Excerpts from the Rabble article:
SL: For the Left to come up with solutions which don't hark back to a golden age that may not have existed, what solutions do you think we should be looking at? One of the focuses of the demonstrations in the streets of London have been around the banking system and in its most spectacular form, protestors stormed the Royal Bank of Scotland. There's been calls on the streets to make banks a public utility. What do you think of that demand by the Left?
LP: I am very much in favour of that. And the main reason that I'm in favour of it is that taking the banking sector, the whole of the financial sector, into the democratic public domain -- however limited our democracies are -- would remove the economic power of that fraction of the capitalist class that are the bankers who have enormous power. They're not the only ones who are powerful, but it would remove their power. And that's the most important reason to take capital away from them.
Now that could also be said of the importance of nationalizing other sectors. But let's just address this. That's the main reason, that you shift the balance of class forces in this society by doing that. And the failure to do that means that Obama needs to say, while at the same time as saying that there is a scandal in giving AIG executives their million dollars in bonuses, he needs to say, we need to find a way of preventing that, while not preventing getting the cooperation of the private bankers in getting the banking system back on track again, that's the way he put it last week.
That's exactly what Paulson said. Paulson was the Treasury Secretary before Geithner, under Bush. And he had the gall, having been the highest paid CEO on Wall Street with the largest bonuses before he became Treasury Secretary, back when he was head of Goldman Sachs, he had the gall when he was trying to get his TARP plan through Congress to say that he thought salaries on Wall Street were unconscionable and we needed to do something about it. But in the same breath he said we need to find a way of doing that that doesn't get in the way of the TARP program working.
Now, what all that means about not getting in the way is simply a reflection of the inherent class power on Wall Street that is linked to the American state. So the most important reason for making banking a public utility is to shift the balance of power in society.
Now on top of that, banking ought to be a public utility insofar as banks can't exist without state deposit insurance; that's been proven since the 1930s and every government in the world has them and follows the American state in having them. Insofar as we can see that a volatile global financial system constantly produces financial crises in which central banks immediately act as lenders of last resort, using public funds to do so, you can see why this shouldn't be something private.