No, I haven’t had my wings clipped nor fallen out of the eyrie. I cannot even claim that there’s been nothing worth blogging about given the week or so we’ve had.
A small matter of blogger’s block. Of too much football on the telly. Of discovering that the series of Borgen I thought had been deleted was in fact there, in its entirety, begging to be watched. Of a heavy workload. And of a cannae be arsed kinda mentality.
So what has drawn me out of my torpor to fulminate, once more?
The banks, that’s what.
You don’t need me to tell you that this is the worst week ever for banking, with the RBS software meltdown, the Barclays LIBOR fixing scandal, or the latest bout of mis-selling all jostling for position. And even though few ever listen to the likes of us, the fact that the markets cut and run, causing share prices to plummet, confirms it. If the barrow boys are unloading their investment from their fellow barrow boys, then it really is time to worry.
Responses have been pitiful. There’s the Governor of the Bank of England wagging his finger, scolding and clucking. There’s Labour in Opposition, expressing outrage and demanding a Leveson-style inquiry. As one wag on Twitter suggested, Ed Balls was effectively demanding an inquiry into things that Ed Balls had set in train. And then there’s the Con-Dem government.
Never lax to pursue an opportunity to justify their continuing berth in this rusting vessel, the Lib Dems, in the form of Vince Cable and Lord Oakeshott were straight into the studios to condemn and demand a tightening of the rules. The Lib Dems are akin to a Pekinese dog in UK politics these days, snapping at their Tory masters’ heels with a particularly harsh and shrill bark that is most definitely not backed up by bite.
And then we have the PM and the Chancellor, playing it softly at first and then rising to the occasion and demanding answers from Bob Diamond on the Barclays scandal, whilst conveniently ignoring their role as the people’s equerries in the state-owned enterprise that is RBS and saying virtually nothing on the interest rate swap thingy. Rhetoric is clearly not in short supply, though policy is.
We the people can only gape in wonder at the inevitability of it all. After all, since 2008 – since these institutions with their cavalier approach to our money brought the whole edifice crashing down – nothing has changed. Not a single thing.
The talk is still of a need to separate out retail from wholesale or investment banking, of preventing companies from simultaneously doing the two. Wasn’t this the cure prescribed in 2008? So why has nothing been done?
Tighter regulation was called for and has been promised. Is it 2020 or thereabouts that it all kicks in? Far too late. Worse, the proposals have been watered down, with the British Bankers’ Association – utterly complicit, either willingly or unknowingly – in the LIBOR fixing scandal leading the resistance to greater state control and oversight over banks’ activities. As a self-regulating body it has failed, utterly, and surely now, any suggestion that this lot can be trusted and allowed to look after their own affairs is dead in the water.
One wee nugget that has emerged – which I found interesting at least – is that those who are employed in wholesale banking – do not have to undertake an integrity test, unlike those who are employed in retail banking. Anyone can walk in off the street, without appropriate qualifications, without meeting any fit and proper test, and get a job.
No integrity test. Nothing to show that this one is more honest than that one or would apply certain ethical standards or inbuilt values to transactions than another before being allowed to take charge of moving and handling millions, sometimes billions of currency, albeit on computer screens, rather in actuality.
This stunned me for a moment, then not. For isn’t such a lack of integrity evident, well everywhere, right now?
Like in football. If there is any consolation to be had from the bankers’ mess, it isn’t that they are the only ones at it. The supposed fit and proper test in football, Scottish football at least, seems nary to have been applied in recent years. And worse, where governing bodies have had powers to apply their standards for running clubs, they’ve chosen not to. Rangers is simply the highest profile example of years of ignoring dubious goings-on at clubs all around Scotland. Rangers’ governance might have been found wanting, leading to the club’s demise, but so too have our governing bodies and associations. The SFA and the SPL maintain that they had not an inkling of what was going on at Rangers in terms of EBTs and non-payment of debts over the last decade. No one in the sports media knew anything either. And they all obviously think we zip up the back.
Ian Bell writes majestically on what this latest banking calamity means for capitalism in general. The free market experiment has failed, as has neo-liberalism. So what now?
The obvious answer is for a swing in the pendulum back to a greater state and public sector role in economic policy. The days of the hands-off approach are surely – this time – numbered. But to suggest that things are by necessity or are necessarily better and cleaner in state-sanctioned activity ignores the news that this week, employees and contractors with Edinburgh City Council were arrested and charged with corruption, fraud and money-laundering offences, in relation to the private factoring scandal.
We’re a few years into this investigation and the scale keeps on growing, with more arrests and charges expected: this could turn out to be the biggest ever corruption scandal in Scotland’s public sector. And surely, what is being uncovered here, demands proper audit and scrutiny of practice elsewhere.
So, no easy panacea in switching to greater state control over markets, economic activity and wealth creation. Everyone, it would appear, is on the make and on the take. There are as many individuals in our ken guilty of petty and not so petty pilfering, in so many different ways that it is difficult not to conclude that our whole polity, our collective and individual values base, is rotten to the core.
The bankers at Barclays, and those soon to be exposed at other banks, as well as the likes of Jimmy Carr and Gary Barlow with their breath-taking tax avoidance schemes, simply expose greed, graft, recklessness and disrespect for the common currency of societal engagement on a larcenous scale. And it tends to result less in self-reflection among we lesser beings of our own standards of behaviour in order to raise them, but more a determination to get in on the action too. Individualism is incestuous.
What’s the answer? Darned if I know. But change is needed and soon.