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Wizard of Oz Economics

June 15, 2012


As George Osborne and Mervyn King announce yet another 100 billion ‘liquidity’ to get the British economy moving, I’m getting more and more confused by the strategy of it all. Maybe I’m just a naive, unintelligent person anable to grasp the complexities of macro-economic theory but why does the government and the Bank of England need to print a load of extra money and give to the banks in the hope that they’ll start loaning that money to small business and individuals? Why not cut out the middle man – the banks – altogther and just loan it to those who need it, or y’know even ‘give’ it to them?

I don’t understand why the banking industry has become so all powerful that they hold the entire world economy to ransome and demand bail outs when they fuck up and pats on the back in the form of massive loans and bonuses when they refuse to do their job, ie taking other people’s money and investing it to provide a return to their shareholders, if not their customers.

What’s the big deal? What am I missing? Ah, it’s far more complicated than that, you have to take into account all those complicated and meaningless buzzwords that market analysts and business reporters use to obscure the fact that the economy’s fucked and the government haven’t got a scooby what to do about it.

When I first got a job I had to get my wages paid into a bank every month. It was the first time I’d ever had a bank account. Only ‘posh people’ had bank accounts and cheque books, although having a building society account was OK for people like me mam and dad, who saved a few bob in mutual societies. I didn’t even know what an overdraft was but once I discovered you could take out more money than you had in, I rubbed my tiny hands together and went mad, running up an overdraft of £200!

Life was simpler then, me dad would pick up his weekly wage packet, box me ma off with her ‘house keeping’ money to pay the rent man and keep us fed and clothed and the rest was left for him to piss up a wall or invest in FTSE 100 shares. Banks were about as alien and useless to most working class people as the ‘money’ sections of newspapers. The bank mananger was something you only saw on Terry & June, Dad’s Army and the Beverley Hillbillies. These mysterious creatures might as well have spoke in dolphin clicks for all we understood them.

Two things happened in the 80s to change all that. One; Thatcher’s council house ownership scheme offered the likes of me mam and dad the chance to buy their home from the council at a knock down price. This was perhaps the Tory’s greatest strategic masterstroke. Automatically, it gave millions of working class people something worth ‘conserving’ something worth selling or leaving to their kids. It made people greedy and selfish, wishing death on relatives and breaking up families and communities.

You can still see the evidence of this on council estates by the roofs of those who bought their homes in the 80s and haven’t had the money or the inclination to get them re-tiled. The council sold off their housing stock to private companies and individuals and this also put large amounts of dough in the arse pockets of corrupt corporate landlords and run of the mill gangsters alike.

Here’s a foolproof business model for you; gangsters purchase drugs and sell them to drug addicts. With the profits from this they invest in housing stock in the most run down areas of the inner cities. The council, being totally reliant on private housing provision, home the poorest people in these residencies, many of them on benefits and addicted to drugs. They therefore pay the rental costs from the benefits budget which goes straight to the gangsters who use it to buy more houses and purchase more drugs to sell to the drug addicts living in their properties. You have to admire the economic perfection of that cycle if not the morality of it.

As more and more people became shackled to the mortgage trap, so banks began to dictate economic policy and as more or more people got sucked into the banking industry’s clutches via direct debits, standing orders, wages and even benefits payments, loans, bogus insurance ‘protection’ policies and easy debt became such a lucrative market that the banks became ever more greedy. Once they became so powerful that the entire western economy was totally reliant on interest rate fluctuations, they knew that no matter what happened, there was too much at stake for the politicians to allow them to fail.

The second thing that happened in the 80s was the capitulation of the left to so-called ‘pragmatism’ which in other words meant accepting the existing economic model was irreplaceable and that de-regulation of industry and privatisation of national assets worked in everyone’s interest. OK, so the likes of Clinton, Blair and Brown may have tinkered around the edges, imposing pathetic minimum wage levels and so on but by and large, they were more guilty than the Neo-Cons in allowing the banks and the city to replace manufacturing as the major means of economic production. Abstract, flickering numbers on screens and balance sheets created a Wizard Of Oz economic subtefuge. Behind the screen there was nothing, just a set of levers spewing out cliches and slogans.

The Bank Of England, the Federal Reserve, The European Central Bank, the International Monetary Fund, they are all futile, all Wizard Of Oz fraudsters pretending that behind the smoke and mirrors there is science, there is philosophy, there is magic. Capitalism isn’t an ism at all, just a better word for ‘greed’ just another excuse for murder and exploitation.

Are bankers any different to the drug dealers? They too have a perfect business model. They take money from people, they charge money for this ‘service’ (the myth of free banking – remember?), they charge interest for this honour, they invest this money in all manner of despicable industries and con tricks. If they fail, they get their debts paid off by governments who impose austerity policies and then pass the buck to ‘irresponsible lenders’ and if they win, they get to keep the profits.

Put it this way if I lend a bag of sand from the local loan shark and he wants seven bags of sand back where do I turn? To the police? Chances are I’ll go to another loan shark and pay off the first one then be even further in the shit with the second loan shark because he wants 40 bags of sand back. I think the Greeks have got this one sussed. Keep going till everyone’s got that much owing to them that they really, really need to keep you alive. Or maybe I’m missing soemthing.


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  1. aldo moravcik permalink

    Another Tory masterstroke was replacing Domestic Rates with the Community Charge (AKA Poll Tax). In one fell swoop, every adult in the house suddenly became liable for a charge, where it was only ‘The Householder’ previously. Youths went from giving Mum and Dad £25pw or whatever for their keep to having to shell out another £30-odd per month Poll ax. Apart from the nationwide problems of inflated charges based on inaccurate valuations and inadeqaute levels of Community Charge Benefit available to the struggling, the despicable genius of this scheme was the interlinking of registration for the Poll Tax with the Electoral Roll. Tens of thousands of mainly young people, many on a wage that was shit but enough to make them liable for the full whack, jibbed payment by failing to register. Parents up and down the country pretended junior had moved out, forwarding address unknown, but while that ended junior’s liability, it also ended his right to vote. The Tory bastards had it both ways: impose an unfair tax on those with least ability to pay AND deprive them the opportunity to vote you out if they didn’t. Evil genius, and – of course – Thatcher treated us in Scotland to it a full year before the rest of you received your invitations to the party.

    • i had to apply to our work’s benevolent fund to pay my missus’s poll tax arrears – not arsed about losing the vote, who’s to vote for?

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