hands the actual control over the economy.” New Labour boasts about the City’s ‘light touch’ regulation. Really it should be called soft touch regulation!

Brown is embarrassingly grovelling to failed capitalists. In a sense he’s stolen the Tories’ clothes. Actually Brown hasn’t really got the hang of running a capitalist economy. He thinks it’s just a matter of throwing other people’s money at any rich man who goes past. But in 1984 Margaret Thatcher nationalised the Johnson Matthey Bank for just £1 when it collapsed. That was not in the interests of JMB shareholders. But it certainly was in the interests of capitalism as a whole.

The opposition have it easy, like shooting fish in a barrel. Tory George Osborne says, “Gordon Brown is mortgaging the taxpayer to try to get him out of the political hole he’s dug for himself. It looks like the British people could be billions of pounds in the red for years to come.” He’s right. Of course, the Tories are stronger on criticism than positive proposals. In reality Osborne would have done the same..

Vince Cable, the LibDem who has argued for nationalisation of the Rock argues, “The private sector isn’t taking any risks. It is the taxpayer taking all the risks.” The Financial Times agrees, “Those Treasury officials not under the spell of Goldman judged nationalisation the cleaner, more efficient option.”

If the banks are always to be bailed out because they are so important to the economy, then we need to take them all over. They have vast resources. They can easily pay for the losses at the Rock out of petty cash.