I've been getting increasingly irate over the weekend by the sight and sound of bond market traders and bankers telling the media (and thus us) how our next government should spend our money. Politicians are (rightly) terrified of the markets, which pass judgement on political decisions by selling or investing in the currency and government-issued debt, which is how day-to-day state spending is financed.
The world's a more complex place than I'd like: the markets exist and to some extent are useful, but we're in danger of losing democracy, simply because some very rightwing people accountable to nobody are happy to bankrupt countries they don't like. They aren't 'rational actors' of the type deified in economics textbooks: they attack liberal and socialist governments.
Even if you think this is OK, remember this: the ratings agencies which are bankrupting Greece and may turn their attention to the UK are the very same people which told us that Enron, the Icelandic banks, credit defaults swaps and all the other insane financial instruments were absolutely fine. They're not just vicious, selfish capitalist scum, they're utterly incompetent.
Added to this is the fact that they're paid to cause short-term moves in the bond and currency rates (ruining a country's currency or bond yields is as profitable as boosting them) and you have a recipe for selfish destructiveness in the fiscal system. Who loses? Governments which need to pay pensions, build new hospitals or schools without waiting for the next tax year.
Let's remove them. Let's organise the IMF and World Bank to trade debt instruments between sovereign nations. Some of my readers know much more about this than I do: are there ways to circumvent these bastards?
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