[Pen-l] Recapitalisation

["Chris Burford" <cburford@xxxxxxxxxx>]

So to the east of the Atlantic the formulas underpinning recapitalisation
seem to be about replacing old discounted capital with current capital 
backed
by national tax income.

This is used to stabilise mass accommodation even though
the value of the mortgages is discounted, and to guarantee the value of
private deposits.

The BBC business editor, Robert Peston, has also come up with his own plan
to use national coordination of state pension funds, to buy preference
stakes in recapitalised banks.

This is not the death of market capitalism, which will have considerable
scope to make profits again once economic circulation resumes on what has in 
reality become a smaller
capital base.

Meanwhile that restructuring could entail major formal
socialisation of a large part of the economy with a substantial wave of
increased social accountability, eg financial executives treated as members
of the privileged intelligentsia, rather than as Capital Incarnate.

The job to recover from depression will have been done - destruction of a
significant proportion of old capital.

Chris Burford

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