Ranting About Banksters
One of the problems that was being cited in the UK about getting the economy moving, is that the banks don’t lend to each other anymore, because they didn’t trust each other anymore because they sold each other junk. Everyone still trusts the ratings agencies, trembles before them, and no one seems to give them any grief, no one says they they’ve lost faith in the ratings agencies and don’t believe what they say anymore. But the banks don’t trust each other we were told, even though they all fell for the same rubbish/garbage/junk.
Just imagining it really was the same ultimate interest behind the banks, this apparent mistrust starts looking like a charade to preserve the illusion that they’re actually different entities, competing with each other, competing in that pure way that emblemises a free and righteous market – when all the time it’s all ultimately a single interest? It is very hard to think so, but it is all very mysterious. It just does look that way at times.
This is fantastical, but is it that the banks’ real business is somewhere else, and their apparently being there to, say, lend to British businesses, is just a front, a façade, a bank counter apparently open here; and the government still don’t realise it? Is that possible? So, the government keep pushing our money at them, to cajole them into behaving like banks, whereas actually they’re not banks at all as we all understand banks.
They’ve transcended this small world and ascended into another dimension. And they know that if they can maintain the appearance of being vital to the economy, then they’ll keep receiving huge bundles of money from the host. It’s just a game, and the government don’t get it? Or that the people who become the government ascend from those who do get it?
It can’t really be like that. But it sometimes it just feels like we’re back to the age where we pay tributes to gods and pharaohs, and they’ve sold us the idea that it all makes sense, and we can’t question it because we can’t read the hieroglyphs, so, we have to do what the priests say, that’s all we know.
The ongoing campaigns for an FTT, Financial Transactions Tax, popularly known as the Robin Hood Tax, have managed to push this into mainstream politics; the EU are planning to get one operating. The tax is a miniscule tax, it’s tiny. In 2009, A group of 200 economists in the USA proposed a tax of 0.25%. That such a minute tax makes such a difference to the industry maybe illustrates the scale of the trades, that it’s tiny percentages involving colossal sums. We don’t know. The staggering scale of the sums involved in financial trading are such that, according to the Institute for Public Policy Research recently, a tax of just 0.01% would raise £25bn a year in the UK, which could alleviate a lot of harsh misery for people and it's 5% of the public bailout. It really does seem only fair.
This is all staggering. We’re going to stick our necks right out here mathematically, this means a tax of 0.25% would raise £625 billion. So, just one year of this tax would pay for the bank bailout with enough left over to fund the NHS that year. Or maybe just the bank bailouts, for there’ll be a heck of a lot of interest to pay, no doubt. Since the taxpayer did bail out the entire financial sector, is a little 0.25% tax on financial transactions a lot to ask? Even just for one year? Anyway, whatever tiny 0.whatever% and whatever sums involved, it would be a significant amount indeed and it feels due.
The ordinary world where ordinary people live, with their elections every so often, is clearly completely dwarfed by the modern financial world. If it’s so that 0.25% of their action for one year would be enough to completely change the picture for the small world, it’s some idea of relative scale. Terrifying. We’re maybe not understanding this properly, it’s all so unreal.
We’re keep hearing in Europe recently, in what seems like perpetual financial crisis, about the intractable debt problems of Europe being socialised, that is, giving ownership of the debt to everybody to share. The proposal is made that the gambling debts of the world of high, fast finance should be covered by all of us, and then we’ll carry on as before, and we’ll give them some more chips to play with. It’s as if there’s an elite who want the profits from risky deals but want everybody else to bear the risk.
Obviously, it’s maybe probably all much more complicated than that, it’s a much more complex question, no doubt, but it’s hard for an ordinary Joe to not see it like this, it’s becoming stark, naked. Income tax is raised on the earnings of wealth creators, people, to service the national debt, which is owed to banks for issuing money out of nothing. Or something like that. We really need to gain a better understanding, but something iffy is going on, something not really thought about much, that is definitely skew-whiffy.
Surely, if debts can’t be paid, they have to be written off. That’s why it’s a risk to lend money, it’s the taking that risk that brings them revenue, that’s what it is that interest is charged for. So, when it goes wrong, it has to be written off, otherwise there is no risk and no basis to charge for taking risk. There developed a huge asymmetry between risk and reward, where profits are harvested by monopoly banks and the losses are dumped on the captive taxpayer.
It’s an insult even to Capitalism. Capitalism has been much distorted from its origins. As Dr Andelson pointed out earlier in these notes, all the principles of Georgism were present in early theories of Capitalism. It was twisted over centuries into monopoly Capitalism and now it’s out of all control and it serves nobody.
Who can really be happy to be vastly rich in a miserable and imperilled world? Are we all trapped, in the role that a runaway programme has for us?