Or at least, not the banksters alone.
There was no housing bubble, as Italian banks demand copper-bottomed collateral before they will lend the ordinary housebuyer a cent. There were almost no toxic assets, as banks are amazingly conservative in their investment policies.
Once upon a time, few Italian bankers spoke a word of English; today most speak the words and grammar, but to their credit they don’t speak the language of the City or Wall Street, or that of the innovative financial operators who filled the market with dubious products over the past decade.
And they\’re still fucked.
There\’s actually an argument that we should be grateful to the banksters. Assume that the lefties are correct. It is only the City, what with their ratings agencies, demands for liquid markets and profits, outrageous bonuses and all the rest: this is all that has stopped the UK Government from Keynesing our way out of this mess.
The national debt could be well on its way to 100% of GDP by now and everything would be sweet roses in the garden of England.
And, given that we don\’t, unlike Italy, have a high private savings rate, we\’d be even more dependent upon foreign money than they are. And close, oh so close, to proper national bankruptcy, where the debt burden simply cannot be paid by any rational or likely set of manouvres.
So, what\’s better? The financial markets calling a halt to such piling up of debt with a recession? Or we carry on to the Italian, or even the Greek, scenario?
I think the recession sounds like the better idea actually. Certainly less pain over time.
But the real point about the Italian example is this: even if the lefties are correct, that the City has done the damage to hte UK economy. Italy shows that politicians and debt can still be a greater problem than banksters.