The Largest Bank Heist in History

There are several levels at which we can understand the “debt crisis.”

As currently reported by the mass media, it is a crisis of the 17-nation Eurozone centered on the inability of the government of Greece to service a national debt of nearly half a trillion dollars.

If we step back a bit, the crisis grows larger. Because banks in most developed countries hold varying amounts of foreign sovereign debt, the entire global financial system is at risk of collapse. That would throw the world economy into a deep recession, causing a vicious downward spiral of layoffs, manufacturing cutbacks, and falling trade.

China would also be seriously affected. Its “workshop of the world” path to booming growth has landed it in a position where a financial collapse in major Western countries will implode its huge manufacturing economy. That would set off a global deflation of commodity prices, bringing misery to many developing countries dependent on their export for much of their income.

If we step back even further from this looming global crisis and look at the fundamental nature of the problem, we can understand it as one of corruption and abuse of power by a small financial elite.

Borrowing has been an essential part of the growth of the global economy over the last four hundred years, but it was always an ancillary factor. What has happened in the last two decades is that those who lend money have got into the driver’s seat, and flooded the world with credit as an easy means of increasing their own income. With greed getting the better of common sense, they then recklessly packaged this debt, much of it to people and institutions without the capacity to repay, into “investments.”

The banking system in developed countries through which this financial elite operates, bought those “investments” on a massive scale, spreading the bad debt to the portfolios of a whole range of investors, including pension funds, universities and insurance companies. In 2008, when these follies first came to a head, governments used taxpayer money to prevent a disastrous and far-reaching collapse. In effect, the financiers got away with the largest bank heist in history, leaving ordinary people to pay for their theft.

 As governments resorted to austerity measures to cope with the unsustainable burdens of debts imposed on their own populations without consultation, there has been rising popular anger. Some sections of the media have resurrected Marxist terminology in presenting this anger in terms of “class war.” However, it is far from that; public anger is directed not at the business community or at the rich generally, but at a very small and powerful set of financial operators.  

Understood in those terms, the current situation offers an opportunity for a creative response beyond the “haircuts” imposed on banks and legal action against those seen to have acted irresponsibly. Social activists, small and medium businesses and credit unions should network to create a new community-based financial infrastructure. That would not only insulate the larger economy from the current crisis, it would be a decisive check on the power of a financial elite that has long outlived its utility.

British Riots a Put Up Job?

The police just happened to shoot an unarmed black man. They did it just when all national leaders and the Mayor of London were on vacation. Then, as vocal outrage brewed, they stayed away.

“There wasn’t a single policeman here last night” one outraged woman told a seemingly drunk Boris Johnson, the Mayor, who made a disastrous public relations foray into the streets of London after returning from his vacation on the third day of the so-called riots. The television cameras caught him mumbling incoherently as another angry citizen demanded "Why are you here now! Why are you here now!".

The Prime Minister staged a more decorous outing, popping out of his official residence to speak to the Press and then going right back in.

By then “copycat riots” had spread around the country. In London, a car driven by a black man mowed down and killed three Asian Muslims.

There is no ideology to it, no real social force. “Greed” is the watchword of media pundits. Disaffected young people driven by the desire for the latest Nike sneakers and colour television sets, they said, were behind the arson and violence. They could not explain the seemingly organized manner in which rioters avoided police. "Social media" was the explanation.

Strangely, no one noted that the “riots” occurred just weeks after the “troubles” started up in Northern Ireland, for no reason at all.

Looks to me like someone dusted off an old “Divide and Rule” playbook. In colonial India, whenever the nationalists got too united, the British would set off “Hindu Muslim riots.”

Chicago Tribune correspondent William Shirer noted in his book on Gandhi that it was difficult to find out how many of the communal riots “were incited by the British in their effort to keep both communities at each other’s throats so that they could not unite in their drive for self-rule.” He reported that the “British Chief of Police in Bombay once told me – almost as a joke – that it was very easy to provoke a Hindu-Muslim riot. For a hundred dollars, he said, you could start something really savage. Pay some Muslims to throw the carcass of a cow into a Hindu temple, or some Hindus to toss a dead pig into a mosque, and you could have, he said, a bloody mess, in which a lot of people would be knifed, beaten and killed.”

As with the current Nike riots, those in India spread quite spontaneously. They were a major factor in splitting India and creating Pakistan as a British proxy.

The current spate of riots are aimed at the British people. The massive social discontent at the cuts in social services and employment, followed by the revelations of elite corruption in the Murdoch hearings, could spell disaster for those squirreling around in the corridors of sleaze.

How conveniently the riots have diverted the attention of British society from the fact that the “austerity” forced on it is not for the general good but to save a political-financial elite whose greed and lust for power are legendary: it got Britain to the top of the list of slave traders, opium traffickers and colonists. And oh yes, brought on two World Wars.

Street riots? Pshaw, it's child's play for this crowd.