Bank bailout was the greatest theft of wealth in history. Will Miliband reverse it?

150113bankrepayments
The money given to UK banks and the amount paid back by October last year – nothing but interest [Image: claritynews.co.uk].
There’s a passage in Russell Brand’s Revolution in which he quotes a chap called Dave Graeber as follows: “During the bailout of Wall Street, $30 trillion in support and subsidies went to the most powerful players… That was the greatest theft of wealth in history.”

Here in the UK, we were part of that. The Brown (Labour) administration paid a fortune into our own banks to keep them solvent because they were also participants in the global economic crisis – it had to, otherwise all of our savings would have disappeared.

We all thought this was reasonable, at the time. Shore up the banks, sure – they’ll pay us back in the long run. Have they paid us back?

Have they heck as like!

(That’s a colloquialism meaning, emphatically, no.)

The Conservative – sorry, Coalition – government has even been helping them steal some more. Look at this RealFare image:

150113camerontaxcuts

The bankers involved in the bailout were all on the top rate of tax – bank on it! – so there’s a double tax cut for them, and their employers enjoyed the Corporation Tax cut too. That’s a huge amount of money that the Treasury has given away to people who already owe the nation a huge amount of money!

Meanwhile George Osborne announces more billions of pounds worth of spending cuts, taking money from the poor.

You see – and perhaps this has been obscured lately – government spending involves the redistribution of wealth, and on the face of it this is to make society more equal. What the poorest can’t afford, the state will provide, to ensure a reasonable standard of living for everybody.

But George Osborne, David Cameron and their government have pig-headedly used the financial crisis and the debts created by it to punish the poor and increase inequality.

The bankers have not been asked to give back the money they were given to bail themselves out – that money has been stolen.

The government has withdrawn spending from people who need it and given the money to people who don’t in tax cuts – that money has also been stolen.

Just because it doesn’t appear in the statute books as an act of theft doesn’t make it any less so.

And now it seems another banking crisis is on its way – because the people who caused the last one are still in charge, haven’t learned their lesson (why should they? They were rewarded for the last crisis), and are hell-bent on repeating the calamity because the only people it hurt were too poor to do anything about it – people like yourself.

Look at this, by Michael Meacher MP: “Six years after the financial breakdown in 2008-9 it is therefore disturbing to see the UK’s Financial Conduct Authority seeking public acclaim for the large increase in financial penalties it has imposed on miscreant banks, as though this has changed the culture of hubris that has infected the major banks over the last decade or more.

“The FCA has certainly imposed fines of £1.4bn on the UK banks in this last year, but that is… too modest by comparison with the enormity of their regular annual profits to change the City’s amoral mindset, and above all focused on the banking institutions themselves (the shareholders) rather than on the real perpetrators (the top executives and traders).

“Not a single top executive in the UK financial sector has been convicted and sent to prison, even for such egregious offences as rigging the Libor and forex markets.”

Ed Miliband has promised to reform the banks, “so they support small businesses” – is that enough?

In September 2012, he promised that, if banks did not separate their retail and investment arms, a future Labour government would break them up (with the aim of protecting personal account holders from debts created by the gambling of the so-called ‘casino’ bankers) – is that enough?

What will be enough?

From where this writer is sitting, the banks and financial institutions are sitting on billions – if not trillions – of pounds of money that doesn’t belong to them, while millions suffer and starve.

Going back to Revolution, Russell points out that this kind of money could cancel the debts of everyone, not just an elite; it could create employment and ‘ease’ life for ordinary people, not just an elite.

Ed Miliband could win an election on this. If he said “A Labour government will take your money back from the banks and use it to improve the lives of everyone,” he’d have a landslide on his hands.

How about it, Ed?

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24 Thoughts to “Bank bailout was the greatest theft of wealth in history. Will Miliband reverse it?”

  1. Good post! I hope Milliband takes up your challenge – but I won’t hold my breath!

  2. Andy

    We need to take back control of our money… http://www.positivemoney.org/

    By the way Russell Brand is a w*%$er and Revolution is drivel.

    1. Mike Sivier

      His writing style leaves a bit to be desired, considering the message he’s trying to get across – but no. It isn’t drivel. At least, not so far.

      1. Andy

        The issue I have with Brand is that he actively promotes not voting. In his book he refers to many great thinkers and activists of our time, Greaber, Pikerty and Chomsky to name a few, with quotes and no references. He sets him self up as a disciple of Chomsky. But even Chomsky still thinks that change can be achieved though the ballot box and pressure on governments. You have to partake in democracy, protest, and attempt to change things. He also degenerates into a load of transcendental mumbo jumbo. I’m not sure if he thinks of himself as an anarchist or not. There are woefully few committed anarchists around. And because of the state propaganda machine working tirelessly there are few people that really understand what anarchism is really about. Anarchists are not against democracy. They not for chaos. They are against state authoritarianism.
        Apart from the Brand issue I’m with you 100%.

      2. Mike Sivier

        There’s a passage in Revolution in which Russell explains why he doesn’t advise people to vote; it’s the same “rejection of the mantle of appointed social prefect that prevents me from telling teenagers to ‘just say no’ to drugs.” I think he’s saying it would be hypocritical.
        The meditation stuff seems to be about coming back to what really matters, rather than ephemeral trappings of fame, money and big TVs (for example).

  3. Thomas M

    We should take the making of money back into government hands, as it was in the Anglo-Saxon period. Or at least partly back into government hands anyway.

  4. Florence

    I haven’t read RB’s book yet, but I still find “The Cancer Stage of Capitalism” a cohesive demolition of the neo-lib (or neo-con) corporatist agenda.

  5. jeffrey davies

    spot on once again

  6. jeffrey davies

    that one on a disabled person being evicted is not being found are they up to their tricks again

    1. Mike Sivier

      It was an old story and I hadn’t realised. When I found out, I deleted it.

  7. Hi Mike, those figures are staggering. Can it be true – what is the source?

    1. Mike Sivier

      Sorry to be late getting back to you. Do you mean the figures in the image? The source is mentioned in the caption.

  8. Yes Ed,,,,,, Are you up for it????

  9. Mr.Angry

    Bring it on Ed help us all out of this present disaster zone.

    1. Mike Sivier

      It was a rhetorical question.
      Since you have answered it, why do you think he won’t?

      1. Jim Round

        Because the influence of the banks and the City is vast.
        Retail banking, such as current accounts, credit cards etc are provided mostly at a loss to the banks, right or wrong the “casino” arm props it up.
        If the separation of these goes through, then charging for current accounts will come in, like in the U.S for example.
        Asyou point out, the reason the banks were bailed out was so that the money supply kept on going and everyone could access their money.
        Yes, the bailout was handled badly, but but all stripes would do the same again.
        The banking industry is the one that is most likely to up sticks and leave the country if they don’t get their own way, and the contribution they make is deemed too great to lose by Westminster.
        The estimate is just over 20% of the tax collected.
        Then add on things that bankers spend their bonuses on, cars, property etc…
        I’m not defending them here, far from it, but those are the reasons why banks and the City get an easier ride.
        If they go elswhere and pack up, around £50bn will be lost in revenue, as well as job losses and little in the way of a replacement (credit unions wouldn’t be able to cope)
        Like it or not the banks will continue to rule our lives, you can’t live with them, but you can’t live without them.

      2. Mike Sivier

        If they go elsewhere, then the government wouldn’t subsidise them either, which means a gain in revenue of slightly more than £50bn, having taken your loss into account – if I recall the Tax Research UK figures correctly.
        Job losses would be an issue I suppose, although I wonder whether they’d be as serious an issue as many might think.

  10. Craig

    Labour are for keeping the status quo, while appearing to be in opposition none of their policies even mention addressing the systemic problems, just policies that appear to be fairer ways of keeping the status quo. Like taxing bankers bonuses, sounds great on paper, but when the EU tried to cap it they just found a workaround. As they would with the tax. No mention of chasing down the billions in dodged tax either, funny that. Hasn’t mentioned taking the power to create money away from the banks either, just “ringfencing” to protect consumers, but not actually changing the way the financial industry drives up house prices, or gambles with toxic debt assets that could and possibly will cause another financial crisis.

    Yes scratch the surface and it’s more of the same, why would you expect him to actually want to do anything that would make serious change, or actually hold the oligarchs accountable for anything?

    1. Mike Sivier

      I’m sick of these comments that make assertions about a party’s policies without ever bothering to support them with evidence. You are cherry-picking plans in order to knock them down without considering the overarching direction of movement and what it implies.
      How do you know so much about Labour – are you also a member of Ed Miliband’s inner circle, like some idiot on Facebook earlier today? I don’t think so. Spare me your ill-observed opinions.

      1. Craig

        I have read through all of Labour’s policies tonight actually, pseudo socialism comes to mind, and too little too late also comes to mind.

        I could go through the list and knock each one back if you want, because I do not need to be part of Miliband’s inner circle to tell you that Labour plan to change very little except talking points in the news, just read their policies.

        Seriously if you want me to do a breakdown of Labour’s policies I will, I am not cherry picking them to knock them down I just didn’t feel like listing every single policy on their website and providing analysis for each one.

        They even support TTIP except the NHS part, if you want me to cite each source I will but it will get tedious. You get very defensive about Labour don’t you?

      2. Mike Sivier

        Okay, I’m going to confine myself to correcting you on just one point: Labour opposes the ISDS part of TTIP altogether, and wants ALL public services to be exempt from inclusion in the TTIP. All of them. Forever. In fairness, I only just heard it because it’s only just been put out, but have you got that? Good.

  11. I think we all know Ed won’t do that, but I’m extremely curious as to why we all know that. Theories / ideas / answers? Is it simply to do with party funding? Is it that the super-rich really do control our economy and could crash it again if anyone stood up to them?

    1. Mike Sivier

      Do we all know that?

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