farmdoc's blog post number 458

As a kid I loved riding on merry-go-rounds. Going up and down on a big white horse as the carousel turned, each time I passed my parents I’d wave excitedly. In my mind that image is wired to the phrase ‘what goes around comes around’ – whose origin’s apparently unclear. But never mind. The Commonwealth Bank of Australia [CBA] was founded in 1911 by the Commonwealth Bank Act introduced by the then Labor government which favoured nationalised banks. Its first branch opened in July 1912, by 1913 it had branches in all six States, and it came to be affectionately called the ‘people’s bank’. In the 1920s the CBA began issuing Australian bank notes, and from 1920 to 1960 it was the nation’s central bank. In the early 1990 election campaign the Labor Party attacked the coalition’s proposal to privatise the CBA. Then, in a spectacular act of hypocrisy and reversal of Labor ideology, later that year Bob Hawke’s government decided to partially privatise the bank. The CBA listed on the Australian Stock Exchange in 1991, and full privatisation occurred in 1996. It’s now one of the ‘big four’ Australian banks, with NAB, ANZ and Westpac. With the CBA no longer a ‘people’s bank’ owned by and beholden to the government, all ‘big four’ banks have been running financial riot, to the public’s major detriment. Now six influential economists have called for the government to create a new ‘people’s bank’. The carousel’s come around. Ho hum.