Of Storms In A Tea Cup: Taking The Public For A Ride

March 1, 2009

I find it hilarious – in a sick, twisted sort of way – how the British government is taking the public for a ride by distracting attention from its appalling handling of the current financial crisis and stirring one storm in a tea cup after another in order to avoid being torn to shreds by its critics.

Take the current ‘row’ surrounding the nearly 700 grand a year pension plan of former boss of Royal Bank of Scotland (RBS) Sir Fred Goodwin. The way the whole thing suddenly came to light last week and became a subject of a fierce national debate in the media was absolutely ludicrous. You could just hear the spin doctors from 10 Downing Street jamming the lines to newspaper editors and TV producers. ‘Keep up the pressure, boys,’ these spin merchants were saying. ‘Don’t let that fat cat Goodwin get away with it.’

And the ever alert and impartial British media played along with this charade. As if Sir Fred was alone in the whole banking sector getting paid obscene amounts of money for doing his job badly.

Let us examine this particular storm in a tea cup more closely: last week RBS posted the biggest annual loss in British corporate history totalling £24.1 billion. We, at StirringTroubleInternationally, have already congratulated RBS with achieving such an amazing result in such a short period of time. But I would like to point out that this great achievement paled into insignificance compared to the amount of public money that the government has pledged to ring-fence all of RBS’s bad debts: £325 billion!!!

That, ladies and gentlemen, is a hell of a lot of money, especially considering that no one really knows how many of these bad debts could be actually recovered. Mighty generous on the part of Prime Minister Gordon Brown and Chancellor Alistair Darling.

But the funniest part of it was that since last Thursday Sir Fred’s pension plan has managed to overshadow both the spectacular losses of RBS and the gigantic bail-out scheme devised for it by the Treasury. What was £350 billion compared to Sir Fred’s £17 million pension pot! It was just as well for the government that RBS’s former boss looked the part of an evil fat cat, with that strange look in his eyes and that weirdish smile of his.

A nasty man by all accounts. Probably brought down not just RBS but the whole bloody financial sector single-handedly.

I simply loved the way the hacks went for Sir Fred the day after the story about his pension plan broke out. There was even a danger that some of the hacks would choke on their indignation and dismay. And so that the fire of anger kept on burning the Prime Minister Brown threatened to use legal action to claw back the money from Sir Fred. And the Chancellor and some other ministers made threatening noises too. That assured another couple of days of blanket coverage of the scandal in the media, overshadowing a small matter of Lloyds Banking Group posting impressive annual losses of nearly £11 billion for the last year. That was the former Lloyds TSB bank that had been doing very well until it was forced by the government to take over the failing HBOS group. Sir Fred was proving invaluable for Brown & Co with the media turning on his like a pack of hounds on a fox.

Here I would like to digress slightly and make the following observation: unlike most professions, journalism is one where it is very difficult to pretend to be straightforward, honest, objective and independent but behave in a totally opposite manner. You can be a conniving politician and get away with it, like Tony Blair and many others did and still do. You can be a dodgy lawyer and still pass for a man of integrity. You can be a hopeless doctor and still have patients flocking to see you. You can be incompetent and dishonest in many professions and fool people for long periods of time. But it is practically impossible to claim to be an independent minded hack and yet suck up in your writings to the rich and powerful. It just does not work this way in the writing profession. You are what you write. There is no getting away from it. And events of the past few days have proven that the majority of British hacks have either sold out or are just too thick to understand where the real issues lie. It was not the first time and it would not be the last. But last week it proved to be spectacularly obvious. (Observation ends)

But let’s look at the damaging bail-out plan for banks devised by this government. Last year Prime Minster Brown was telling the British people that an injection of £37 billion into the banking sector would save the British economy and the whole world along with it. Remember that time? Well, by now the figure of the bail-out has grown to £600 billion – up by a £100 billion in the last week alone – and it only covers three banks – Northern Rock, RBS and the Lloyds Banking Group. In return for this the banks in question have promised to start lending – so good of them – and provide extra loans of something like £40 billion. Compare – £600 billion and rising and a promise of an increase of £40 billion. It is nothing more than a con, a swindle, a betrayal of the people’s trust.

And yet all the talk for the past several days was about Sir Fred and his 700 grand a year. How can anyone could have fallen for this trick? And how embarrassing for the media to tag along and play the shameful game of ignoring the real priorities.

We will look back in anger on these days, just you wait and see. It would not take long now.

Category: Let's Be Cynical · No Comments »
Tags: crisis, RBS, Sir Fred Goodwin