Six years after the banking disaster of 2007/8 it seems to me the greatest devastation has been to people rather than the economy.
We now have growing levels of unemployment, (no matter what the ‘reported statistics’ say) and a ‘well educated’ youth imprisoned by backbreaking debt and without the means to repay it. On top of this we are seeing the collapse of Society’s infrastructures of health, education, pension provision, and privatisation of energy and rail services, to name but a few.
This got me thinking about what sort of conversation took place between the banks and government when it all fell over and what is behind it all.
(Not sure I’m any good at satire but try this for size):
Curtain Opens . . .
Banks – “Hi. We’ve just made a serious mess of things and need a load of dosh . . . NOW!”
Government – “We can’t spare much, we usually borrow from you!”
Banks – “Come of it, your Treasury is loaded”
Government – “Yes but that’s taxpayer money!”
Banks – “Look, we are on the verge of a global banking collapse and too big to fail because the world would implode! It’s our money remember, we only lend it to you. We now want it back for a while to get it into our banks so they can start lending again and restart the economy”
Government – “Put like that how can we refuse?” And so they all go over to the Treasury.
Banks – “Road Tax money. Hmm we’ll have that. More potholes will slow traffic up and reduce road incidents. Blimey look how much money you’ve got for Healthcare, we’ll have half of that. And look at all that Benefits money, we’ll have half of that as well. Help you cut down on the scroungers!” And so it goes on until enough money is found to back up the banks.
Government – “Hmmm, not sure we’ve got enough money to run the country now”
Banks – “Don’t worry about it. We’ll print some more and lend it to you!”
Government – “That’s fine but also not sure we can pay it back.”
Banks – “Don’t worry. We’ll make it a condition of the loan that you have to introduce ‘Austerity’ measures to meet the repayments. Part of those measures will include selling off your public services (at discount prices) to help with those repayments”
Government – “But that could take decades and anyway isn’t this what you have done in Greece, and Spain, and Italy? In fact across Europe and America as well as the undeveloped countries?”
Banks – “There you go . . . We’re all in this together, welcome to the club!”
What is not understood by the majority of people is that the money we use is the banks property, which they only lend to us. The words on banknotes about “Bank of England” and “I promise to pay the bearer” etc. are for branding purposes only to show that our government has declared their money as our legal tender.
As it is their money they can do with it what they choose as well as charging for its use by way of interest, that’s fair enough. However, they have now put so much of their money into the system that the interest payments on this mountain of money will keep us in penury for a lifetime, if not several lifetimes. The banks know this and hence the softening up message from the IMF MD Christine Lagarde who was reported as saying that “debt and unemployment could become the new normal.”
Whilst banks are more than entitled to charge for their services, charging interest on loans has greater impact. In the same manner that Austerity is not a financial solution but a means by which to control and plunder Society, Debt too is a means of applying control through obligation. We have all seen the fine print on loan applications, although whether we read it all is doubtful. If we did we would realise that the bank will assert absolute control over our lives, by seizing what we own if necessary, to ensure their loans are repaid and our obligation to repay is therefore assured.
The same goes for countries and so the question has to be asked . . . has the banking collapse provided the means by which democracy is now being neutered through debt obligation? It certainly seems to be the case as financial institutions, be they banks or corporations, exert increasing dominance over our lives, with little concern for the inequalities and suffering this is causing.
Tomorrow I will write about how our money supply is like our water supply and the part our government has to play if we are to come out from under the financial yoke now placed upon us.
Until the next time
Thinking form his book: Global Magna Carta. Returning Power to The 99% . . . If They Want It! By J T Coombes