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The Spectator’s Notes

Charles Moore

Wednesday, 23rd January 2008

Charles Moore's reflections on the week

President Sarkozy has made the right decision by avoiding the World Economic Forum in Davos this week. The global titans of banking and politics are not looking good: to be photographed having fun with them would be a provocation. Not since the oil crises of the 1970s has there been less confidence in the people in charge. In normal times, one may not think very much about the astronomical sums made by money men, but one’s acceptance of their rewards depends on the idea that they run risks. Now it turns out that they don’t. There is a well-known saying that if you owe the bank £100, that is your problem, but if you owe it £1 million, that is its problem. What happens when the banks themselves owe several billion pounds? The answer appears to be that it is everyone’s problem except theirs. The US authorities are now helping out the big American banks on an enormous scale while the banks continue to pay their dividends, their bonuses, their huge pay-offs and, in the case of J.P. Morgan, hundreds of thousands to Tony Blair to meet their clients. Over here, Gordon Brown commits £55 billion of public money to make it safe for Richard Branson (or whoever) to own a bank that is in trouble. The late Alan Clark once told me that Hitler’s aggression had been worthwhile because ‘at least it stilled the steady tap of the counting house’. It was a (deliberately) terrible thing to say, but his frame of mind is one that afflicts societies which come to believe that the banks, instead of managing their money, have grabbed it for themselves.

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