14 February 2009
The cry goes up, ‘wha’ happened?’ The former boss of HBOS, Sir James Crosby became head of the Financial Services Authority allegedly the ‘watchdog’ of the financial sector and then it emerges that Crosby was one of the architects of what Michael Hudson describes as:
“The commercial banks…us[ing] their credit-creating power not to expand the production of goods and services or raise living standards but simply to inflate prices for real estate (making fortunes for their brokerage, property appraisal and insurance affiliates), stocks and bonds (making more fortunes for their investment bank subsidiaries), fine arts (whose demand is now essentially for trophies, degrading the idea of art accordingly) and other assets already in place.” — ‘Bubble Economy 2.0: The Financial Recovery Plan from Hell’ By Michael Hudson’
Not exactly how the BBC’s economic ‘guru’ Robert Peston explains it. Peston, in a vain attempt to put a gloss on the disaster has this to say:
“But – amazing as it may now seem – HBOS and the FSA did not believe, in 2004 and 2005, that it was appropriate to assess the riskiness of its rate of growth on the basis that funds from wholesale sources could vanish.”
Peston continues in as abject a piece of dissembling as you’re likely to come across in a piece of ‘objective’ journalism:
“What’s the point? Well, it’s that Sir James was not obliged to resign as the FSA’s deputy chair because of evidence that he broke any law or regulation.”
But that’s entirely the damn point! What had previously been criminal acts had been, by both the Tory and Labour governments, decriminalized’, namely the innocuously named ‘deregulation’ of the financial sector, so how the hell could Crosby have broken any laws?
Peston, still not content with his whitewash of capitalism continues:
“Sir James chose to resign because he wanted to protect the FSA from incessant criticism by media and opposition politicians that its number two had made a chronically bad judgement as chief executive of HBOS.
“So the lesson of hindsight is that Sir James made a disastrous judgement about HBOS’s rate of expansion – but not that he committed a crime or a misdemeanour.” — ‘Why Sir James Crosby resigned’, by Robert Peston, BBC News Website, 11 February, 2009.
Judgement? Hindsight? Is that all? The decision to ‘deregulate’, that is to say, decriminalize the activities of finance capitalism flowed directly from the the neo-liberal dogma of the ‘Chicago School’ of unbridled, gangster capitalism. Of course apologists like Peston are absolutely essential if the truth of the situation is to be kept hidden from a public that is paying the price for the actions of our corrupt political class.
The absolutely disgusting thing about ‘New’ Labour/Old Tory is that awful creeps and war criminals like Tony Blair and Gordon Brown and the rest of the ‘New’ Labour parasites were concerned only about power, gaining power that is and in order to do that it was necessary to toady up to Big Business and in the process stab millions of loyal Labour supporters in the back, buying them off with ‘cheap’ credit and the lure of a consumer paradise courtesy the sweatshops and slave factories of Asia and Latin America. Ye reap what ye sow.
Thus prior to 1997, when ‘New’ Labour swept into power, it had already established an unholy alliance with Capital, with the ‘captains of industry’ pumping millions into to ‘New’ Labour’s election campaign, including such ‘luminaries’ as Rupert Murdoch whose ownership of print and electronic media was harnessed to ensure a ‘New’ Labour victory.
As Seumas Milne puts it:
“Who befriended Lord Stevenson, ex-chairman of HBOS, and put him in charge of House of Lords vetting? Tony Blair. Who embraced Goodwin as a regular visitor to 11 Downing Street, appointing him to this taskforce and that advisory council? It was the same Gordon Brown who hailed the City’s “new golden age” just as it was tipping over the precipice of a classic speculative crash.” — ‘Booing Davos Man is a start, but the crisis runs far deeper’, the Guardian, 12 February, 2009
This is crony capitalism carried to new heights, the cronies being our ruling political class under whose ‘leadership’ they have brought about the Crash to end all Crashes. Milne continues:
“And who unleashed the financial free-for-all that created the conditions for the crash – and who then warned against any move to bring the City to heel last year? The Conservative government and its would-be successors, David Cameron and George Osborne, cheered on by most of the media, Rupert Murdoch’s Sun included. The same goes for the cult of deregulated markets, privatisation, pocket-stuffing bonus culture and corporate-controlled globalisation now intensifying the real-world impact of the financial implosion.”
Now as far as I know Seumas Milne is not a Marxist but it doesn’t take a dialectical analysis to figure out what’s going on, the rip-off is of such staggering dimensions that only the state’s mouthpiece, the BBC could ignore it.
Machiavelli meets Microchip
In the ‘good old days’, the intimate relationship between the state and capital was kept well hidden behind a wall of ‘tradition’ and downright lies eg, the ‘mother of democracies’. In reality the ruling class maintained its control through a network of marriages of convenience between the families that owned land and businesses. Likewise the select schools and universities, all attended by the ‘well-connected’ who went on to become the managers of the legal, educational, civil service, armed forces, police and security arms of the British state.
This cosy relationship extends to the cross-connections between the ruling political class (whether Labour or Tory made no difference) and big business, with ex-politicians ending up on boards of directors, becoming lobbyists, heading up the various and sundry government-sponsored ‘thinktanks’ and the so-called regulatory authorities and vice versa, in a revolving door relationship that ensured a continuity of action literally across the generations.
But the rats of ‘New’ Labour, continuing in the ‘tradition’ laid down by the Queen Rat herself, Maggie Thatcher, were determined to finish what she had started, that is to say, an overhaul of British capitalism, dragging it kicking and screaming into the 20th century, literally Machiavelli meets Microchip.
Unfortunately, it was all an illusion, built on wealth created with computers and complex equations in a series of incredible scams, frauds is a more accurate description, that made a few incredibly wealthy and effectively bankrupted the planet as the con unravelled, which is what makes Robert Peston’s mealy-mouthed description so ingratiating and insulting to our intelligence.
What makes the current ruling political class so awful—compared to the ‘ancien regime’ anyway—is incompetence coupled to arrogance, a lethal combination. After all, what are they? A ragtag bunch of former Trotyskists and alleged lefties, second rate lawyers, PR flacks and journalists, a cheap and tawdry bunch if ever I saw one, Armani suits notwithstanding. These are the dregs of capitalism, prepared to do anything to hold on to power. Corrupt, bought and sold a dozen times over like so many whores, they have destroyed what remained of our collective wealth through their collusion with their corrupt business pals. ‘New’ Labour is a national disgrace, we should all bow our heads in shame that we actually voted these incompetent war criminals into power (and that goes for those who claim to be on the left of the Labour government for agreeing to participate in the illusion of democracy).
For the past ten years they have conducted a vast confidence trick on the public under the guise of ‘modernization’ and ‘efficiency’, spending hundreds of millions on all manner of techy tricks, not a one of which has actually worked, from their NHS computerization scam, to their total cockup, ‘joined up’ government, with all its profitable spinoffs for a bunch of computer/telco companies, again, not a one of which has actually worked; sometimes, the company retained to do the work have actually walked off the job but have still been paid!). Even their attempts at creating a security state is a sick and expensive joke whether it be ID cards or their attempts at creating giant databases on its citizens.
Put any one of our glorious leaders in a polyester suit and a job in a shady business, and they’d fit right in, no problem. It’s a damn scandal that we have such useless individuals acting allegedly on our behalf, spending our money by the billion and we just stand and stare. And now that the shit has really hit the fan because of these oafs, why are we tolerating such behaviour? Millions of people’s lives are being profoundly and negatively transformed by this crisis.