The author finds himself debating whether the intelligence squared forum in London should vote to "love its Bankers", in a meeting well-stocked with the subject themselves.
London should love its bankers
That’s simply bonkers.
The burgled should love the burglar. The victim should love the aggressor. It’s a well-known syndrome, and one that the other side in this debate clearly suffers from. It’s named after another capital, Stockholm Syndrome.
The other side in this debate are asking us, not to love the hostage-taker, as they did in Sweden; but the white collar criminal equivalent - Fred the Shred - instead.
At least it’s less bloody when it’s Fred, these ladies and gentlemen might argue. But actually, the business that’s been going on over there, in the City, is far from having its hands clean.
There’s blood - at least by interposed dollar bills. Ed Vulliamy, the fearless Guardian investigator whose place I am taking, has courageously pursued the story of HSBC and its links to drug-money-laundering. He’s followed the trail from the ugly “launderettes” in Bajia Mexico, where poor illegal desperados deposit their dangerously acquired gains from running drugs over the border.
These front businesses then deposit wads of dollar bills into banks owned and controlled by HSBC or Wachovia or whatever. No questions asked.
And once inside the well-oiled system of global finance, what happens to that cash? Well, it goes to bolster HSBC’s credit-worthiness. All of a sudden, HSBC can issue new bonds on the back of that high-powered cash, that injection of M0 into its coffers. And those that buy the bonds - the hedge funds in Mayfair - can put them up as surety for some other instrument they’re touting …
… and so, in just 3 steps, the low depths of Bajia are linked to the swell salons of Mayfair.
“But we weren’t breaking the law.” I hear the hedgies cry. “You can’t punish us for doing our job and doing it bloody brilliantly!”
OK. Most of you weren’t breaking the law.
Let’s wait to see how many weren’t - LIBOR, fraudulent mis-selling of instruments, sanctions-busting … the legal challenges are only just beginning.
But in any case, the point tonight is not about whether we, that voluptuous, London-ny kind of “we” should punish our bankers.
No. That’s not the point. It’s whether we should love them or not.
What are banks _for_?
They're there to make sure that the surplus that humanity can set aside over and above its consumption-needs is put to wise and productive use, to make sure it is ploughed back into the soil for future harvest, as it were.
(and, per person, that surplus really is very small - just a few thousand dollars per person per year - that’s what banking and finance were meant to look after, the extra amount that each person can set aside after hard labour has been done)
So have the bankers been doing what they're for? No. Instead, they’ve been fleecing us.
As I see it, they were given unprecedented freedom to do this job well in the late 1990s - when the last semblance of depression-era regulation was taken out of the system -
then what did they actually do?
In the space of just a few years, they managed to sow the seeds of at least 3 catastrophes:
ONE the financiers gave South East Asia such a fright that we're still living with the paranoia embodied in China’s trade surplus. The first signs that finance was taking us off the rails was the collapse of LTCM in the 97/98 crisis, with the huge bets that it had made on South East Asian and Russian currencies. China became so paranoid of becoming the victim of hot money flows - and who wouldn’t be - that they decided to develop in a massively protected, but terribly brittle and destabilising way, China has accumulated reserves as if they were pumping-up the amniotic fluid that guards the fragile baby that modern China is giving birth to
[So that’s one catastrophe - a globally destabilising Chinese economy]
TWO the bankers massively over-invested in IT - we're still only now lighting up the fibreoptic that was wastefully laid everywhere. Remember the mania … and then think whether Facebook and Google and Amazon - great as each might be - is really the revolution that, say, the train, or the car or the washing machine or the invention of plastics, or pharmaceuticals were in bye-gone eras of technological revolution. Which would you rather do without - Facebook’s stream, or your car? They - the bankers, the investors, the venture capitalists - fell for the hype. They drank the kool-aid. And our pensions are still suffering for it. [So that’s the second catastrophe - they mal-invested in technology]
THREE they undertook that simple and age-old task - lending to ordinary folk to build and buy houses - and still they managed to mess it all up
How many maths PhD’s and tax barristers does it take to sell a mortgage?
None, if you’re doing it the honest way.
Tower-blocks full of them, if you’re doing it the Barclays way.
The fact is that the bankers have been living high on the hog ever since they were deregulated.
And the hog, ladies and gentlemen, is us. You and me - and maybe not the ladies and gentlemen on the other side of this debate.
And in piling-high on us these endless ill-decisions, they’ve even gone and made London a worse place for us to scrape a living in: expensive housing, expensive schooling and a terrible taste in over-priced restaurants.
So let’s be honest: what have they done for us: done their job badly, made a load of awful decisions and even managed, in the process, to make our lives harder.
Now they want love?
Well, we asked what banks are for … now we should ask what is Love for.
It is the ultimate currency - that because of which we do everything we do. That great yearning. That which everyone who has achieved anything at all in reality strives for.
Bankers too. They were doing it for love, even when they did not realise it. The love of their peers, the love of the father or the mother who left them at boarding school aged 8 and never collected them. The love of a lost lover whom they’re still trying to settle scores with. The temporary simulacrum of love that the girl high-heeling her way into your Ferrari represents …
So should we be easy with handing out our love, that ultimate gold-plated carrot that we, it seems have it in our power to distribute?
No. We - I’m getting used to talking as London … we should be like the stern parents that our bankers still seem to be trying to impress.
We should be forgiving but firm:
do your job as its meant to be done, and in a trustworthy way
don’t expect inordinate amounts of cash - the faux-love stuff - in return for an honest day’s work
and if you manage to follow those simple precepts, then we’ll come and take you out for the week-end and maybe give you toast and milk and honey for tea. If you’re good, that is.