Idea IS the format

This is the simplest explanation I’ve encountered of what’s just happened to the global financial system. The fact that it was originally used to describe the events leading up to the Great Depression is, well, depressing.

I was down at my parents’ house recently and my dad was lamenting the fact that his father was a banker, at a time when it was regarded as a highly reputable vocation.  In his day the purpose of a bank was to aggregate wealth, so that anybody needing to borrow some money in order to buy a house or start a business would have the opportunity to do so.

In that respect everybody was investing in each other, backing their readiness to work hard and create things of tangible value, stimulating the growth of the economy through inventiveness and endeavour.  A bank was able to make a decent profit on this, through the provision of what was an essentially administrative service.

Nowadays banking is rightly regarded as a dark art, driven by springs and principles very few of us could ever claim to fully understand.  My dad’s point was that a bank’s core value to the consumer hasn’t changed, but that we no longer differentiate between these necessary services and the devlishly intricate high-stakes gambling of the stockmarket.

We seem to somehow imagine that there is something reputable about share dealing, just because the men who practice it aren’t sitting in Ladbrokes reeking of stale smoke, fresh urine and abject desperation.

For my part, I can’t find anything reputable about sharking around the city in a sharp suit playing dice with somebody else’s money.  My money, in fact, and yours.  If it was their own hard-earned savings, do you think it would have end up tied up in sub-prime mortgages masquerading as Triple-A bonds?

And guess what?  Now they need to borrow some more, just to keep the game going, just to keep themselves in the next hand.  And they need somebody to lend it to them?  What kind of an idiot would do that?

Yup, you guessed it, that’d be you, and me, and anybody else who’s going to be paying taxes on the flipside of the next election, for about the next decade.  Because, of course, we all need a healthy banking sector.  We all need to be able to buy houses and and start businesses.  And that means paying for everything that goes with it, everything coming under the ever-widening remit of our ‘world-leading’ financial services sector.

Like my dad, I’ve never thought of socialism as a dirty word. I’m on the record that I’ll happily pay a little more of my earnings as taxes, if I feel confident that it’s being used for the benefit of society as a whole.  By which, in the broadest imaginable strokes, I mean the advancement of the welfare state, and the implementation of essentially humanitarian foreign policy.

When I stop feeling quite so benevolent is the point at which the same money is being used to indulge a cartel of greedy, morally bankrupt serial gamblers, who are at their most inventive when they’re doing their book-keeping.

No doubt they’ll argue that it was our mistake, yours and mine, that we borrowed beyond our means, and that we are the greedy ones, not them.

I disagree.

The first financial service I expect from my bank, my building society and my mortgage advisor is that they pool the extent of their knowledge and expertise in order to help me make informed decisions about borrowing.

If they can’t offer me that, they needn’t bother calling me up once a month to try and sell me a loan.  If they can’t offer me that, they become just another loan shark, feeding on weakness and misfortune to satisfy their own pathetic addiction.

As far as I’m concerned, they ought to want to invest in my long-term future, not to sell me down the river in the name of a fast buck.

Guess I’m kind of old-fashioned like that.