Free Market Socialism, Mr Keynes

It's funny how we're getting all this talk about the real economy finally being affected by the banking crisis. Two million Britons on the dole by Christmas, they say. This is our moment of truth, according to Gordon Brown.

This is no longer a question of how to win the next election. Rather, this is question of how to get through to Christmas. Any Christmas. This next one'll do.

And then there's this idea that keeps on cropping up, whatever you read, wherever you look. The City versus the real economy. I'm mightily irritated that this division should exist in the first place. It's wrong. It's unfair. It's entirely predictable. And we're all going to suffer. This from the first Observer story I linked to above:

Others at risk include the aviation industry - Willie Walsh, the British Airways chief executive, is predicting that up to 30 airlines worldwide will go bust - while further losses are likely in the City. Unemployed bankers are being advised to seek work in Shanghai or Mumbai amid warnings that the Square Mile will be permanently reshaped by the crisis.

'City people I speak to are despairing because they may not get another job for a year,' said Shaun Springer, chief executive of the City headhunting firm Napier Scott. 'For the first time in 30 years in the City, I'm scared.'

But all sectors are at risk. From charities to small businesses. From car manufacturers to transport companies. The real economy and the illusory economy suddenly find themselves joined at the hip. Suddenly, we live in the same world.

Which is how it should've been all along. If it had, we wouldn't now find ourselves in this mess.

Thank goodness that there has been some cross-party consensus on how to proceed (or, at least, on what not to do):

The last few days have, he argues, seen an outbreak of cross-party Keynesianism with even the Tory Mayor of London, Boris Johnson, warning against halting investment. Similarly, ministers are being lobbied to snap up land at bargain prices as the property market crashes and use it to build social housing, keeping construction workers in jobs.

Even so, from a psychological point of view if nothing else, the situation looks about as bad as it could get:

The speed with which the bubble burst is one of the most striking factors of this crisis, and could help determine what happens next. Consumer confidence is now lower on some indices than in the 1980s slump or even the mid-1970s, according to the pollster Peter Kellner, suggesting that Britons unused to tough times are quicker to panic than in previous slumps - leading to a more sudden fall in sales, and consequently a more severe immediate threat to jobs.

'It may be that paradoxically because it's been so good for the last 16 years people are not used to the idea (of bad times) whereas in previous times the boom and bust rolled around so regularly that it was less of a shock to the system,' he argues.

It's entirely unreasonable that the problems of one sector - its inability to run its own businesses properly and decently - should spill over into the rest of the economy and create such a traumatic downturn. It's clearly time to nationalise the entire banking industry and ensure that from now on it works on behalf of the public and industries it should serve.

How about by Christmas?

Which Christmas?

This next Christmas'll do nicely, thank you very much.

Let's have some free market socialism, for a change, Mr Keynes.