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LIVE 24-SEVEN


DIGBY LORD JONES THOUGHTS FOR OCTOBER


It is ten years ago this month (as I write this, in early September 2018) that Lehman Brothers went bust, the Bradford & Bingley Building Society had already gone the way of Northern Rock and soon we, The Great British Taxpayer, would own the greater part of the Royal Bank of Scotland, NatWest, Coutts (The Queen’s Bankers for God’s Sake!!), the Bank of Scotland and...you could hear my Grandma Jones from Yorkshire turning in her grave...that paragon of financial probity and saving for home ownership or just for a rainy day, the Halifax Building Society.


This was The Crash…to be labelled forever as The Financial Crisis of 2008...and it changed things forever.


I remember voting in the House of Lords on the legislation needed to bail out RBS and hearing a Labour Peer saying loudly, with a degree of incredulity, that the forces of capitalism in Parliament were speedily voting through the very thing they had fought against tooth and nail during many a Labour Government since the Second World War, nationalisation of the banks.


It was left to Her Majesty the Queen to ask publicly the question to which everyone required an answer;


why didn’t the regiments of well-paid economists and experts see it coming? (Not the last time they were going to get a drubbing in the subsequent decade was it, Mr Gove?!).


It wasn’t rocket science. If you lend people dollops of dosh that they haven’t a snowball’s chance in hell of repaying without substantial asset inflation, if you persuade people to borrow beyond their means on the basis that they will be able to repay the fast- accruing interest at a time in the future out of...er...borrowing even more, if you lend the stuff out on long term plans and fund all of it from short term borrowings, then don’t be surprised if you go bust.


Western democracies survived; the banking system withstood the storm; democratic capitalism lived to fight another day, but...


…the trust had disappeared – forever.


Small businesses (especially in the property related sector) that had never let their bank down, never exceeded borrowing limits, never missed a request or a payment, were ordered to repay their trading overdrafts at once. The reason? Their bank literally needed the money to prevent it going bust. Never again would small businesses trust the banks. “We’re open for business” and “We’re on the side of small business” became the straplines in the rainforest-worth of newsprint advertising (paid for by our money as taxpayers) to which the small business women and men just said, “b****cks!”. The whole working capital scenario changed – forever.


Whilst the Socialist cohort predictably (even gleefully) wheeled out the Karl Marx maxim, “If you give capitalists enough rope, they will eventually hang themselves” (memo to the greedy ba****ds in parts of business today, increasing their profit-related bonuses at the expense of good-quality customer service: Watch It!!) the average Joe or Jo in the street, in the months and years that followed, developed a deep-rooted sense of anger and betrayal. Where were the prosecutions? Or at least where were the findings of personal liability in the people who’d picked up gargantuan bonuses by gambling other people’s money? Heads they won, tails we lost. As my Mum said at the time, “They had no right to gamble my savings away.”


Not only did no-one seem to pay for obvious acts of greed, negligence, poor enforcement of regulation or apparent downright cheating, but more quickly than you could say, “Pass the Bolly, it’s Bonus Day!” the banks were at it again (on both sides of The Pond) paying out huge sums to people who were rewarded for upside and never penalised for downside. The phrase,“When will they ever learn?” did not just belong to the American Protest Movement of the Sixties.


/ 58


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