Greed Ain't Good - for the Bankers

Social media is a wonderful route to expose and explore stories that are perhaps not brushed under the carpet as such, but certainly not highlighted by the mass (owned) media.

Rumbling along on a number of progressive and leftwing forums of late has been the rise in suicides among traders in the finance world, where traders in particular are nearly 40% more likely to kill themselves than the average. Thirteen men and women have killed themselves in almost as many months, often with no clear reason or warning. Three have been from JP Morgan, but others have been unconnected, their ages have ranged widely from 28 to 58, and so the cause behind this self-destructive trend seems elusive.

And yet...

Imagine being at heart maybe a relatively decent human. Imagine being pushed by parents or peers, or simply attracted to the idea of doing well, and entering their world with its twisted morality, its total competitiveness, its aggression... And the ingrained sense of total personal failure if you drop out... It's not a big step from there to standing in front of a speeding train.

In "The Spirit Level", Richard Wilkinson and Kate Pickett, set out a convincing range of evidence that more equal societies are happier ones - not only for the poor, but for the better off as well. And not just because in a less desperate society there is less crime or ill health, but because it is also more co-operative and community-oriented. With less pressure to relentlessly compete and with traits like aggression generally disapproved of in the workplace and elsewhere, people from all walks of life can feel a little more at ease with each other and, crucially, with themselves.

Contrast that with the world of banking and high finance: with fortunes and record-breaking bonuses to be had at the rapid click of the mouse, buying and selling relentlessly, building up and tearing down financial empires regardless of the impact on real people and their livelihoods, facing pressure to achieve, to produce "results", any human would ultimately begin to struggle. Except perhaps for the psychopaths who happily inhabit such worlds, amplify them and thrive on a culture of dog-eat-dog.

And indeed, using the psychopath tests developed by Babiak and Hare, these traits are often confused with the traditional traits of "good" workplace leadership - aggression is equated to decisiveness; manipulative game-playing to interpersonal skills; lack of empathy to being able to make difficult decisions; disregarding social and legal norms becomes imaginatively go-getting, and so on. Consequently, among management roles, the incidence of psychopathy increases from the normal 1% of the population to 3%. A risk-taking, rule-breaking, high materially-rewarding sector like finance and trading especially is almost like wonderland for someone of such ilk.

Does this, then, explain the rash of suicides? It is impossible to say. But what is certain is this: even if 3%, or even 6%, of traders or their managers are psychopaths, that still means that over 90% are not. But if the culture is one favouring and shaped and reinforced by psychopathic traits, it might be little wonder if others might eventually struggle and wilt. Failure to compete, to meet targets - their wealth doubtless insulates them, but on a psychological level only to a degree.

Get out then, we might tell them - if they are not psychopaths, they should know better; and certainly given the soaring bonuses paid out to so many of them, it is a far easier option than for people in most other occupations to do. But if someone has been become inured to such a way of life, accustomed to it so that they cannot imagine alternatives, the prospect of leaving may well be overwhelming. And, at the end of the day, they are simply flesh and blood themselves.

In The Ragged Trousered Philanthropists, the protagonist, Owen, reflects on the excesses of the rich, but does not condemn them - they are, he concludes, simply playing out their part in capitalism. In this sense, capitalist society can destroy a banker almost as dispassionately as it destroys an unemployed or disabled person, though, of course, in far fewer numbers and with much more coverage than someone driven to take their lives by the prospect of not being able to repay a loan shark. In this twisted world, by turns forcing and encouraging people to compromise with their humanity and deal with the devil, no one, ultimately, is secure or able to be entirely content. Money can buy you happiness, except, of course, that it can't.

And yet, with bankers and benefits claimants alike taking their lives rather than continue living in the capitalist world we are told is the only choice, Wilkinson and Pickett's thesis seems confirmed. It may be difficult to feel much sympathy for greedy bankers struggling to cope with the culture they are steeped in. But a more equal society, a less acquisitive world, one where co-operation is prized over competition, or where, as the late Bob Crow succinctly put it, need replaces greed as the main societal driver - this would indeed be to the benefit of all.

Apart of course for the psychopaths. But we don't listen to them. Do we?

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Housing - the Benefit of Mutuals

Hidden as a footnote in the BBC business news today is the report from the mutual Building Societies Association that in 2011, approved lending in this not-for-profit sector rose by a substantial 15% overall, with a massive 49% increase in mortgage lending. At the same time, the corporate banking sector saw a small decline in overall lending in spite of the increasingly desperate efforts of the Con Dem Government to get the "Masters of the Universe" as the financial PLC sector used to refer to themselves to lend cash to get the economy out of the doldrums.

Mutuals have long been advocated by many in the socialist and green movements as a key part of the solution to a free market economy based on speculation and accumulation. Formed out of mutual aid friendly societies as long as the late 18th century, British building societies have always worked on the basis of sufficiency - never lending more than came in and limiting what members could take at any one time; and, critically, not seeking profits for any purpose other than reinvesting in the business. There are no shareholders, no owners and no money taken out.

The result was that by the late 1980s, the sector was large and healthy, and at that stage still relatively diverse in spite of a trend of mergers. But the Thatcherite era saw an infusion of new possibilities for financial mutuals first of all to diversify their services and then to "go public" - become publicly listed companies making profits for shareholders. In other words, to become banks. Key to this was the 1986 Building Societies Act, as Thatcherite a piece of legislation as you could possibly find, which paved the way for the cash-grab of the bankers.

I briefly worked for the Bradford-based National & Provincial Building Society in its last days as a mutual. As its Board tilted towards de-mutualisation, scores of high paid executives were imported from the banking sector in a veritable frenzy of backslapping bonus-sharing as they strove to find ways to become a bank. In just three years, the number of Directors increased from six to over 60. Many staff in what had been a major local employer and a means of fostering modest home ownership and savings became uncomfortable about the sponsorship of a culture of greed and pie-in-the-sky notions that, in future, N&P as it became, might sell anything at all - "even hamburgers!" one over-excited director declared.

The vanishing mutual: N&P's Bradford city centre branch, long since empty..

As it was, a couple of years after I left, the first big housing recession kicked in and their plans came to nothing. Instead of sailing their way into corporate supremacy, the financial wizards had to settle for being swallowed up first by Abby National PLC before in turn vanishing into the giant Santander PLC. The headquarters, a large building in Bradford city centre that appeared to have been architecturally inspired by lego windows, was symbolically dynamited as hordes of locals looked on, uncertain how to react other than run up the hill when the dust clouds billowed out much further than anticipated.

The intervening decade and a half up to 2008 saw the bankers egotistical bubble inflate and stretch horrendously. Old shibboleths that limited lending went by the wayside. Anything could be borrowed and repaid. Buy-to-let mortgages, where people could borrow to purchase property to rent out, were introduced after decades of being illegal - causing massive inflation in the first-time buyers sector and pricing many younger people out of the housing market for good. Mortgage limits, once pegged at 80% of house value, rose to 120% and beyond as the poison of overlending reached everywhere.

The banks have failed and failed comprehensively. Nearly four years on from the crash of 2008, most remain in hoc to the Government, which in turn is punishing ordinary people through higher taxes and reduced services, grinding the whole economy to a halt. The housing market is flatter than flat, with unscrupulous private landlords the sole beneficiaries. In spite of repeated demands from the government, small businesses especially complain that it is nigh impossible to get loans for vital investment in their businesses. Stagnation results, with unemployment and low wages driving the consequent cycle ever down.

In all, with offers of a few hundred pounds in shares to members, ten building societies took the crooked path from mutuals to plcs. Read the list now, and they have virtually all vanished or, in the case of Bradford & Bingley and the pisspoor Northern Rock, were nationalised after collapsing only for their profitable sections to be sold off to the private sector once more.

The Green New Deal, proposed just before the last election by a range of green economists and politicians, including GPEW leader Caroline Lucas, argued for the hastily nationalised banks to be broken up and re-mutualised rather than sold off. In this way, the link with the need to make profits would be broken and they could focus again on building communities and local businesses and co-operatives.

But the Government is not listening. The profitable bits of RBS are being sold off to Santander, all of which will go firmly back into the private banking sector, in spite of all the signs that it has not learnt its lessons from the avaricious mess it has got itself and all the rest of us into. 

But of course, the building societies don't make donations to the Conservative Party - perhaps the one investment that does still count these days.  

IF YOU WOULD LIKE TO STOP BANKING WITH BANKS, LINK TO THE NEW MUTUALS CAMPAIGN TO VOTE WITH YOUR CASH - MOVEYOURMONEY.ORG.UK

"Why don't they start with the bankers?"

The British Government has announced its programme of cuts in public spending today. Carefully crafting a wide range of substantial reductions in spending so that the average cuts per Government department come in at 19% over four years rather than Labour's planned 20%, the Con Dems betray the essential unity of the three main parties around a monetarist, free market agenda. Their little school boyish prank may make waves in the Westminster Village, a bit like waving condoms about in a Prefects' Room, but the impact on a wide range of poor and vulnerable citizens will be even worse than feared, with £7 billions more than expected off disability payments - £50 per week taken from people on Incapacity Benefit for more than 12 months - and a 50% reduction in the social housing budget. At the same time, precisely nothing is done to tackle the massive tax evasion and corporate tax exemptions that plague Britain.

So amidst the gloom, it was good to see this video (below) of Green Party leader Caroline Lucas MP railing passionately against the cuts as socially damaging and economically illiterate - worsening the crisis of the deficit rather than tackling it. Clearly angered by the Chancellor's approach, she calls for action on investment in sustainable jobs and action against tax evasion. Government led spending on a range of activities such as improving public transport and developing renewable energy would pay dividends in a multiplicity of ways - generating jobs and tax revenue, cutting the deficit, reducing our dependence on foreign energy and cutting our carbon emissions.

This type of Keynesian economic theory,on which the "Green New Deal" is based, used to be the economic orthodoxy that worked for a coherent society. By contrast, Monetarist theory adopted by right wingers in the 1970s onwards changed that - placing economic objectives above social ones and seeking to reduce government involvement in the economy and socirty as a whole. As Nigel Lawson, Thatcher's Chancellor, explained on BBC Radio 4 last night, "I wasn't much bothered about damaging solidarity and social cohesion." All he was bothered about was creating space for tax cuts for the wealthy and a chance to flog off the national assets.

As the Conservatives and Liberal Democrats contemplate the biggest sale of public assets ever, as well as cutting deep into the welfare state, the Con Dem regime is emerging as one of the most avowedly ideological governments in British history, rolling back the shrinking public sector further than Mrs Thatcher ever dared imagine.

At least, hearing Caroline Lucas' speech, there is clearly a voice in Parliament showing that there IS an alternative to an agenda that turns citizens into numbers and shuts its eyes to real human suffering. Let's hope it keeps getting louder. And heard.