All wind and weakness

[Thinking Man's Idiot]

All wind and weakness

(Friday 19 September 2008)






YOU really can't keep a good, or perhaps a greedier than average, gambler down, can you?


No sooner do the US and British governments heed their City masters' voices and pump billions of taxpayers' money into rescuing the speculators from the results of their own greed and idiocy than the whole trading circus starts up again.

The FTSE 100 index jumps by more than 8 per cent, Royal Bank of Scotland and HBOS shares zoom up by more than 50 per cent and France's Cac 40 and Germany's Dax indexes rally by 6.5 per cent and 4 per cent respectively.

But who can blame the speculators for jumping back into the pool, after the two governments have virtually said "come on in, the water's lovely?"
A combined effort by the big capitalist countries' central banks on Thursday pumped around $180 billion of short-term loans into the banking system to shore up the kaleidoscope of greed that they have the cheek to call a market.

Mind you, it's not surprising that they did, given that the US Treasury Secretary, one Hank Paulson, is one of the speculators' own, having been the boss of Goldman Sachs in a previous incarnation.

He has already committed $300 billion of public money to the rescue of failed institutions and now he is proposing to introduce new laws to buy many hundreds of billions of dollars of bad debt from banks who went overboard with sub-prime mortgages, rescuing them from the fruits of their own stupid avarice.

And this from an administration that won't find the cash or the political will to provide a decent national health service, can't provide a reasonable municipal housing system and runs a country that rejects any responsibility for its citizens in financial difficulties - unless, apparently, they are big-shot bankers and City profiteers.

It would seem that only wars and failed speculators are worthy of funding by Mr Bush's administration.

The speculators and profiteers on both sides of the Atlantic must be barely able to restrain themselves from dancing in the streets.

Not only is poor old Joe Public going to bale them out, the restrictions that almost everyone had been expecting on short selling and the various derivatives fiddles which make up the working lives of the speculators look like they are going to be mainly hot air.

The Financial Services Authority in this country, despite Prime Minister Gordon Brown's boasts that the government will "clean up the City," has done little more than block short selling on around 30 financial businesses for three months.

The SEC in the US has been rather more sweeping, banning short selling of the shares of 799 financial companies, but only for two weeks.

So much for cleaning up the City, then. It looks more like giving the big sharks a breathing space before the smaller piranhas start nibbling again.
What this whole circus has starkly revealed is both the parasitic nature of the markets and the extent to which capitalist governments are pawns in the hands of big business.

As Noam Chomsky pointed out in relation to the measures taken by the US, the nature of the state's interventions has "revealed, once again, the profoundly undemocratic character of state capitalist institutions, designed in large measure to socialise cost and risk and privatise profit, without a public voice."

The test for new Labour was in the nature of its defence of working people. It is a test that Mr Brown and his henchmen have so far failed dismally.