From goose to snake

Watching Newsnight\’s \’trial\’ to examine who was to blame for the near-collapse of global capitalism last night, I could only wonder at the sheer quantity of bad faith on display.

The programme began with the results of a telephone survey, showing that the vast majority of the public blamed speculation in particular or banks in general for their irresponsibility, with s smaller proportion blaming the government, and five per cent each blaming regulators and the borrowing public.

The various \’accused\’ explained why it was not their fault. Paul Mason, the usually sensible Newsnight Economics Editor, talked in horror-struck tones of bankers being motivated to lend recklessly by the \”personal enrichment\” that could follow (as opposed to the altruism that usually prevails in financial services), and Will Hutton lambasted banks for not unilaterally cutting back their remuneration to a level that could be described as sane (and would no doubt lead to a swift leakage of skilled personnel).

So, the mess we\’re in is all a result of these evil institutions, which apparently operate in an entirely parallel universe from the rest of us? No. The simple truth, however unpalatable, is that – whenever we have rejoiced in cheap mortgages, easy credit card transfers or stockmarket gains – we have added air to the bubble. We may wriggle to avoid blame (and everyone else involved is, so why not?), but most of us were complicit in the system.

But now, less than a year after we were worrying about the terrible implications of asking rich people to pay tax, when all the talk was of killing geese that lay golden eggs, we stand astonished that financial institutions have been playing as fast and loose as they can, in order to maximise their profits.

Perhaps it\’s because I am a child of the Thatcher years, but I can\’t find it in my heart to expect capitalist institutions to be anything other than ruthlessly – and even recklessly – self-interested. You may not like it (and I don\’t much), but it\’s the world in which we live. As Michael Foot recently observed (a footnote to this), there was an alternative, but we chose a different path 25 years ago.

I\’m reminded of Al Wilson\’s Northern Soul classic, The Snake: a kindly woman takes in and looks after a snake that is dying of cold. Recovered, the snake duly bites her. As the venom takes hold, the woman complains of how her hospitality has been repaid, but the snake is having none of it:

\”Oh shut up, silly woman\”, said the reptile with a grin.
\”You knew darn well I was a snake before you took me in!\”

8 thoughts on “From goose to snake”

  1. Hi its Paul Mason. The charge was that bankers \”recklessly lent to people who could not pay it back\” and that the motive for that was personal gain, because bank profits and thus remuneration became linked to subprime. CheersPaul

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  2. Excellent article in London Review of Books by John Lanchester, setting out the extraordinary recent events. His conclusion: \”One thing which has been lacking in public discourse about the crisis is someone to point out that we did this to ourselves, because we allowed our governments to do it, and because we were greedy and stupid. It’s not just bankers who have been indulging in greed, short-termism and fantasy economics. In addition to our stretched mortgage borrowing, Britain has half of the total European credit-card debt. That is a horrible fact, and although it’s nice to reserve the blame for banks who made lending too easy, the great British public is just as much to blame. We grew obsessed with the price of our houses, felt richer than we should, borrowed money we didn’t have, spent it on tat, and now that the downturn has happened – as it was bound to do – we want someone else to blame. Well boo fucking hoo. Bankers are to blame, but we’re to blame too. That’s just as well, because we’re the ones who are going to have to pay.\”

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  3. Agreed that we\’re all to blame, but I would argue to greater and lesser degrees: as a financially feckless member of the \’great British public\’ I would expect the people betting my money (bankers) to have a firmer grasp on the prudence of financial risk-taking than I do – evidently not as it transpires – and as a consequence the feckless British public has been cajoled into committing acts of gross financial indecency like a herd of doe-eyed trusting lambs to the slaughter; what\’s more, I have to say that it does feel a bit weird to be contributing to the bonuses of individuals working in what are now largely state-owned banks. I\’m wondering if there is any end to our financial contributions? What will the bankers require next to save them from the brink of extinction? A lifetime\’s supply of responsibility-shirking sedatives? Luxury holidays in Barbados? Relevant qualifications, perhaps? (Of course, that\’s unthinkable). Bankers in state-owned banks need to get real about the new situation. They\’re public servants now, no longer über-capitalist get-rich-quick kids, and they should be conducting their business in line with the values and principles of public service provision – i.e. with selflessness, integrity, objectivity, accountability, openness and honesty. They should be taking decisions that are grounded in reality and solely in the public interest. That doesn\’t sound like such a raw deal to me.

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  4. To be honest my attitude has hardened on this since last autumn. Partly from absurd situations like listening to some pin-striped fool on the radio yesterday (0733 on http://news.bbc.co.uk/today/hi/today/newsid_7896000/7896184.stm) explaining why giving money to banks is a matter of national interest, but trying to protect industries who actually make things is a dangerous exercise in 1970s nostalgia, shielding lame ducks against the cleansing fires of recession. To recycle a well-used phrase, \”socialism for the rich, capitalism for everyone else\”

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