Same old problem. Just when you need a Labour party there is none in sight – and clearly not one in the coming election. On Monday evening the parties' three economic spokesmen went head to head and stroked each other to a draw. They nattered away like cleaning ladies over how to clear up after the great bankers' ball. There were smashed derivatives, defaulted swaps and toxic turds strewn everywhere – and who, they said, was going to pick up the £170bn bill?

None of them discussed whether the party should have been allowed in the first place. I suddenly craved some good old Labour blood and guts, an Arthur Scargill, a Tony Benn, a Michael Foot, a Nye Bevan, someone to shout in their faces: "You blew it! When those petrified, knock-kneed smoothies from the City came pleading for help, you caved in and gave them the people's money. You panicked, you bunch of creeps."

That is what a real Labour party would have said: "When, back in October 2008, the bankers told you they were too big to fail, you believed them. You were conned. Your economics was too rusty to call their bluff. Now you have wrecked everything we stand for, everything you and your government have done in a decade. You, Darling, are a banker's stooge, another Ramsay MacDonald."

A Labour spokesman on Monday night would have pointed out that taxes would now rise, hospitals would close, workers be sacked, students lose grants, child poverty increase, all because Darling lacked the guts to stand up to the City. He had done more damage to the British economy in one year than Scargill's miners or Jack Dash's dockers ever did. Look at the mess we are in.

Labour would not have moped over whose "efficiency savings" were the more meaningless but pointed out that the three spokesmen were peas from the same pod. The Tories' George Osborne never questioned the bank bail-out because his friends were bankers. Indeed, he thought the Treasury should have panicked sooner. Vince Cable, whose path to political sanctity is endlessly to curse sin and bless virtue, was equally bamboozled by the City ramp. He bought "too big to fail" in his book, The Storm, and his only response was a Liberal Democrat miasma of on-the-one-hand-on-the-other.

Of course we shall never know what the world would be like today had Darling reacted differently in 2008. It could hardly have been worse. I gather some smart business schools are starting to play the relevant "war games". Some scenarios, such as just letting the banks fail, are undeniably hairy, though the global market in finance is astonishingly resilient and would, by now, probably be picking up the pieces and getting back to normal. America still eats and breathes, despite the failure of Lehman Brothers.

More plausible, a Labour party would argue that Darling should have properly nationalised the ailing banks, in a version of what he did to Northern Rock the year before. He could then have secured ordinary deposits, up to any limit, ringfenced business lending (as the Treasury did when it nationalised banks during the war), and put the casino divisions into bankruptcy administration, dumping their worst debts on the vulture fund market. He could then have rebuilt good and bad banks, and eventually resold them.

The impact would have been traumatic, and much of the money now being extorted from present and future taxpayers would have been lost to them in some other way. Insurance and pension funds would have taken a pounding as defaults cascaded through the financial system. But much of the burden would have fallen on those who had benefited from the bubble in the first place, and the racketeers would have been hung out to dry.

The "quantitative easing" money that simply disappeared, much of it overseas – and which has fuelled the past year's stockmarket boom – should have been used to boost demand in the high street by raising pensions and social security payments and instituting mass scrappage schemes. Public policy would have been directed at restructuring the supply of credit rather than, as now, doing absolutely nothing to stop it all happening again – bonuses, derivatives and all.

Such an intervention would have been both properly Keynesian and properly monetarist. There would have been no need for the savage deflation permitted by Darling from late 2008 which emptied shops, collapsed lending and threw thousands out of work. It is reportedly now threatening, according to a Treasury estimate, one third of all spending on the health service by the end of the decade.

This deflation is harsher than anything abroad. It is harsher than Margaret Thatcher's medicine of 1980-1. Darling's policy was not a bailout on a par with British Leyland or Upper Clyde. It was a gigantic, unprecedented, overnight evaporation of the nation's cash.

We are told on the grapevine that in October 2008, as Downing Street stared "into the abyss" (as bankers love to put it), the chief horror was not the prospect of dismantling 10 years of government and mortgaging the future. The horror was of Darling and Gordon Brown being accused of "old-style nationalisation" by precisely the banks who were now pleading for the new-style version: public subsidy with no strings attached.

Darling pretends that the only alternative to his capitulation was "cash machines seizing up and bank doors closing". That is bankers' blackmail. A gambler's family does not have to starve if you ringfence his income and give it to the grocer while denying him access to the casino. Darling merely let the gamblers return to their ways. He won all the disadvantages of bank nationalisation with none of the advantages. He spent the money but failed to use the power. This is the treason against the left of which a Labour party would have accused him on Monday night.

Without a Labour party, this argument is dead. The Tories are intellectual lightweights. Nobody dares mention the awful truth that, whatever rescue might have been appropriate when the bubble burst, it cannot conceivably justify the devastation about to be inflicted on Britain's infrastructure and social services. Money on the scale disbursed by Darling a year ago should have gone, if at all, to the public benefit, not to correcting imbalances in bank indebtedness.

That is what a real Labour party would have said on Monday night. For once, it would have been right.