Banks and stooges: The rise of the Soviets

"When a government takes over a people’s economic life it becomes absolute, and when it has become absolute it destroys the arts, the minds, the liberties and the meaning of the people it governs", Maxwell Anderson


Politicians need money. Banks had money. Politicians got money from banks and kept their mouths shut with respect to the dangers of synthetic products. The banks busted, the politicians blamed the banks and hid the fact they were being lobbyed by them . Who is to blame ? The banks - at least according to the politicians. The politicians - at least according to the banks. The public - at least according to both.

The credit crunch debacle was extremely revealing when it comes to understanding the mechanisms underlying the formation of the tidal wave of debt. Both politicians and banks colluded to advance a state of things that the tax payer would have to bankroll. The immediate convenience of it all was obvious and the tendency toward short term gratification, a well known psychological phenomenon. Given the simple explanation for it all, where then dissenters really silenced ?
Naturally, the news were meant to entertain, the prestige Madoffs hailed as wizards, the bankers idolized as value added, the politicians advertised growth, the public bought houses and the world was a happy place. Those who tried to detract the madness were ignored and the advantages of the get rich quick system highlighted as a virtuous circle. The world needed large global banks. The finance sector can be the value added of the feeble minded.

So what now ?
The banks are on an artificial lung with borrowed state money. There has been no change in the people who generated the banking crisis in the banks, apart from the CEO's who did not trade by themselves in the first place. The regulation has not changed that much and still yields potential for more trouble. The public pays all. After paying for the banking bonuses.

The rise of the Soviets

“In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy.”, Fran Lebowitz

In conclusion, the banks are now in the hands of the politicians. More DNA databases, more CCTV, more Lords and more controls over the internet, more moral hazard with respect to the idiosyncrasies of finance. And most importantly finance is now, increasingly, a matter for the government. There is a good side to all this; more jobs for the boys. Tony Blair no longer has to bend to Morgan Chase to finance a mortgage and can soon ask the Soviets for a place to crash.

China has picked up the debt and can boast ownership of part of the British motoring industry as well. Soon they could be bankrolling top gear and ordering Clarkson to buy a minimum amount of chinese ciggies.