Bankers, Governments, Globalisation and Murdoch (Phew …)

10 Jan


A) You blame the world’s ills on the greedy bankers (and rightly so), BUT they have broken no laws.

B) You also defend RM because he has broken no laws.

The financial world seized upon the opportunity afforded by short-termist, dogmatic, incompetent and above-all negligeant, craven, cowardly and greedy governments which removed effective regulation, in particular those separating traditional banking from casino-style gambling with derivatives – and of course in property speculation, particuarly in the USA and Spain. Man collectively is indeed “greedy”. This is something that goes back to caveman times when if you caught a dinosaur you gorged yourself silly on it because you didn’t know when you might catch another one. (Yes, Clever Dick, I do know that Man didn’t live at the same time as the T Rex, but you can see what I mean …) The best example of this greed, which I have elsewhere likened to a pathological illness, was the Enron directors. Already fabulously wealthy by any standards, they wanted even more and so sabotaged their OWN power plants so as to push up the price.

The astounding degree to which greed can blind even clever people to danger is funnily-enough being shown AT THIS VERY MOMENT by top bankers. Do they not understand the degree of anger about the renewal of their bonus schemes only two years after being bailed out? They MUST understand this intellectually, but their greed is overpowering and so they are ploughing on regardless.

No, governments are ultimately to blame even if bankers can be blamed for excessive greed on a personal level (Yes, I KNOW that “excessive” is a “value judgement”, but without those you can’t discuss ANYTHING except maths and pure facts), but at the NATIONAL level you can ONLY blame the government. Parliament is sovereign; it can and should make laws that achieve the results that the people want. Re the bankers, they are CLEARLY not doing that, and it is NOT JUST THE TORIES either.

If they DON’T deal with this problem of “greedy bankers”,  then we should ask A) WHY NOT and B) what can be done to fix this?

Considering A) this is mainly because they fear that banks will quit the City of London if Parliament starts “interfering” too much – as the bankers see it – in their business. In this way, a game of bluff is going on; the banks are effectively engaging in “divide and rule”, as indeed are multi-nationals avoiding tax. However sooner or later in poker you have to call someone’s bluff. This requires a degree of courage and nerve, both in very short supply in recent years.

As for B), I think Parliament is too unaccountable and unresponsive; having to pretend they are responding to people’s wishes only once every 5 years is not good enough.  There is a continuum from MPs being 100% representatives and doing ONLY and EXACTLY what voters want to MPs considering themselves as 100% DELEGATED and thus doing what THEY want in what THEY consider to be in our best interests (which is often now what is in THEIR best interests)

I consider they have moved TOO FAR up this continuum. Is there a solution there? Well, voters should have some mechanism between elections to make themselves heard more strongly – perhaps by forcing a constituency vote on a specific issue. One problem here is that it’s a vicious circle; too many people say “I’m not interested in politics” or “There’s nothing I can do anyway.” and of course (as I have explained quite clearly) the FPTP system prevents the TRUE spectrum of opinion from being registered on election days. The current system seems to me to lead to an almost total contempt for the people, as was clearly and wonderfully shown by the Brown-Duffy mini-soap.

A) You cannot blame either individuals or companies for tax AVOIDANCE. Only an idiot pays voluntarily more tax than he or she has to. If governments (and clearly Old Rantonicus) think they pay too little tax, then it is up to governments individually and collectively to deal with this problem. Once again, multi-nationals play the “divide-and-rule” and poker games, but national governments being sovereign and also operating in international alliances should be able to deal with this problem to find a solution “fair” to everyone.

Tax EVASION is another matter and must of course be punished harshly. Yes, the tax system in Britain is horrendously complex, but look who was in charge of it for 13 years!

B) They (like Murdoch) operate within the regulatory frameworks and facts of life as they ARE, not as some would LIKE them to be. If people don’t like the way they operate and/or think they should pay more tax, then – governments being sovereign – it should not be beyond our wit to deal with this.

C) On balance, I do not believe multi-nationals to be as evil as the usual ranting suspects keep banging on about. They generally (but not always) treat indigenous people much better than these latter would be treated by their own people and they create jobs and wealth in developing countries (a Vietnamese, African, Chinese, Indian or whatever would die for a good job with a multi-national). Where it has all gone wrong is in the speed and scope of globalisation and relocation off-shore, which is destroying the USA. (and what happens there usually happens in Europe later)

D) As in every other field, some multi-nationals are nastier than others and some are very nasty. Others are not. We should not see the world in black and white.

GOVERNMENTS? My problem with governments is that A) they can’t stop spending money they haven’t got and B) they shy away from most really tough decisions (see A). But they also seem extraordinarily stupid and short-sighted at times. For example, it would be EASY for a government to pass several laws to make it illegal:

A) … to use public money to rescue a bank (let them go bust, nationalise them, repay the creditors BUT NOT SHAREHOLDERS, run them properly (WITH SUFFICIENT RESERVES), SEPARATE banking from gambling activities (Glass-Seagall) and they would soon be back in profit FOR THE COUNTRY.

B) … for banks to charge more than a fixed % above bank-rate – that it is legal to issue a “store-card” charging up to 30% interest is unbelievable; Brown could have STOPPED that outright if he’d wanted to, but it suited him for people and the country to run up horrendous debts so as to give the illusion for his own short-term ends that there was an unbustable boom, which is why I HATE him so much.

C) … to limit the differentials between the highest and lowest paid in  a company to a certain multiple. It is obscene that this differential has ROCKETED in recent years to quite absurd levels, because of course there is little to stop directors paying themselves what they want, which is EXACTLY like the EU elite, whose useless President in a pointless job is paid more than Obama and is just having a new €300,000,000 office palace built in Brussels.

IF Britain introduced such laws and companies threatened to pull out, then tough – call their bluff. They might of course go to America, which is collapsing economically and therefore simultaneously socially, though surreally-enough the Americans don’t seem to understand this. It is like watching the Titanic steaming towards the iceberg and shouting at them to stop without anyone being on the bridge. No country has a happy long-term future where vast rich-poor differentials exist, and these are getting bigger and bigger with NO GOVERNMENT, left or right, seeming to CARE or DO ANYTHING about it.

Aren’t you also fed up with this attitude “We can’t (or won’t) do anything about this problem?” Bankers, wealth-gap and all the rest? Our governments are or should be SOVEREIGN. Yes, capital is mobile and can move to another country, but call their bluff, act in multi-governmental co-operation to deal with this. It would be of no value to companies to base themselves in Liechtenstein if their national governments sanctioned that country, if financial transfers to and from there were blocked. And sanctions against tax-havens are JUSTIFIED. In the same way that you CANNOT tolerate country A harbouring terrorists B and allowing them to train to attack you, you CANNOT allow a tax-haven to store money earned by your country’s companies who thereby evade tax. Money has now clearly been seen to be a WEAPON OF MASS DESTRUCTION; the recent crisis has changed the game totally, but governments seem only dimly to understand this.

In this respect, the EU should help (and they do SOME good things), but they mostly seem to act in their own interest, which (apart from enriching themselves beyond belief – well done Kinnock – your losing the election in 1992 and getting the cronyist EU job was the best financial move you ever made) is to create a European Superstate, which we do not want. And of course, their OWN agenda causes them to seek to go too far and too fast and often in the “wrong”direction. For example, it is clearly beneficial to have a degree of “harmonisation” in the EU in various areas. The trouble is, that for the Franco-Belgian-Luxembourgeouis axis of financial lunacy this harmonisation is clearly meant to be UPWARDS to their absurd levels of tax, government-spending and bureaucracy. What a pity that the EU elite are killing the goose that should lay the golden egg!

Finally, GLOBALISATION has gone too far too fast. It cannot be right that almost all the manufacturing is stripped out of a country, leaving just highly-paid executives overseeing overseas operations served by a pleb population of McDonald’s servers. It seemed like a wonderful idea at the time, especially in evening out world standards of living. And it IS a good idea in that respect, but done TOO FAST – again, a lack of balance. As a species, we are TOO IMPATIENT. You saw this with Brown. So eager was he to build new hospitals and schools everywhere that rather than wait till we could afford it he launched a spending binge including the long-term hideously-expensive PFI schemes he so favoured because they don’t appear on the books in the normal way so that it is isn’t immediately apparent just how great are the future deficits and bills being piled up for future generations.

In a world concerned about carbon emissions it doesn’t make sense either for vast tonnages of (often frivolous) products to be shipped across the world when many of them could just as easily be made much nearer – creating more jobs of course.

MURDOCH: I repeat, he operates within the law. If the law is inadequate, pester your MP to help change it. I’m not sure what else you can reproach him with. If he is unethical, then punish him by not buying his products; this has already happened with some companies, but I would like to see specific examples of his unethicality. I have no special brief for him; I just think it is funny (and silly) when the usual suspects keep churning out his name as if he was Goebbels in a Darth Vader suit.


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One response to “Bankers, Governments, Globalisation and Murdoch (Phew …)

  1. Sebastian Kraemer

    July 10, 2011 at 11:00 am

    I googled Murdoch banks and found your interesting blog. But Murdoch, it’s now clear, has overseen lawbreaking. I agree about parliament needing to stand up to bankers, but what sort of scandal will bring them into the kind of disrepute that Rupert and his family are now in? Where is the Milly Dowler moment for financiers?


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