Tonight:
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One of the most frustrating things about the current level of political debate is that though the Labour Government has presented the Conservatives with a wide-open goal, there seems to be no one on that side capable of kicking the ball.
For three Parliaments since 1997, the Opposition has waited for Labour to screw up. Now it has, David Cameron and his cohorts seem unable to spell out clearly and simply what they would do instead. The sum total of their musings so far adds up to a claim that they would regulate better. Is that it? Is that all there is to hope for? Is that how they propose to deal with the greatest financial challenge since the 1930s?
The absence of ringing endorsement of free markets or a clarion call for capitalism leaves the electorate with no idea what the Tories believe in or stand for. That is probably why, fed up though they may be with the leadership of Gordon Brown, they show so little enthusiasm for the Tory alternative.
The Tories' stock excuse is that they won't say what they will do because they do not want to give the Government the chance to steal their ideas, but that seems just a smokescreen. Closer to the heart of the matter is a problem identified by right-wing think-tank the Centre for Policy Studies. Under the chairmanship of Lord Saatchi, it has come to understand that this crisis poses a fundamental challenge to the belief that has driven political thought for the past 30 years, which is that free markets are best.
This was the central belief of Margaret Thatcher, and has been central to Tory thinking ever since. The Labour Party may have weakened the ability of the country to respond to the financial crisis by mismanaging the public finances on a titanic scale, but that cannot alter the fact that this appears to be the first major crisis of Thatcherite capitalism. The markets failed to regulate themselves. Markets did not know best. Coming to terms with that and working out how to respond is what has paralysed the Conservatives and made them appear so vacuous.
But perhaps they misdiagnose the illness. Despite the rhetoric to the contrary, the current crisis is not one of capitalism, but one of finance. Capitalism continues to work and to give us the likes of Tesco, Rolls-Royce, Marks & Spencer and BSkyB. You may or may not like everything about these companies, but they and tens of thousands like them deliver value every day. Second, the crisis is not one of free markets, but the opposite.
The executives in the banks created for themselves a system of rewards that insulated them from the reality of the market place and encouraged them simply to gamble. If they won, they became rich; if they lost, someone else picked up the bill. Where is the market discipline in that?
Dealing bankers a taxing blow
Getting the banks off the pay and incentive structures that brought the global financial system to its knees ought not to have become a problem. Senior bankers, having been rescued by the taxpayer, should have seen the need to mend their ways. But now it appears bonuses are their heroin - they may know they have the potential to kill and destroy, but cannot bring themselves to give them up.
So the challenge, which politicians thus far have sought to avoid, is how to make the banks go cold turkey. How do we get them off the addiction? A windfall tax, as suggested here, creates an unwelcome precedent, but there are other ways. One reader points out that because of their vast losses - which the law allows to be rolled forward to be offset against future profits - few banks will pay tax in this country for years. Typical is a ploy by Merrill Lynch which, while it was still independent, decided to book all its losses to the London operation. It made it unlikely to pay tax for the next 20 years.
Therefore, one way to remind senior bankers it is in their and their shareholders' interests to behave as if they were part of society would be to remove the right of banks - whose continued prosperity has only been made possible by Government bailouts - to set those losses against tax.
For this purpose, a bailout would be defined not just as a direct injection of equity capital but would also include those banks that have benefited from Government insurance programmes, schemes to purchase bad assets and the injection of central bank liquidity into the markets. That - particularly the injection of liquidity - would catch most of them.
It would, of course, be much more effective if applied internationally. Perhaps our Prime Minister could seize the moment once again to lead the world by persuading the Americans and European Union to follow suit.
No doubt bankers will protest that increasing the tax burden will divert money which might otherwise be available to assist their return to health. But they do not seem to worry about that when it comes to paying millions in bonuses.
And it might just be the price we have to pay to drive home the point that they cannot blow up the system and then carry on as if nothing has happened.
