Ann Pettifor

Osborne’s puppet-masters: Société Générale.

15th January, 2009.

Patient readers this blog is triggered by Jeff Randall’s column in the Daily Telegraph today.

In it he inadvertently discloses the identity of the puppet-masters dictating the Tory political agenda around public spending cuts.

In a somewhat histrionic column in which he describes the public deficit as a ‘disaster’ ( he should mind his language: Haiti’s earthquake is a disaster) Randall quotes a piece of ‘research’ by the French bank, Société Générale.  The paper is titled “Popular Delusions” and its authors explain some simple facts about government spending cuts to Telegraph readers:

“Removing the stimulus will involve pain; lower growth, higher unemployment and political unpopularity.”

Not for bankers it won’t.

The Société Générale authors continue:  “But policy-makers don’t like lower growth, higher unemployment and political unpopularity.”

Forgive me for interrupting dear bankers, but a little more ‘research’ might reveal that it’s not ‘policy-makers’ that don’t like pain and higher unemployment.  Its the people. The victims. Known in a democracy as the voters.

The bankers drone on:  “They (the politicians) enacted the stimulus in the first place to avoid it!”

Such blinding insight.  They, the elected, democratic politicians, rightly fear that ‘pain and unemployment’ will incur the wrath of the voters – especially if this pain and unemployment is a direct result of the greed and irresponsible behaviour of a small elite of financiers.

Then our bankers pose a rhetorical question: “At what point will they (the politicians) decide they do want lower growth, higher unemployment and political unpopularity?”

Bravely, they volunteer an answer:  “Given the choice, they won’t, ever.”  (And if the choice is put to the people, does that mean that, given a choice, they won’t ever vote for George Osborne and his friends?)

It is at this point that our bankers at  Société Générale turn nasty and spell out the threat:

“So it will be imposed on them …….. by a suddenly less generous bond market via a government funding crisis.”

This is nothing short of blackmail. Blackmail of democratically-elected and accountable politicians.

Furthermore this is blackmail from bankers at Société Générale whose recent history is one of fraud, incompetence, scandal and a taxpayer-backed bail-out.

Let me remind you dear readers, of that recent history.

In January, 2008, according to the Wall St. Journal (30 April, 2009) “Société Générale – a French bank – disclosed it had lost €4.9 billion ($6.44 billion) – the biggest net trading loss by one person in banking history – at the hands of a low-level employee who the bank alleged had engaged in unauthorized and unhedged trading for nearly two years.”

When news broke of this massive fraud and of the incompetence of those managing traders at the bank, President Sarkozy of France stung by growing public anger,  lashed out at the bank and particularly its chairman, Mr. Bouton (pictured above):

“We have to put a stop to this financial system which is out of its mind and which has lost sight of its purpose” Reuters quoted him as saying on 26th January, 2008.

The President placed public pressure on the chairman of the bank to resign, but Daniel Bouton “would not bow to political pressure”.

Why should a banker bow to mere democratic pressure?  After all, bankers live in an ‘offshore’  world – beyond the reach of democratic institutions – the world of ‘offshore capitalism.

“As the credit crisis spread in October (2008), the French government announced it would provide €10.5 billion to the country’s banks to help them continue lending to individuals;

“Société Générale received €1.7 billion of those funds.”

“Then, as French workers took to the streets this year to demand that the government introduce measures to boost their spending power, the bank announced a plan to reward bosses, including Mr. Bouton (the chairman), with stock options. It was only after President Nicolas Sarkozy called the move “a scandal,” that Mr. Bouton and others agreed to renounce the options.”

These are the bankers that act as trusty ‘researchers’ to Jeff Randall, and as puppet-masters to those politicians – the Tories – that ruthlessly disregard the interests of their voters.

The question is this: will Telegraph readers vote for these puppets?  Call me naive, but I don’t believe they will.


5 thoughts on “Osborne’s puppet-masters: Société Générale.”

  1. Can I just point out that the link to the Daily Telegraph website has an extra (http//) in it which causes it to fail when clicked

    upon. I have noticed a similar, if not identical, failing previously but at that time assumed it was a one-off. Thought this was the easiest way to

    let you know.

    It also, at this moment, links to Friday’s post, which doesn’t appear to be the one Ann is referring to in her latest blog.

    I suspect it will not correct itself in the morning as it refers to a specific article, not the column in general.

  2. Excellent. Of course, this “threat” has been put into play more than once already and no one has called these ba***rds on it. Even

    Cable can seemingly only bring himself to express astonishment instead of anger. The Financial Responsibility Tax that Obama is going to impose is

    only .15%, a drop in the bucket, yet some of our arrogant bankers have let the administration know that they intend to offset this effrontery.

    Brown and Darling have been even “nicer” than this and have received some stick from certain members of the banking community. These bankers will

    only get the picture if they are placed under siege – the iron fist seems to be all that they seem to be willing to understand (forget the velvet


  3. It’s “death by a thousand cuts” – the politicians are competing to make deeper and quicker cuts

    than each other…there’s more cuts than your average barber manages in a week.

    But it seems to me there are plenty of sensible, rational

    and equitable alternative proposals to these cuts. Here are 4:

    1. Green New Deal – thank you Ann et. al.

    2. Basic/citizen’s income –

    compared to allowing the banks to create money in parallel with debt this would be positively utopian…and democratic!

    3. Tax/land reform

    – the Report “In Place of Cuts” by Compass is a good introduction

    4. Monetary Reform Campaign(s) – e.g. see Ben Dyson’s work

    Meanwhile, New labour are competing to cut Higher Education funding by some 20% so there’s no let-up in this maveric and ghoulish contest as we

    career towards a proper depression and misery for those already marginalised in our society.

  4. Pingback: Tax Research UK » Osborne’s puppet-masters: Société Générale.

  5. Pingback: Osborne’s puppet-masters: Société Générale. | called2account

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