International Banking - My part in it's downfall

The Irish Banks went on strike for three months in 1976 and to be honest I’m not sure anybody noticed. In those days most people were paid in cash and if you were unlucky enough to get a cheque, there were plenty of pubs that would cash it for you and they would then use it to pay their suppliers in an unofficial system of credit. Most people were spared the luxury of savings and so didn’t have to worry about it being locked up in some untouchable vault. What little they had was kept in the post office or the credit union and that’s where you got a car loan or the money to go on holiday. Banks were simply magnificent Georgian buildings in the town square that changed your punts into sterling when you were visiting your sister in Birmingham each summer.

People owned their own house (and usually only one in the days before Irish people owned as many houses as John McCain) or lived in one kindly provided by the local council, so Mortgages were as rare as hen’s teeth. Pensions were paid by your employer or the State and were based on your final salary and not the whims of the stock market.

In short, people had little or no interaction with banks, apart from an obsession with getting their children a job in one. If banks had gone bust then, it would scarcely have bothered the masses as much as the risk of their local pub closing. These days of course it is different. Banks all over the world are tottering on the precipice with only the weak and unsteady hand of government holding them back. And everybody is affected by this whether they like it or not.

In the past thirty years, Governments have abdicated responsibility for running the economy to the International private banking system. On your first day at work HR will give you a form requesting lots of personal (and mainly intrusive but irrelevant) information. This will include your bank account number, so that they may efficiently transfer your hard earned cash into the clutches of a private company. You can try and argue that you want no hand or part in this capitalist conspiracy, but you won’t get very far and you certainly won’t get paid.

Once your money is in the bank, you’re on the slippery slope towards debt and destitution. They will drip feed it back to you in weekly withdrawals from the hole in the wall outside or make you queue for half an hour to get it from a surly clerk who will make you feel guilty for withdrawing your own cash. Over time the bank will encourage you to get a credit card and maybe a loan or two (particularly if they trapped you at a drink fuelled student promotion) and maybe tease you with some tax avoiding off-shore savings account.

Encouraging salaries to be paid directly into banks was the first example of outsourcing society’s needs to these private and profit making institutions. But much worse was to follow and for that we have to look to that arch enemy of Society, Margaret Thatcher. She engineered a seismic cultural change in Britain that most people understood as uncomfortable but went along with anyway. In Ireland, we swallowed our normal anti-English sentiment and embraced Thatcherism with enthusiasm. I was always a rebel against this orthodoxy I should say and I proved this when I refused to pay my poll tax while living in England in the late 1980’s. At the time, I lived across Dulwich Park from Thatcher and she never called in to say hello or to bring round a cake when the three of us Irish lads moved in next to her. We were in the flat one night when Thatcher popped up on the news. Emperor Hirohito had just died and the Iron Lady was making a pompous speech about how she would be shunning the funeral on account of the Japanese making the English build a railway in Burma during world war two when that was clearly a job for Irish navvies. My flatmate Jella chuckled and said “that’s OK; the bitch can pass on her condolences in person when she meets him in hell”. Oh how we laughed.

So you can tell that I don’t have a soft spot for her. But my feelings are complicated by the fact that I have become fat and comfortable from her decisions. I got a job in Financial Services in the UK at precisely the time that Thatcher was de-regulating that industry and handing over the keys to the nation’s housing stock and the administration of ordinary people’s pensions. In a few short years, council housing estates were sold off to banks who then mortgaged them back to the people who had lived in them for generations. Your pension was no longer a guaranteed reward after a life of hard work, but something you had to pay for yourself. It would then go into the coffers of a large financial institution to be gambled on stock markets and in complex financial instruments which were beyond the intellect of even those who administered them.

So unlike 1976, if banks fail now, they will bring your salary, your savings, your house and your pension down with them. We have sold our economic soul to these bastions of profit and risk and if they crash it would be as fundamental as the loss of water, electricity or breathable air. So while it is morally repugnant to have tax payers bail out these bastards, the alternative is such an appalling vista that it can scarcely be contemplated. Our governments took Thatcher’s lead and mortgaged our souls to the banks. The really scary thing is that they also sold water, electricity and the maintenance of clean air to private companies. They are also greedy and speculative and will eventually fail for the same reason the banks have failed. Guess who will have to bail them out?