You give bankers £1.3 trillion and do they thank you? Do they hell

[CHIMO]

Everyone says how tough this week's budget will be, how enormous the budget deficit is and how few options chancellor Alistair Darling has. Which is all true, but only within the tenets of conventional thinking. For a government with vision, this should be a golden opportunity for a landmark budget that seizes the high economic ground. It could change the dynamics of Britain's finance-driven capitalism and try to constrain unemployment growth while preparing for the upturn that will eventually come. But don't hold your breath.

For this recession is palpably the result of the collapse of what was, in effect, a gigantic pyramid debt selling scheme. The City's rise was feted by politicians across the political spectrum, none more than Gordon Brown, confusing Ponzi finance as innovation and creativity. Now the British government has had to put an astounding £1.3 trillion in various guarantees and investments behind the banking system in order to avoid the consequence of its fall. It creates a once-in-a-generation political opportunity to challenge the terms on which Britain approaches both the structures of capitalism and its management. Let's at least get something back from the highest-ever peacetime budget deficit.

The desire to stick to orthodoxy, though, is very strong, even if it has ended in disaster. What is striking about the last 20 months is how unwilling bankers, regulators, officials and ministers have been to accept that the free market of the last 30 years is redundant, intellectually and financially. Markets, it turns out, do make mistakes. Public authority does have to shape and reshape the structure in which markets operate. Regulators have to look at system-wide stability rather than assume the market will take care of it.

Above all, the business model of banks is not just a matter for banks. It is a matter of the keenest public interest. Otherwise the bargain - bankers pick up profits while taxpayers pick up losses - is grotesquely unfair.

http://www.guardian.co.uk/commentisfree/2009/apr/19/banking-budget-recession-will-hutton