‘ Up on Housing Project Hill
It’s either fortune or fame
You must pick one or the other
Though neither of them are to be what they claim ‘
Just Like Tom Thumb’s Blues – Bob Dylan
Speculation and speculators are pejorative terms . But all capitalist enterprise is speculative. Unless that is, it is underwritten by government . Or since the Great Financial Crash of 2008 the enterprise is ‘ too big to fail ‘ the phrase conjured up to justify bailing out financial institutions whose collapse into bankruptcy would supposedly have posed a risk to the financial system as a whole. There was an alternative in that instance which was for the government to take them over as happened in the UK where the government took over RBS as well as engineering the takeover of Halifax which was bankrupt by Lloyds. The British government didn’t go the whole hog and nationalise the banks as it could have done and thereby made banking a public utility for which there is a good case to be made.
Simon Johnson the former Chief Economist of the IMF wrote a widely read piece for the Atlantic magazine soon after GFC in early 2009. He said this about the state of the American banks following the collapse of the system ‘ The challenges the US faces are familiar territory to the people at the IMF . If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say : nationalise troubled banks and break them up as necessary . ‘ And a little further on in the same piece ‘ Anything that is too big to fail is too big to exist ‘ .
Not only did neither of these things happen further consolidation of those same banks was allowed to take place unchallenged thereby embedding the implicit , if not explicit, guarantee of future bail-outs should the need arise. And remember these banks are not simply retail entities – the type of bank we all depend upon for our everyday financial transactions – but sprawling financial behemoths covering all manner of ‘ investment ‘ activities , many of which weren’t and still aren’t regulated; and it was in these activities that the rot developed that brought down the whole edifice.
And as for the bankers themselves those ‘ masters of the universe ‘ whose profligacy and chicanery that constructed the edifice and paid themselves millions and millions of dollars in the process not one was prosecuted or even suffered the humiliation of being fired .
Fast forward to early 2020 and the outbreak of the Coronavirus and what doing we find ; the American government enacting legislation to enable it to create out-of-thin-air ( aka on a computer ) trillions of dollars for the biggest corporations with virtually no strings attached. That’s the ultimate reach off the neoliberal virus right there . And for the little guy , almost nothing .