In the first of an occasional series of guest blog posts, we cut consumer drone Chris Fyles loose from wage slavery for a short while to have a pop at bankers…
I was listening to Jeremy Vine on Radio 2 the other day.
(That can never be a good way to start anything, but on the other hand a terrible confession of this nature helps grab the reader’s attention, so…)
The discussion was on banker’s bonuses – specifically those at RBS – and whether the millionaire Cabinet should step in to defend the interest of the Man in the Street or just allow the trough to overflow as usual. At one point, a Man in the Street came on air to say that he’d lost his job in the recession and had limped on for the next four years, but that bankers had to get their bonuses because of their vital role in the British economy and this was “just market forces”. It was the standard argument that if we want the best, they must be “incentivised” or else they’ll just leave and go to live in Switzerland.
As a man found frequently in the street myself, far be it from me to pick apart this happy slave’s point of view, but I’m going to regardless, so let’s just get on with it.
(1) Britain has the largest banking sector as a proportion of its economy of any country in the developed world (apart from maybe Switzerland or Luxembourg)
(2) Britain’s banking sector is vital to the British economy
(3) Without awarding large bonuses to top bankers, they would leave and seek work elsewhere
(4) Without their top employees, British banks would collapse
(5) See premise (2)
It is vital to Britain’s economic interest to award large bonuses to its top bankers
I think premise (1) is currently indisputable. But what about (2)? Is banking vital to Britain? This depends on whether another premise is true – let’s call it (2a): Banks are good for business.
Given that (1) is true, if banks really were good for business, you’d expect Britain to have the most vibrant economy in the world – its manufacturers would be putting the Germans to shame, its workers would be drowning in well-paid jobs and its high streets would be crammed with bustling shops. But, as we know, we’re a long, long way from that, aren’t we? And yet our vaunted financial sector continues to wax – coincidence? I don’t think so.
Because, it is this drone’s opinion, banks are parasitical on real work. Far from enabling dreams to get off the ground, they trap people into years of payback on mortgages, business and personal loans and various other forms of credit which simultaneously inflate the price of everything well beyond what could be affordable without a loan, thus making loans essential.
For instance, if there were no mortgages, houses would cost a tiny fraction of what they do now, because buyers would only be able to pay what they could really afford and sellers would charge what they could realistically expect to get. Instead, the only way most people can buy a house these days is to take out enormous loans that will take twenty-five years to pay back and present them with homelessness if they lose their jobs in the meantime. And this is supposed to be progress?
“Ah yes, but,” you cry, “if there were no mortgages, only the rich could buy houses and they’d gobble them all up and become rapacious private landlords charging their terrorised tenants an arm and a leg (possibly literally)”. True, possibly. But then again, housing associations and credit unions could also buy up houses, while if government actually enforced tenants’ rights, brought in rent control and stopped subsidising Rachmanism with our taxes there would be far fewer greedy capitalists willing to take on the hassle of being landlords than you might think. In any case, banks protecting you from crooked landlords is a bit like Mussolini protecting you from the Mafia. Or the other way round. Banks don’t give you independence, they trap you in debt. You don’t own your house, the bank does. They are in charge and don’t you forget it.
Meanwhile, businesses can’t expand (or even start up) because they can’t get loans. Why do they need loans? Because the cost of everything is artificially inflated to ensure maximum returns on… loans. The banks are the lenders and in many cases also the main shareholders, via hedge-funds, in big businesses, many of which do nothing but move money around for their own benefit.
Our economy is chronically unbalanced and will continue to be so while we swallow the trickle-down nonsense that what is good for the top is good for all. Banks are not vital to the economy, they are a parasitical drain on it. We can bail them out when they stuff up and they still end up calling the shots while their grateful peasants knuckle down to austerity, part-time sweatshop insecurity and the demonisation of the welfare safety net (good for returns on those loans after all).
This is not “market forces”, it is an oligarchy, which shores itself up by pretending that no one else could manage things as beautifully. There are 60 million people in Britain, is it really true that not one of them could do as well as the current denizens of RBS? Goodbye, premise (4) – whether or not individual banks went under, alternatives would replace them, or we would find we were better off in their absence. And as for (3) – the sooner the usurious swine leave for good, the better. Conclusion: it is in Britain’s economic interest to upturn the trough.
I seem to have got a bit angry there. Never mind, back to the hive…Buzz, buzz…
* NB: The writers of Floyd’s Giblets do not in any way endorse Bob’s incitement to criminal damage and arson.