Tuesday, January 26, 2010

The Bankers are back

The bankers are back, along with their bonuses, and as arrogant as ever. Fred the Shred is not left behind – he has again achieved profitable employment, this time as financial advisor to an architectural establishment, interestingly enough, the very same as designed and built the Scottish Parliament building – at ten times the original costing …

Meantime RBS chief Sephen Hester, running a bank that was rescued from collapse with public money, has refused to tell MPs size of staff bonuses
‘It is my duty to protect shareholder interests and pay the minimum bonuses that out group can get away with …’ he proclaimed. The insolence passes all understanding. The British executives at Goldman Sachs appear to believe that they are putting on a hair shirt when they limit their individual loot for the year to £1 million per looter.

Commenting on Radio 4 about the latter report, the writer Sebastian Faulks remarked how infuriating it was to see these people strutting about as though they owned the world – all the more so since they do own it, he noted. He might have added that they also own us. Even Gordon Brown is expressing dismay that government appeals for restraint are shrugged aside, though no-one (apart from Thatcher herself) has done more to create the climate in which these things have become possible.

Even now the British government is not prepared to follow Obama’s modest proposal to reinstitute, as used to be the case, the compulsory separation of everyday commercial banking from investment banking. As Faulks also pointed out, the term investment banking is itself very much a misnomer – it has little to do with either banking or investment, but means instead gambling on the financial markets with depositors’ money; and does so with financial instruments and packages so complex that not even their originators can understand them.

It was J M Keynes who back in the thirties expressed regret that the creation of values, material and otherwise, should be ‘the by-product of a casino’. He spoke whereof he knew, for, having lost one fortune in the 1929 stock market crash, his financial expertise enable him to speedily make a replacement one.

What the present crisis has mad clear is that the controllers of the banks and the stock markets, ‘too big to fail’, regard any limitation of their right to plunder as the height of impertinence and no government throughout the Western world is able to stand up to them even if they wanted to and with massive public approval. Unelected, irresponsible and malignant, they nevertheless control not only financial institutions but all our destinies as well.

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