With the advent of Gloablization with its fundamentalist insistance upon open markets and free access for capital without restraints, there were suddenly no regulations to bind the Financial Class , no taxes they could not avoid and no political process they could not buy. It was a freedom from any notion of obligation, care or concern for anybody but themselves. It was a perversion of the very word freedom. They could vote wherever they chose, buy citizenship wherever they felt like it and pay only those taxes they found convenient and have no loyalty anyone or anywhere. They were ‘free’.
I put ‘Free’ in quotes because talking of trade in terms of it being ‘Free’ makes it sound like it’s a heart warming tale of oppressed trade that has escaped from tyranny; from the tyranny of centrally planned, protectionist, ‘reds under the bed’ to the freedom of the ‘free’ market. Hurrah! Except its not that kind of freedom at all. It’s freedom in the sense of free from regulation and moral care. Which, when you’ve just had a several trillion dollar melt down as a result of capital that had ‘freed’ itself from regulation.doesn’t sound nearly so Red,White and Blue.
We all knew at the time, whether we approved of it or not, that the free Market ideology was founded on a fundamentalist’s faith in ‘self’ or ‘light touch’ regulation, open markets and globalization. What we did not realize was that there was, it now turns out, a clause buried down in the small print, which said that in case of an extreme financial crisis, there was to be a complete transfer of private debts to the public purse so that those who had caused the crisis and were now in danger of being goaled for fraud or declared bankrupt would instead be guaranteed immunity from any loss or prosecution.
Today those who got us in to this catastrophe remain in their positions of power and wealth, so they can now dictate the policies for getting us out. There was a moment when it looked like maybe the towers of wealth and power were teetering. But they did not fall. Neither the bankers nor our political class have felt it necessary to learn a thing and are in fact intent on re-building essentially the same system, based on the same failed ideology, that caused the crisis in the first place.
We are at war. In America, Jamie Dimon the CEO of the mighty, JP Morgan Chase, threatened US regulators that if they tried to tighten regulations they would put US banks at a disadvantage relative to Europe’s banks. While in Europe Douglas Flint, Chairman of HSBC, was making a parallel attack on UK regulators. HSBC, he said, worried “a lot” that any new regulation would mean UK banking would lose business. And UBS, the giant Swiss bank weighted in on the regulatory restraints being applied to bonuses, at Barclays in particular , “
“Concern over ‘too big to fail’ dominates the UK regulatory agenda but rather than Barclays being too big, it may well be that the UK is too small,” said UBS.
There is a growing confidence and cold arrogance re-asserting itself in the towers of finance. A House of Lord investigation into the role and conduct of Auditors and Accountants in the Financial Crisis found they had completely failed in their duty. At the centre of their investigation and report is the fact, which the accountancy firms do not deny, that, they gave banks who were essentially insolvent and collapsing, a clean bill of health as going concerns several times in the run up to their eventual collapse.
How could this possibly be? The Accountants simply said, when they evaluated the bank’s health, they considered the likelihood of government bail outs and when they realized the government would pour public money in to cover all the bad debts, this meant the banks would be fine. Thus they signed off that the banks were ‘going concerns’.
But this isn’t the astonishing part. The astonishing part is that the big Accountancy firms involved, PriceWaterhouseCoopers (PwC) etc cannot see the problem. The Lords said in their report that the Accountants had ‘failed in their moral duty’. To which the accountants said, ‘Our whaty what?’
PwC senior partner Ian Powell said: “I am surprised by the committee’s claim that there was a ‘dereliction of duty’ given their stated view that auditors fulfilled their legal duties.”
While in an article on the Lord’s report in Accountancy Age magazine, Head of the Institute of Chartered Accountants in England and Wales (ICAEW), Mr Michael Izza simply said,
“We do not accept that auditors contributed to the severity of the financial crisis.”
“We do not accept…” That tells you were the power and the arrogance lies.
We have two worlds at war. One in which there are moral concerns and duties and reponsabilities. The one in which you and I live. And then there is the world of the financial class in which there is no moral code, there is only the letter of the law, which is no more than a box to be ticked as you ignore its intent and take whatever you want.
The Global Financial class and the system in which their power and wealth is vested, is at war with ordinary people. No less a person than Warren Buffett was clear that indeed there is a war,
“there’s class warfare, all right. But it’s my class, the rich class, that’s making war, and we’re winning.”