Bank bosses say sorry
Tuesday 10th February 2009, 11:50AM GMT.
The former bosses of the two biggest UK casualties of the banking crisis today apologised to the nation for their part in triggering the credit crunch, writes Sunita Patel.
Former HBOS chairman Lord Stevenson of Coddenham told a hostile Westminster Treasury Committee: “We are profoundly and unreservedly sorry for the turn of events.”
And he added: “We are sorry of the effects it has had on the communities that we serve.”
He was joined at this morning’s grilling by the Royal Bank of Scotland’s previous chief executive Sir Fred Goodwin and ex-chairman Sir Tom McKillop, and ex-HBOS head Andy Hornby.
They expressed their regret and remorse for what had happened and the impact it had on colleagues – and customers – as they were confronted by MPs investigating the roots of the banking crisis.
They were quizzed about their role, mistakes and how both banks were brought to their knees by the financial turmoil – and probed for detailed explanations of why their banks failed.
The four former heavyweights were grilled by MPs sitting at the Treasury Select Committee as the row over bank bonuses continued to rage. Billions of pounds of taxpayers’ money has gone on propping-up banks, sparking widespread anger about the scale of the Government’s bailouts and the huge rewards and bonuses set to be paid out to bankers.
Prime Minister Gordon Brown has expressed anger at the proposed payouts and has urged bankers entitled to bonuses to refuse the cash on moral grounds.
He has said there should be “no rewards for failure” amid reports that RBS is to pay out £1 billion to some bank staff, despite the fact that the public now owns 68 per cent of RBS after a £20 billion bailout.
HBOS was rescued by Lloyds and propped up with £37 million in taxpayers’ cash last autumn, leaving 40 per cent state-owned.
Further reports suggest the new boss of RBS, Stephen Hester, is in line for a £4 million payoff if he gets the sack, while some bankers are contemplating legal action to get their bonuses.
Treasury officials last night admitted any attempt to stop bankers with contractural agreements getting payouts could end up in courts. But Conservative leader David Cameron said it was “outrageous” rescued banks were considering huge bonuses.
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Thats ok they are sorry so all is forgiven.
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and what do they intend to do now ? have their homes repossed to help put the money back into the econemy, i dont think so their still on a cushy little number where as the average joe has to work more than twice as hard for pitance.
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Just watched a couple of hours of the programme. The four bankers looked quite out of touch with reality and it is no wonder they brought about the present fiasco. For once I was impressed with the knowledge of the assembled MPs.
Bring back old fashioned banking and Mr Mainwaring.
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Well that makes it all alright then.
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Did you hear Gordon Brown this morning on the Breakfast programme. In a “flashback speech” to when he was first made Chancellor in 1977 he said, “we only need light regulation” of the economy and banking. This was just before Bliar said, “over regulation will strangle the economy”.
And this was the economic “regulation” regime that these fat-cat bankers exploited to the full giving rise to our present disasters. Clown and Bliar should have also been with this lot answering some more very awkward questions, the first being “why, when you took office did you alter the banking regulatory system, taking it from the Bank of England and giving it to the Financial Services Authority which you so irresponsibly emasculated to the point where it was totally inneffective”.
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Take every penny off them like they do to their defaulters. make them penniless. Then their rich friends can support them, if they have any
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I am sorry too.
The failed policies of the Tory party over the years of Maggie lead directly to this.
I now realise the error of my ways and will now become a Liberal Democrat.
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You will have as much credibility with them as you had with the Tories – nil, zilch, none, nothing. Now the Monster Raving Loonies are right up your street, they are looking for someone with clueless ideas and a liability into the bargain.
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Thanks for the admission Lib-Dem boy…apology accepted!
Stuart,
Perhaps you could point us to all the times where the Tories were calling for much tighter regulation of banking and the reining-in of the bonus culture in the 1980s and ’90s when the whole ‘greed is good’ culture put down its poisonous roots? Thought not…
One of the things that no-one appears to have picked up on, is that many of these senior execs were not, by profession, bankers.
Instead they are part of the incestuous band of CEOs and other highly paid execs, who vote each other on to the boards of major companies, vote each other massive share options and bonuses and find each other alternative highly-paid jobs when they screw up! (After they’ve had their golden handshakes of course!)
It’s not just the bankers who need sorting out and castigating for their greed…
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tory boy do me a favour, the truth is that these 4 until 18 months ago were making tens of billions of pounds for their companies and shareholders and their staff were rewarded as of course were these 4. then they got greedy and the reults are as we know them today. thankfully hsbc and barclays go from strength to strength. perhaps the punishment should be for them to study these 2 banks and see how real banking is done. personally i would not let them near my piggy bank! the sad fact is that in the good old days these 4 among others made the london finance market the envy of the world and the reverse of this is why the uk will suffer a deeper recession,/depression than any other country because we had a low manufacturing base and we relied on the city of london to see us through those heady good old days with nothing being put aside for a rainy day by the city or new labour, on second thoughts tory boy i might even join you, except the libdems will have to change their views on europe by 180 degrees. just think how great, britain might become if we all followed tory boys lead, that is if he was serious. vince cable rules ok!!
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It as now come out that one of the risk Managers at RBS pointed out the problems ahead on numerous occasions only to be ignored! its obvious that regulation is essential albeit the strict US controls of Sarbannes Oxley failed to control their finance sector.
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They should be ordered to payback a percentage of their bonuses, plus they should also have their titles removed, as I feel sir and lord are not justified anymore, but I could think of some other titles for them !!!!
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Not as sorry as me and Gordon Brown has urged the bankers not to accept the bonuses whats the point in owning the majority of the bank if they can do what they want.
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capt chaos the even more worrying thing about a risk manager of hbos warning of the bank extending itself, is that the very ex director who sacked this man for his warning, is now, get this, a finance adviser to gordon brown!
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shame on the liberal who impersonates my blog
i would rather die than vote lib dem, its socialists and liberals who caused this problem, they are trying to blame the markets and the banks, but its not their fault its the governments
its gordon browns turn to say sorry now
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Peter, don’t start again, the Tories DID NOT call for stronger regulation of banking when they were in office because there was no need to.
Banks and financial institutions were regulated by the Bank of England whilst the Tories were in office. FACT, look it up.
When Clarke handed over to Clown, the books were perfect, not a hint of a problem, one of the best economies this country has ever had on a change of Government. FACT, look it up.
When Labour came in, they totally altered the system around, the regulatory function was taken off the B of E and given to the Financial Services Authority (FSA) – a new organization that Gordon Brown set up. The Bank of England was left with the single responsibility of being our version of being a “reserve” bank and managing “interest rates”. Having given the FSA the regulating responsibilities, both Clown and Bliar then directed the FSA to exercise “only light regulation” over banking etc. In fact they told them not to regulate and in fact they didn’t, it was a free for all with devil take the hindmost. It brought us to this unholy mess.
It appears from this mornings news programmes that the Deputy CEO on the FSA is a former Clown economic advisor and a big shot in the RBS. Clown certainly got good advise from an idiot that needed some himself but he sacked the chap giving it to him – why didn’t Clown sack his advisor who dropped him in it.
It is finally being accepted by all commentators that much of the blame for this disaster can be laid at Clown’s door as much as the bankers and anyone else.
If it happens on your “watch”, it’s no use denying all knowledge about it. Clown and his clique are toast.
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we are all culpable in this, with our cheap loans and booming house prices, we lapped it up and would have hated any governemnt who tried to dampen down the fire
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The Clown Mc Broon had two of the Bankers knighted
What a gimp!
Boom & Bust is a thing of the past?
Things can only get better?
For Bliar & Co.
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Well said Stuart!
Spot on.
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so they should, its there fault, no one elses but their greed has caused this
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Stuart,
The FSA was set up largely because of the mis-selling of endowments and pensions under the Tories’ watch. Many many ordinary people lost out big-time – and it was Maggie who encouraged people to contract out of SERPS in favour of these get rich quick schemes.
Historically the Tories have never been in favour of regulation of any sort – especially where it applies to ordinary folk. If it had been up to them we’d have no minimum wage, no limit on working hours (especially unpaid ones!) etc.
The FACT is that the philosophy and working environment which led to the current calamity was born with the Tories and they changed our economy fundamentally to the benefit of the ‘fat cats’ and yuppies they created.
You simply cannot get away from the fact that the Thatcherite ‘economic revolution’ is now left in tatters.
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good for thwem, i have more respect because they accept the blame, now FSA, gordon brown et al, its your turn to apologise
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Peter, are you proud of what Nu Labour has done?
Beggars belief!
11 abysmal years and of lies and spin, tax and waste.
Are you a relative of Jacqui Smith?
FACT
The reason this Country is in tatters is due to Nu labour.
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Peter, I will be as polite as I can, from start to finish, you are talking utter and complete balderdash. You forget one essential thing of which I have reminded you over and over again, Bliar, Clown and the rest of the square pegs in round holes have been in office since 1977, not 5 minutes ago or yesterday but 12 long years ago. They took over a sound, rock solid economy. Period, finish, kaput, unarguable, solid FACT.
We are not talking about the “Thatcherite economic revolution”, we are talking about the Clown implosion that started after that with eye watering borrowings that accumulated over the years until we are where we are, on the verge of “printing money” because we are almost bankrupt.
If I sell you a good, sound, secure business and after you take it over, you wreck it and end up almost bankupt – don’t blame me, look at yourself and if you insist that this (whatever it is) “Thatcherite economic revolution” is still in being, albeit in “tatters”, what became of all the Clown initiatives that he was going to put in place in order to alter what he took over to do away with, yes, that old Clownite cliche, “BOOM AND BUST”. I thought he said he was doing away with Thatcherism but according to you, he hasn’t, don’t you recall that speech of his?
As for ordinary people losing out “big – time”, speak to my next door neighbour, he was an artist for a fine pottery firm, when Clown raided the pension schemes, like thousands of others he lost three quarters of his pension and almost overnight he was reduced from a pensionable life at ease with one of almost penury. He was a Labourite through and through, mention Labour to him now and see the response, and, if you mention the word to his wife, stand at least outide throwing range because she get’s almost violent and apoplectic and these are decent sensible people normally.
This clown has reduced this country to a state of penury and you, in all seriousness, expect the ordinary people of this country, like the two million unemployed, the bankrupt business people, the dispossessed home owners, those who have lost pensions and all those in positions of disadvantage because of his policies to vote him and his lot in again. You cannot be serious.
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Should be 1997, have to correct that or Peter will be claiming Labour credit for all the brilliant Tory policies when they were in office.
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sorry stuart peter is right to point out maggies mis management
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tens of thousand homeless, manufacturing base drastically reduced, 4 million unemployed, 15% interest rates, negative equity, poll tax etc, now when was all that,ah ah yes 1979 to 1997, on maggie thatchers and john majors watch. i never never ever want to go back to those bad old days.
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under the tories we stopped manfacturing trains and locomotives, we imported from usa and germany. today the new labour government have announced a british consortium has won a 7.5 billion pound contract to build a fleet of super express trains, and providing 12500 british jobs. now we are manufacturing again well done the consortium well done gordon brown. the trains are to be built in a new plant to be situated in sheffield, ashby de la zouch or gateshead.
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Devon, sorry, we have had this out before. Give me one “believable” authority who puts the unemployed at 4 million – there isn’t one, pure fiction, it was 3 million at it’s highest.
It is shortly going to reach that under Master Clown with far wider decimation than what there ever was under the Tories. Brown has decimated the “manufacturing base” more than at any time in our countries history – look it up.
Yes granted 15% interest. What do we have though now to balance that, almost a worthless £ Sterling, the lowest against the dollar for donkey’s years. There is more negative equity now with falling house prices than there ever was – fact.
Council Tax, yes, risen by 120% since this lot took over, give me poll tax any day. It was the wastrels, the layabouts who also had to pay the Poll Tax that rioted and objected because the State didn’t pay it for them like it does now. Can’t pay your Council Tax now, just go to the Council and get a freebie or at least some help and it is us that pays for it. You could’nt do that with the Poll Tax.
Come back Maggie for goodness sake, this present lot have destroyed our country and made us the laughing stock of the world into the bargain.
There is not one single Tory policy of past years that can compare in any way with the devastation caused by these of present day Labour.
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sorry stuart you are right on unemployment figures it was 3,000,000 and to be fair may be that again by say december. but i hope you will share my delight at this country building our own trains again, no matter who is in 10 downing street. look out for more green shoots on the way, probably primroses!
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Stuart,
New labour took over an economy that the Tories had shifted from a manufacturing base to a ‘service industry’ base, with much of that being the financial service industry. That is indisputable – it’s one of the things that Thatcher was most proud of…
National assets such as utility companies had been sold for short-term gain – we now see the ‘benefit’ of that – sky-high price increases, and massive profiteering by the multi-nationals who now own our former assets. And these were sold as part of the ‘share-owning democracy’ which in fact only extended to those who could afford a few hundred quid to buy in – not much democracy there.
As I recall they even sold a publicly-owned bank (The Trustee Savings Bank) which it’s doubtful they had the right to do in the first place.
If we look further at this allegedly ‘sound, rock-solid economy’ we find that essential public services had been neglected to such an extent that primary schools were in a disgraceful state of repair, hospitals were increasingly being run down (and/or closed), and the general level of service available to the vast majority who couldn’t afford to go private was diminishing daily.
People still like to whinge about the NHS and schools, doubtless thay always will, but Labour (and I much prefer ‘old’ Labour ‘to ‘New’ Labour) have at least invested miney in better schools and hospitals, rather than squandering it on massive tax cuts for the wealthiest in society (go on Stuart – deny that happened!) like the Tories did. and yes Drewp – I am proud that they had the moral fibre to do that.
Negative equity is of relatively little importance to those not intending to sell up. Numerically there may be more now – but that’s only because the overall price of houses is higher than it was then. Negative equity as a proportion of house value was higher under the Tories’ housing crises. Repossessions now have not reached the level they did under the Tories – many of the repossessions taking place now are of buy-to-let properties where the owners have over-stretched themselves.
Unlike the tories in the 80s and 90s, the government are making efforts to help homowners stay in their properties – I’m pleased with those efforts too.
You still seek to blame the current difficulties solely on Brown. Look at what has happened. There was an over reliance by the financial markets on inter-bank lending, particularly from the US. Due to bad credit (most of it in the US), that flow of credit dried up, very abruptly, leaving a number of our banks, who had overstretched themselves with acquisitions especially, high and dry.
Add to that the rumour-mill and hedge-fund speculation which scuppered Northern Rock (who as a bank had been one of the more responsible ones) and severely damaged the share price of other banks, and you see the real legacy of Thatcher’s ‘economic vision’.
That sort of greed-capitalism has failed us all badly – yet you want to bring it back! Ye Gods…
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devon, you do live in this country I presume, you do get BBC TV the same as the rest of us but I wonder if it is the same BBC TV 6.0pm News programme that we get and you get something special all to yourself.
On my BBC TV News about 50 minutes ago. – A large contract has been just awarded to the Japanese firm Hitachi to build a new type of railway engine which will be revolutionary in it’s design etc etc etc. It is reported that the engine will be made in Europe, possibly in Germany, the wheels will be made in England and the body shell and ancillary equipment will be made in Japan and shipped over here. Unions have raised serious concerns with Geoff Hoon and the locomotive engineering works in Derby have also complained that they will not figure in the contract. It will take some 12 months to finalise the contract.
Now, what was that you were saying about the British consortium, well done Gordon Brown and all that, the trains are to be built in a plant in Sheffield.
Perhaps the Editor will let you withdraw your comment at 28 if you ask politely enough and the British Engineering works that built the “inter cities” won’t hold it against you for saying that the trains that they built were shipped in from America and germany. Anyone can make the odd mistake time after time, wan’t to change your party again. I can still laugh.
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time for the torys to say sorry next for deregulation and the nonesense of globalisaton and free markets
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hi stuart, i took my comments from ceefax, as you rightly say a japanese/junior british consortium won the contract against british based bombardier trains who are reduced to maintenance jobs. the japanese will manufacture the trains, build the first 70 then ship 1300 trains to britain in flat packs to be assembled over here. this is not manufacturing as i know it, it is a meccano job, and if the engines are to be built in germany then this compounds wilful misinformation by the government. all we want now is a gang ot italians or similar to bid for the work over here and that is it.so i quoted from ceefax that up to 12500 jobs to be created or secured in this country was misinformation, and it looks nearer 500.
as for your last para, you are incorrect about the high speed trains, they were built in the early 1970′s and entered service from 1975 replacing the german produced diesel hydraulic locos on the western region and later on the east coast route. the usa locos i referred to were the hundreds of freight classes 59,60 and 66 that were exported to newport docks in the late 1980′s and early 1990′s just prior to and following privatisation by the tories.
when i saw the bbc news at 10pm 1 was horrified at the earlier misinformation which now i am sorry i passed on. i believe on this issue we may now be on the same hymn sheet
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It all boils down to this;
Either you think mankind is naturally good and regulation of anything is not required (and that ‘anything’ is a key word here unless you want to get into a logical muddle (I mention this for the ‘CoE at prayer’ mob), or you think the opposite and consider regulation of everything the only thing that stops us descending into the law of the jungle (and I mention this for the ‘get that CCTV out of my face’ brigade).
Of course, you may fit into a third classification that mankind is a bit of both and try to find the third way (somewhere in-between) – attempts to find this apocryphal ‘politicans stone’ have been attempted throughout history without much success.
Capitalism tends towards the ‘mankind=good’ model. Socialism tends towards the ‘mankind=bad’ model.
Neither of these extremes really work – “Freedom without Socialism is privilege and injustice and Socialism without freedom is slavery and brutality” (Bakunin was an anarchist, mind – but boy, did he nail it!)
Whichever political stance you take you’ll find attempting to fit the current financial problems into an attack on your political polar opposite and support for your own, will lead you on a merry dance – I see nothing but foxtrotting in the more political posts so far.
The problem, as Jonty points out, is ours alone.
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That’s OK devon, anyone can make the odd mistake but those primroses, well, if they are a sign of better things to come we are going to have to wait awhile, I usually have them all over my lawn but, as yet, nary a trace and the way the wood pigeons have increased this year it is unlikely they will come at all as they usually peck at the new shoots. I liken the wood pigeons to Clown of course, as soon as something looks as if it is going to bloom and be productive, he usually chops it down to make it useless.
I will sum up Peter’s comment with a quote from Andrew Neil on his last night’s programme with Dianne Abbott and the Tory “has been” Michael Portillo.
Directed to them both, ” do you think it right to say that the blame for all this is now pointing directly at Brown”. With a nervous cough, splutter and gasp, Abbott managed to get out a half “yes”, half “no” answer and looked as if anywhere else was better than where she was sitting whilst Portillo, never a rabid, staunch defender of extreme Toryism managed to gulp out a qualified “yes”.
It’s all pointing to Clown Peter and most pundits are now saying it.
Just one little point, you appear to make light of “negative equity” Peter. That issue is a devastating matter for those who are in it and see their homes being repossessed, not only do they lose their home, they are also left with thousands of pounds of debt on a house that they no longer own.
Peter from Wem, sorry Pete, youv’e missed the drift for the past 12 years, Labourites have been in charge since then. One thing you can guarantee though, international, national, county, city, town, village and parish finance and economics will be altered out of all recognition after this little lot is over – which, according to the economic guru, Labourite Ed Balls (yes, him with the Monty Python eyes) won’t be for another 100 years. So why should any of us worry, let’s all do a Bliar and Clown, spend, spend, spend, live for today, damn tomorrow and make merry while the sun shines. The repercussions will come about three generations down the line.
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I am a young hard working person getting screwed by the whole issue along with pretty much everyone else.
After reading all your arguements i do believe that we wouldnt really be better off by either government. They both screw over the masses in one way or another.
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perhaps the lib dems could have a go, but they remain unelectable as long as they maintain pro eu opinions. the majority of us i suspect have had enough of the eu, ireland certainly have
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Wilhelm Scream, a good “academic” comment but that’s where it starts and ends. It is to simplistic and whilst the theory may tend to hold some water in a political state of fixed “one or the others”, ie capitalism or socialism, what is the position where there is no clear demarcation between the two and with the political/constitutional system we have in this country. Or for that matter, in a political situation which is neither capitalist or socialist.
For all our proud boast of being a “liberal democracy” what sort of democracy is it when the elected carry out policies over which the people who elected them have no immediate influence or ability to eject them from office until those elected, elect themselves to go (albeit within a maximum fixed term).
What Jonty and yourself say is quite wrong, the electorate may well be and obviously in most cases is, responsible for their own economic and financial situation, they either take advantage or fail to take advantage of a situation created by the Government but on a collective basis the responsibility is wholly that of the Government which may/may not be influenced by circumstances totally outside their control and certainly outside the control of individuals.
As you say, the problem is ours collectively as a country but it is utter nonsence to say, “we are all responsible” for the “problem”. We are not.
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Charlie, that’s it precisely!
99.99999% of the worlds problems are caused by 0.000001% of the population and we grant them the power to do us over again and again.
Labour have tried to navigate the third way, it’s hardly been a resounding success. As next incumbents of No. 10, Cameron will also attempt to steer the third way – and like every government before him, he will fail.
History; repetitious, tragic, farcical in equal measures.
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hi on the bbc news website, it is said hbos about to announce 10 billion loss, lloyds tsb about about to announce 1.3 bn profit and must be wishing they never set eyes on hbos
good time to be investing in gold, now $943 an ounce. sovereigns selling for about £180 and half sovs about £90
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Stuart, we’re largely singing from the same hymn sheet – we’ve just got the psalms numbered differently.
You seem to be acknowledging the following points which I wholeheartedly concur with;
1) That the 2 main parties whilst having a background in opposites can only get elected by denying these principles. I would further add that whilst Opposition parties consistently state that the Government steals their ideas (and has too to keep the electable middle-ground), that rather than sit back and treat the Government as a labour-saving device they bemoan the situation – thus they reveal themselves as hungry for power, as opposed to hungry to do the right thing. Under these circumstances should we elect anyone who wants to be elected ?
2) That we elect governments that do not carry out the wishes of the populous – thus we willingly hand over power to possibly well-meaning but certainly & consistently bad-management.
Seems to me, you’re calling for a workers buy-out ? And you’re certainly in line with Tony Benn’s questions for a democracy – “What power do you have? where is your power from? in whose interest is it exercised? to whom are you accountable? and how do we get rid of you?”
Back to my original point, that if we consider that the issue was caused by a lack of regulation, then we have a problem balancing this against a desire to have less of it.
And why I say it’s a problem caused by us;
a) We don’t want a Nanny until we’ve grazed our financial knees whereupon we cry ‘Why wasn’t our Nanny there?’
b) We grazed our knees because we didn’t listen to the adage ‘If something sounds too good to be true then it probably is’.
We took part in a fool’s gold rush, ignoring that part of our brains that said ‘can we really afford this’ but not that part of our brain that said ‘can we afford not to?’. Greedy…us. The Bankers and the Government just gave us what we wanted – until we all got what we deserved.
c) We elect people to act on our behalf for our good whilst consistently knowing they don’t, indeed can’t.
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Wilhelm,
Originally we were discussing the “specific” culpability for the situation in this country in it’s widest forms. Jonty said, “we are all culpable in this”. I hold that we are not, except in it’s widest most intangible interpretations.
Yes, we voted this Government into power, so theoretically they act on our behalf and we are responsible for their actions/policies. We blindly accept this without argument until something really goes amiss – like the Iraq war, remember the posters “Not in my name”. How very true for millions of people and a clear demonstration of the faults and reality of our “democracy”. People cannot be held responsible for the actions of “their” government in reality if that Government patently does something so alien to the best interests of the people it governs. Take Zimbabwe as the extreme, the country has collapsed, Mugabe holds elections, he would argue that his country was a democracy. Are we to accept and hold that the common people are responsible for the state of that country. I don’t think any reasonable person would, unless they blamed the people for not violently overthrowing the government no matter how problematical that may be in order to bring about a better situation.
And so, on a different scale, but just as fictitious as that in Zimbabwe, we have our own “democracy”. We cannot dismiss the government by common consent of the people, we have no say in the selection of the Prime Minister, we have no say when elections will be held, we have no choice in the selection of candidates for election, we are not consulted when major “constitutional” issues are decided upon and by High Court dictat, Party manifestos upon which the people have voted governments into office can be broken, altered, amended or cancelled at the will of the Government or ruling party. There is of course much more on which a true democracy would be based but these are enough to illustrate my point that our Government is alone responsible for the present crisis, the people, as yourself and Jonty would have us accept are not.
Only when we have “true democracy” will I accept that the people themselves are culpable for the affects of their governments policies. Until then, in our imperfect system of Government and democracy, Government must accept responsibility for the policies which cause problems for the people they govern.
A good example of Government “collective responsibility and culpability” was in the Nuremburgh Trials where the Nazi Party and Government was held to be a criminal organisation, the common people were not. The same was held to be the case in the Japanese war crimes trials, where the Government, not the Emperor (albeit many qualifications) were held to be culpable and again, the common people were specifically cleared, extreme cases I know but they illustrate the point that people cannot always be held responsible for the actions/policies of their government.
And so, in our case, put simply, Brown and his cabal are to blame for the present dire circumstances in which we find ourselves. I, as an ordinary man in the street are no more to blame than the man in the moon.
I would add that I am no academic or reader of deep politics so I bow to your expertise there, I am just a “common or garden” opposite to everything Brown stands for.
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Stuart,
Nicely put. We all need to be careful where we point the finger though, lest we hang the innocent, and let the guilty slip away. (GB innocent ? I’m having a larf)
To reaffirm my point (b), and apologies this may take a while;
1) Regulation in banks is actually very stringent, even considering fractional reserve banking where they lend more than they have in deposit due to the low probability of all depositors asking for their money back at once. So where did it all go wrong ? Enter the shadowy, considerably less regulated world of investment banking/hedge funds – these lent considerably more than regulations allow via a sophisticated insurance loophole – they insured themselves against borrowers being unable to pay-up and it was the value of these derivatives that became unsustainable. All of a sudden, tracking debt became nigh on impossible – confidence in the system collapsed. Banks were left playing ‘Chase the Ace’ & with global GDP to asset bubble ration of 1:5 it’s a very big Ace or more likely there’s a lot of them.
2) The wealth we thought we had, didn’t go anywhere, it was never there in the first place. Once we understand that money is debt (as in it is a ‘Promise to Pay the Bearer’ – a Fiat economy) it is always negative wealth. And it because Money is a promise, that when confidence is lost in the banking system their ‘Promise’ to pay the bearer starts to resemble a mere ‘Best endeavour’.
3) Remember that money is a portable promise to pay, a representation of matter only, so unless you want to dismantle the law of conservation of matter (if you’ve got a quiet afternoon perhaps) you’re stuck with the fact that ‘Money can neither be created nor destroyed, it can only be moved around’. Sure we can change the value of money (inflation/deflation/FX), we can even print more of it (which is the same as decreasing it’s value), we can burn it (which is the same as increasing the value of the remainder) but the law prevails – at the end of every transaction the overall books must balance. So, for A to get richer, B must get poorer – whether that be an individual, a company, or a nation. The stock exchange is effectively a casino where we can gamble on the outcome of where all this money will be redistributed to. As an aside, the stock exchange, like the house, always wins as it makes it’s money out of a handling charge irrespective of where the roulette ball lands. One of the ways we, the people, went wrong was to gamble more than we could afford to lose, to stay at the table long after we should have cashed in our chips, and to forget the dumbed down version of the law of conservation – ‘When everybody is rich, then nobody is’. Now, we may expect a Government to set the house-rules, but we’d be making the mistake of forgetting that a Government is a) as human and ergo as fallable as the rest of us, b) as greedy as the rest of us, c) as desirous of popularity as the rest of us (if not more so) – no Government will say ‘no more bets’ when everyones making money (even if they’d had Nostradamus as Chancellor advising them that on the next spin the ball would land in ’0′) and, d) as Sir Reginald McKenna put it, “Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people”. Yep, you can forget your blessed party politics, the real power is where the money is.
4) So, why did so much credit occur for it to become crunched ? Well, this is down to us, the people – The value of our assets rose, as we all felt wealthier, so we borrowed more.
We cannot make the mistake of considering that a flaw in the Fiat economy is not a fault-line within Capitalism and the markets, nor that the frankly too small elastoplast of semi-nationalisation of many of the banks is anything other than Socialism – Hence my mentioning them in the first place. Look, I don’t like it anymore than you do, but you gotta face the facts!
So, in conclusion, to attempt to string up Brown for all this is wrong and dangerous (albeit the easy option – and I think I’ve made it clear enough in what I’ve said so far I’m no supporter of his), if we fail to understand the root issue we allow it to reoccur.
Thanks for the time to explain (I know this problem, I’m closer to it than most) some day, we can discuss how Globalisation is Communism by the back door, but that’s for another time.
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