By Mark Rogers
Banks are businesses like any other (in principle) but the regulatory frameworks constructed to “oversee” them in fact legislated banks out the consequences of operating in the private sector. The question inevitably arises therefore: what were the kickbacks?
They were obviously not such as obtained in the media, where for decades newspapers have espoused political causes and backed parties and politicians. Yes there were some ultimately certain relations that proved fairly poisonous for democracy – one thinks of Murdoch and Blair for example. The Browne/Balls-Banker axis was more fundamental, more insidious and more toxic than the media-politician axis, if only because the latter was transparent, in the sense that we could see some at least of what was going on and newspapers made no bones about their political stance.
Banks had traditionally been independent of the state (remember: the Bank of England was only nationalized in the late 1940s). The media-state “interface” had always been the more obvious and troublesome one: censorship versus boosterism – no surprise there. Journalists and politicians after all have a lot in common.
In other words, what the LIBOR arrangements, if guessed correctly by The Spectator, amounted to were not merely a conscription of the banks by the state, but the willingness of the former to be so co-opted. So where does that leave Barclay’s decision not the take the Queen’s shilling? And the subsequent vilification of Bob Diamond?
Are bankers inherently dishonest or do politicians persuade, even force, the at least more craven of the bankers to become so?
After all you don’t have much choice after you’ve been nationalized – and the legislation that exempted bankers from the commercial consequences of failure was effectively a form of nationalization.
Nazi-style socialism
It needs to be strongly emphasised that when Mr Anthony Blair persuaded the Labour Party to abandon Clause Four, the nationalization of the means of production, in favour of “market forces”, he actually was trading in the Communist version of Socialism for the Nazi version of Socialism which was to leave industrial and commercial productive forces in private hands but surround them with state interference and legislation. This is not market forces.
For a brilliant analysis of the banking problem as caused by the regulatory framework – not, it must be insisted upon, bad or lax regulation but the fact of the regulatory regime existing at all – please read the last of the three links below, and then go out and buy the book!
Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS
And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST
And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES
BANKING FAILURES was first posted on January 29, 2013 at 5:58 pm.
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