At last, a government response to the financial crisis that is actually working. Am I referring to last November’s VAT cut? Of course not; it has been as ineffectual as we all said it would be. Those loan guarantee schemes for struggling small businesses? Nope, still very little sign of them, I’m afraid, months after they were announced and re-announced. Quantitative easing? Oops, sorry, much of the first wheelbarrow load of new-minted cash has disappeared abroad, to foreigners who jumped at the opportunity to offer their gilt holdings back to the Bank of England — while the Bank has been struggling to sell new gilts to investors perturbed by signs of a rift between the Governor and Downing Street.
No, on most fronts, things are more pear-shaped than ever. But the successful policy I’m talking about is Gordon Brown’s campaign to persuade us that it’s better to vent our anger on bankers than on him. The first big breakthrough came last week, when the Edinburgh home and car of ex-Royal Bank of Scotland chief Sir Fred Goodwin (now said to be holed up in Majorca with his family, for fear of more attacks) suffered criminal damage. This week, the strategy has borne fruit beyond the Prime Minister’s wildest hopes, with a cavalcade of anti-capitalist, anti-war and save-the-planet activists marching on the Bank of England, besieging dressed-down City workers in their locked offices, and no doubt trashing a few fast-food outlets as they pass.
Unintended outcomes are the overarching theme of the financial crisis, and this week’s disruption of London is just one more: social disorder is perhaps the most frightening of all possible consequences of a severe recession, yet by signalling that banker-bashing is morally justified, Brown has actually managed to encourage it. Indeed, the extent to which he has got more than he wished for is matched only by the tragic extent to which he has promised more than he can deliver.
Expectations of a positive outcome from the G20 meeting have been managed downwards so vigorously that any agreement on anything — on taking the lid off some of the world’s tax havens, for example — will be declared a triumph. But in truth the only green shoots the gathering is likely to fertilise this spring will be in the glazing and contract security sectors, and it will have been an extraordinarily tiresome couple of days for everyone else who struggles to make a living in the capital.
The question is not whether the G20 encounter, in the incongruous Excel Centre in Docklands, comes to be seen by historians as the event that set the world on the path to recovery — it might, but let’s not get our hopes up. The more pertinent question today is whether its unintended symbolism of posturing leaders surrounded by howling anarchists jogs the public consciousness in a positive direction. By that I mean that if the whole thing descends into chaos, it might have the perverse effect of teaching us to forgive the financiers and even learn to love them again.
Don’t get me wrong, I’m all for a spot of youthful protest now and then — and I know bankers can be loathsome. As I always point out, I should know, I used to be one. What Brown has tapped into and let rip is a deep seam of banker-hating that can be traced in British popular culture from the 1930s when J.B. Priestley wrote about the City doing to the working classes ‘what the black-moustached glossy gentleman in the old melodramas always did to the innocent maiden’, through the 1980s when a chorus of traders chanted ‘Do the f***ing business, do the f***ing business’ in Caryl Churchill’s play Serious Money.
But still it was not Brown but Lord Mandelson — at his off-message best — who offered this week’s most forward-looking thought for the day: it’s time to give the bankers a break, he said, because right now we need them to give their full attention to repairing the damage they helped to cause. They’ve already been given what he called ‘a bloody nose’, but enough is enough. Underlying his remarks is the fact that there is no prospect of jailing any of them for their bad decisions, nor even of fulfilling Harriet Harman’s ambition of denying Sir Fred Goodwin his giant pension. So further recrimination is pointless and destructive, rather than cathartic: it merely fuels the kind of mob behaviour that damages the livelihoods of the innocent while attempting to frighten the supposedly guilty.
And whatever the outcome of the G20 meeting, we know from the body language of those taking part that it can achieve at best only a slow, uncertain impact on the global economic situation — and will therefore disappoint voters everywhere who, despite the evidence of history, expect governments to produce quick fixes. There can only be so many trillions worth of state bail-outs (the fate of the Dunfermline Building Society certainly indicates that failed banks below the level of systemic catastrophe need no longer apply) before government bond markets start to close down and the IMF says it has no cash left to bail out governments. Big nations can gang up on small ones with lax tax regimes, but there can only be so much agreement on global financial regulation before competitive national interests supervene. And even if world leaders achieve a quite unexpected degree of harmony and collective eloquence, they can only change the economic weather with the co-operation and confidence of private-sector entrepreneurs and financiers.
Which brings me to the nub of this argument. Recovery will only come when bankers are chastened but no longer embarrassed to be identified, and once more eager to meet new customers; when idealistic youngsters look at a boarded-up former estate agency or Woolworths store not as a site on which to spray-paint ‘Capitalism has failed’, but as an opportunity, with the help of the local bank manager, to open an organic deli or a bicycle hire shop, and maybe one day build up a national chain and float it on the stock market. It is on the resurgent health of that mechanism that global prosperity depends; displays of political togetherness and public anger are merely sideshows.
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