Wednesday, 9 February 2011

They’re Making Monkeys of Us

My wife tells a story from her younger days, of a man armed with a sawn-off shot gun, dressed in a gorilla suit, walking into the pub and demanding the contents of the till. While the regulars watched with some intrigue, the landlady simply shrugged her shoulders opened the cash draw, pulled out a worth-while wad of the folding stuff and handed it to the man saying “There you go Trevor, but what’s with the gorilla outfit?”

I was reminded today of another classic gorilla moment, when I heard that the top four banks in this country “were livid” at the news that George Osborne has imposed a further levy on them of £850 million, taking their collective charges to £2.5 billion for the year.

As the day unfolded we heard various comments from our political leaders. Outstanding amongst them was firstly Tim Farron, President of the Lib Dems, who told listeners of Victoria Derbyshire’s show on Radio 5 Live, that it was only right that the banks be made to pay for “causing the deficit” and then George Osborne himself saying that the banks had to “pay their fair share towards the deficit”.

The problem with having a government made up of young career politicians half of whom have studied PPE at uni, is that they have all been taught from the same old texts, they have all sat at the feet of the same old indoctrinated economists spouting the same old accepted wisdom that has gone before. But let’s get one thing clear. What ever their dusty text books and dry old lecturers may have told them at university, it is inexcusable for senior political figures in this country to give the impression that the banks have anything to do with the setting of this country’s budget.

I will say it again! The Deficit is the difference between what the government spends each year and what it receives through taxation. The Deficit, is the government not living within its means.

The National Debt increases each year by the amount of the Deficit – It’s Not Rocket Science.

All three main parties went into the general election last year, saying they would halve the deficit over the life time of the next parliament, from around £150bn per year to about £100bn per year at the end of four years (clearly maths is not a big part of the politics, philosophy and economics degree curriculum) a reduction of £11bn per year (and interest). George Osborne and David Cameron then decided to go at it like a bull at a gate and get it down by £83bn over four years. Yet government borrowing for November was £23.9bn which would indicate the deficit for this year being more like £250bn. Austerity isn’t going to work. It isn’t the answer.

It’s time to throw away the dusty old text books, and let the old duffers at Cambridge out to pasture. We need to change the system so that is suits us, the people, not the bankers.

The answer is to change the monetary policy of the country, so that instead of the banks creating the nations money for the government to borrow, the government creates the money, and if the banks want to borrow some to lend to us, then they can pay interest to the government for the privilege. The government shouldn’t need to lay off thousands of people from their jobs, and then go cap in hand to the banks to borrow the money to pay them a bit of job seekers twice a month.

David Cameron tells us we are paying £120million a day in interest on national borrowing. The banks create the money that they lend to the government (and us for that matter) out of thin air, by way of an accounting fraud on a computer screen, and lend it to us at 3% interest.

Interest payments for the government this year are £43.8bn, but when George says he’s going to claw back £2.5bn by way of a levy, the banks all scream like a troop of baboons.

The people in the gorilla suits on this occasion are the bankers. The government is trying to give the impression of having tamed them, and like Gerald in the “Not The Nine O’clock News” sketch when the interviewer asks were they wild when they were caught? They have replied “Wild? We were livid! But it’s the bankers who are laughing, because dressed in their gorilla suits, we can’t see the grins on their faces.

They’re getting away with it again.

In truth the bankers are more like Psycho Trevor from the pub. We all know who it is that’s robbing us, but we just let them do it anyway.

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