The laughably called “Independent Commission on Banking” has presented the great answer to the banking collapse that has cost every one of my readers in the UK and US at least £10,000 for every man, woman and child in your family. And the great answer is – do nothing to control the bankers. Or, in the words of the report:
“Rather than pursuing more radical policies towards capital or structure, the approach outlined above is a combination of more moderate measures.”
Moderate to non-existent. Retail banking and casino banking will still take place in the same bank, but in different divisions. Retail banking will be subject to a laughably low ten per cent equity requirement – ie you can only loan out ten times the money you actually have. In fact this will operate not as a floor but as a ceiling – banks will never have more than 10% equity against loans, because despite the so-called “firewall” any capital they have in excess of 10% will be able to be invested in the “casino banking” side.
On banks paying obscene salaries and bonuses when their gambles pay off, and then going to the taxpayer when their gambles fail, there are no proposals whatsoever.
UK governments routinely nowadays slouch off responsibility for policy making to “independent” reports, which are always set up to provide exactly the answer which the government wanted. The government then hides behind them. These are simply Establishment protection mechanisms in which “safe” figures forward the vested interests of the powerful and wealthy. Browne, Vickers, Butler, two Huttons, Chilcot – we all know the form.
It is therefore an astonishing reflection on the naivety of the parliamentary Lib Dems that they were duped into demanding in advance the full implementation of the recommendations of the Vickers report, in the expectation that it would be sensible and radical. The Tories have reeled them in like a fish. Clegg of course is a Tory on economic and particularly City issues and will almost certainly have played a part in fooling Cable and his own party.
The airwaves are full of City types welcoming this “sensible” report. What more do you need to know?
Capitalism, given the chance, will eat itself. Or rather, given the chance, capitalists will eat eachother's assets until there are very few left. Let them. We must take matters into our own hands. Money will become increasingly worthless. The fight for the remaining oil upon which the whole thing runs is now quite clearly in full swing. Now is the time for more transition towns, more local, citizen-agreed currencies, and time to accept that our affluent, Rich World, corporate-supplied lifestyle is simply unsustainable. The collapse is coming. Best to be prepared for it.
Money is getting increasingly concentrated but I fear that I see no sign of it becoming less valuable in the sense of necessary to live.
Looking for signs of it becoming less valuable is rather passive, though. Clark is suggesting a more active approach. I agree with him.
Yes, that's what I mean about taking matters into our own hands. We need to combine our skills without the coordination of the corporate system. The ideal outcome would be that the people end up holding the means of production, and the rich fat bastards get left with a pile of useless paper or figures on bank computers. In reality, some kind of balance will likely be achieved, but we should try to weight that balance as much in the favour of the ordinary people as possible.
http://www.transitionnetwork.org/
The gangsters-in-charge are the same as the banksters-in-charge.
Pre-election do you remember Cable holding forth as the people's champion against the wrongdoing? Now look at the worm who has turned and his sidekick Danny Alexander, aged 10 and three quarters or however old Adrian Mole was..
I think Vince meant it. Danny Alexander has little interest in life outside Danny Alexander. Vince has been bamboozled and tied up by Clegg.
Vince is not what you think he is, wake up!. The truth will out in the end, it takes some longer to see it then others!. I remember you thought Obama would bring change, you got that one wrong as well Craig!!!.
Yes, I generally try to belive in "radical" leaders as long as I can. Then I end up feeling stupid!
"Then I end up feeling stupid!"
Done that myself, on more then one occasion!. I work on looking at every angle, with anyone high up in this coalition government take it as is…they are evil. So many are in politics with only one thing on their minds…themselves, sad but true.
"The gangsters-in-charge are the same as the banksters-in-charge." http://www.thestreetofschemes.com/wp-content/uplo…
Some backbone here.
http://www.thedailybell.com/2037/Little-Iceland-P…
The true meaning of the phrase "power to the people" becomes clear. An elected president/PM/cabinet can be subverted, a parliament can be subverted, but an entire people cannot be subverted.
Iceland is without doubt making strides towards real democracy and is ahead of the UK in that respect. We ought to have our own Democracy Movement Party by now.. http://www.grapevine.is/Home/ReadArticle/Democrac…
The Daily Bell article is utterly brilliant!
There was something called the Glass-Steagall Act in the US, brought in after the first Republican Great Depression, in 1933. This basically did what is being tip-toed around in the initial proposals in this country, as if such a thing was rather revolutionary and extreme. The Glass-Steagall Act remained in force all the way until 1999, when the Gram-Leach-Bliley act overturned it. Boring profits from ordinary banking wasn't exciting the investor classes (and endangering the entire banking system) enough for Republicans in charge of the House. Clinton – to his great discredit – signed it into law. Less than a decade later, the new, improved casino-banking worked its magic, and brought us the collapse of several major institutions, dragging down the heavily invested ordinary banks down with them. But not to worry! The generous taxpayer was on hand to cover the bets. And still is, following this cowardly rejection of separating the banking and gambling sectors.
We need new banks, of all kinds and sizes from north dakota style down to credit unions, when they're established remove the deposit guarantee from any bank which runs a casino operation, that will remove the credit creation/securitisation that comes from creating debt from those banks, as most people will borrow where they bank.
I like capitalism where we invest in providing a service or product for each other, and test it in reality, some win some lose life goes on. I detest Capitalism where we are defined / yoked as economic cyphers locked into some mad game theory world where the rules are concealed from us, and the rules we're compelled to serve [like chess pieces] act only as revenue raising devices for the 'real' players.
I liked the suggestion on Radio-4's PM programme, that banks arguably should hold a "reserve" to allow them to get through rough times. (Rough times they've created, that is.) What a notion! Instead of sharing out the winnings as bonuses, a reserve should be created. But that would entirely change the "heads we [banksters] win tails you [taxpayers] lose" nature of their gambling, and The City just wouldn't like that. We'd find confidence being eroded, threats of moving to other countries, "losing the best people" and so on.
I prefer this suggestion – http://www.guardian.co.uk/business/2011/mar/27/du…
Nothing – in this country and elsewhere – was ever gained by allowing corporate interests a free-hand at 'reform'.
The Dutch are openly debating I&R and have started experimenting with this already. The effect of such "credible action" by the people is to awaken the politicians' consciences somewhat..
http://www.iniref.org/netherlands.html
We are going over the same ground, again. Yes we are being screwed and lied to – I would guess there is not a single person on this site that disagrees with that analysis. Why worry about the extent of the screwing, whether it is systemic, a conspiracy, or a mixture of the two? Who cares? Why discuss these things endlessly when the remedy in any case is the same.
You know what I mean – the only way to stop a minority abusing its power is to take that power away from them, full stop. This applies whether the actions of the minority are conscious or coincidental. The point is that buffoons and evil masterminds in charge of our institutions are not the causes but the symptoms of the malaise. It is not possible to remedy the situation by putting the "right" people in charge but only by putting PEOPLE ultimately in charge in some practical (not merely academic) sense.
How to advance toward that goal should be a more interesting discussion, surely. My personal view is that there are two vectors of reform that can be effective. One is to expose the abyss between the ideas of popular sovereignty that we take for granted and the reality of the wretched not-even-"representative" system that we have "on the ground". Someone ought to make and disseminate widely a documentary about Democracy – logically following through the idea of "government of the people, for the people, by the people" and ultimately, inescapably arriving at the conclusion that a) our government is very very far from this, consequently the evil that emanates from it is not surprising, and b) Initiative & Referendum is a practical expression of the idea of popular sovereignty and all arguments against this are arguments against democracy itself, of the same form as the arguments that were once advanced against the women's vote, the black vote and all other extensions of the franchise..
The other vector of reform is along the lines of Julian Assange's thesis which he shares with Thomas Jefferson who is attributed this quote – "I would rather live in a country without elections than in a country without newspapers". Of course Jefferson had in mind newspapers that sold news to their audiences and not the present kind that sell audiences to their corporate advertising clients. So the goal here is the creation of credible MAINSTREAM, "AGENDA-SETTING" news outlets that are democratically accountable and economically viable. How to do this?
The point above is crucial – all of the independent blogosphere today is no more than the modern day equivalent of the radical politics bookshelf in the bookstores and libraries. Yes it is freedom of speech but its effectiveness is much attenuated by lack of credibility. It is preaching to the converted mostly. Here is an illustration of the value of knowledge that is shared by a minority – knowing that the house prices are perpetually inflated by land speculation is no help in negotiating the price during a house purchase. The only choice is then to "go with the flow".
As for the means of exchange, I think the abuse of this is a symptom of the general unaccountability of our society. It is hard to see how community currency projects can fundamentally change the way our society functions. Reforming our money system entirely just seems to me inconceivable without deep democratic reforms as a pre-requisite. But maybe I am wrong, I wish the monetary reformers all the luck.
Evgueni, I agree that the creation of "credible, mainstream, agenda-setting news outlets" would be of immense value, as would the extension of the franchise. I just don't see how to encourage this. They both involve the overcoming of a threshold, and the threshold has become unachievably high. By contrast, local community schemes and local currencies can develop piecemeal, one contributor at a time. Could the local approach assist your larger schemes? Maybe the blogsphere sits midway between the two, awaiting some catalysing event or "critical density" that pulls the threads into a coherent whole…
How did Switzerland get to where it is?
Clark, my own ideas for this are pretty sketchy. I was hoping to prompt others to think about it. Something like a journalists' co-operative as a starting point but with an elected "editorial committee" (call it what you like). An internally democratic as well as externally accountable enterprise. Internal democracy along the lines of Ricardo Semler's Semco – this ought to make it resilient to external shocks. Externally accountable in the sense that the editorial board are elected by the public, or drawn by lot. Basically to ensure that subversion by narrow interests is not possible. I think a large part of the funding can still be drawn from advertising but clearly funding is at the heart of the problem..
Perhaps I am being naive but I think that the idea of democratising the news media is easily defensible from attack because everyone instinctively understands it. With local currencies it is not so self-evident.
Switzerland – here is one account of how Direct Democracy evolved there: http://www.athene.antenna.nl/MEDIATHEEK/KOBACH-1….
Btw Switzerland is a country that has had some practice with DD, but there are many more now on the map that have significant elements of in principle, including some from former Eastern block. These people are keeping track of developments: http://www.iri-europe.org/
There are a lot of publications about DD on the internet, unlike in the mainstream..
The idea of creating firewalls within the banks is as ludicrous as the graphic in one of Peston's drawling reports. (A brick wall rose up from the ground as if by magic). I think the same is supposed to exist within the Stock Exchange and look hoiw many cases of insider trading there have been.
It`s all legal… http://www.bbc.co.uk/news/uk-england-hampshire-13…
A couple of comments on Medialens.
The Banks on Newsnight tonight
Posted by Hidari on April 11, 2011, 10:44 pm
Paxman was (for once) quite right: despite the fortune they spend (of our money) on advertising, despite their lobbing and influence, what does it say about the Banks that not one of them was prepared to go on Newsnight and defend themselves (against the conclusions of the worthless and insipid Government report, which will do little or nothing to deal with the real issues of our out of control banking system).
Posted by Keith-264 on April 12, 2011, 8:47 am, in reply to "The Banks on Newsnight tonight"
The report was bound to be a damp squib because the banks' behaviour was the government's behaviour – the (dis)orderly management of colonial plunder
Unless financial system backing up economic activities are real and sustainable, society will further walk along the same road. I agree that basis democracy I&R, as well as decentralisation of power is the way forward to make these international giants comply with their social responsibilities.
It becoming clearer, apart from fire walls, not much will change. 900 billion plus will still bypass exchequers world wide and off shoring of profits gaine from taxes and bond sales, money from the tax payer, i still going to end up in the Turks and caicos.
Trade rules will have to be kicked into place, because the reach for international business, their rights to compete with any and every vegetable cart standing in drive, has been law for years. Unless local referenda exclude themselves from these overarching regulations, their powers will always be limited.
Good first referendum would be to support local low CO2 essential service providers and reject the Internationally agreed Uruguay and Doha trade rounds. Establishing smaller community banks, following the Grameen example, not necessarilly the same route, local saving schemes, exchange and trading schemes, all these can and hopefully will change our lives.