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Beautifully put!
Never a day passes without examples of the gap between A and B and C becoming wider, and the growth of D becoming ever more evident. But as the world is ever more controlled by those who populate A, the majority of whom are clearly uncaring about, or oblivious to, the plight of those who populate B, our decent into a 21st century variant of feudalism is set to continue to gain pace.
Thanks
A possible (probable) example of why A is where it is, Richard, and set to travel ever further from B.
The new edition of Private Eye (1371) carries a story about the “Shareholder Executive” (SE). This is an agency which is part of BIS (i.e. Vince Cable’s domain) and was set up by Gordon Brown in 2002 to ‘to improve the government’s performance as shareholder in companies from the Post Office to Channel 4.’.
The SE is currently run by a former corporate finance consultant from KPMG. Meanwhile the person (Roger Lowe) who ran the team that handled the sell off of Royal Mail is an ex-Lazard banker who now has responsibility for the government’s portfolio of 20 companies. To quote Private Eye, which as a long-time subscriber I hope they won’t mind:
‘The Eye has discovered that not only did Lowe use Lazard as its external adviser, he also employed a Lazard banker on secondment, bringing the bank into the heart of the process.’.
Just to remind us all, Lazard was one of the “priority investors” in Royal Mail that made £8m from the under-priced shares. As Private Eye notes, this caused uproar after the flotation, but they continue: ‘But the presence of a Lazard banker on the inside of government while his or her employer prepared to make a packet from the deal gives perhaps even greater cause for concern.’.
To that gross understatement I’d add that ordinary citizens of the UK might imagine that a prerequisite for anyone appointed to a body supposed to operate in the public interest is that they have some background and commitment to publicly owned and operated companies and services. But no.
Worse still, this is a graphic example of the scale and scope of the capture of government and public service by corporate interests, and, more specifically, the City.
And finally, in Vince Cable’s defence of such blatantly compromised arrangements and processes we see the true heart of a cowardly politician. A position that in Cable’s case is amplified ten times over but his constant threats to get tough on such shifty practices.
Meanwhile, the UK ship of state and her citizens sink deeper into the mire, while A and all aboard sail majestically into the ever-richer sunset!
Depressingly true
And as if to prove Richard’s point even further, what do we see on the front page of today’s City A.M, but the headline ‘RBS accused of misleading MPs’
It turns out that RBS executives ‘misled’ (i.e lied) about the result of an internal investigation into the claims it’s global restructuring group deliberately shut down small firms, and that this group was not a profit centre.
So yet more evidence that the bailed out banks should have been made into a state run investment bank as Richard and some others have said all along. What more evidence do our useless political leaders need to show them that the private banking sector in the UK is a dishonest, failing system?
This is the ‘interest rate swap business isn’t it?
Unbelievable thuggery and destruction of real human endeavour.
Simon
not exactly, although the attempts to force small businesses to ‘hedge’ against interest & currency movements that were never likely to affect them added to the problem.
R4 ran a documentary on the allegations made, which were shocking. That RBS, firstly, used its GRG to make money by charging struggling firms vast sums for “advice” & “debt restructuring” which, in turn, made businesses that might otherwise have remained viable hit the wall.
Secondly, even more shockingly, that because it was such a great profit centre, they began to push entirely solvent firms down the ‘insolvency’ path to satisfy the GRG’s lust for gelt.
When R4’s documentary was aired, RBS were robust in saying that they had commissioned an internal report that showed they’d done nothing wrong.
If that is now accepted to be untrue then I think it would be impossible for any single member of the RBS Board to remain. (Obviously, they’ll need to transition their exits!)
Thanks for the clarification Eriugena’s -a documentary on the Beeb I saw some years ago focused on the compulsory hedging as part of the deal. people’s lives and years of hard work were shredded. I can remember one couple running a kindergarten (or had been!) had their health ruined through the stress.
You forgot to add a circle for bankers – a subset of A?
If A were to intercept C in the same way as does B, giving a mirror reflection on the right-hand side and an interception subset of A and C as with D for B and C – call it E – wouldn’t this be likely to include most of those whose living standards have actually risen since the collapse? Asserting their parasitism upon disaster, call the resulting diagram a COC chart after its designers Cameron-Osborne-Clegg.
You may wish to add a further consonant to the acronym.
I think you’re right Dave
Every time a small business goes under it is a tragedy, for the founders (usually, unless they have been deliberately neglectful), & the employees (always), & a horrible blow to the suppliers &, to a lesser extent, the customers & other creditors. It can be a tragedy for the customers (e.g if business is care home).
If it transpires RBS have been engineering insolvencies their reputation should be finished for all time.
“If it transpires RBS have been engineering insolvencies their reputation should be finished for all time.”
Yes, well, the emphasis here is ‘should’: what do you bet is going to be done about this appalling behaviour by those who can/should intervene? Is the FCA, as the FSA’s succesor, going to hold the Board of RBS to account? How about the BoE demanding the resignation of the Board members responsible?
Or of course the government, who, as our elected representatives should be concerned about SME’s being driven to the wall by a bailed out bank should they not? Especially since most of this government is composed of the Conservatives, who always like to tell us they’re the party of wealth creation, and how we should be responsible for our actions, pay for our misdemeanours etc, etc, etc.
Who am I kidding? We’ll probably get the usual excuses that the Board should be left in place to ‘finish the job’ of sorting out the mess RBS got itself into, ‘recovery is under way’, ‘don’t rock the boat now’ blah, blah, blah.
“should be finished for all time”
Agreed-but we know this won’t happen. banks operate in a world that is now ‘beyond reputation’.
See: http://www.youtube.com/watch?v=eTPuI-32IOo