Saturday, 5 September 2009

History is Bank

One year on... and some are foolish enough to believe that the 'goose that laid the golden egg' was in actual fact 'the goose that took a dump' on the economies of the West. How wrong they are. Bank shares are soaring, income from trading is on the up again - and so much so that banks are once again wealthy enough to pay multi million bonuses to their intrepid 'big swinging dicks'. Little wonder then that Gordon Brown is now blowing hot and cold over the issue of bonus restraint.

Brown was the champion of the city from the early nineties onwards. In the financial markets he saw what all politicians adore: Pixie dust. He saw that the world around us no longer had to be defined by truth, but could be defined by perception. In the case of the financial markets, this perception meant one thing: confidence.

New Labour was the first party openly to believe that politics was just a form of marketing, simply a way of getting people to believe, a means of encouraging faith. The confidence of the financial markets chimed very well with that approach, because the financial markets were marketing writ large. Brown saw how over the seventies and eighties, corporate America and corporate Britain had lost power to the financiers such as Goldsmith and Milken who could move markets, intimidate companies and influence government.

Then in 1992, Soros showed that he could go one better and actually intimidate government. Brown at this point realised that huge cash flows could alter government policy and even beguile an electorate that increasingly wanted a way of getting rich quick. That is why Brown cosied up to the bankers and why he never urged restraint on the credit derivatives markets. Confidence was high and had to remain high for New Labour to prosper. And when confidence was no longer high, Labour's prospects sank.

But Gordon Brown dealt with all of that. He saved the world. After his hyperdermic injections of capital the economies of West - once close to collapse - are now soaring. And that is once again because reality is defined by perception, by confidence, not by what is really happening. The goose is laying its golden eggs again. So why restrain it?

Oh, fair enough, there is the question of some debt that needs to be repaid one day, but Gordon can probably find some way of shoving it 'off balance sheet' - Out of sight out of mind... Maybe some kind banker will help Brown flog this debt by creating a new type of funky 'Government Derivative', or a 'Collateralised Brown Obligation'. And then everyone in the City of London can carry on doing what they always did best: Jettisoning history and living like there was no tomorrow.

29 comments:

  1. Yeah, so like what are you going to do about it? Kill the goose?

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  2. Interesting. 'Brown proves that History is Bunk'...

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  3. It ain't gonna win him the election though.

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  4. We ought to realise now that the good years were not good because the real economy was making money - that is to say, i.e. the people who create wealth to buy stuff and generate business profits and pay taxes - their wages were not going up but they were doing it buy getting deeper into debt.

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  5. Killing the goose and showing restraint are not necessarily the same thing. Noone want to stop people making money, but in a zero sum gain, you have to ask who is going to lose out long term...? The taxpayer???

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  6. Does anyone have a better (short term) solution?

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  7. People blame derivatives and 'innovative' financial products for the crisis, but RBS and HBoS did not collapse under the weight of just derivatives but because it lent too much money to the wrong people, UK corporates and householders respectively. The gov egged them on and the FSA turned a blind eye but the burden of guilt should lie at the boards of these businesses.

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  8. What a joke - Brown has the arrogance to tell the French what to do. The two world failures in financial control, America and Britain confirm by their results, that you cannot borrow and spend irresponsibly. They will never learn that out of control personal debt will always lead to recession.

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  9. Brown refuses to curb bonuses even though nearly everyone agrees that that was a major cause of the banking crisis and the current recession. Amazing the stupidity of the USA and British governments. Some crimes are obviously more acceptable than others when money is concerned.

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  10. Debt was what caused the problem.
    My advice is clear your debts before you even think of taking on any more.

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  11. Brown also signed up to the idea that governments would close the tax havens where some of these vast bonuses - not just from the bankers - are hidden
    Does not look like that is going to happen. Was that another empty gesture??

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  12. Every man needs somewhere to park his moulah for crying out loud. What next? A ban on insider trading?

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  13. Finance and investment banking represent a huge proportion of GDP in the economy. What is Labour's or Conservative plans if these banks decide to leave the UK? How will the precious public servies be maintained?

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  14. As I said, does anyone have a better short term solution? I for one cannot see Brown turning down the chance to make some quick tax bucks back - especially before the next general election.
    Banks make quick money, quick cash flow.
    Just the ticket right now

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  15. I think that most people recognise what you're talking about 'Henry'.
    But you have to admit it is pretty cynical - and really does not address the underlying problem of controls.

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  16. Apparently this recession nonsense will be over by Christmas - I have it on good authority.

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  17. Depends on what you mean by over...

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  18. If there are signs of recovery, as people are suggesting then it's because the public sector is spending money furiously - hiring consultants, starting construction projects (M25 project) etc which is where I suspect this 'activity' is coming from.

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  19. One Swallow Does not a Summer Make

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  20. Funny though, Brown's best ally when it comes to the banks is Boris Johnson.
    Such are the burdens of government...

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  21. You the same ProfJackal as the one above or did you forget to put your URL?

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  22. Gordon Brown took the full credit for a working economy and fiscal regulation, so why can he not take the blame for when it went wrong?
    I don't know, maybe he is back on the credit again or something.

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  23. Yeah, definitely back on the credit...

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  24. Pitt the much Younger5 September 2009 at 18:40

    Blimey, get the man a drip!

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  25. Oo-er, the City of London is the powerhouse behind this global mindfuck - sounds a bit like the Matrix (reloaded).

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  26. It's never too late to tend your own garden

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