The bank bailouts were a rotten attempt at appeasement

As the stockmarkets go on a rollercoaster, and the US squeaks past a technical debt default, the world feels like an uncertain place. There are many difficult decisions ahead, but also some of the choices before national leaders seem pretty stark and obvious.

Using ‘the deficit’ as a reason to impose ideological cuts was a choice taken by the Conservative and LibDem coalition. They’ve had plenty of opportunities to re-consider, including the awful spectre of serious rioting in our capital.

There’s no excuse to go on the rampage, looting or arson. But growing inequality, declining social cohesion and fewer opportunities for many are known to have a devastating impact on communities. How many people with hope, with prospects of a decent job, go out rioting?

Perhaps cyncism over politics, such as Blair ignoring the massive Iraq peace marches, has accelerated the move in some minds from peaceful protest to more radical action. But rioting and direct action are not the same thing. There are motivations at work but there’s palpable anger at hand over inherent unfairness in the current system. Similar violent outbursts occurred in deprived parts of France but similarities drawn are at best inconclusive. Many argue there was little politics in these riots, just consumerism. Perhaps, but that has political ramifications too.

The situation, put simply, is this: The economy is weak, our education system is not fit for purpose, those who complete a degree find it won’t necessarily get them a good job and meanwhile we are vulnerable to rising energy costs as well as a massively indebted Western world.

In this context the bailouts of the banks, and the financial system as a whole, was in my view no better than appeasement in the worst sense of the 1938 Chamberlain-Hitler Munich Agreement.

Of course there were no painless choices, then as now. Politicians faced a set of bad-looking options. I can see why Brown and Darling in 2008 were desperate to avoid having to explain why savers and investors were suffering for the failings of banks.

But… are we really any better off now? We still see questions being raised about the financial viability of not just banks now, but whole countries. The system has not been fundamentally fixed, it just continues to unravel. How could it be different?

In the UK a Green-led action plan to right things would be:

  1. Reverse reductions to key areas of government spending including Police, NHS and local government.
  2. Close tax loopholes, clamp down on tax avoidance and ensure highest earners pay their fare share.
  3. Redirect massive government funding from defence and road building to preparing the UK for a carbon-free future: Wind power, electric trains & cars and a huge programme of energy efficiency for homes as well as offices. This will create jobs and skills.
  4. Reform the local tax system to use land value tax which encourages efficient land use and bringing empty properties into use. This will help to rebalance the UK’s runaway property market.
  5. Regulate banks far more strictly in terms of their risk exposure, how they lend and push for a ‘Tobin Tax’ on currency speculation transactions.

Those five points won’t right all wrongs, but will get us moving in the right direction.

At the moment much of the current government’s actions are taking us backwards, away from a better society and reducing our readiness to face the challenges we know are ahead.

Quality of life matters. I don’t think our current national political leaders are looking far enough ahead to fix what’s broken.

There’s lots of work to do and debating water cannons does not get us to where we need to be.

5 thoughts on “The bank bailouts were a rotten attempt at appeasement”

  1. I tweeted to you that the economic situation had nothing to do with riots & looting and thought it was mainly due to illiteracy in its many forms and you replied ” you are seriously suggesting that the economic situation is not connecting to rioting at all!?”

    Tweet won’t let me reply to you for some reason, so I will respond here:

    Many of the rioters are young and are not even old enough to be in work. Some are actually working and have received a good education, including a grammar school girl and a teaching assistant. I don’t think you understand teenage children and what can go wrong if there is poverty of parenting! I have had teenage children and maybe have more insight than you Cllr Kitcat.

    When my son was 9, he played with a group of children in our road. Someone complained to us that he had scratched the word f**k on a neighbour’s car. I marched him round to that neighbour to apologise and the repair came from his savings. When he waqs 14, he smashed a window in his friend’s house when out ‘egging’ on Halloween. He was caught, reported to me, had to go round and apologise and had to foot the £80 bill to repair the window. Since then he has worked hard and been in no more trouble.

    It is inadequate parenting that sends children off the rails. Why were young adults roaming around in gangs? Why were other young adults, who are still affected by the economic situation, not involved in the riots? I think your statement that the economic situation is to blame is dangerous and simplistic

  2. Dear Margot

    As a parent myself I of course recognise the huge importance of parenting; and my duty to instil ethics, mutual respect and responsibility in all those I care for.

    However blaming it on bad parenting is an astonishing simplification which seems to suggest parenting skills are worse in some parts of the country than others ie those where the riots were. Which I don’t believe for a moment. There are plenty of people who had troubled upbringings who are now upstanding members of society. Furthermore parenting issues are nothing new, for time immemorial people have been bemoaning “the youth of today”, it doesn’t help us understand what happened with the rioting now.

    So my response is that it is ‘dangerous and simplistic’ to suggest that ‘inadequate parenting’ is the cause. People have to take responsibility for their own actions, regardless of context or parenting. But why did people have so little to lose, so little hope, that they went on the rampage in that way?

    What is different at the moment which may have contributed to the outbursts we saw in the form of riot, arson and looting? I argue the economic climate, the loss of the social safety net – youth services being dramatically cut back for example – and the ever widening gaps between rich and poor.

    regards,
    Jason

  3. I see your reasoning, but it doesn’t really resonate in reality.

    Many of the rioters either had jobs or, in one case I read, was very well educated and from a comfortable home. Many were also white non immigrant.

    Some examples from presiding magistrates: Man of 45 tried to gouge out a policeman’s eyes; Call centre worker; 11 year old girl; man who said on Facebook “who’s up for shopping”; graduate social worker stealing TV in Enfield; 2nd year law student; football coach with place at uni to study economics etc etc

    These are not people who conveniently fit the profile of the youth you refer to who need the social safety net.
    With respect, you do these young people a disservice to assume just because they are from low income groups that they could become criminal.

    It is not the gap between rich and poor, it is the gap between aspirational and self-control and poverty of aspiration and lack of self-control.

  4. Try redrawing those graphs for Lloyds and HBOS since the date Gordon lumbered us all with his portfolio of zombie banks.

    Down a lot more than 10% I think you’ll find.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s