It appears obvious that the US, UK and world economy were steered toward recession. The question that remains is was this deliberate or the result of a mixture of greed and incompetence.
The effect of the recession has been to make a number of individual bankers very rich. On the political side the UK government has done what diehard old style labourites never dreamed of : They have started nationalising banks. The recession has also put all those pesky poor people who wanted to have the thing their political masters and betters take for granted back in their place at the bottom of the heap where they can be treated like dirt. And then there is Iraq: The credit bubble financed the war for the UK and America.
On the banks’ side those top bankers who did not bow their head to conceal a smile and retire with a mumbled apology to enjoy a multi-million pound pension can now feel their ego boosted by feeling they are part of the government. And top politicians can now argue that when they leave politics they can legitimately join the nationalised banks without having abused their position. And the banks look set to end with a property mountain they can sell at a vast profit, lending at exorbitant interest rates.
The motive is their, the mean were there and the opportunity was their.
Or did conversations like this take place
“I know how we can make a load of money”
“How?”
“Lend money to poor people to buy homes”
“And the risk?”
“Not our problem, we securitise the debt”
“Who’d buy that rubbish?”
“No problem, we wrap a few prime loans in with a load of garbage and get it rated AAA”
“The regulators won’t buy that”
“They will if we talk right to the politicians”
“Yes, and we don’t even need to try bribery, they will fall for anything”
“So if all goes well we get the money from these hopeful poor people, if not we get the homes and sell to the rich, and the investors who bought the securities carry the risk”
“And if they look like going under the politicians will have to bail them out”
“Yes, and you know the nicest bit?”
“No”
“If people think this was planned we blame Bin Laden”
“Fantastic, they’ll believe that”
“I can see it now: ‘Your bankruptcy is a victory in the war on terrorism’ ”
“Let’s not ask who won”
“Precisely. Pour me another bonus please”
Meanwhile in a room full of politicians somewhere
“OK we lift regulations protecting borrowers and when the bubble bursts we nationalise everything we can thereby making the people slaves of us not the banks”
“And if the voters think it was deliberate?”
“Blame it on terrorists”
Am I too cynical?
You decide
I had fun writing this. In my mind the twinr explanations for the observed steering of key economies to recession: deliberate malice versus a mixture of greed and stupidity have about equal weight. I tend to give greedy stupidity the edge as I have a distrust of “conspiracy” theories
Tags: conspiracy, credit crunch, house price bubble, Recession
