4. The people will have revenge
The countries worst affected by the financial crisis, the United States and especially the United Kingdom, have since experienced severe political turbulence. I believe this can be directly traced back to the financial crisis and the way it was dealt with by governments, central banks and the financial elite.
Essentially, the general public came to the view that the elites’ first priority in the crisis was to look after each other. They were the first to get into the lifeboats.
Thus, central banks saved banks and offered unlimited finance to governments. Governments repaid the favour by promoting central bankers to be chief guardians of the economy.
Bankers, in turn, submitted to extra layers of reglation and fines which they made sure did not reduce the personal financial rewards they took from their businesses and the cost of which they passed on to customers. They also established the “too big to fail” doctrine more firmly, making it safer to take bigger bets with taxpayers’ money. investment banks were conveniently offered shelter by the US government when their business model failed, grossly extending the umbrella of taxpayer’s money like a warm blanked to those on the brink of failure.
But in both the US and UK the public took revenge. They voted in ways that profoundly shocked the “establishments” of each nation. Donald Trump was preferred to Hillary Clinton. Brexit was chosen, in a direct challenge to the liberal, cosmopolitan elite – and contrary to the advice of a large majority of economists: “We have had enough of experts”, declared minister Michael Gove in a typical populist gesture – Gove himself being a typical member of the expert elite, privately educated, Oxford etc. It was he who got Trump to affirm his support for Brexit, describing the vote to leave as “so smart”, and praise the fall of the pound sterling. In an interview, Gove also got Trump to promise a free trade deal for Britain post-Brexit, a promise that he could not deliver.
Experts in the US and UK laughed at the gullibility of the masses, who they said would be betrayed by Trump and suffer most from Brexit.
I think people were aware of this, but wanted to give the elites a bloody nose at all costs.
Central bankers bleat that nobody loves them, that they are misunderstood.
Their solution is to try to communicate better. Senior Bank of England officials tour the country in a bid to “reach out” to the general public and have “conversations” rather than simply deliver lectures. They even hold up Trump as a model communicator! They brandish research showing that nobody understands what central bankers are saying but that 95% of the American public understand Trump’s tweets. So let’s copy Trump’s simplicities!
Bungling the financial crisis
In fact, the public understands what has been going on better than these central bankers imagine. The people do understand these messages but reject them as they are, essentially , based on lies.
The general public views the way the crisis was dealt with by central bankers and politicians as grossly unfair. They see that those responsible for the crisis have not been held to account. They see the bonuses continue to flow. Meanwhile, many experience flat or falling real wages. They see assets of people with significant stock market investments or high-end properties soar into the stratosphere, while minorities, single mums , the sick and the “failures” of society are pushed into the gutter.
The people’s revenge condemns the US and UK to years of political and financial instability.
The US will recover. For Britain, it will lead to long-term economic and political decline.
Brexit- it is the worst mistake for 1,000 years. Britain will be a bitter and divided society for generations to come. It is worse than Suez in 1957. Nothing in England’s history since the Civil War in the 17th century has been as divisive. Yet out of that conflict came ideas of equality, curbing the powers of the monarchy, some great literature and, eventually, a more tolerant society. With Brexit there is no upside.
It is, ultimately, the penalty of a society’s failure to deal adequately and fairly with money.
The lessons?
1. People know injustice when they see it.
2. They will find ways to make their anger felt.
10-Year retrospective: Lesson 4
People know injustice when they see it
4. The people will have revenge
The countries worst affected by the financial crisis, the United States and especially the United Kingdom, have since experienced severe political turbulence. I believe this can be directly traced back to the financial crisis and the way it was dealt with by governments, central banks and the financial elite.
Essentially, the general public came to the view that the elites’ first priority in the crisis was to look after each other. They were the first to get into the lifeboats.
Thus, central banks saved banks and offered unlimited finance to governments. Governments repaid the favour by promoting central bankers to be chief guardians of the economy.
Bankers, in turn, submitted to extra layers of reglation and fines which they made sure did not reduce the personal financial rewards they took from their businesses and the cost of which they passed on to customers. They also established the “too big to fail” doctrine more firmly, making it safer to take bigger bets with taxpayers’ money. investment banks were conveniently offered shelter by the US government when their business model failed, grossly extending the umbrella of taxpayer’s money like a warm blanked to those on the brink of failure.
But in both the US and UK the public took revenge. They voted in ways that profoundly shocked the “establishments” of each nation. Donald Trump was preferred to Hillary Clinton. Brexit was chosen, in a direct challenge to the liberal, cosmopolitan elite – and contrary to the advice of a large majority of economists: “We have had enough of experts”, declared minister Michael Gove in a typical populist gesture – Gove himself being a typical member of the expert elite, privately educated, Oxford etc. It was he who got Trump to affirm his support for Brexit, describing the vote to leave as “so smart”, and praise the fall of the pound sterling. In an interview, Gove also got Trump to promise a free trade deal for Britain post-Brexit, a promise that he could not deliver.
Experts in the US and UK laughed at the gullibility of the masses, who they said would be betrayed by Trump and suffer most from Brexit.
I think people were aware of this, but wanted to give the elites a bloody nose at all costs.
Central bankers bleat that nobody loves them, that they are misunderstood.
Their solution is to try to communicate better. Senior Bank of England officials tour the country in a bid to “reach out” to the general public and have “conversations” rather than simply deliver lectures. They even hold up Trump as a model communicator! They brandish research showing that nobody understands what central bankers are saying but that 95% of the American public understand Trump’s tweets. So let’s copy Trump’s simplicities!
Bungling the financial crisis
In fact, the public understands what has been going on better than these central bankers imagine. The people do understand these messages but reject them as they are, essentially , based on lies.
The general public views the way the crisis was dealt with by central bankers and politicians as grossly unfair. They see that those responsible for the crisis have not been held to account. They see the bonuses continue to flow. Meanwhile, many experience flat or falling real wages. They see assets of people with significant stock market investments or high-end properties soar into the stratosphere, while minorities, single mums , the sick and the “failures” of society are pushed into the gutter.
The people’s revenge condemns the US and UK to years of political and financial instability.
The US will recover. For Britain, it will lead to long-term economic and political decline.
Brexit- it is the worst mistake for 1,000 years. Britain will be a bitter and divided society for generations to come. It is worse than Suez in 1957. Nothing in England’s history since the Civil War in the 17th century has been as divisive. Yet out of that conflict came ideas of equality, curbing the powers of the monarchy, some great literature and, eventually, a more tolerant society. With Brexit there is no upside.
It is, ultimately, the penalty of a society’s failure to deal adequately and fairly with money.
The lessons?
1. People know injustice when they see it.
2. They will find ways to make their anger felt.
Written on October 16, 2017 at 10:06 pm, by robert
Categories: Banking, Homepage, Official Money, RP's Diary