It's a bad weekend when you think it'd be better to wake up on Monday and for it to be 1983 and find that your converse runners have been replaced by a pair of steel-toed Doc Martins. Hell, even the music was better; we have Justin Bieber as the soundtrack to our impending doom. To crave hearing Bananarama on the radio is a terrible thing.
After a few years of epic news, it seems it's now about to get apocalyptic. A year that began with an ineffective debt deal in America has ended with European markets plummeting, Greece collapsing, the English feeling smugger by the minute and the Italians increasingly looking like they’ve all just walked out of a bunga bunga party and have to explain to their better halves what the hell just happened.
Happily though, at least those poor Wall Street traders are still looking on the bright side.
So how did it come to this? Was it that the population of the world suddenly becoming extra greedy trying to ride the boom gravy train? Was it the governments heaping sovereign debt upon sovereign debt so they could buy their next election? Was it the banks, the financial traders, or the ratings agencies? Was it the lizard people?
No, no, partially, and…. quite possibly (Jim Corr can be very convincing). It was the political classes’ deregulation of the financial markets what done it.
Since deregulation (taking away the rules governing the financial markets) began in earnest during the 1980’s a combination of banks, financial traders and rating agencies has managed to screw up the world to the point where the Sun will surely be printing a ‘Can the last person to leave Europe please turn the lights off?’ headline on their front page any day now.
The financial world, for so often quite a boring and static place became, after deregulation, a place where money could be made, fast, and the phrase ‘greed is good’ became the calling card of a generation. Of course, where there is money and growth governments and politicians will always want a piece of the pie and then try and claim credit for baking it in the first place. When the rules began to be relaxed and growth began, it reinforced the view that this was only the beginning.
This deregulation was all due to the propagation of the ‘Invisible Hand’ theory, which basically says that the markets would naturally regulate itself; a type of survival of the fittest but with stocks and shares rather than teeth and claws. In reality it was the governments saying ‘Jesus, this money shit is really fucking complicated, isn’t it? Anyone here know economics? No? Fuck it, let them do it themselves then’.
So they deregulated the financial markets at a rate that would make a rutting rabbit blush.
But that’s okay because someone was watching what was going on, right? We all know the answer to that one. Government watchdogs became next to useless, in Ireland
And let’s not even mention the ratings agencies; they became so entwined with the banking system that they changed from independent watchdogs to the financial markets lapdogs.
The upshot was that deregulation changed how the world valued things, or rather how we assigned value, and no-one in the know pointed out that this was inherently wrong. Where once we valued goods on how desired by the world they were, we now valued them based on how well the traders on the financial markets could sell them to the world. We let them bundle up solid gold and sub-prime loans into one package and sell them on as if they were the same. No-one knew what they were buying anymore and nothing was based on what value it brought to the world.
And this is the crux of the thing; the world had changed from rewarding productivity to rewarding the printing of money. This printing of money wasn’t done in mints around the world, it was done by taking a dollars worth of debt, repackaging it and selling it on saying it was worth ten dollars. So suddenly the world had nine dollars circulating around that didn’t actually exist. This happened literally millions of times to the point where the world was awash with fake money; the financial collapse around the world was when people woke up and realised that fact.
People blame the banks and irresponsible lenders, and rightly so. These people knew exactly what they were doing. There are countless examples of traders describing the packages they were selling as ‘complete shit’ while the rating agencies gave them the highest ratings possible in the knowledge that they were junk, safe in the knowledge that the ratings they gave were only opinion and not subject to law.
CEO’s at the top mostly didn’t understand what was going on (these people really aren’t that smart) except that they were making pot loads of money, and didn’t care because they were busy buying their new personal jets. Within the worldwide financial system there were lies, widespread illegal activity and now there are deliberate attempts to destroy companies (and countries) so they can make money while they collapse.
CEO’s at the top mostly didn’t understand what was going on (these people really aren’t that smart) except that they were making pot loads of money, and didn’t care because they were busy buying their new personal jets. Within the worldwide financial system there were lies, widespread illegal activity and now there are deliberate attempts to destroy companies (and countries) so they can make money while they collapse.
The simple fact though is that we let them do it, even after watching Gordon Gecko in Wall Street.
If the governments had paid a little more attention to human nature and, y’know, the entire history of mankind, they’d know that greed will always trump rational thought in the short term. Put ten Wall Street
The financial markets don’t, and never have, produced anything of value. They assign value; that’s their role. With deregulation, they were suddenly able to create ‘financial packages’ that added value that didn’t exist. It was like someone selling you ten bars of gold, promising they’ll store them in a bank account for you but when you actually go to open it up, you find there’s only one there. It was also the equivalent of handing Kim Jong-il a gun and telling him that all his antics are clearly the work of a man that has a small penis; things are going to get messy.
And now governments are terrified of the overbearing influence of the stock markets – an influence they themselves helped create. Whenever a debt deal is announced, the media doesn’t ask the politicians what they think first, they check to see what the financial markets are saying. Governments are falling across Europe because the stock markets now have the power to collapse them.
We need to take back that power. And fast. We need to give the financial markets a spanking that only a guest at Madam Daisy's house of ill-repute would enjoy. We, quite frankly, have to show them who's boss. They serve us, not the other way around.
If we don't wake up to that fact than Justin Bieber’s winy pre-pubescent voice will be the least of our problems.
If we don't wake up to that fact than Justin Bieber’s winy pre-pubescent voice will be the least of our problems.