Bailing Out the Banks: Fair or Not?

With the recent news that the final world wide figure for supporting the failing banks system will be trillions of poundsmust leave us all asking very serious questions about the morality and common sense of lending this volume of cash to a banking sector that has failed once already.  In modern society the market has been built into every situation, the principle of ability to choose from a range of options by the consumer and its principles have even started to effect there very fundamental needs of humanity such as health and well being.  Markets have two sides some businesses will prosper because they are taking manageable risks and making profits, others will fail because they have taken the wrong decisions.  In every normal business in the world when your income becomes less than your outgoings and you are unable to pay you become insolvent.  The banks failed because they were not viable businesses, their speculation had become so reckless that they were forced beg the world to prop them up.  The most annoying part of all is that we as tax payers are still being subject to the same terms and conditions from the banks while the boot has been on the other foot for some time.

I bet your thinking the same as me, why is it that if I go bankrupt I have to pay up when the banks get away with a great big hand shake and a pile of money? I think on reflection there would have been a far fairer and effective way of dealing with the crisis, cancel consumer debt.

Tax payers from every nation pay huge amounts of their income to the state, would it not be fairer to cancel the crippling credit card and non-secured loans debts that ordinary families.  This would have 2 effects firstly it would create millions of extra money in the economy through available balances in credit cards and their interest payments secondly it would have propped the banks up by providing the requested cash flow.  With this simple step you could have avoided the anger that many people feel towards their financial providers.

There is of course another issue of morality that must be answered and that is namely, why if the governments of the world had so much cash to spare did they not spend it one ending world poverty?  It is estimated that the actual figure needed to be spent each year to wipe out the suffering of millions would be about 1% of the UK spend on bank rescues and why when we face an unprecedented evironmental catastophe are we not spending similar money saving our selves from oblivion? 

I have no logical answer to these questions. Could it be that the goverments of the World were so affraid of the banks that they did the first thing that came to mind?  Is it possible that the markets only applies to the little guy, while the big boys can do what they like?  Is it fair that we should continue to support large companies that have made the ordinary family poorer?

I will finish this article by quoting Lord Acton a British 19th century peer and social activits

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”