Monday, 9 July 2012

Bob Diamond, the criminals and the vermin

There was something pathetically unprepossessing about Bob Diamond, the disgraced former Chief Executive of Barclays Bank, to give him his honorific descriptor, when he appeared before a Commons Select Committee last week.  Diamond's fall from grace, hopefully not cushioned by a massive pay-out at the expense of shareholders and customers, has a marvellously satisfying quality to it.

For the last four years, first under Brown and now under Hamster-face, bankers and the so-called wealth creators in the City have been seemingly immune from the consequences of their own cupidity and stupidity.  Diamond himself suggested that it was time to call the dogs off bankers - the equivalent of Dave's hoodie-hugging gaffe - and let them get on with their unscrutinised usury in peace and quiet.  Yet the Serious Fraud Office is now investigating his bank's manipulations and potential illegal trading (not that the SFO's own reputation inspires much confidence), and there is a growing chorus of disaffection.

No sane economist suggests that the entire banking model is wrong - fractional reserve banking has been accepted for centuries as a means of ensuring that saving and borrowing can work together to create wealth.  What has been different in the last three decades (post Reagan and Thatcher) is that the wealth has been a money illusion, through complex financial instruments that nobody understands, asset bubbles and recycling of money between financial institutions whose accountability and internal probity are as microscopic as George Osborne's competence.

Yet the fictions remain.  Every month there is new evidence of economic decline and depression, which the Bank of England responds to by leaving interest rates low and by pumping money into the economy through Quantitative Easing.  QE is now being used to rebuild bank balance sheets - not to promote lending to businesses and individuals that could create wealth - a far more effective policy would be a Keynesian-style public works programme using the creditworthiness of government and not syphoning off profits to the cronies.

Diamond is part of a global capitalist conspiracy, and one which should unravel before too much longer.  Preserving the myth of entrepreneurship has been a pre-requisite of government policy, even when their pet plutocrats are only kept afloat by hidden subsidies such as the Private Finance Initiative.  Last week it emerged that £300bn will be the cost of PFI over the next five years, or almost all the budget deficit that is being used as a justification for austerity and the Tory assault on the poor.

Any party wishing to achieve an electoral victory (anyone listening?) in 2015 and beyond needs to articulate the lunacy that we now live with - where profit comes before service and where totally inappropriate activities have been given to a bunch of shysters whose moral compass is non-existent rather than defective.  Being "all in this together" requires expropriation of excess wealth from the self-styled top of the tree before any further attempts are made to further pauperise the rest of us.  Diamond's £20m potential parachute compares very nicely against the reduction in employment protection, theft of pensions and pay restraint that most other people are putting up with.

The Tories talk about "reward" for wealth-creation.  Most of the people who create wealth, through manufacturing or providing professional services, only dream about paying higher-rate tax.  Much of what has been done in the name of global capitalism is morally offensive and probably criminal, and totally at odds with what is needed for a decent society.  This is not about enterprise but cronyism, and the sooner radical politicians start reminding the world that the emperor is not merely naked but repugant, the sooner we can get on with bringing down these parasites.

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