guardian.co.uk/commentisfree … uppet-city
The bankers lied. And Darling, a mere puppet on their string, knows it
11 March 2010
**Simon Jenkins **
Britain has paid a horrific price for allowing the City to dictate credit policy. Yet there is no inquiry, no questioning, only silence
Still no inquiry. Still no answers. A trillion pounds has been devoted over the past 18 months to protect Britain’s financial system from alleged Armageddon, with not a murmur of value for money. This stupefying sum is more than has ever been spent on any project by any government in British history.
We know where the money came from but we do not know if it was necessary, nor who now has it. We know only that, a year on, Britain is experiencing a worse recession than any comparable country. The lack of accountability, the sheer lack of curiosity from the political community, is amazing.
The nearest to an explanation came from the man responsible, Alistair Darling, on Michael Cockerell’s recent BBC documentary on the Treasury. If he had not acted in October 2008 as he did, Darling asserted, “the bank doors couldn’t have opened, cash machines wouldn’t have functioned. All over the world people wouldn’t have got money”. Who says?
The reality is that at the time, a year after Northern Rock and with Lloyds/HBOS and RBS faltering in the wake of the Lehman Brothers collapse, Whitehall was in policy turmoil. Every option was in the air. Darling and his patron, Gordon Brown, were in perpetual conclave with advisers such as Lord Myners and Lady Vadera and Downing Street’s “UBS mafia”. Calls were coming from important City figures saying such things as, “We can’t go on beyond lunchtime … Give us the money”.
Faced with a global asset bubble of some $290 trillion about to burst, a frantic Darling started throwing millions, then billions, then a trillion at underpinning the banks’ near worthless “casino” debts. He never spent such money on indebted homeowners or indebted manufacturers or indebted African states. He did it to banks because they told him they were too big to fail. Advised by bankers, surrounded by bankers, obsessed with bankers, Darling paid.
A trillion pounds has been devoted over the past 18 months to protect Britain’s financial system from alleged Armageddon, with not a murmur of value for money. This stupefying sum is more than has ever been spent on any project by any government in British history.
We know where the money came from but we do not know if it was necessary, nor who now has it.
My view is that these bailouts ultimately go to the owners of property by protecting their wealth. You give the banks a trillion, but you might save/preserve five trillion in private wealth, by preventing a collapse in commercial and residential property values caused by failed banks.
The people who are really burned by these bailouts are non property owners who wind up paying higher taxes to pay for them, just to keep property prices unaffordable and to prevent the free market from operating as intended.