Wednesday, 1 September 2010
Why are people not more angry with the bankers?
The question that occurs as the Coalition Government announces one cut after another is why are people not more angry about the bankers?It was afterall they who largely created the deficit in the first place. The taxpayer was forced to step in to bail out the bankers or see the whole system crash. The consequences were thought too dire to apprehend: cash machines no longer giving out money, businesses unable to access credit and quite rapidly the whole system declining into anarchy. The banks had to be saved, which the Labour Government of the day did by effectively nationalising a number of them.It was from this point that the problems started. The government should have taken effective control of the banks and how they operate. Instead, it allowed management teams in the banks to pretty much continue as before. The system was fixed so that not even the banks could fail to restore their institutions to profit. Interest rates were cut but the banks were not forced to pass the cuts on to morgage holders. What they did was partially pass on the cuts to borrowers while handing them on in full to savers. Instead of making credit available to struggling businesses they shut up shop. Meanwhile, as bank balance sheets started to be restored they continued with business as usual regarding the payment of high salaries and huge bonuses to themselves.Why did the government not insist on the banks that it owned opened up credit lines to business? Why were savers, many of whom include the elderly, so savagely hit? The banks should have been made instruments of social justice, operating for the common good. Instead, they have been effectively bailed out by the taxpayer and then continued with business as usual. Losses have been effectively nationalised, while profits continue to be privatised at the behest of the market.The Coaliton Government, with its cuts agenda, has creatred a process, whereby the poorer members of society are being made to pay for the largesse of the rich.The Coaliton Government together with many complient voices in the media has done its best to blame the deficit on the past government. It was the profligacy of Labour that caused this crisis, so the story goes. This is a less than subtle PR line designed no doubt to soften the blow of making the mass of people pay for the avarice of the rich. It is much easier to sell a line that blames the last government rather than the bankers. If the bankers were blaimed all of the time then there might be a lot more anger around and less acceptance that everyone else should pay for the behaviour of this small group of irresponsible individuals.This is not ofcourse to say that the last government was blameless. The weakening of the regulatory framework by splitting the task between the Bank of England, Treasury and Financial Services Authority made the crisis far more likely to happen. Had Prime Minister Gordon Brown not been quite so enthralled with City bankers in suits then much of the damage could no doubt have been avoided.What the banking crisis should teach is just how close society now resides to the precipice. Anarchy was not far away in the autumn of 2008, as the banks threatened to crash on mass. There needs to be a step back taken to look at how our society is organised and in the interests of whom. An examination of Catholic Social Teaching could well provide a way forward. CST emphasises the need to work for the Common Good. The Church teaches that people are here to adminster wealth on behalf of the mass of people, not monopolise it on behalf of a small group of the priveliged. There needs to be some responsibility exercised in plotting the way forward. If this path of action is not taken there is every chance that next time the banks or some similar key institutions crashes there will be no second chance. There will be anarchy on the streets and the law of the jungle will reign to the detriment of all. There needs to be fundamental change now, not simply putting the wheels back on a vehicle that is already broken.