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Sanity Check: “Revolt Over Risks of Elite Class of Bankers”

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The Financial Times’ John Gapper makes some remarks in his latest comment at the Financial Times, “Revolt Over Risks of Elite Class of Bankers,” that I found surprising:

The common thread of this week’s events is that national depositors and taxpayers are revolting against the idea that they should bear the risks of international finance and permit an elite class of global bankers such as Mr Adoboli – or the feckless citizens of other countries – to take the rewards. As they draw back, global financial regulation is creaking at the seams.

In some ways, this is a shame. It is the financial equivalent of the trade protectionism that erupted after the 1929 crash, when the US and other countries raised tariffs. But it is not surprising. Investment bankers in the City and on Wall Street have done little to earn back favour after the recent bail-outs.

I have trouble with the idea that there ever was “global financial regulation”. Basel II was never implemented in the US.Even the initial Basel accord was implemented by national regulators and my understanding was that it was tweaked somewhat in various nations. There has been more communication and cooperation between national banking regulators post crisis, but that is not tantamount to international regulation.

Gapper may be seeing something I am missing, but from my US vantage, nothing has changed from what I wrote in ECONNED (published March 2010):

The firms that had been silently drained of capital and tied together in shadowy counterparty links teetered, fell, and looked certain to perish. There was one last capital reserve to tap, U.S. taxpayers, to revive the financial system and make the innovators whole. Widespread anger turned into sullen resignation as the public realized its opposition to the looting was futile.

A question to readers:

Has there been a meaningful change in sentiment towards major financial players in the UK and Europe? Is the public fed up enough with bankers that politicians might be forced to take action?

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99 comments

  1. pj

    The public is hard-pressed to choose whether it is the bankers or the politicians we are more fed up with.

    It is my opinion that they are both rapidly losing any semblance of credibility or utility they ever had.

    Obsolescence happens.

    1. rd

      The political leadership keeps announcing that they have been given a “mandate” when they win. However, I think over the past decade, the only mandate they are getting is to “not be the other guy.” The swing voters in the middle keep getting handing two polar opposite, unappetizing choices to vote for.

      I think the polling is consistently showing this with intense dislike for Congress and most other political entities. Also, the politicians are waging war over issues that the majority of the electorate believe are unimportant or want resolved differently than the politicians’ positions.

      Obama came in with a lot of promises and promise. In the end, his failures are likely to be a major contributor to the growing cynicism of the electorate.

      1. watercarrier4diogenes

        I think you’ll agree that Obama offered a polar opposite, but it wasn’t until he got in office that he became an unappetizing choice to vote for.

    2. Carla

      “The public is hard-pressed to choose whether it is the bankers or the politicians we are more fed up with.”

      Why choose?

      I mean, what is the difference?

  2. burnside

    I’ve got a few contacts in Germany where, until early this Summer, the subject excited little interest. That has changed, and evidently they are a quick study. The change, then, is that major financial players appear to have the public’s attention there today.

    I’m told there is a reader survey in progress at *Die Zeit*. And would like to think it reflects disapproval spread broadly enough to bring political pressure to bear. But then I thought the same of Ireland some time ago.

  3. chris

    The general public in the US is more accepting of being fleeced by bankers than they are of being fleeced by the government but I don’t think people are as upset as it seems would be warranted. If people are working or have held their job, are not losing their home, or taking massive pay cuts, which is probably 70 % of the work force….I really don’t know what percentage it is but the minority are those that are angry with the banks but I think they still believe this will be over soon and it is just a normal recession without realizing that a new president will likely not bring a speedy turn around to the economy. Most people are unaware of the implications of the title issues as well and are gladly willing to look for the cheapest house they can find.
    It is clear that the majority of people are ok with letting the bankers off the hook no matter what they have done and they we still operate something close to a free market system.
    A few years ago I speculated that all of this would be brushed under the rug and the bankers would be let off the hook. But that wasn’t enough…the banks have been rewarded for their criminal behavior and are continuing to reap the rewards of the bailout and easy money from the government. Majority is ruling but it is unfortunate that the majority is wrong.
    That is what I see from over here……
    The banks can put in notes in the computer and they are the gold standard that will not be questions even if they have fabricated the input.

  4. Woodrow

    “Is the public fed up enough with bankers that politicians might be forced to take action?” -

    Obviously not here in the United States, the one’s that would put themselves at risk, are too spread out to do anything to make any kind of impact.

    Maybe when enough have been looted enough here in The United States, and government can no longer feed and house millions MORE Americans, then we might see something.

    A lot of Americans have their own problems, pretty sure they’re not concerned with citizens in EUrope, we get looted here just as much as they do.

    1. rd

      The powers that be of both political parties and the Fed threw everything, including the kitchen sink and the baby and the bath water, into extend and pretend. So far, the stock market rose back up and we did not collapse into consistent double digit headline unemployment numbers (although more realistic measures are there).

      However, if the wheels fall of the markets again (which I think is likely in the next two years), it will be clear the the US public that they were had. I think the rage then will be intense. Americans can tolerate a lot but expect results. The “extend and pretend” farce at that time will impact even more of the boomers approaching or are already into retirement that n in 2008-2009.

      It will be hard for the political and banking class to survive a wave of very pissed off seniors and 20 somethings. These depressions usually take well over ten years (probably 15-20) to resolve. We are only at year 11 and counting.

      Greenspan made the opening move in the early 2000s opening up the money spigots and refusal to regulate after the NASDAQ collapse. That led to the fireworks of the housing collapse and 2008 financial crisis in the early middle game. Bernanke and Congress sacrificed the queen with ZIRP, QE, and TARP. We are really only moving into the late middle game at this point with the Europeans now in the process of sacrificing their queen. We can’t fully envision the end game yet when the math takes over and dicates the result.

      1. jake chase

        It is annoying that no banksters have been prosecuted, but the bigger problem is that nothing has been done to correct the financial behavior which caused the crisis. Without a Tobin tax on high frequency trading and derivative bets we are simply drifting toward the next crash which is guaranteed to be even bigger. I am not aware of a single public figure trying to institute such a tax. Apart from identifying one and running him for President there is no point in doing anything but attempting to protect oneself.

  5. 4l-X

    Hi!
    Here in Germany the politics and mainstream Medea managed to shift the anger away from the banks and insurance companies to Greece, the PIIGS and Euro/EU in general.
    People are confused and the easiest solution is to blame the hole thing on ‘the lazy south Europeans’. It is no longer a ‘banking crisis’ it is ‘the European debt crisis’ now.
    (of course not all the Germans buy the story but too many)

    (sry for the bad english)

    1. justice

      Cultural scapegoats are always available to take the blame for the elites. You remind us that at the outset of the “subprime mortgage crisis” the bankers, their friends in the news media and right wing politicians tried to blame the disaster on “dishonest homeowners” who borrowed more than they could afford — with the not so subtle implication that these were mostly poor blacks and HIspanics who had duped the bannisters.

      No need to apologize. Your English is very good.

      1. Justicia

        My English doesn’t look so good here — thanks to my iPad’s spell correction feature that replaces what you write with what it thinks you meant to write. Anyone know how to turn this damned feature OFF?

        1. The lives of others

          iPad
          Try settings /keyboard/
          You can turn off the auto correction feature, but it also turns off spelling check.

      2. sgt_doom

        Well said, justice, well said.

        Truly, too many either forget, or are unaware, that between 2003 – 2007, $1.5 trillion subprime mortgages were written, of which approximately $14 trillion in mortgage backed securities and CDOs were written, and the most conservative estimate is that they were leveraged to at least $140 trillion (probably much more).

        So normally a 4% default rate in America, which should never have resulted in a meltdown in America, let along throughout the planet, ended up to involve $5.6 trillion (4% cascading along that $140 trillion amount).

        That’s a lotta leveraging. (And the upper 5/6ths involved in those subprime loans were corporate and wealthy individual speculators and house-flippers, it is only the bottom 1/6th which were single and family residential buyers.)

        Great comments.

  6. Anon

    I thought when I first read it (saw it before Yves put it up), that Gapper’s piece was entirely specious.

    In particular, this bit about what the banker elites have been up to in the past few years:

    An enormous mismatch of assets and liabilities has lain at the heart of international finance for the past several decades. Retail and private bank deposits in the US, UK,
    Germany, Switzerland and France have been used to support the expansion by banks such as UBS, Barclays, Société Générale, Deutsche Bank and JPMorgan into global markets.

    This had benefits for global trade and commerce, which have grown hugely in that period. It has made it easier for US and European companies to attract investors from other countries. Companies such as Apple and Nike have been able to finance and assemble global supply chains, creating jobs in Asia and lowering their prices.

    That’s it – just good, clean harmless, innocent fun! I mean, it was all just $$$ invested in global trading – for the public good! What kind of fool would object to that?

    But it’s a specious argument. It elides.

    For a start, there’s no mention of the fx carry trade, which tanked Iceland (and is about to do the same for Hungary).

    And more egregiously, there’s no mention of the worldwide housing and commercial real estate bubbles, which were of course fuelled by friend Greenspan and his merry gang of wreckers from Wall St. For years and years and years.

    If this is the best Gapper can do, he should quit the FT and head off to The Economist. This piece is more their style – tendentious, specious b*llsh*t.

  7. Ben

    “Has there been a meaningful change in sentiment towards major financial players in the UK and Europe? Is the public fed up enough with bankers that politicians might be forced to take action?”

    Well, in the UK the Government might not be forced to take action, but the current public view towards bankers means that it certainly can’t use banker-friendly rhetoric. It certainly puts the Conservative government in a bind – usually it would be being the bankers best friend, but it has to be tough in public at least, due to public opinion.

    Thus bank-friendly initiatives (lowering corporation tax by removing capital allowances, which will hit industry and reward financial services, or amending the Controlled Foreign Companies regime to allow subsidiaries in tax havens to pay only 5% UK tax) have had to be done on the quiet.

    (Oh, and ‘the UK and Europe’?? The UK is in Europe! Despite what the Tories might wish…)

    1. William C

      I think Ben has it right about the situation in the UK. The public here are hostile to the bankers (but also appalled at the behaviour of the politicians, the police and the journalists, so focus on the bankers has faded since 2009). I think the government will regard the changes arising as a result of the Vickers Report as enough of a sop to public opinion to let things run for now, though there are tensions within the coalition (Osborn v Cable largely). And it is a step in the right direction, just does not go as far as I, for one, would like. All could of course change – it was one of our Prime Ministers Macmillan who, when asked what caused him problems, said ‘Events, dear boy, events’.

      1. watercarrier4diogenes

        Ringfencing has about the same chance in the UK as reinstatement of Glass-Steagel here. Both are desperately needed, but the grassroots public can’t afford the $$ it would take to outspend the corporatocracy to awaken and educate enough voters to get the job done.

  8. DavidS

    There needs to be a single villain against which the public can channel its anger for anything to really change.

    Obviously the reality is that everyone was responsible, to varying degrees, which makes no one responsible. The banks in the US and Germany have, for example, deftly exploited existing sentiment to channel the public’s anger towards big government and “lazy” Greeks, respectively.

    If you are interested in changing the policy debate, you really do need to communicate in clear, consistent, black-and-white absolutes using language the public already uses, otherwise the public’s attention will remain unfocused and diverted.

    Noble Taxpayers = selfless heroes who saved the economy from the brink of disaster with the bailouts.

    Fatcat Bankers = villains for crashing it and trying to loot the treasury.

    The end.

    1. F. Beard

      Obviously the reality is that everyone was responsible, to varying degrees, which makes no one responsible. DavidS

      Wrong. The public behaved rationally given the system. A money system that precludes honest saving will encourage speculation and consumption.

      And let’s not blame the bankers too much. The money system itself (government backed counterfeiting and usury) is inherently dishonest and unstable. And even so-called “prudent banking” is unstable because growth rates are not sufficient for people to long endure it. Plus “prudent banking” remains dishonest since some, the so-called “credit-worthy”, are allowed to steal purchasing power from everyone else. How can an economic system based on exploiting one’s fellow countrymen prosper?

      1. sgt_doom

        “And let’s not blame the bankers too much. The money system itself (government backed counterfeiting and usury) is inherently dishonest and unstable.”

        Geez Louise!!!! You might wish to learn something about predatory legislation and predatory jurisprudence and massive lobbying by Wall Street, dood!!!

        Trying perusing the Private Securities Legislation Reform Act of 1996, as well as the Derivatives Policy Group and what Wall Street firms made it up, and the Gramm-Leach-Bliley Act of 1999, and who was behind it, and the Commodity Futures Modernization Act of 2000, and who was behind it, and re-read JPMorgan’s Glass-Steagall: Overdue for Repeal, and guess who was behind that?

        The banksters bought the Supreme Court decisions, they paid for the predatory legislation from congress, and they profited mightily form their mass perfidy.

        Michael Paese doesn’t leave Barney Franks’ staff to become a chief Goldman Sachs lobbyist for altruistic reasons (actually, it was primarily to give Barney the written material to be inserted into the Dodd-Frank “financial reform” legislation).

        Nor did Paese replace Mark Patterson for the hell of it; as Patterson left that position as chief lobbyist at Goldman Sachs to become advisor to Treasury Secretary Timothy Geithner.

        Beginning to see a pattern here? Or are you a chatbot???

        1. F. Beard

          I’m not defending anyone. But until you realize that your local “prudent banker” and credit union are also part of the problem you will never truly fix it.

          Go ahead and reverse those laws and prosecute the criminals. But that is not nearly enough. I for one am tired of a money system that is fundamentally crooked and which oscillates between boom and bust.

          We can’t do better than that?

          1. William

            Yes, the problem is systemic, but boom and bust is a feature of capitalism in general, not any particular monetary system.
            We can’t do better until people come to terms with that.

          2. F. Beard

            … but boom and bust is a feature of capitalism in general, not any particular monetary system. William

            I don’t think so. Usury itself is unstable since the debt typically compounds faster than real economic growth. But our system is even worse since money (so-called “credit”) is lent into existence and is destroyed as it is repaid. That alone could cause the boom-bust cycle unless ever more debt is added to the system.

  9. Jessica

    In Copenhagen and Vienna, what I hear is all about the periphery debt issue, not about their own banks.
    Danes seemed more sympathetic to the south, especially if I asked “even if it is the South’s fault, should they be punished with the kind of economic Depression that is happening”.
    In Austria, the virtuous hard-working north vs. lazy south meme seems to fit quite well with existing strong feelings against southern and eastern European immigrants.
    In Denmark, the feelings against immigrants don’t come up so easily in conversation, and the immigration issue is more about Muslim immigrants, so it is separate from the PIGGs issue. Also, the Danes are largely feeling _very_ glad that they refused to join the Euro.
    Just my take on it from people I meet in both cities.
    As an American, I think it is a pity that the north-south divide-and-conquer is working as well on Europe and the black-white one has for decades in America. (Canada = USA minus effect of black-white divide-and-conquer)

    1. sgt_doom

      Ask a well-informed Dane about their loss in national tax revenues when private equity firm, the Blackstone Group, did a leveraged buyout on their national telecom (TDC).

      And what laws were passed afterwards…..

    2. Ian ollmann

      I don’t know. Obama has taken a lot of heat lately but about zero of it is because he is a black man. I won’t say racism is dead, but I think any black white divide is no longer a driving force for the national discourse. What little is left is often difficult to separate from mainstream revulsion of ghetto culture and poverty. That is we are happy to welcome the black man next door. We are more worried about the one from the projects. We still have a lot of inequality, but I think it is poverty that can and does hold people back for generations.

      The national stage is however dominated by a lot of anti-Hispanic and anti-gay bigotry. Thatis just ugly. We are also busily ramping up on class and generational warfare.

      1. Jessica

        You correct about the current state of things.
        I think that in the 60s-70s, when the New Deal coalition fractured, resentment against African-Americans among the white working class and middle class was encouraged and was used as the main lever for divide and conquer. It is that process from 40-50 years ago that the current north-south split in Europe reminds me of. Not the exact content, but the general form of ordinary folks paying too much attention to the perceived flaws of other ordinary folks and not enough attention to what their own elites were doing to them.

  10. Mondo

    Living in Germany now, after spending two years in the US: People here still want to trust their governments as well as their bankers. And since the economy is still going strong at the moment people seem to have only a slight feeling of unease, and if anything take more of a fatalistic approach, hoping that everything will turn out somewhat OK in the end. You may call that realistic as well, there isn’t anywhere or anybody to turn to really for the average citizen. Our politicians aren’t seen as being very competent in this crisis but there isn’t any alternative either.

    People have been trying to save their wealth by investing it into real estate – residential building activities are very high right now. This has been going on for a while and arguably is playing a big part in keeping the economy going. If investing in bricks and mortar is really such a splendid idea if everybody is doing it in the face of adverse demographics is another question, and anyway we may see the end of this boom coincide with a collapse of manufacturing orders due to the Euro mess starting to have more of an impact over the next couple of months.

    Re trust in banks – Don’t forget that the German retail banking system is still dominated by smaller savings and loan institutions. Those are seen to be quite far from the mess that the big banks are in. Maybe rightly so – as my banker tells me, his (smallish) bank is extremely cautious right now to deal at all with any of the big banks. In the end of course that may still not save them if things really fall apart.

    Anyway, what do you mean by ‘politicians might be forced to take action’ ? It is not like that there is a clear path to salvation. Most people would probably see an enhancement of the EFSF capacity as unworkable from an implementation perspective, and as a highly problematic measure in itself. You would buy time in exchange for risking a complete loss of confidence, as well as potential collapse of the Euro, once it turns out that the EFSF commitments are not backed by anything really – except the capability of the ECB to print unlimited Euros. MMT’ers will argue for it but they should look at the consequences. I’d like to see somebody look at MMT from a behavioral economics perspective to try to find a practical limit to MMT based monetary policy – it is pretty obvious that there is one, but it would be hugely interesting to know where it is really these days.

    The other potential strategy would be a more unified EU, working towards a much tighter integration with national governments ceding much more authority to the EU. Unfortunately, and that is probably one of the biggest problem right now, none of the German government representatives (or anywhere else in the EU) who you read or hear from in the media every day has been willing or able to communicate a clear vision to that end. Also, supranational EU bodies including the commission, the council, and even the parliament are not seen as democratic (which is their own fault I’d say) and therefore I don’t see how public support can be generated for such a solution in the little time that is left.

    Now, if by ‘action’ you mean better regulation, that is clearly desirable but is not one of the things that will help fix the Euro mess. At any rate, every regulatory proposal that I have seen so far, including the most recent one from the UK, have an implementation time frame that is far too long to make any difference in the current crisis. A more Chinese approach might help – authorities there have a habit of issuing edicts that become active in a very short time frame.

    Overall I think complacency still reigns both at the government and the general population level. At the government level it may also be the realization that there is no way out. If this impression is correct then the likelihood of a disorderly resolution appears very high to me.

    1. Richard Kline

      So Mondo: “I’d like to see somebody look at MMT from a behavioral economics perspective to try to find a practical limit to MMT based monetary policy – it is pretty obvious that there is one, but it would be hugely interesting to know where it is really these days.” That is the crux of the matter regarding MMT, isn’t it? It all works perfectly well until the day the public losses confidence in the currency, after which they trade the stuff for blue jeans, flats, and heroin as proper endstage Soviets?

      Greater financial union is coming in Europe in my view, not least because, as you say, politicians withing the loop can see that there is no way out. I had more to say on that in the comment thread of the ‘Bank Bailout?’ post. Much of what is done will be done more or less by fiat from the center, just as we see this massive, necessary, liquidity float in the Eurozone now. The politicians can’t do it because they are tied to local constituencies who are not up to speed but who do vote in by-elections. It will be the faceless Eurocrats who act. And we’ve seen the departure of several ‘Don’t act’ members of the ECB Board exactly because, in my view, they have lost the internal policy debate and can’t derail what’s coming.

    2. Carla

      Mondo–complacency is it. “I’m okay, Jack.” Those who have jobs, investments, money in the bank, decent homes, health insurance and a comfortable life cannot imagine that anything will ever be different for them. They see and hear that others are suffering, but surely, they cannot be expected to do anything differently. They know the political system is a sham, but it’s not their problem. YET.

      1. watercarrier4diogenes

        Might be more than a few finally waking up there. This from Der Spiegel, with an “interesting” set of poll #s on the left side of the article:

        The Euro Crisis Hits Berlin
        Merkel’s Authority Is on the Wane

        “Chancellor Angela Merkel’s authority is being undermined by leading members of her coalition partners, the FDP and CSU parties, who have openly challenged her policy on the euro. There is growing speculation that her coalition may collapse, prompting a return of the right-left grand coalition of conservatives and SPD.”

  11. Linus Huber

    As per socionomics, the mood changes are reflected in the stock market. We had a run up over the past 2 years that may have peaked earlier this year. If we are at the beginning of a new bear market now, then I would expect that people’s anger will increase considerably over the coming period until the end of the bear.
    So, if I were a banker, I would run before it is too late.

    In daily life I observe that normal average people do understand the workings of the system quite well but they cannot phathom yet that things will turn so bad that it would have impact on their daily life. As long as they still receive their monthly pensions on the same level as planned (here in Switzerland) they think that somehow it will pass them by. The real anger will start when they are faced with specific effects of the problem which may take another year or 2 to show up in this country.

  12. Yearning To Learn

    what is this tripe?

    The common thread of this week’s events is that national depositors and taxpayers are revolting against the idea that they should bear the risks of international finance and permit an elite class of global bankers such as Mr Adoboli – or the feckless citizens of other countries – to take the rewards.

    It’s about time! depositors and taxayers are FINALLY revolting as they should have done 15 years ago.

    As they draw back, global financial regulation is creaking at the seams.

    no. the financial regulation was smothered long ago by bankers and their puppet governments. there is little left to creak. the only creaking that remains are the regulations that exist on paper crying out to be enforced… alas, those same government stooges refuse to pick them up and hope that they’ll die a nice crib death if left ignored long enough.

    In some ways, this is a shame.

    No. it is not. It is a shame that we ever put taxpayers in this position in the first place. When taxpayer funds OR funds that put taxpayers at risk were used it should have immediately come with CONTROL. And I’m not afraid to say it: nationalization.

    the bankers could have screamed and cried and gnashed their teeth. They could have threatened to go elsewhere. But there was NOWHERE ELSE TO GO. Thus: good. Go. They sucked anyway. Put them somewhere where they can’t do so much harm like Teach for America or Peace Corps or something. (and no, don’t let them go into tech or nuclear fields… they’ve already shown that they’re dangerous).

    It is the financial equivalent of the trade protectionism that erupted after the 1929 crash, when the US and other countries raised tariffs.

    no it is not. one COULD argue that the protectionism, although understandable on a personal level, harmed the general person in aggregate.
    In this case, refusing to use taxpayer/depositor funds to allow casino capitalism MAKES SENSE all the way around, and is the ONLY logical way forward.

    But it is not surprising. Investment bankers in the City and on Wall Street have done little to earn back favour after the recent bail-outs.

    because they are all self-centered criminals with no remorse.

    even now, they try to make out as though we all had some sort of blame. No we didn’t.

    when I am agitated I go for bike rides and imagine that I had supreme ability. That ability would include wiping out EVERYTHING from EVERY one of their accounts immediately, leaving them with nothing. instantly.

    (I wish I were Matthew Sobol in the great fun fictional book Daemon… a fun read).

  13. Middle Seaman

    As mentioned above, Germany is doing fine and the little objection there is seems to be against Merkel personally. The Danes are less well off and seem to blame the bumbling politicians. Banks do not seem to be targeted.

    Although most European politician slave for banksters very much like in the US, politicians in Europe do not need the banksters for their elections even close to the degree they are needed in the US,

  14. Abigail Caplovitz Field

    I think the US is absolutely ripe for forcing government action. The inchoate rage is palpable outside of elite circles. All that’s needed is to tap into it and channel it into something effective, garnering as much media attention as possible all the way. And if we don’t tap it and channel it, violent civil disorder is surely not far away.

    Traditionally the American trigger for violent disorder is police shooting of young black men. But this time it might be one particularly egregious eviction too many; one banker bailout/no accountability contrasted with no help for homeowners/the unemployed too many. The powers that be are aware of the risks, and worried. Consider how the government reacted to the guy painting the Chase bank as if it were on fire; http://www.youtube.com/watch?v=ZYhsRqqwgkk&feature=share .

    I’d say the question isn’t, are Americans ready to force change; it’s: Can the Americans’ existing and growing rage be channeled into intentional, constructive change or will it just blow, and like the financial crisis, force improvised change that may or may not be constructive?

    Lots of groups are trying, see e.g., The Other 98%, The New Bottom Line, the nurses, etc. But so far it hasn’t added up to a movement. I hope it will, or I believe things will get very messy. In fact, the moment for a movement is perfect, given the presidential election plus all the Congressional races. It’s basically now (meaning this election cycle) or (I’m pretty sure) the country’s going to blow.

    1. Viator

      The Other 98%. Brought to you by the good billionaire and currency trader, George Soros. When you are a multi-billionaire it is always good to have the left in your pocket.

      1. LillithMc

        George Soros seems to be the only name the righties know. Time to get a new idea. Dear George is a piker compared to the financial support of the “convervative” fake-party.

    2. Ian ollmann

      An eviction as a trigger point seems unlikely to me. If we had traditional, deeply established communities where one lived all his life and never left, then yes. We aren’t like that though. We are a nation of immigrants from other states in the union. Many of us don’t know who half our neighbors are, and if we did, they’d just move away in a year or three.

      I wish the democrats would have more of a fire in their belly. The republican party is absolutely demonizable, these days. The tea party republican debate was just repugnant. No mother would raise her children with that kind of ethos!

      It would be nice if the national culture would prize wit and intelligence again. I’m having trouble identifying with my fellow American because he acts like an idiot.

  15. lambert strether

    The looting class will continue to loot with impunity. Until they can’t. See Matt 25:13.

    We can’t know in advance if or when that moment will come. In the Arab Spring, the moment came when the rentiers asked too much of one street vendor, Mohamed Bouazizi. (Literally: He immolated himself over a permitting issue that made it impossible for him to pay a debt.)

    That said, there are straws in the wind. From a couple in a foreclosure case:

    “We’re facing losing our homes, and we want to go down letting the whole world know what’s going on.”

    “We want to go down…” Since the current dispensation, our rentier state, provides so many opportunities for people to go down — 6% loss of real wages; ~10% nominal (20% real) DISemployment; 50 million without health insurance — I would imagine lots of people have that scenario in their minds, as a way to give meaning to the ending of dreams and a life that used to be, as did Bouazizi.

    This couple sought out the courts. The banksters are trying to choke that option off. When they succeed, what will couples like this one do?

    1. lambert strether

      Addition to above: When I say “the banksters are trying to choke that option off,” of course I mean “…the banksters, who own both legacy parties and the President, are trying…”

  16. hello

    The polity has been neutralized via bread/circuses and the “Oh dear. I don’t like what’s going on, but I can’t really do anything effect” highlighted by Adam Curtis ( http://www.youtube.com/results?search_query=oh+dearism&aq=f ).

    The real threat to the bankers are the “industrial elites,” ie Coca-Cola pissed at GS for hoarding aluminum or Wal-Mart wanting to help working America because Wal-Mart’s profits derive from Joe Six Pack, not the Thomas Pink crowd or the trucking industry PO’d by the toll hikes on privatized roads.

  17. Dan Duncan

    Bring out the Hooligans.

    On the web, Banker Dissidents should organize weekly block parties near the branches of major banks. But the dissidents should not reveal to the “invitees” that this is really a Banker Protest. Just call it a “Party.”

    [On second thought, use "party" as a verb, instead of a noun. Consider the following:

    "You want to party tonight?"

    vs.

    "You want to go to a party tonight?"

    The use of "party" as a verb always involves illicit behavior. It's the "wink, wink" that says "Sex and Drugs will be served here".]

    OK…so, Banker Dissidents organize gatherings where the invitees come to party.

    In the “We’re Gonna Party!” Announcement, make it clear that a lot of alcohol will be readily available to all revelers.

    And make the Announcement fun! Put in a playful little note that breathalyzer tests will be given upon entry and “you’re not getting in if you’re below the legal limit…cuz we’re gonna Party!” Plant the seed that they should start drinking before coming to party and interacting with others.

    And now comes the two most important parts:

    1. At the bottom, insert a simple, matter of fact statement to the effect of: “No Jews, please.” Or “Blacks, not welcome.” or “No Burkas!”

    It doesn’t matter who you exclude and/or insult. Just don’t make it obvious.
    All you need to do is gently—and elegantly–bring a match to the kindling of racial and nationalistic tensions.

    [Of course, for more authenticity, feel free to also include casual, homophobic remarks about any local Club Football Teams. The Man U in Manchester United should proved plenty of good working material.]

    2. Then, on the flip side, create a fictional Banker who represents the interests of “__________” whatever bank you wish to protest.

    Have this “Big Bank Representative” notify the police, demanding a severe crackdown on these “Flash Street Parties”. Then, make it clear to all media outlets that “We here at [Big Bank] demand that riot police snuff out this hooliganism.”

    From here, just go to the Social Networks, stoking the flames that “[Big Bank], the police (and the Jews) are brutalizing our citizens!”

    And let the hooligans work their magic with bricks, bottles and urine bombs.

    1. different clue

      Under this scenario, why wouldn’t the partiers decide to party in front of mosques, synagogues, black churches, and gay bars? If you introduce those irrelevant nonplayers as targets, that’s where the partyers will go party.

      Muslims, Jews, Blacks, and Gays have gun rights under the Second Ammendment. Assuming that partiers decide to carry out your scenario, Muslims, Jews, Blacks, and Gays had better arm themselves to the teeth, buy thousands of rounds of ammo for every gun, train train train, and armor up and fortify their sacred places.

      1. ambrit

        Dear clue;
        The scenario you provided is, and always has been, used by reactionary elements the world over. You object to progressives adopting a proven tactic?

        1. different clue

          Did the tactic solve any real problems? Did the Nazis find Germany brick and leave Germany marble?

          I think that misdirection of saying “No Jews allowed” or “black people unwelcome” or “no burquas” or “no gays please”
          would direct the partiers attention away from the banks and towards the Jews, blacks, burquists, and gays. I wonder whether that might actually be the hidden agenda. But I have no power over anything. If progressives think it is a good idea, then they will give it a try. In which case, the Jews, blacks, burquists, and gays should be fortified, gunned and ammo’d to the teeth, and trained trained trained
          to kill as many partiers as necessary if those partiers “get lost” on the way to the bank and “find themselves” in front of a synagogue or a black church or a mosque or a gay bar instead. And if that happens, the Jews and the blacks and the burquists and the gays will know exactly who sent the partiers. They will know that the progressives sent the partiers, and they will find some way to thank the progressives and maybe even return the favor.

          I suppose it could be an interesting experiment. If the progressives wish to try it, we will just see where it goes.

          1. different clue

            ( And if anyone gets ohhh fen ded by someone speaking of “killing partiers” , well then . . . let no one bring a Klan Nazi lynch mob ( oh, I’m sorry, I mean a “party”) to a synagogue or a black church or a mosque or a gay bar.

  18. Dan G

    What is at stake is the whole financial machine that the the politico, and millions of others rely upon. Thus, the “machine”, including the media, make the tax reaming of the middle class go on withiout a fight. The banks literally rule the world, and there is seemingly nothing or no one to stop them. The system has been corrupted beyond repair. It insures a continued growing income disaparity between the rich and the middle class being sucked into lower class status faster than one can say tyranny. They will bailout with impunity because no one will stop them. The machine will continue on until it blows down like a Fukishima power plant.
    Goetner threw the feeler out there about bailing out Europe, and got little pushback, therefore we will see some QEE for QE Euriope by Bernake at the next 2 day meeting starting Wedneday; and the beat them down goes on.

  19. Ransome

    My middle class neighbors don’t understand why they are not receiving 6% returns on their savings deposits.

    1. ambrit

      Dear Ransome;
      My sub middle class neigbhors are somewhat perplexed to observe that the social contract they implicitly endorsed, by not adopting various crimes as sources of income, has been broken by the ‘elites.’ How does a population sue for compliance? Todays elites had better watch out. They are creating tomorrows revolutionaries.

  20. different clue

    Americans as a group won’t do anything until conditions in America become as bad as they were in Russia just before the abdication of Czar Nicholas.

    Therefor, those American individuals who understand the looting conducted by the gang bankers and Big Banka in general
    will have to try protecting their own individual and family survival as best they can in the meantime. They can also come together in mini-movements for mutual assistance and defense, as seen in past threads on this blog; where people shared knowledge and advice about how to counter illegal foreclosure attempts through various levels of the legal enforcement system.

    It has been noted that a whole second tier of midi-banks and a third tier of mini-banks and credit unions where not direct authors / participants in the Grand Theft Lootathon.
    Those individuals who wish to withhold their money from the gang bankers who would use that money against America might move their money (if they have any) into a midi-bank or a mini-bank. They might also want to store several months worth of raw survival cash somewhere in a physical safe place so they can still pay for things if the electronically mediated money-system goes dark for a while.
    If they can legally prove that they own the house they think they own, they might want to super insulate the house, put in roofwater harvesting systems, scientific waterless-toilet composting systems, etc. They might want to turn as much of their yard as their neighbors will permit
    into high powered gardens and micro-orchards.

    Those who think they own their houses free and clear of any mortgage might want to find a way to establish that for a banker-proof fact. If they can get that established, they might want to prepay their property taxes for as many years going forward as they can afford. That way, if they lose their jobs or moneysource, they are not at immediate risk of having their local government seize their house to give to rich crony-pal investors for “non-payment of taxes”.

    People facing the irreversible loss of their house might want to investigate the sort of sabotage which would make the house they are losing uninhabitable and the site unbuildable for decades to come. I don’t mean “vandalism”.
    I mean genuine sabotage. I mean filling the toilet with cement and pushing the cement many feet down the toilet drain pipe. I mean filling the hot water heater with cement and pushing cement up into all the water pipes and drain pipes (bathtub, sinks, etc.) as far as it will go short of where the city pipes begin. I mean opening subtle pinhole leaks here and there so that a very slow steady trickle of water will foster the mass growth of deadly black mold throughout the hidden internal structures of the house. And driving little copper spikes into every tree on the property. And soaking the back yard with gallons of a mixture of atrazine/fuel oil/etc.

  21. Pitchfork

    The Irish people I know are pretty ho-hum about it. Fine Gael’s election is comparable to Obama’s in that respect — it felt good and there were promises of change, but no chance of getting it. It will take a while for people to catch on.

    Then, too, people in Ireland are constantly fed disinformation about what it would mean to default on the bank guarantee. In the media, that route is constantly conflated with sovereign default (i.e. default on Irish gov bonds).

    For whatever reason, the IRish people simply don’t seem to understand that their debt slavery is for the express benefit of European banks. Wake the flock up, muintir na hEireann!

  22. Jib

    I think the anger at the banks and Wall Street is very real in the US. Remember in the original rant by Santelli that myth has it started the Tea Party,the ‘tea’ he was going to dump into Lake Michigan was MBS’s. The Tea Party people I know are very much aware that TARP was a republican program and they are as angry about that as anything. The propaganda machine at FNC and talk radio did some skillful jujitsu to redirect the anger towards the budget deficits mainly by talking ONLY about the budget and never about Wall Street. But the anger is still out there.

    That is why I think Warrens campaign is so important in MA. We need leaders who will run against Wall Street. We need a lot more than her, we especially need house candidates running in primaries against safe dems. Nothing scares a pol more than getting primaried in a safe seat.

    Running against Wall Street is a winning political message for either side and it is testament to the power the King Finance has over the political system that it has taken this long for ANYONE to run against them.

    1. Mike Murphy

      Running against the bankers is one thing. we need someone who will govern as promised. Obama ran promising reform, but look what he’s done. The Bankers will be bankers, any chance they get. THe citizens’ means to control them is supposed to be the government, so the bigger failing here is the government’s. But then, the government is us, theoretically. I voted for Clinton, I voted for Obama. Look in the mirror. It brings to mind Georgia Governor Lester Maddox’s comment on prison reform after his eight years in office: “We need a better class of prisoners.” How do we become a better class of citizens?

    2. Roger Bigod

      My recollection is that Santelli started the rant with TARP and the MBS mess. That got the attention of people on the floor. Then he segued over into “losers” who bought a house they couldn’t afford and were getting Federal mortgage mods. Big applause.

  23. frequent

    The Greece (debtors) aid packages do seem to create a stir in the ruling German coalition these days.

    Tomorrows Berlin regional election will also be telling in that regard, especially for the coaltion FDP party trying to not drop out of another regional parliament and therefore thinking a lot of Greece-bust-leave-EU-related things aloud.

    But I agree with the above posts… the talk is about having to bailout Greece and not the holders of Greek debt.

    For me, I’d rather see my taxpayer Euro spent getting Greece back on track after defaulting, a EU Marshal Plan would sound much more European-spirtited to me, than the current proposed structures. Therefore chapeau to Mr Schäubles comments in Wroclaw last week.

    As for defaulting… fork in the risk-premiums, bear the risks. Hasn’t it always been like that…? If the only way to return investment management to sanity is a collective default, then be it. I’d just prefer having our govt installing a backup local banking system … for all eventualities.

    1. different clue

      Eureka Springs,

      Thank you for the kind words. Perhaps “gang banker” could be just as viable a meme as “gang bankster”. Perhaps both should be tried in various experimental social settings to see which one takes deeper hold in the minds of the listeners.
      One form or another could bend the social mass-mind matrix if it got mainstream acceptance.

  24. Eureka Springs

    I do wish folk would blame gang banksters (love that term!) and buy-partisan bribed parties as the root of the problem. And I can only hope when dissent arises in mass… that we who are in the know on these matters encourage direction of such dissent into the wealthy neighborhoods instead of the town square, or worse, working class neighborhoods.

  25. Jackrabbit

    TPTB will use every device to keep the economic and political system stable. That may be a good thing, but if the problems are not worked out over time as hoped, its possible that a worse crisis develops from from the weight of all the problems that are built up. Most people will not worry much or protest unless and until the later occurs.

    Unfortunately, time to work out problems is bought with moral hazard (which leads to more problems). And those entrusted with protecting the public interest (economists, regulators, politicians, etc.) find that is in their interest to feed the moral hazard monster rather than slay it.

    So its a Catch-22: it seems that only an engaged public can force the necessary accountability, but ‘extend and pretend’, back-door bailouts, etc. are designed to keep the public in the dark.

  26. Susan the other

    “Feckless citizens.” That hurt. In defense of having been a feckless citizen for too long without an honorable excuse, I can only say that I was too ignorant to even imagine what was really going on. I am no longer that person. I do think that Mr. Gapper left out a group of people who are more than “feckless citizens.” He left out the kleptocrats. He defined them only as the “elite.” They are always in collusion and usually form the nexus between banks and government. He also implies that we face financial isolationism now because no one is to be trusted. Does he actually think this is worse than the massive fraud that needs to be cleaned up? What would an honest clean-up look like? One that will permit us all to trust each other again.

    1. Ian ollmann

      It would be one that involves mass arrest and conviction. Get 3/4 of the homeland security dept working on anti-corruption and I think faith would be restored. I’m thinking J. Edgar hoovers FBI.

  27. Hugh

    Kleptocracy, wealth inequality, and class war are the three great issues of our times. Kleptocracy is the looting of the many by the elites. It is a system. Bankers are just the tip of the spear. Politicians, regulators,academics, the media, and the judiciary are all crucial to keeping the looting going. Massive wealth inequality is the natural result. That wealth inequality is defended through class war whose principal weapon is distraction. And boy, do I see a lot of that here.

    The message that all of our elites are sending us is that they are in control, they know best, and there is nothing we can do. “We” can afford what they want. “We” cannot afford what we want. They set us against each other. In Europe, it is north against south, core against periphery. And there is the complacency of those who do not yet feel the full effects of the looting. This is still the great majority. They remind me of Martin Niemöller’s:

    First they came for the communists,
    and I didn’t speak out because I wasn’t a communist.

    Then they came for the trade unionists,
    and I didn’t speak out because I wasn’t a trade unionist.

    Then they came for the Jews,
    and I didn’t speak out because I wasn’t a Jew.

    Then they came for me
    and there was no one left to speak out for me.

    There are only looters and lootees. We the lootees are all in this together. We need to understand the nature of the problem and the degree of criminality of our elites. We need to stop looking at Obama, Sarkozy, and Merkel as political figures but as criminals. We need to do this not with just them but all the elites that are looting us. To stand back or blame anyone other than the looters is to be a part of the problem that Niemöller describes.

    1. LucyLulu

      Marx spoke of how the capitalists exploited the workers by propagating the lie that what was best for the capitalists would be best for everyone. He said that when enough workers came to realize this wasn’t true, they would revolt. He also said that wages and social benefits would have been cut in order to increase profits for the capitalists and pay for larger militaries. Perhaps a bit oversimplified version, but that’s the gist.

      It’s impossible to predict an exact sequence of events, and even more difficult to identify the timeline. However, the similarities between what Marx identified as the end of capitalism and today’s events is scary. Speaking of the lie above, what first comes to mind is “we can’t raise taxes on the wealthy, these are the job creators”. Then we are asked to reconcile such a statement with “we won’t bailout the banks”. Our politicians donate ‘workers-funded’ subsidies to protect the ‘capitalists’ bottom line from taking a modest hit, yet politicians would not donate those same subsidies to protect the ‘capitalists’ from financial ruin? While I don’t share his vision for the ideal future, Marx was right about the present. It’s only a matter of time before working folk decide “I’m mad as hell, and I’m not taking it anymore.”

  28. Jim Elliot

    Oh boooy….

    Who wins? Who Loses? Who cares? More like who cares who has any power? I really don’t see any citizens marching in the streets, but Obama and wall street are marching in the media.
    I know there will be winners and losers and I know that Wall Street Really Cares! and is really in a position to make themselves a winner (again). I also am seeing WS as a socipathic entity who’s only interest is winning. Dismiss the human cost (or benefit) and manipulate from a mac5ro perspective. I’m also seeing WS as a parasitic entity that does have an interest in keeping the donor alive – not prosperous, but alive, and under control, but the first motivation is winning. The good news is that they really don’t want to kill us.
    (In making this statement, I realize that many if not most of the people who work in WS do have consciences – I’m looking at the overall industry as a single but multifacited person). It might be more accurate to consider Wall Street Personified as an extreme narcissist.

    To Wall Street, we are here to keep them alive – As a sociopath and abuser, wall street wants to convice us that they we need them and that we can’t survive without them.

    I got thinking about how there really is no satisfying answer in the media (or blogasphere)regarding what is going on or why regarding the financial/real estate meltdown/mortgage crisis.

  29. ECON

    Since the citizens are unable to put down the channel changer and become aware of the objective conditions that they are blind to, I see that the only help to overcome your constant care and feeding of Wall Street banksters is nature deliver an asteroid during work hours on the financial district.

  30. Doug Terpstra

    Yes, Yves, the public is fed up enough with bankers that politicians might be forced to take action. Related to the (not-covered) nurses protests, there’s a sizable march on Wall Street right now. Locals may wish to swell the ranks at Ducati (?) Park.

    http://www.livestream.com/globalrevolution?utm_source=lsplayer&utm_medium=ui-play&utm_campaign=click-bait&utm_content=globalrevolution

    You won’t see much of it on MSM because, as Gil Scott Heron said in 1970, “The Revolution Will not be Televised . . . the revolution will be live.”

  31. KFritz

    The people of the US are mostly convinced that it’s the government that’s the problem, just like Unca Ronnie told us 30 years and more ago. They may be angry @ the bankers, but gubmint gets far more wrath. We (as a people) have been well and thoroughly conditioned.

    Only the sort of people who listen to 60′s vintage singers on NPR are angrier @ the bankers.

    http://www.youtube.com/watch?v=LxaY_mxYflg

      1. KFritz

        It’s true that large swaths of the the govt have been captured by monied interests. But to equate govt and banking in ad hominem fashion strikes me as sophistry.

  32. http://twitter.com/#!/Rakehell_Obi

    Whenever I tune the radio to talkshows like LBC, I always agree with the callers who blame the banksters. The hosts like James MAx tends to defend the banksters, but it cuts no ice with many listeners.

    I do see a double standard with the way they portray the teachers who are fighting for their pensions and the way banksters bonuses are defended.

  33. solo

    Yves asks: “Has there been a meaningful change in sentiment towards major financial players in the UK and Europe? Is the public fed up enough with bankers that politicians might be forced to take action?” –As to the first question, the evidence so far seems to indicate that the political “meaning” in Europe has been the discredit of what passes for the Left (Social Democrats, etc.) and growth of the far Right, including the fascist Right. (A recent article in “The Nation,” “Europe’s Turn to the Right,” by Ian Buruma, is a case in point. Another article, by Maria Margaronis, “Greece In Debt, Eurozone In Crisis,” argues in a similar vein.) Your second question refers to “the public” without geographical specification. If you are here also referring to the U.S. public, the answer is an emphatic “no.” As to the politically active slivers of the U.S. public, Right or Left, their main complaint seems to center around the felt loss of the American Dream–namely, successful egoism for all, aka Consumerism–a goal that prima facie declares the human bankruptcy of its advocates. I share the appraisal of the political potential of the American public that Ralph Nader uttered when he bade farewell to his life of reform with the bittersweet fantasy book, “Only the Super-Rich Can Save Us.”
    As to your other point–”global financial regulation” is an empty phrase (on the order of “the international community,” I would add)–Simon Johnson has long been saying the same thing by way of criticism of the official remedies (Dodd-Frank, etc.) proclaimed in the aftermath of the recent financial crisis. Without “cross-border resolution authority,” Johnson argues, financial reform is doomed to fail. He, and you, are quite right on this score. The nation-state shell game is useful to big capital in more ways than the international strong-arm “Defense” racket.

  34. Jane Doe

    Most of the public still does not even understand the nature of the problem with bankers. They have been taught erroneously that they understand government issues. This is a great set up for why they act the way they do.

  35. d. shatin

    biblical justice and wisdom would suggest when party a commits fraud against party b, the courts are the forum whereby guilt or innocence is proven and if guilty party b must make restitution to party a plus the costs of lost opportunity costs, pain and suffering, and any other harm caused directly by party a by fraudulent and unjust actions against party a.

    you may be to young to recollect a day in america when criminals and fraudsters were required to make whole the party they ripped off, injured, and so on.

    what has transpired in the past fifty decades with acceleration over the past 30 decades is the downward slope of this nation into the ethers…all stability in our national economy is destroyed…the highest court is a sham…Presidential elections are proven shams…the value of the dollar is laughable …our nation’s Sec of Treasury is more interested in placated China and maintaining Sino dominance over the United States of America…and the President and EPA dictate the light bulbs and cars we can’t have or drive to save energy so China can gobble it up.

    the public certainly knows exactly what is happening… the question is how to correct extremely our nation’s course with out the destruction of The Declaration of Independence and the US Constitution, born of the Age of Enlightenment.

    1. John M

      “what has transpired in the past fifty decades with acceleration over the past 30 decades is the downward slope of this nation into the ethers…”

      Surely, you don’t mean decades… Years perhaps?

  36. d. shatin

    addendum:

    today in america we are buying pumpkin in a can brought into the USA from China. Pumpkin grown in China; processed in China; canned in China; exported from China; imported into the USA.

    if government were truly interested in being ‘green’, i.e. reducing energy consumption, the pumpkin on our shelves would be locally grown or at least grown in American for consumption in the USA.

    ad infinitum…can’t even purchase in a supermarket ground beef from the same cow raised ….

    just think how energy inefficient is the globalization of the food supply, yet
    our great congressional and presidential thinkers dream up more ways to degrade America and the American way of life….

    How much grey matter does it take to realize the great sucking sound of outsourcing of jobs with IBM Sam Pasano leading the way would result in massive US unemployment, wage depression, and consumer demand only from those HB1 foreign workers wealthy enough to excessively consume.

    1. Ian ollmann

      Yes, but Chinese laborers are willing to work in exchange for 1/10th the resources that American workers think they need. I suspect that once you take that into account, the shipping costs are quite minuscule.

      1. ambrit

        Mr Ollman;
        I think you’re comparing Pumpkins to Artichokes here. The Chineese labouring classes haven’t woken up to the potentials of Trades Unionism yet. When they finally do, and I posit that this is a function of the awareness of possible superior outcomes, they will make the American and European ‘Union Wars’ look small by comparison. China isn’t as simple as that, I know, but the dynamics of modernization are well known by now. Why must China be any exception to the rule? Pumpkin growing and processing will return to America soon enough. Mark my words.

  37. John M

    “Is the public fed up enough with bankers that politicians might be forced to take action?”

    The answer is, of course, no — for two reasons. First, the public outrage has no effect on the politicians, unless it translates into their ability to get reelected.

    Second, the Koch brothers and their likes can channel the public outrage into their desired channels.

  38. Fiver

    The great puzzler is how truly lame the reaction from the various national publics has been given the enormous damage done over much of the globe, the very broad sense that it’s not ending any time soon, and the fact that, in simple terms, everyone knows their own particular leaderships have completely betrayed them.

    The success of Wall Street’s 30-year assault on the public good is indeed a very brutely impressive fact. A fraud-based event of this magnitude even in 1985 (maybe even squeeze to ’90) would’ve seen hundreds of thousands in the streets demanding action; thousands of SENIOR executives sent to prison; institutions responsible broken up; serious re-regulation, and much more – and still probably bring down governments on whose “watch” the disaster occurred.

    That’s an enormous change in core adaptive response in a very short period of time, and I can only wonder if we are now so completely entwined with our technologies that we are quite literally not what we used to be.

  39. gerold k.b. weber

    YS asked: “Has there been a meaningful change in sentiment towards major financial players in the UK and Europe? Is the public fed up enough with bankers that politicians might be forced to take action?”

    Austria: We went through the crisis relatively well but debt-to-gdp rose about 10 pct since 2008, partly due to bank nationalizations. Banks got some loans at the height of the crisis but repaid most of it. The public is fed up with global casino capitalism and doesn’t believe banks should speculate.

    Politicians took action: a banking tax (volume about EUR 0,5 billion). The social democratic chancellor is a strong supporter of a financial transaction tax, and even the co-governing conservatives are joining in! The conservative finance minister Mrs. Fekter was openly disgusted that Timothy Geither was not ready to discuss this tax at the 16. September meeting in Poland. Mrs. Fekter is usually closely aligned with Mr. Schäuble, the German finance minister.

    Relevant parts of the left-leaning public is thinking along left/right paradigms and believes the rich should be taxed more, as too much wealth in the hands of the rich is a main reason for the current crisis, the lack of global aggregate demand, and increasing commodity prices.

    The social democrats are proposing the reintroduction of a financial wealth tax on wealth above EUR 1 million. The conservatives are blocking as expected, but also technocrats doubt it is a very good idea, as financial wealth can be moved easily.

    As an example I recommend the following text by a well-known Austrian artist and consultant: Disappropriate? Yes, of course!

  40. DS

    “As to the first question, the evidence so far seems to indicate that the political “meaning” in Europe has been the discredit of what passes for the Left (Social Democrats, etc.”

    Nonsense, the actual mood is that moderate left would win elections in Germany, France and Italy.
    In France its just a new reason to despise US capitalism ( and their english allies ) and have good words for the poor greeks workers. Europe is another world.

    1. ambrit

      Dear DS;
      “Europe is another world.” Well, that seems to be the problem to the ‘elites’ right now. Their ‘fiendishly clever plan’ is to concentrate control of world finance into a few related hands. Now that the U.S. Fed is bailing out European banks, their plan looks to be proceeding apace. Perhaps a new World Great Depression is the only way out left. “All politics is local,” used to be the dominant meme. Now it’s looking to be, “All politics is financial.”

  41. Schofield

    There would appear to be revulsion in the UK amongst some informed commentators that in the light of the latest $2 billion USB bank EFT scandal the UK based banks have recently been given 8 years (by the Vicker’s report into banking) to implement ring-fencing between their commercial and investment activities whilst the Coalition Government lost little time in introducing a sado-monetarist program of austerity cuts that appear to have produced an accelerating downward spiral of the UK economy. Much of this right-wing cuts program appears to be driven by nothing more than a Hayekian Neo-Liberal hatred of government based on a shallow reading of “The Road to Serfdom.” Indeed as Jesse Larner points out in his 2008 article “Who’s Afraid of Friedrich Hayek?” the maestro was very casual in his research including the origins of serfdom where in fact it was the rich who conspired with the state to impose serfdom:-

    “In titling his individualist manifesto The Road To Serfdom, Hayek clearly was equating collectivism with a tendency to slavery. It is surprising that he apparently did no research on the historical roots of serfdom. For serfdom in Russia came about through the loss of collective solidarity, as free peasant communes, starting in the mid-fifteenth century, first lost their community right to negotiate terms with estate holders throughout the year, except on St. George’s Day; then saw this exception suspended, and finally terminated by decree. With no bargaining power, and with the state on the side of its aristocratic vassals in underpopulated rural Russia, the peasants became the property of the estate and later of the manorial lord.”

    http://www.dissentmagazine.org/article/?article=992

  42. Schofield

    Mondo says:

    “Most people would probably see an enhancement of the EFSF capacity as unworkable from an implementation perspective, and as a highly problematic measure in itself. You would buy time in exchange for risking a complete loss of confidence, as well as potential collapse of the Euro, once it turns out that the EFSF commitments are not backed by anything really – except the capability of the ECB to print unlimited Euros. MMT’ers will argue for it but they should look at the consequences. I’d like to see somebody look at MMT from a behavioral economics perspective to try to find a practical limit to MMT based monetary policy – it is pretty obvious that there is one, but it would be hugely interesting to know where it is really these days.”

    The difficulty within the EU is implementing a fiscal policy of taxation re-flux to control inflation, that plus the failure of most individuals including currency speculators to understand MMT.

  43. Tom Shillock

    “It is the financial equivalent of the trade protectionism that erupted after the 1929 crash, when the US and other countries raised tariffs.”

    In fact, U.S. tariffs at the time amounted to 4 percent of U.S. GDP. Yet Gapper’s comment has become conventional wisdom. That wisdom serves the interest of global finance not growth in America’s real economy or the incomes of the bottom 95 percent of Americans.

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