On the evening of Thursday 4th April, I was privileged to address an audience at the Friends' Meeting House in Manchester. The topic of my presentation, for which I have to thank Phil Duval, both for the invitation and the theme, was '...How the banks are stealing your children's future...'
I didn't realise it before I got to the venue, but it stands literally a stone's throw away from the site of the Peterloo Massacre, (or the Battle of Peterloo) which occurred at St Peter's Field, Manchester on 16 August 1819, when local mounted yeomanry charged into a crowd of 60,000–80,000 people, gathered to demand the reform of parliamentary representation and electoral enfranchisement..
The soldiers were local territorial volunteers, not regular army cavalrymen, and the local Yeomanry were given the 'privilege' of arresting the speakers. They were led by Captain Hugh Birley, (Birley owned a large textile factory in Oxford Road, Manchester. He had developed a reputation as an arrogant industrialist with highly reactionary political opinions); and Major Thomas Trafford, (Sir Thomas Joseph de Trafford, 1st Baronet) and were essentially a paramilitary force drawn from the ranks of the local mill and shop owners, coupled with the local landed elites, who had active interests in suppressing popular local reform demands, despite the great distress of the ordinary working people in their community.
The end of the Napoleonic Wars in 1815 had resulted in periods of great famine and chronic unemployment, exacerbated by the introduction of the first of the Corn Laws, legislation which had been introduced to ensure that British landowners reaped all the financial profits from farming. The corn laws (which imposed steep import duties on cheaper foreign grain) made it too expensive for anyone to import grain from other countries, and thus maintained food prices at an artificially high level, even when the people of Great Britain and Ireland were literally starving, and needed the food.
Then, as now, the rich elites ensured their own hegemony at the expense of the poor and the working class, in a similar way to which the Tory-voting banksters today manipulate the financial markets through criminal activity and steal vast sums from their clients, while paying themselves vast salaries and obscene bonuses. At the same time, George Osborne and Iain Duncan-Smith cut working people's benefits, blaming the poor and those on benefits for the desperate financial situation the country faces, and set working class people in conflict against each other, while routinely ignoring the crimes of the rich and powerful.
By the beginning of 1819 the pressure generated by poor economic conditions, coupled with the lack of suffrage in Northern England, had enhanced the appeal of political radicalism, and In response, the Manchester Patriotic Union, a group agitating for parliamentary reform, organised a demonstration to be addressed by the well-known radical orator Henry Hunt..
Shortly after the meeting began, local magistrates called on the military authorities to arrest Hunt, and to disperse the crowd. The Yeomanry charged into the crowd with sabres drawn, and in the ensuing confusion, 15 people were killed and 400–700 were injured. The massacre was given the name Peterloo in ironic comparison to the Battle of Waterloo, which had taken place four years earlier.
I was fascinated to have the privilege to address an informed local audience in such a setting, and I felt a strong sense of historical synergy as I talked about the crimes of the powerful today and the way they were impacting on the financial interests of ordinary people and how the crimes committed by the banksters would leave a legacy which our children and indeed our grandchildren would still be paying for in years to come.
The day had started well with the news that the three main protagonists in the HBOS collapse had been impugned in a scathing report by the Parliamentary Banking Commission which had said that "toxic" misjudgements led to the bank's downfall and the need for a £20.5bn bailout by the taxpayer at the height of the financial crisis.
The report concluded: "The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death."
There can be no escaping from the realisation that the UK is in terrible financial trouble. Putting it at its simplest, the main High Street banks are to all intents and purposes, frankly bankrupt, and Government is vainly seeking to enforce higher levels of capital adequacy in order to give them sufficient capital in depth in order to be able to withstand another (the next) major financial crisis.
How we got into this desperate situation is an appalling story of arrogance, hubris, bullying and incompetence, a toxic mal-administration of both the banking sector, and its functions. It was orchestrated by a group of men, Bob Diamond, Fred Goodwin, James Crosby, among many others, men who had reached levels of power from which it was virtually impossible to unseat them, and whose arrogance was blinding them to the reality of their actions.
By overseeing a campaign of institutionalised financial crime (PPI fraud, LIBOR manipulation, as well as other offences of downright criminality such as drug money laundering), and coupled with a campaign of debt-creation on a scale unimaginable only a few years ago, these men oversaw institutions in which all the ordinary rules of prudent commercial engagement were thrown to the wolves and trampled underfoot.
A report into Barclays bank has blamed "cultural shortcomings" at the bank for problems that led to the Libor-rigging scandal last year. The report said there was a sense that senior management did not want to hear bad news. As a result, the bank had become too focused on profit and bonuses rather than the interests of customers. Barclays' rapid expansion in the years leading up to the financial crisis produced "cultural challenges" at the bank. "The result of this growth was that Barclays became too complex to manage, tending to develop silos with different values and cultures," it said.
The bank became increasingly dominated by the investment banking business, which possessed a strong culture of winning. This meant there was an "over-emphasis" on short-term financial performance, reinforced by a bonus and pay culture that rewarded money-making over serving the interests of customers and clients.
In these few short paragraphs, the poisonous cocktail of mismanagement practices are laid bare; an over-emphasis on short-term profits, resulting in vast bonuses being paid to a small group of elites; the over-complexity of structure, leading to a focus on micro-management of specific profit centres, to the detriment of the wider institution, benefiting a small group of elites again; and finally the over-emphasis on investment banking (or casino banking, identified by gambling with other people's money), yet again, benefiting a small group of elites.
Reading between the lines, Barclays Bank, and indeed many other banks within the UK financial construct, had become the private playthings of a small group of spivs and chancers who were willing to put the rest of the banking structure at risk, all the time they were making vast profits and bonuses for themselves.
They were happily undermining the entire underlying banking structure on which UK plc depended for its future development and the continued maintenance of its complex democracy and social infrastructure, for their own personal benefit and gain. They were mortgaging the future of the entire British community by engineering fictitious money out of thin air, secured on the deposits of their customers, to be spread around in highly risky securitised lending to every Tom, Dick and Harriet who knew enough to be able to find their way to a bank.
As they wrote and re-wrote loans running into billions of pounds, they spread the risk around to other risk takers - who took the chance to sell the risk on to third and fourth party risk takers, who in turn played the zero sum game by balancing their exposures to risk by hastily structured credit default swaps. It didn't seem to matter how many times you turned the money-making handle, the profits poured out, the salesmen's commissions flowed and the banks made more and more money.
The City entered into a Faustian pact with the Labour Government of Blair and Gordon Brown, who, bedazzled by the profits being declared and the taxes being paid on these vast fortunes, (Brown never once stopped to consider that these banks were only declaring a very small percentage of their vast profits for tax purposes) the rest was being quietly stashed away in off-shore branches of their institutions and moved on to other tax shelters. That is why Barclays and other banks provided departments that focused on tax-restructuring (or evasion on a massive scale).
All the time Brown was believing the falsified figures, he could be prevailed upon to soft-pedal on the compliance brake, and insist that the regulators cut the boys in the banks some slack, while they were making all this money.
His Mansion House speech in 2002 is a masterpiece of hubris, the words of a man who had been taken for the biggest idiot in Christendom, and was the living proof of the greater fool theory.
The full text of the chancellor's speech at the Mansion House, London, June 26 2002 can be read here; http://www.guardian.co.uk/politics/2002/jun/27/economy.uk - read it and weep! Here's a taste;
"...And, as you, Lord Mayor, have indicated this evening, the importance that the city attaches to integrity and the highest standards in the provision of financial services is the enduring means by which London's reputation as one of the world's leading financial centres is secured, and indeed enhanced..."
Yeah, yeah, yeah, Yada, yada, yada, whatever!
And this nonsense is still openly subscribed to by politicians and citizens alike, so much so that the banking sector feels capable of holding the country to ransom with the threat that if they are brought to heel, they will simply leave and go elsewhere. The fact is they won't, but no-one seems willing to call their bluff. They believed it so much they poured tax-payers' money into shoring up the whole rotting edifice, and there is no doubt the banksters will need more recourse to tax-payer's funding before too long.
And thereby the seeds of the next harvest of damaging civil unrest are sown!
None of our political parties have the balls or the guts to take on the banks, because they still labour under the same misapprehension that banks aren't really organised criminal enterprises.
They still want to be fooled into thinking that the crimes being committed daily by the banks are merely a minor aberration committed by a tiny minority of people who are misguided. They have simply failed to grasp the full implications of the ways in which a committed cadre of organised criminals have run the British banking industry into the ground, and literally stolen its assets through the simple expedient of organised criminality and paying themselves their insane salaries, their obscene bonuses and above all their bloated pension funds.
James Crosby alone, the now disgraced former boss of Halifax Bank of Scotland is sitting on a pension pot worth up to £25 million despite his central role in the mortgage giant’s collapse.
This calculates his annual retirement earnings from the failed lender is estimated to worth around £700,000 a year, according to the Sunday Times. No other citizen of this country would be able to run a major bank into the ground, be publicly humiliated for being a total and utter incompetent, and still be allowed to hang on to sums of money of this value.
It is now clear that if you are a friend of the Tory Government, you can organise and run frauds in the City realising multi-billion pound losses; you can manipulate the world's leading interest-rate setting mechanism to your own financial advantage and you can launder billions of dollars worth of drug money, all of which are straight-forward crimes, and no-one will do a damn thing to prosecute you.
Ironically, this would not have been a true state of affairs under Margaret Thatcher's control. The death of the former Prime Minister has just been announced, and I am reminded of the time just before her second election, when she too wanted to take on the welfare benefit issue as part of her election campaign.
She was reminded by Cecil Parkinson that if the Tories wanted to go up against the benefit culture, in order to be seen to be fair and maintain their working-class vote at the same time, they would have to do something about the plethora of City Fraud which was fast becoming a national scandal.
Her response was somehow typical of her;
'Well. we'd better get the handcuffs on, Cecil!
Later that day, Ernest Saunders was arrested coming out of his solicitor's offices, and the Guinness prosecution was set in train!
Under Cameron's administration and with Osborne riding shotgun on the financial sector, things are very different. You don't have to be an outright crook however, if you are just irredeemably incompetent and you destroy a once-proud bank through your own outright stupidity and arrogance, you can still be allowed to keep all the loot your have squirreled away!
But God help you if you are a single mother on benefits, and your boyfriend chooses to stay over for the night; if you are suffering from serious health issues and are unable to work. Don't try to get a loan to build your business if you are an SME, and don't ask for a pay rise, because there are none coming, and don't get ill because the Health Service we once respected is now run by accountants, not doctors.
The real issue here is not what the politicians choose to tell us, it is what the people who are affected by the changes believe for themselves. As one commentator said to me in Manchester last week, 'It's not too bad for you down in London, in some places there it's hard to appreciate there is a recession, but up here in Manchester, there are many, many, areas where there is real hardship, and where the anger on the estates and run-down housing ghettoes is growing by the day.
People may choose to believe that what Cameron and Osborne are doing is in the best interests of the country, but until they start demonstrating a reality about all being in it together, and taking away from the banksters the proceeds of their rotten games, and locking up those who have committed financial crimes, then no-one, but no-one is going to believe that the austerity programme is 'fair'.
This is the word that Cameron keeps parroting, that it is fair to attack the culture of benefit dependency, but if he really wants ordinary people to believe him, then he has got to start demonstrating that we live in 2013 and not 1819, because my evening in Manchester demonstrated to me that many in my audience believe that violent social unrest and street violence aimed at the elites is only just a stone's throw away.
Next time, it won't be the hit and run tactics used in Tottenham and copied elsewhere in the country, with gangs of young people just smashing shop windows and stealing designer accessories. Next time, the rioters will be standing their ground, and trading blows with the police, with everything to hand at their disposal. There is a real, tangible visceral hatred of the police in Manchester among the poor and the underclass, and some of the observations made to me about this dislike are very scaring.
Cameron and Osborne have got to demonstrate that there is only one law for all the people, not just the poor and working class, all the while their friends in the elites get away scot free, but that is what is happening. Their bankster friends have already effectively stolen our children's future, and there is a sizeable number of young and dispossessed people who are just waiting for the day to go and steal some of it back.
Peters' Fields are quiet today, but it will not take too much to see them filled with rioters again, fighting for much the same thing as their forebears fought for, 200 odd years ago. That was the right to be electorally enfranchised - to be treated as equal citizens and guaranteed fairness in their social treatment, a fairness which is being swiftly eroded, by the way in which the elites are being allowed to commit financial crimes with impunity. I predict these events because for many working class people, they have nothing to lose, and a man who has nothing to lose, has everything to gain from his actions.
.png)
.png)
.png)
