Monday, 29 September 2008

Credit Crunch

Is it me or has the world (or the West) gone crazy. I am so mad about what is going on in the financial markets at the mo, for my own sanity i had to vent.

I have been saying for the past couple of years that the markets were unstable and a crash was highly possible if not inevitable. Crazy bankers and greedy brokers have been building a house of cards. Lending way more than was sensible, for flip flops sake, surely the very label "sub-prime" was enough of a clue!! And now it has all gone belly up, after years of indifference at best and down right hostility at worst to government regulation, they all go crying to the state to help them out.

And - this is the bit that really makes me mad - the state says ok. We will lend (a city euphemism for give) you billions of quid, so long as you promise to say sorry and try not to do it again.

Lehmans US kept $1.9 billion to share out to executives which would have paid all the UK staff for a year. As it is, they get no redundancy pay or even the wage they just worked for.

So obviously we can trust these same people to use the $700 billion US government hand out wisely and fairly and for the benefit of the whole of society and not just stuff it in their own pockets.

Taking this slightly wider - what it shows us is that Free Market Capitalism can only ever result in disaster. In every de-regulated sector, what happens is not an increase in competition driving down price, but rather a serious of mergers that results in several large companies exercising monopoly power and ripping of the customer.

The top people in these firms make lots of money - and the majority of us end up paying more and more for our electricity, petrol, food etc etc

What we need is an end to greed and the idea that profit is all that matters. We need people to matter again. Community to matter again. If that comes as a result of this crash, then it will be a defining moment in history.

My fear is that nothing has been learnt and the the banks will just take the cash, our cash, and start building the same house of cards again, and in a year or so, everything will be fine once more - for them!