Fixing The Game

 

‘Mr Lord Mayor, we will not forget that the first and foremost duty of government – as the governor has reminded us – is to maintain and indeed to strengthen the monetary and fiscal stability that has enabled us, successively, to grow and remain free of recession…..stability through a predictable and light touch regulatory environment.’

Gordon Brown Mansion House speech 2007

 

　

The BBC has set out to target the Banks….as Evan Davis admitted before…“So we can blame the bankers for it, as we normally do”….but it has set the parameters, the limits of engagement so to speak.

The BBC programme about the banking system is described thus by the Open University who partner the BBC in producing this series:

‘Interviewing a range of important figures in the financial and political sector, including those intimately involved with the meltdown of 2007 / 2008, this new series will delve behind the scenes of a crisis that brought the global banking system to the brink of collapse.’

 

Note that ‘behind the scenes of a crisis that brought the global banking system to the brink of collapse’…the BBC programme is entitled ‘Fixing the System’…so surely you must examine why it ‘broke’.

Unfortunately that’s just what the BBC doesn’t do.

The BBC itself says about the programme…‘Fixing the System traces the cultural changes that took place in London’s banks during the late 1990s and early 2000s, which many now identify as one of the underlying causes of the Libor scandal.’

The Libor? So what? The Libor rigging didn’t cause the Crash.

Once again the BBC have decided to duck the issue of what caused the Crash…why? To protect Labour and Gordon Brown.

The BBC tells us that: ‘By 2009 the FSA knew that there was cheating and lying at the heart of the banking system and the layers of control were failing: The bank management failed, the BBA failed, the FSA failed‘…but the BBC doesn’t mention the Labour politicians failing.

Labour is only mentioned in relation to its challenge to the bonuses to be paid to the RBS bankers….our heroes!

Unfortunately for the BBC even Gordon Brown admits his own part in our downfall:

“The truth is that, globally and nationally, we should have been regulating them more”.

The BBC though doesn’t look at the cause of the Crash…it has decided that what is important is to ask the question ‘Can we trust the Banks?’…claiming also that: ‘Some say it took this latest scandal to expose a profit-at-all-costs cynicism that they believe has corrupted the heart of our banking system; all agree things need to change.’

Well, no…we never have been able to trust banks, no one has ever trusted the banks…but nor can we trust supermarkets, garages, the NHS, schools, food producers and yes even the BBC.

That’s why we have all sorts of regulators and inspectors…because no one trusts anyone.

The Banks went belly up precisely because Labour decided they didn’t need regulating…allowing them to ‘let rip’…..so the question is really ‘Can we trust the politicians to protect us from monopolies, incompetence and fraud?’

As Lord Turner of the FSA said: ‘Politicians were in love with the ultra free market and wanted to let it rip.’

　

So what exactly is the point of this new series?

Here are a couple of comments on the Open University site about the programme that sums it up:

‘The most telling statement in the whole programme was that the banks have been making money from their customers and not for their customers. I thought that most of the comments from both sides of the debate were like watching a hamster in its wheel. Lots of activity but ultimately going nowhere. The programme was full of prejudicial opinions and devoid of any hard evidence. The fundamental problem which caused the crash was missed entirely. The creation of money as debt by the privately owned banks. Anyone looking at the data with an open mind will understand the problem, if you review the money supply over the last 100 years……The reason the banks caused the crisis/crash is being conflated with the banks’ demonstrable dishonesty. I fear the politicians will ‘solve’ the dishonesty but gloss over the reason the banks actually caused the crisis/crash.’

　

And:

‘I just watched this on iplayer and i have to say it was totally biased. The producers obviously had an agenda that went something like this:

A in the old days there was trust and integrity

B greed took over and Barclays symbolised a greed-leads-to growth environment by its own exponential growth

C libor fixing was part of all this greed

D bob diamond “aggressiveness” was to blame for libor fixing taking place

E the regulators now step in where before they turned a blind eye

All contributions were carefully edited to support this pre-conceived agenda.

I am not a banker, do not work in financial services, am not a politician or belong to a political party, I am working and living on the minimum wage despite being middle aged. And yet i can see a skewed truth when i see it.

Libor Fixing? I hope someone makes a programme about “BBC Truth Fixing” – boy, there is more than enough evidence to back that up.’

　

　

A write up of the first episode is available…..‘the first episode a three-part BBC Two series looks at the Libor scandal – a watershed moment that finally exposed wide-scale lying and cheating at the heart of the banking system.’

 

Episode 2 (available this coming Wednesday) looks at risk…but in relation to recent incidents, not that which caused the crash:

‘With gripping first-hand accounts from banking insiders, regulators and politicians this film tells the story of two recent multi-billion pound trading disasters that rocked the City. It shows that some bankers are still taking reckless risks, five years after the crash that brought the world’s economy to its knees.’

 

Episode three is still under wraps.

The programme seems aimed at undermining banks reputations rather than asking real questions about how economic crashes occur…it seems more in line with simple, child like rhetoric from Occupy than something that will enlighten and provide answers and solutions….and avoids asking difficult questions of those really in control…the politicians.

A final telling comment told us that by 2012 there was a new world order…the regulators were now the most powerful people whereas previously it was the bankers.

That means that the bankers, not the Regulators were in control before the crash….allowed to ‘let rip’ by the politicians like Gordon Brown.

A Gordon Brown who the BBC strangely fail to remind us that in his  June 2007 Mansion House speech,  that this is “an era that history will record as the beginning of a new golden age for the City of London  …..And I believe it will be said of this age, the first decades of the 21st century, that out of the greatest restructuring of the global economy, perhaps even greater than the industrial revolution, a new world order was created…..and I will be honest with you, many who advised me, including not a few newspapers, favoured a regulatory crackdown”.    “I believe”, he went on, “we were right not to go down that road … and we were right to build upon our light touch system….fair, proportionate and increasingly risk based”.

Back in 2005, he said that the better model for financial regulation was “not just a light touch, but a limited touch. We should not only apply the concept of risk to enforcement of regulation, but to…the decision as to whether to regulate at all.”’

 

And did Ed Balls have a hand in all this…which he denies?

“Ed Balls, our new City Minister, will work with you to develop publish and then promote a long term strategy for the development of London’s financial services and promoting our unique advantages and assets.”

‘

Way back in 2005 even Stephanie Flanders knew that Gordon Brown’s economy was in trouble…long before the Crash brought on by under regulating the banks…this was trouble caused by over spending and reliance on consumer credit….just a shame that she can’t seem to remember that now:

 

Testing the Miracle

Stephanie Flanders, BBC economics reporter

On running the rule over Gordon Brown’s economic record

2005

‘These must be frustrating times for Gordon Brown. Now his foes have decided it is open season on the economy – which even a year ago had seemed beyond reproach.

Britain is growing slower than it has in more than a decade. The high street has ground to a halt, and inflation is the highest it has been under Labour.

When we look back, in a few years’ time, at Brown’s economy, will we still see an economic miracle? Or another old-fashioned spending binge that, sooner or later, had to run dry?

　

Former chancellor Ken Clarke was disarmingly petulant. “What I’m saying is that I did all the spadework, and that my four years were better than the eight years since….And if he doesn’t do something about the public finances soon he’s going to leave a terrible mess for his successor.”

‘Gordon Brown took my nice shiny economy and he frittered it away.’

Our trade gap has widened almost every year since Labour took office.

Ed Balls was with Gordon Brown every step of the way until he became MP for Normanton in May 2005. I asked him whether he was disappointed by Britain’s continued low productivity and widening trade gap.

“There’s an ability for people to plan ahead, invest in the future, which we’ve not seen in the last 20 to 30 years.”

Quite a few people around the country echoed this view – especially the property developers (before the property crash of course….causing the credit crunch). There is just one problem. Businesses are not investing more. They are investing less.

Total investment as a share of Gross Domestic Product (GDP) is the lowest it has been since those records began in 1965.

　

Saved by spending

The miracle, if there is one, is that we carried on growing. But looking around the country, you see it is a miracle built not on investing, or exporting, but on a miraculous capacity to spend.

The public spending prop

What is left of the miracle economy, if you strip out the cheap imports and the consumer spending? What is left is a lot of public spending. The only part of the economy that has grown faster than spending by all of us the past few years has been spending by the government.

In the north-east, one recent estimate puts the public sector of the economy at close to 60%.

But all of that public spending, sooner or later has to be paid for. Ed Balls denies that Gordon Brown’s decision to move the goal posts on his golden rule this summer has done his reputation real harm.

What Gordon Brown would like to be his final years as chancellor could be the most testing yet.’

 

 

 

So just remember that quote at the top of the page from Brown:

‘…the first and foremost duty of government – as the governor has reminded us – is to maintain and indeed to strengthen the monetary and fiscal stability…..’

 

The Government is responsible ultimately….Banks can’t be trusted, we know that, have always known that…that’s why we have Regulators.

The BBC just can’t seem to accept that simple premise…Gordon Brown’s fingerprints are all over this recession.

 

So far this series hasn’t been about ‘Fixing The System’….dishonesty or fraud was not what caused the collapse of the System….bad judgement, a preparedness to take unqualified risks and the lack of regualtion to rein in such impulses were the main causes.

The BBC is going round kicking the tyres when the real reason Gordon Brown’s Rolls Royce economy is off the road is because the engine has blown up due to lack of maintenance.