Banks and Markets

Back again! So much has been happening, I've got quite a backblog, but first a current one:

Will Hutton did a good job on last night's Dispatches in exposing the extraordinary arrogance, intransigence, insouciance and greed of the banking industry, but the programme didn't go far enough to close the loop and make clear the connections to the wider politico-economic machinations currently at work. It left an overall impression of the banking sector as a massively powerful, out-of-control engine that would wreak further havoc if it wasn't restrained. It implied almost that bankers are a separate, self-deluding breed, who need to be brought into line by others (politicians and regulators) with a more balanced and objective view of their economic role and value.

Yet as Hutton himself pointed out, the bankers, key politicians and regulators are by and large from the same select group of individuals, rooted in the City and effortlessly swapping positions and salaries in endless games of musical goverment/boardroom chairs and pass-the parcel. This was increasingly the case under Neutered Labour, but how much more so now Cleggameron are in charge. I forget how many of the new Tory MPs are from the financial sector, but I remember being shocked when I saw the figure, and despondent at the predictable lack of media attention to it at a time when bankers were generally regarded as the villains of the piece. It's a great pity Hutton didn't go on to show in more detail how many of these individuals come from the same group of elite private schools, went on to Oxbridge and inhabit the same social milieu, many being personal friends and exchanging pleasantries at the same exclusive clubs and holiday destinations*. Furthermore, and this is the crucial connection that is persistently ignored in the media, these same individuals are also key players in 'The Markets', the polymorphous idol before which they prostrate themselves in public, sacrifice the working poor in policy and reap astronomic bonuses and dividends from via arcane derivatives, hedge funds, offshore accounts etc in private. It's a complete con, aided and abetted by a sycophantic media.

Here are a few of the phrases used by various media commentators during the week immediately following the General Election: "The markets are demanding ...", "The markets will be turning their attention ...", "...desperate to avoid speculation by the so called 'wolf pack' ...", " ...the markets can turn against you quite quickly ..." This is a narrative of an essentially malevolent entity which is beyond rational dialogue or societal bonds. (We are in the domain of Greek myth!) Yet in reality these 'Markets' are constituted by the combined activities of the very same senior bankers, corporate magnates, fund managers and international oligarchs who are constantly in and out of government and media corridors, (plus a growing number of city minions who have cottoned on to how easy it is with contemporary technology to indulge in this newest form of gambling - check out http://www.tradingmarkets.com/ as an example of just one in hundreds of similar sites dedicated to an activity to which most of the world's poulation are probably entirely oblivious, despite its huge impact on the quality of their daily lives.) In other words, the hedge fund manager who comes on to Sky News to issue dire warnings about the scale of the UK deficit and the need for austerity, is quite possibly the very same person who the following day will authorise a massive sell-off of UK shares or currency (or both) before breakfast, attend a bank board meeting during the morning at which he will contribute ideas about strategies for subverting regulatory initiatives, have lunch with a government minister which he will use as an opportunity for some intense lobbying or, depending on the strength of his power, threats, and in the evening discuss with his senior personal accountant how best to avoid the forthcoming tightening of tax loopholes hinted at by the minister/adviser at lunch. It is the same individuals, no doubt, who give advice and feed insider information to the Credit Rating Agencies, the current newcomers on the economic narrative block; it is certainly the financial sector which pays their inflated salaries. Can any serious person believe that all these players in the current melodrama - the bankers, the key politicians, the investors, the regulators, the media magnates, the credit ratings agencies - have the welfare of ordinary working people as ther primary concern, let alone the unemployed and dispossessed? Every single one of them has made enormous financial gains from the deregulation initiated in the '80s and is part of the appalling statistics of the widening chasm between rich and poor, nationally and globally. Many of them feel completely justified in what they do. They believe in self-interest. They don't think anything else is real. Why would they behave otherwise? Those who retain some sort of ethical awareness or social conscience are pretty well forced by the collective pressure of their peers (in both senses of the word in some cases) to rationalise it into acquiescence.

The question that Hutton barely raised, but which needs to be urgently addressed, is how to divest this self-serving elite of their wealth and power intelligently. They are not going to give it back voluntarily. Until they lose it, they can use it. The world economy is now so weakened and destabilised by their monstrously unethical behaviour that countless lives and livelihoods could be at stake. Clearly this is a global problem requiring globally co-ordinated action, yet many if not all our global institutions are influenced and controlled by the people whom they need to be policing. When there is self-evident, endemic injustice, intense suffering and no practical means of redress, we are in the territory of insurgence. We are entering, surely, a time when only mass global revolution will bring about the scale of change required on this planet.

* (Added 17/06/10) A good many of them on show at The Mansion House last night as George Osborne dutifully delivers the script they've given him.