If we're printing money it should go to poor people who spend not bankers who hoard.

    Imagine being asked to pay your bank for the privilege of depositing your money in it. Most of us think that we are victims of reverse bank robbery already. But actually give them money to take our money? The Bank of England moved rapidly yesterday to insist that the policy of negative interest rates, floated by bank official, Paul Tucker, was “very blue sky thinking” and anyway wouldn't affect the deposit rate that is paid to ordinary savers, only big banks. Though, as we'll see, that isn't strictly true.

The main reason the Bank of England is talking about negative interest rates is to force the banks to lend to business. Much of that quantitative easing money that is being printed and handed, effectively, to the commercial banks is being redeposited with the Bank of England. Yes, the banks get electronic money from the Bank of England; then they deposit it back with the Bank of England to earn interest on the cash it has printed.

You might think that is the economics of the mad house, and you might well be right. But in the paradoxical world of high finance, this is considered a sound monetary policy.

Banks and horses. Food and financial products contaminated by greed.

There are striking similarities between the horse-burger affair and the international banking scandal that broke in August 2007. The financial crash was caused the sale of toxic financial products called Collateral Debt Obligations that were composed of mortgage bonds that had been "sliced and diced" into new products that were then marketed as cheap and safe. They were the financial equivalent of mince meat, which of course was itself invented as a means of disguising poor quality meat.

In theory CDOs spread the risk and diminished the likelihood of a price crash, because the dodgy mortgages were bolstered by the sound ones. So, for every "liar loan" handed to an unemployed single parent in Detroit, there was supposed to be a solid and dependable loan on a substantial sandstone property in Edinburgh. Unfortunately, it didn't quite work out that way - the duff mortgages ended up contaminating the good ones and the whole system perished. These financial products had been sliced and diced so often and had been swapped back and forth between the offshore subsidiaries of international banks that no one knew any more what was in them.

The issue was one of trust - the most essential commodity in any financial system, or indeed, in any food chain. When you examine the extraordinary circuitous route by which processed meat is marketed, it is hardly surprising that it becomes contaminated. Findus ready meals were found to have horse meat that came from Romanian slaughterhouses, via a Dutch food trader, who sold the stuff to a Cypriot dealer who sold it on to a French firm, Comigel, that sold it to some of it to the Netherlands, and some to UK supermarkets, which ended up being tested in Ireland. Once a product has been passed through half a dozen intermediaries, it is impossible to know where it is headed or what the hell is in it. We know that horse meat ended up in cottage pies sold to children in England. The Scottish government insists that no horse has been flogged - if you'll excuse the inevitable pun - to Scottish schools, but who really knows?

Catalonia. Bankrupt. Scotland next?

    Scottish nationalists could be forgiven for cursing fate this week. Both Ireland and the autonomous Spanish region of Catalonia, the two most admired constitutional role models for a post-union Scotland, are sinking under the weight of their debts. Today, Ireland's voters are expected to vote reluctantly for an EU financial austerity package that could condemn them to economic depression for a decade or more. Meanwhile, the Catalonian President, Artur Mas, says Catalonia may “not be able to pay its bills at the end of the month”. The region has already restored prescription charges, introduced tourism and fuel taxes and cut spending on infrastructure projects.

There but for the grace of god goes Scotland say unionists. What price independence if it means going cap in hand either to Madrid or the ECB for bailouts? Scotland's much safer in the UK which is big enough to withstand these economic shocks. Well, maybe. The troubles in these once prosperous corners of Europe are undoubtedly a problem for Alex Salmond, who has just launched the SNP's Yes Campaign for the 2014 independence referendum. The negative headlines from Dublin and Barcelona will discourage many Scottish voters from signing the pledge.

However they are not necessarily arguments against independence as such. Catalonia and Ireland have been plunged into crisis, not by their constitutions, but by their banks and by Europe's relentless sovereign debt crisis, now morphing into an economic depression. Neither Catalonia nor Ireland see relinquishing independence as a solution to their financial difficulties - though they are beginning to see Europe as part of the problem

The economic living dead: misery of the middle earners.

Where is the anger?  Where is the resistance? Five years into the worst economic crisis since the 1930s and earnings – apart from those of the top ten percent - have fallen year on year. A raft of studies has shown that ordinary families in Britain are suffering the longest squeeze in living memory, yet the streets are quiet, there are no barricades, no factory occupations. People have been voting, if they vote at all, for the established political parties. The Left and even the far Right have never been more marginal, at least in Britain..

Ed Miliband isn't offering any radical alternative to austerity, just slightly slower cuts. Francois Hollande, the new socialist President in France, who calls himself “Mr Normal”, is actually promising greater austerity. He says he will legislate for a balanced budget in France by 2017, in a country that hasn't had a balanced budget since the 1960s. Here in Scotland, the Scottish National Party is promising oil-fuelled growth and better public services but its leader, Alex Salmond, is behaving increasingly like an economic conservative.

As for popular resistance, all we have seen so far are token stoppages like the rather damp demonstration by civil service workers in defence of their pensions – pensions which of course are denied to the vast majority of workers in the private sector. But closing a few libraries and museums isn't exactly a red revolution. Last year, the Occupy movement, inspired by the Arab Spring, seemed to be building some kind of international movement against global capitalism, but the tented communities that sprang up in Wall Street, St Paul's and in Edinburgh's financial district have moved on.

But the inequalities of wealth that motivated Occupy – the 99% as they called themselves - are as real as ever. According to the Sunday Times Rich List, published last week, the top 1,000 wealthiest people in Britain now own a combined £414 billion, equal to a third of the National Debt. The top 1% of earners in Britain syphon 15% of national income, a figure that has doubled in 30 years thanks to lower income tax. Down at the other end of the salary scale, the bottom ten percent 10% saw their real earnings fall by 4.1% last year, according to an analysis last week by the TUC. This is because inflation is worse for those on the margins. The rate of inflation in essentials like foods and fuel is around 6%, whereas if you're buying flat screen televisions, computers or air travel prices are actually falling. Whoopee!

Epitaph for the Age of Irresponsibility

     “An epitaph for an age of irresponsibility”, is how the Chancellor, George Osborne, described the Barclay's Libor-fixing scandal in the Commons last week. It was, he went on: “symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees”. If even a Tory Chancellor has finally got it, can we expect real action to sort out Britain's banks? Don't hold your breath.

The manipulation of Libor – the London Inter-Bank Offered Rate - has been common knowledge in financial circles for years. The Economist has been writing about it at least since 2008. The idea that the British Bankers Association didn't know what has been going on is laughable. Every barrow-boy in the City knew the banks had been fiddling their borrowing costs in order to disguise their distress after Lehman Brother's crashed in 2008 and interbank lending almost froze. By manipulating their borrowing costs, banks like Barclays were able to convey the impression that they were in less financial stress than they actually were.

 It's the biggest poker game in history. On one side of the table, the dowdy, conservative German Chancellor, Angela Merkel, on the other, youthful, radical Alexis Tsipras, leader of the Greek left wing coalition, Syriza, which is expected to win increased support in today's Greek elections. Could ever a financial crisis have thrown up an odder couple? Eyeballing each other over the future of the eurozone. Waiting for the other to blink. 

   The stakes? Around four trillion – that's the likely cost of bailing out all of Europe's busted banks if there isn't a resolution to the eurozone debt crisis. And right now, there isn't one.

Spanish debt crisis is a crisis for all of us.

     Capital Flight may sound like the name of a new budget airline – in fact it's what happens when a country loses trust in itself. In the first three months of the year, Spaniards exported a total of e100 billion to London, Frankfurt, Paris - anywhere. The biggest flight of funds since records began. Citizens, firms and banks are hedging against the likelihood that Spain will depart the eurozone, crushed by the burden of its sovereign debts. The respected former Spanish premier Felipe Gonzales said last week that “Spain is in a situation of total emergency, the worst crisis we have ever lived through”.

Where did this come from? It was supposed to be Greece that was on the point of departure. Only last week we were all worrying about contagion from a “Grexit” spreading to other Mediterrannean countries. But the contagion seems to be happening before the disease. In fact, there's a possibility the patient may die even before it is infected, because the collapse of Spain – an economy four times the size of Greece – would be curtains for Europe, and probably for the world economy. It's not just too big to fail; it's too big to bail.

What is happening to Spain is similar to what happened to Lehman Brothers in autumn 2008, except on an epic scale. That was just a run on a Wall Street investment bank; this is a run on a trillion euro economy, the fourth largest in Europe. When entire countries go bust the reverberations are felt across the planet.. If Spain restores the peseta – and this is actually being talked about – then it would default on the huge debts owed by its private sector to international banks. They would go bust as a result, causing credit to cease overnight and international trade grind to a halt. There would be runs on nearly all European banks, not just the Spanish ones. Cash machines would close. It's as serious as that.

Party's over for the public sector.

It's open season on 'pen-pushers'. The Chancellor, Alistair Darling, is now calling, not just for a freeze, but for actual reductions in bureaucrats' pay. The Scottish government has launched an assault on bonuses for highly-paid public quangocrats. The Tories want pay cuts across the board. Everyone says the end is nigh for public spending and that with a £200bn deficit, cuts are inevitable – though politicians can never quite get round to saying where.


It's so over for the public sector, it seems. But before we go on, a word of support of the much-maligned public sector worker. They aren't all time-serving pen pushers with shiny bottoms. The state employs some of the most valuable and productive workers in society - doctors, nurses, teachers, social workers, soldiers, judges, prison officers, scientists, researchers. Without them, Britain has no future – economically, educationally, socially. Moreover, had it not been for the public sector keeping the economy going, the economic recession might well have plunged into a depression. In Scotland, where 60% of GDP is generated by the public sector, there would have been economic chaos.


Ok - party political broadcast over, because from here on it gets nasty. I'm afraid I have to end the habit of a lifetime and agree with the Chancellor. Quite simply: it's all gone too far. It's not just all those hospital administrators on £200,000 a year, or the 20% bonuses being paid to quango bosses. Public sector workers as a class have privileges which are no longer justified or affordable. And I'm afraid very few of them realise it. Most public sector workers still live in a world where jobs are secure, salaries increase every year, the working week is getting shorter, early retirement is the norm and final salary pensions are guaranteed whatever the state of the economy. That world has gone.


And,yes, I know this sounds like the Daily Mail. I know lots of people in the public sector, mostly in education, politics, the civil service. I have great respect for many of them, but they just don't get it. They think everyone in the private sector is paid better than they are, which isn't true. Whisper it, but even many teachers and nurses are rather comfortably off now.


Take Pete Powerpoint, a bog standard college lecturer on £43,000. In his fifties, with house paid up, he's looking for early retirement. He thinks he deserves his index-linked pension after a lifetime of service. But the cost of providing it will be around £1.3 million – and it won't be paid by him it will be paid by the rest of us. The lifestyles, pensions and salaries of Britain's 6 million state workers are paid for out of the taxes paid by the other 15 milllion workers, and most of them are really struggling. .


The fundamental question is this: How can you ask one group of workers, whose pay is being slashed and either have no pension at all or have lost half of it in the stock market, to pay the salary increases and index linked pensions of another group of workers who just happen to work for the state? The unfunded burden of public sector pensions alone amounts to nearly a £1 trillion. These obligations are enshrined in law - so public services are going to be cut to shreds in order to keep paying the Pete Powerpoints. And taxes are going to have to go up. Already there are councils in Scotland where nearly all the council tax receipts go to pay the pensions of public sector workers.


Now, in the old days, the deal was that people in public service got job security and a small pension as a reward for poor pay – but those days are gone. Wages and salaries in the  public
sector are much higher than in the private sector, both in annual terms and hourly wages -  and that's not taking into account pension benefits, which are equivalent to 19% in additional salary for every public sector worker.  Defenders of public sector privilege argue that the pay differential is because many of the poorly-paid public sector jobs, like hospital cleaners, janitors etc.. have been outsourced to the private sector. But I'm afraid this only underlines the point I am trying to make: that it is increasingly impoverished workers in the private sector who are being asked to pay the exploding pensions and salaries of the public sector.


People also say that public service workers should get the rate for the job, if we want the best people. But that is a banker's argument, and it is as specious in council offices as it is in RBS. Our civil service has been infected by a bonus culture, borrowed from the City, which is creating ludicrous disparities between public employees and the ordinary people who pay their wages. And the bureaucracy is mind numbing.


Take the NHS, where the number of administrators has doubled since 1997. In that period, the number of beds has actually fallen, from 12 beds per manager to 5 beds. Since 1997 NHS chief executives have seen their average earnings increase by 98% compared to the 50% increase across the public sector as a whole.  No one is a greater defender of the NHS than I am – but this is simply insane. Senior health board executives all on six figure salaries plus bonus are a luxury we cannot afford.


Overall, public sector pay increased by 3.8% last year when private sector pay went down by 0.1%. That may not seem like much, but it is a relativity of epic significance. Private sector pay is going down faster than at any time since the 1950s as poorly unionised work-forces accept cuts to keep their jobs. 60% of employers say they are going to cut pay further this year. In free-for-all Britain, workplaces are governed by fear. These workers have no security and no future pensions to look forward to. Only one worker in five is saving enough for a proper pension.


But hang on, says Pete Powerpoint, why should the public sector have to share the misery? Depriving state employees of their security and pensions won't stop people being exploited? No, but the hard political reality is that the shrinking cohort of private sector tax payers are simply unable to pay the cost out of their diminishing salaries. The writing is on the wall. Get that early retirement deal quick Pete - while you still can. 

Let's have some capitalism for capitalists.

My Big Idea for 2010? Simple. Bring back capitalism. No, I'm serious. I may be a superannuated socialist who thinks the banks should be nationalised and has always supported the redistribution of wealth. But right now, we need a bit of capitalist rigour to sort out the mess left by the financial crisis. It's time for financiers to start paying for their mistakes, honouring their debts without rushing to the state for another bail out. Just like Margaret Thatcher said of the old nationalised industries thirty years ago: no more lame ducks; no more feather-bedding.


Capitalism is supposed to be about competition - failing firms are supposed to go out of business so that capital can be re-assigned to profitable businesses that are producing things that society wants and needs. Capitalism cannot function when one set of capitalists is given privileged access to public funds in order to insulate them from market forces – and provide them with lavish profits they haven't earned. Yet that is exactly what has happened over the last eighteen months – and on a colossal scale. Hundreds of billions of pounds have been thrown at loss making enterprises which just happen to be called banks. As the governor of the Bank of England, Mervyn King, famously put it, in what must be the quote of the year: “Never has so much been owed by so few to so many, and with little real reform”.


The investment banks who brought us the 2008 crash learned that if their debts are big enough, and their losses large enough, then they become “systemically important” and can expect to be rescued by the state to prevent a collapse of the entire financial system. The banks actually have a lot in common with the old state enterprises in Communist states of Eastern Europe in that they have no competition and no risk of failure because of their access to public funds. But we surely learned from the Soviet experience just how dangerous it is to allow a small clique to seize control of the economy, whether bankers or communist party bureaucrats.


The West's financial oligarchs have plunged the world into recession, destroyed millions of jobs and consumed vast amounts of social capital, but like the old Communist bosses in Russia, it didn't cost them personally. They have been insulated from risk by the state. Their share options may have fallen somewhat in value, but thanks to the billions handed to them by the government, and reduced competition, banks like Goldman Sachs are richer than ever and paying the biggest bonuses in history. Even state owned Royal Bank of Scotland, officially the worst bank in the world, has been handing million pound bonuses to the very executives who made RBS a by-word for irresponsible speculation. They say, without irony, that they must reward excellence or lose their best people.


What sticks in the craw is that many of these people – the Fred Goodwins, Andy Hornbys, Eric Daniels - used to be the cheerleaders for Thatcherite private enterprise. Financiers were the first to condemn trades unions in the 1970s for their restrictive practices, their leap-frogging pay claims and their lack of social responsibility. Yet here they are, snouts in the trough, arguing for parity with other plutocrats, demanding special deals, ignoring the impact of their selfishness on the rest of society. These very banking executives used to claim that the free market had to be protected from the dead hand of state control. Now here they are running to the state for bail outs, equity injections, interest free loans, asset protections schemes – anything to protect them from the very system they imposed on the rest of society. It's one law for them, another for the rest – the mission statement of the economic parasite since the days of Feudal privilege.


Really, there is no more pressing issue facing our legislators as the British economy hauls itself wheezing out of recession in 2010. Whoever wins the next election must deliver a very clear warning to the City of London: never again! There is no free lunch any more. Banks that are bankrupt must go out of business. Directors must lose their jobs and bonuses. Bank shareholders must lose all their equity, as in any other risk venture.. Same with other loss-making organisations that have been seeking government support like gas guzzling car manufacturers, property speculators exploiting near zero interest rates, quasi-nationalised train companies and fly-by-night PFI providers.


If we don't draw a line under this now, the behemoth banks, knowing they are too big to fail, will simply return to irresponsible lending and derivative trading exactly as before. Actually, they're already at it. Have you wondered why the banks that were at death's door a year ago are now making vast profits again? Why their share prices are rising so fast? Well, first of all, the government – that's you and me – has taken hundreds of billions of bad debts off their books in asset protection schemes so they don't have to register these as losses.


But that's only the start. The banks are currently borrowing money at 0.5% interest rates from the Bank of England and then buying government bonds that pay around 3.5%. That is as near to free money as it is possible to get – except that the money ultimately comes from us in our taxes. Banks are also using this cheap money to speculate on shares, hence the recent stock market boom, and in commodities like oil and gold, which have been making splendid returns recently. What they are not doing is lending to productive industry- which is still at record low levels - or to first time home buyers.


Banks don't make things, apart from debt, so it's often hard to understand quite how they make their profits. They use impenetrable jargon like “bid-offer spreads”, “discount window”, “carry trade” “derivative trading” which mystifies the whole process. But at root it isn't that difficult to understand. Say I lend you £100 at 1% interest for one year , and you then lend that £100 pounds to someone else at 10%. After twelve months, you get back £110, but you only have to pay me back £101. That's almost exactly what the banks are doing. It is like magic. And that's what financiers really are – conjurers who fool us into thinking that they can create money out of nothing.


Trouble is, they also fool themselves. And this is how the great credit bubble began in the early years of this decade, when interest rates were kept too low for too long after the 2000/01 dot.com crash. Banks were able to make huge profits, lending out cheap money at ever greater multiples of their core capital. They didn't care who they were lending it to because, they believed – rightly – that the government would come to their rescue the in the end. Only one thing will prevent the bankers blowing up another credit bubble: the fear that they may lose everything if they go too far.

One final thought: the rest of us could do with taking a look at our own financial behaviour too. The banking crisis may have been caused by the greed and irresponsibility of a financial kleptocracy. But we have all participated in the creation of the credit economy – most obviously through the housing bubble. People have grown used to their homes 'earning' more that they do by working at a job. We have become addicted to living on debt: equity release, credit cards, mega mortgages, overdrafts, student loans, car leasing arrangements. Instead of trying to live within our means, we have sucked hard and long on the teat of credit.


This has served the long term interests of the banking oligarchs, but we cannot ignore our role as the bankers willing little helpers. Clambering greedily up the “housing ladder”, exploiting tax breaks on property ownership, demanding such high prices for our real estate that first time buyers have been priced out of the housing market altogether. And if the mortgage becomes too much we expect the government to cut interest rates to magically wipe away our debts, just like the banks'. Millions of home owners with large mortgages have had tax free windfalls of several hundred pound a a month in 2009 thanks to near zero interest rates. People with huge debts are being given a free ride. Older people are being bribed to stay in big homes they don't need while young families can't get anywhere to live. Britain has become two nations: the home owners with their subsidised loans and the rest who can't hope to afford to join them. And ultimately it's all paid for by money printed by the Bank of England – a sure fire recipe for hyper-inflation.


When I was a naive young man, I campaigned for a socialist economy in which the commanding heights of capitalism were brought into public ownership and control. Well, in a way it has happened. The state now owns large chunks of the banking system, and has supported the rest of it through a whole range of bail out measures, from buying toxic loans to acting as lender of last resort to banks bereft of liquidity. But this isn't promoting the common good. We have created a bastard synthesis of finance capitalism and communism – a system of socialism for the banks. Time for a little bit of Thatcherite medicine to be applied to people who were so keen to apply it to the rest of society. Let's have some capitalism for capitalists.

Brown's Tobin tax bombshell.

   Shake me, I must be dreaming.  I could have sworn that Gordon Brown just called for a “Tobin tax” on international financial transactions to curb the excesses of the banks and  provide funds for developing nations and climate change.   Can’t be true, surely.  I must have nodded off, somewhere.  

   This is the prime minister whose ‘light touch’ regulation and tax breaks turned Britain into the biggest offshore tax haven in the world. A man who has been bought and sold by the City of London.  A First Lord of the Treasury whose minions rubbished the idea of a tax on financial transactions when it was floated by the boss of the Financial Services Authority, Adair Turner, only three months ago. 

  But there it is  in black and white in the communiqué from the G20 summit in St Andrews.  Gordon Brown has asked the International Monetary Fund to look into the feasibility of “a financial transactions tax” - a tax on international bank transfers first proposed by the American economist James Tobin over thirty years ago to rein in the anarchic forces of financial globalisation and dampen currency fluctuations.  The Prime Minister appears to have conducted the most dramatic economic u-turn of his entire period in office. 

   Brown says that he wants a new “social contract” with the financial services industry. “It cannot be acceptable”, he said in his speech to the G20 meeting of finance ministers in St Andrews, “ that the benefits of success in this sector are reaped by the few, but the costs of its failure are borne by all of us”.   Powerful stuff: the St Andrews Declaration, it should be called.   This column has been pretty tough on the prime minister in recent years, along with the rest of the UK media, but on this at least, Gordon Brown deserves to be praised.  That is, if he means it.  There is a suspicion that the PM has floated this idea secure in the knowledge that it will never happen.  But let’s dream on for a moment, and imagine that he really is serious.  

   So what would this Tobin Tax look like?  Well, first of all it needn’t necessarily be a tax.   Brown wants to create a fund to ensure is that, in future, it is the world’s banks that pay the cost of banking crises not the taxpayer.  At present, when one of our mega banks, leveraged 30-1 and loaded up with toxic mortgage bonds, becomes insolvent, it holds a gun to the government’s head:  either bail us out, or we’ll wreck the economy.  It’s the Dirty Harry approach to financial regulation: “Ok punk. Do you feel lucky

    Politicians don’t want to go down in history for creating economic depressions and throwing millions out of work, so they generally hand over the money.  It isn’t theirs, after all. The Bank of You and Me is the most generous financial institution in the world, ever ready to empty its accounts in order to salvage the spivs and speculators.  After they get their hands on our bail out cash, the banks then just carry on speculating as before, paying themselves colossal bonuses,  sowing the seeds of the next crisis.  It is our old friend moral hazard. 

  Banks are intellectually and morally incapable of seeing that this is an unacceptable way to behave.  They are blinded by a curious, almost religious conviction in their right to hold the world to ransom.  As the boss of Goldman Sachs, Lloyd Blankfein,  confirmed bankers believe they are on a mission from God - doing “God’s work”.   Society must find a way to make this deluded cult see that their personal wealth is derived from the expropriation of millions of ordinary people around the world.  If it hadn’t been for the bank rescues, all of the Wall Street banks would have gone out of business, Goldman Sachs included.  Mr Blankfein would have gone to meet his maker 

   Socialism for the banks is unacceptable. It's time to liberate them from the state.  They must be made so contribute to a stabilisation fund, either through taxation or through insurance, so that in future when “systemic” banks like  HBOS or  Royal Bank of Scotland go under as a result of their own greed and irresponsibility, they do not turn to the taxpayer for help.  The money is already there.  This is simply prudent financial management - based on the same principle as the hedge fund.  The only difference is that the banks pay for their mistakes, not society. 

   Needless to say, the bankers aren’t keen on this. They say it would wreck competition, deprive productive industry of capital, slow down the wheels of finance.  Well, they would say that wouldn’t they.  More seriously, the idea has been dissed by the most powerful banker of all, Tim Geithner, the American Treasury Secretary, and if the US doesn’t adopt the system, then it will fail because no other country will take it up.  But it is not acceptable for a country which has been the epicentre of the greatest global financial mismanagement in history to have any veto on attempts to prevent it happening again.   I believe Barack Obama can be made to realise this.  

      It is certainly feasible technically given the information technology that allows international finance to take place.  If we can trade Collateralised Debt Obligations and Credit Default Swaps then we can tax financial transfers. If it is international, then no country faces a loss of competition.  A Tobin tax is not just a financial measure, but a call for a form of world governance and would require to be administered by the IMF or the United Nations.  Pah, say the critics - they’ll never get their act together.  Well, if they don’t we are all doomed, because climate change will also demand a form of world governance.  Brown was right to link the financial transaction tax directly to the environment because humanity no longer has a choice but to manage its affairs on a global basis.  The financial transactions tax is a suitable vehicle since the richest nations would be making the greatest contributions. 

    Yes, Brown may be guilty of cynical posturing, trying to sound tougher on the banks than George Osborne.  But now that this issue is on the international agenda it will not go away. The Prime Minister has finally given the world a moral lead. And as Roosevelt said, the only thing to fear is fear itself.