Friday, 14 September 2012

Historicism

Whoever said the lesson of history is that there are no lessons was an arse. Mark Twain on the other hand is supposed to have said “The past does not repeat itself, but it rhymes”, which rocks.


To give one example, there’s that Scottish bank run disastrously into the ground by its West of Scotland executives who, speculating on asset values, lent too much to too few people while taking no where near enough security to protect their company’s interests. Obviously, I’m talking about the 1878 failure of the City of Glasgow Bank. Obviously. Since then banking has become a much, much more sophisticated activity and no banker would ever be fuckwitted enough to adopt a similar “business model", give or take the ones that have.

To be fair, the work chat I mind from a couple of years back was that business cycles last 6 years; 4 to learn the lessons of the last disaster and another 2 to forget them. This implies that in banking, greed, arrogance and stupidity are both timeless and recurring. Given that, let’s compare and contrast what happened to the bods who knacked the City of Glasgow Bank with today’s high flying “wealth creators”.

As if to emphasise the difference between then and now, the late historian Sydney Checkland described the City of Glasgow Bank’s board when it failed as “mediocrities and men of straw”. All of them, plus the Bank’s manager, were soon had up before the High Court in Edinburgh, found guilty of various offences and given jail sentences ranging from 8 to 18 months. Thankfully, today’s “wealth creators” are treated with much more respect; when they go a tad awry, the worst they can expect is a fine equal to only a fraction of their personal wealth or the loss of a knighthood, but prison? Heaven forbid.

Another difference between then and now was that the City of Glasgow failure taught the late Victorian bourgeoisie the limitations of unlimited liability; because it was an unlimited concern the Bank's 1,819 shareholders were liable for all of its obligations and after these were met, only 254 of them remained solvent. Funnily enough, the City of Glasgow Bank failure was followed by a new Companies Act in 1879 and with it the widespread adoption of limited liability; unlimited liability, or what a Vince Cable might call shareholder activism, having previously been regarded as a built-in check on management, was suddenly recast as a barrier to investment and as such something to be got rid of pronto for the good of the economy.

Fast forwarding to today, rather than any change sensibilities, I'd argue the structural changes made to the financial obligations of asset owners/shareholders (i.e. the rich) underpin the change in how “wealth creators” now get treated. Then, shareholders got fucked. Now? It’s the taxpayer. Then, the people who ran banks that fucked up and fucked the finances of the rich got the jail. Now? Less so. See the difference?

As for the rhyme, it sounds like Berkshire Hunt(s).

Wednesday, 12 September 2012

Peter C

The FSA judgement on Peter Cummings is interesting for all sorts of reasons, notably its fundamental flaws. Cummings' repugnantly unrepentant whine, as quoted in a BBC article  is also interesting; "(f)or the past three and a half years I have been singled out and subjected to an extraordinary Orwellian process by an organisation that acts as lawmaker, judge, jury, appeal court and executioner."

That Cummings appears aware of how organisational power can enforce a worldview wherein 2+2 = 5 is a revelation, but am guessing he actually meant Kafkaesque. Am also guessing he doesn't know any better. Ignorant dick.

Tuesday, 11 September 2012

Where's it gone?



Is this it here? Have you looked under there? On top of that? Nope? Then I don’t know either. Do you know where the threats British banks made to relocate overseas in response to potential regulatory changes they didn’t like have gone?

They definitely used to be here, like they were very loud and clear and deliberately made part of the bank regulatory reform debate. And there were loads of them as well; HSBC (the drug barons’ bank of choice) had one, so did Barclays (Libor rigging) and Standard Chartered (Iranian sanctions? Pfff).

Yeah it is weird. Like when Barclays was subsequently forced to change its utterly irreplaceable CEO, you'd have thought that would have prompted a mass exodus overseas.

Was it the implicit government subsidy/insurance policy other countries wouldn’t be able or willing to provide that proved too big a barrier? Or was it the reality of not having UK regulators to back them up when the Americans got a hold of their nads that prompted second thoughts? Mebbe it was only ever disingenuous sabre rattling that was taken too seriously by politicians/media too used to the old approach of banks get what they want or else(!).

So yes there is the positive here of this loss signalling the terms (or at least the rhetoric) of the debate have changed, but its still a fundamental shift in policy that perhaps the next big bank bod to be questioned could explain. Oh hang on, the other thing we’ve lost (assuming we had it in the first place), is a practical memory when it comes to things like this.

Saturday, 8 September 2012

None so blind as those who will not see



So why exactly does the BBC go SOOO easy on, to the extent of misrepresenting, the American right?

Partly, I think its because nasty bastards like Paul Ryan are only ever found on the extreme fringes of British politics so when the BBC is confronted by what he actually believes in, says, votes and campaigns for, they instinctively assume he’s not being serious and selectively tone down how he’s portrayed into something it finds more palatable.

The other thing is the BBC is lazy and relies on predictable tropes for communicating the news. When it comes to America this means viewing everything in terms of the “special relationship”.

Practically, this involves producing stories that:
-          exaggerate the importance of the UK to the US as a strategic partner
-          exaggerate the influence the UK has on the US
-          exaggerate the attention paid by US politicians and the US public to the UK,  its politicians and the Royal family
-          downplay the extent to which the UK is just another mid-size economy/political player
-          downplay the extent to which UK support is taken for granted

Then on the back of this periodically debating whether there still is a “special relationship”, its costs/benefits, producing documentaries that examine it (all predicated on the assumption that there is one) and so on.

The problem Paul Ryan poses here is straightforward; no one wants to be a relationship with a nasty mentalist, special or otherwise. To actually produce accurate reports would expose this. The BBC response? To provide only biased and highly selective accounts that leave deluded notions of the "special relationship” intact by leaving out the batshit crazy nasty aspects of actual Republican politics.

Monday, 3 September 2012

A dignified part




A cool thing about America is how looking at stuff there gives an insight into how shit is/will be here in an if only I could see myself how others do style. Not everything of course, but some good ‘uns, my personal favourite being the Military Industrial Complex (MIC). 

The MIC is so popular with the US left it figures in “pop” songs.  Calling it out highlights the actual relationship between private military contractors and the state and how the former lobbies for increased defence spending, using the profits this generates to grease the revolving door between the two that sees officials responsible for spending taxpayer monies subsequently taking up well paid jobs with contract winners on a regular basis.

So the MIC draws attention to the vested interests and general bentness of government spending. Obviously nothing like that happens here what with our civil service having a deep and profound public service ethos give or take the PFI/PPP private sector bods who advise government on err PFI/PPP, the Ministry of Defence bods who get jobs with BAE etc., etc.,  ....

Actually, this reality prompts questions about why we tend to delude ourselves about such obvious bentness  given how much raw vested/self-interest figures in our lives as well. Am guessing it's because we remain suckers for the “dignified part” of the constitution Walter Bagehot went on about and kid ourselves its all fair play and a good innings ya de ya di bollocks. Like click here for a wonderfully naive example of some middle class English bod placing as much faith in the power of "independent" truth as an attorney played by Julia Roberts would in a Hollywood shitfest.

That aside the interesting thing right now is how little liberal American critiques of the American polity and the American right appear to be resonating here despite the reality. Starting with the polity, it’s the whole Washington is in its Wall Street paymasters’ pockets due to the reliance of politicians on political donations thang. Here? Ach, its totally and completely different, like “Under Cameron, forexample, the proportion of Conservative Party funding derived from the Cityrose by 25% in five years to make up 50.8% of the Party’s total – 27% of thiscame from hedge funds and private equity”. Oh. Oh dear.

But, hey that’s just cash for "dignified" knighthoods isn’t it, like it’s not as if financiers are backing up the influence and access their money gives them with policy ideas by promoting and supporting think tanks and policy proposals? Like its no as if 6 board members of the Tory Centre for Policy Studies think tank are bigwig fund managers, investment bankers or private equity bods. Oh, they are? And the only significant industry grouping on its board is finance with no other industry or sector having any meaningful representation whatsoever? Really? Oh.

But, hey at least the tendency of the US media to go easy on Republican/Right-wing lies isn’t replicated here, like when Paul Ryan lied about how fast he’d completed a marathon (!?!??)  it wasn’t as if our own Matthew Parris said “it's hard to imagine that Ryan's "misspeak" was a calculated lie ... that is exactly the kind of thing you know journalists are going to check. I don't think he was lying. He may genuinely have forgotten." Oh, except he did. And what exactly is a “misspeak”, is it “economical with the actualit√©” for the twitter generation? But, hey implies the mainstream media here is as easy on the US right as its US equivalent. Nah, no chance. 

Here, lets look at the BBC coverage ofPaul Ryan’s conference speech where he told a run of absolute, blatant whoppers to the extant that some US bods are now talking about “post-truth” politics wherein, contra Matthew Parris, politicians tell humungous porky pies the media doesn’t bother to check. 

Thankfully the Beeb in its lovely and objective way called him out every time by referring to Ryan’s speech/whopper list as having contained some “alleged inaccuracies” (?), “errors”(?) and that for some he was “slack with his facts” (WTF?) and was open to the charge of “misleading his audience”. Oh. No, not really, rather he told a run of utter whoppers, like UTTER whoppers with them and the marathon time thang indicating he’s got a pathological aversion to anything not in keeping with his worldview/public image.

Oh dear. This example actually suggests that when a US politician on the right lies thru his pants in public, his recent personal association with efforts to get utterly revolting notions of rape built into US law gets forgotten by our licence payer funded journalists because they're too busy twisting themselves in semantic knots trying to tone down his tendency to tell utter whoppers. Oh dear 2x.

Again the short-term question this prompts is why. Longer term, given Labour has already half-inched loads of Obama rhetoric, it’s whether in an era when the financiers that fucked the UK economy still have an obviously disproportionate influence over the UK polity in ways that reek of hotdogs, we’re also heading towards a post-truth politics. That or whether we’re already there.