Slí Eile: Following previous blogs about the principles underlying a progressive strategy for economic recovery with fairness, here are another four:
Principle VI SORT OUT BANKING – GET CREDIT FLOWING AGAIN
NAMA is not the only game in town – even now. There is a strong case for:
* Using every means to pay much less for liabilities transferred to NAMA (should be referred to as the National Liabilities Management Agency);
* Take a majority holding in one or more publicly quoted banks sooner rather than later; and
* Establishing a State Retail Bank along with a State Investment bank capitalised from holdings of existing state enterprises – these banks, subject to public scrutiny but with delegated independence, would compete with private banks on the global market taking deposits and extending loans
* As a matter of urgency a State Industrial Lending Agency – along the lines of the old ICC. This should be established to guarantee loans to small and medium enterprises and ensure that businesses stay in business and people stay in their jobs.
* Establish agencies to provide long-term and infrastructural financing – something that, historically, private sector banks have failed to provide.
The FT carried an interesting article, recently, (‘How to take moral hazard out of banking’)
reporting that Mervyn King, Governor of the Bank of England has called for ‘utility banking’ which would limit banks to their legitimate purpose – financial intermediation and payment facilitation.
Principle VII REFORM PUBLIC SERVICES DELIVERY AND CORPORATE GOVERNANCE
Linked to a reformed and enhanced public service is the need to democratise institutions (as well as reform public sector institutions, work practices and responsiveness). Our education and health sectors (to take just two examples) remain profoundly undemocratic and exclusionist in spite of all the talk about customers and inclusion. Likewise, the workplace needs to become a place where skills, team-working and decision-making are not the preserve of the shareholders or the managerial elite. Openness, transparency and accountability must reach into every public, private and voluntary organisations (but especially those in receipt of State subsidies or in charge of delivering some part of public or social services). We need to begin a process of reform of our political institutions to restore accountability, transparency and openness.
Principle VIII SAVE THE PLANET – WITH A GREEN NEW DEAL
The necessary progress towards a low-carbon economy means more than just carbon taxes; it constitutes new relationships between sustainable production and consumption. This can revive the economy through an innovative, resource-efficient society with environmental and business payoffs. We will need new financing mechanisms (e.g. Green Bonds), joint public and private enterprise initiatives, and greater grass-roots participation and collaboration.
Principle IX GOOD GOVERNANCE, PARTICIPATORY GOVERNANCE
We need a major shift towards ‘stakeholder governance’ in our political and economic institutions – private and public. The growing inclusion of employees, consumers, communities and environmental interests in decision-making process has been shown to add to productivity and sustainability and can lay a new foundation for prosperity.