Ann Pettifor

Bankers tighten their grip

13 May, 2010

With a backdrop of bankers looting the EU’s Treasuries (via a bailout that rivals George Bush’s TARP) let us consider one of the most significant Dem-Con appointments (and a non-appointment) to the British cabinet.

That of someone who until now was invisible: David Laws the new Chief Secretary to the Treasury.

His Wikipedia profile (updated on the day of his elevation, and before he had taken up his ministerial responsibilities) depicts him as the man that speaks for his party on matters relating to kiddie-winkies and families and, no doubt, motherhood and apple pie.  He is also commended for his conciliatory role in negotiating the Scottish Parliament coalition.

No mention here of his real background.

For, according to ePolitix, David Laws was once Vice President of JP Morgan and Co and based in the United States, before becoming Managing Director of Barclays de Zoete Wedd in 1992.

Now, in my book the most obvious candidate for the job of Chancellor, or Chief Secretary to the Treasury,  was surely Vince Cable, a man credited for his prescience in predicting the financial crisis, respected for his ongoing analysis of that crisis and regarded as a “scourge of City ‘fat cats’.”

Why was he shunted across to the toothless Department of Business, Innovation and Skills? And why was a man who until now has had absolutely no record of speaking out on the financial crisis, elevated to a powerful post at the Treasury?

Could it be that Vince Cable is unacceptable to the City? That he was likely to threaten the oligarchical role of the British banking community, and their grip on the UK Treasury?

Evidently so. What else can explain the Financial Times’s headline (under a picture of David Laws and the Old Etonian) “Coalition softens stance on banks” (FT 13 May 2010).  And the comment that “proposals for banking reform announced by the new coalition government appear to take a much more measured approach to the task of reshaping Britain’s bloated banking sector”.

So be afeared.

While most economists recognise (as does the FT’s Martin Wolf) that “the source of the government debt…. is the past profligacy of large segments of the private sector, and in particular the financial sector.” (FT 12 May 2010) yesterday’s Dem-Con coalition statement argued to the contrary. Government debt, according to our new political masters, is the result of “Labour’s financial crisis’ – with the City of London blanked out.

This framing of the debate is deliberate, and Labour was profoundly unwise, and irresponsible, for allowing it to pass unchallenged during the election campaign.

Because this devious framing of the causes of the financial crisis was at the heart of the Conservative election campaign strategy. And even while the Tories hid George Osborne away in a cupboard for the full duration of the election campaign, the framing of the issue remained central to their strategy. The role of the City of London was completely ignored, and the entire financial crisis laid at the door of the government, and the innocents dependent on, and working for, the public sector.

It was the most dishonourable and deceitful sleight of hand in modern British politics, I would contend.  And sadly, both Labour and too many of the British public bought into this framing of the debate.

So the ground is now laid. Bankers are preparing to move from looting Treasuries in the US and EU – to once again looting the British Treasury.  And as Michael Hudson argues, to shift the burden of taxation from property and finance – back on to Labour.

Less public money spent on welfare and jobs, means more money for bank bailouts.

Labour’s claims for jobs, for healthcare and pensions will be subordinated to claims by the banks “to get fully paid on hundreds of billions of dollars of recklessly bad loans… reduced to junk status.”

With a totally inexperienced and economically inept Old Etonian in charge: with David Laws playing the role of decoy in this proposed Great Bank Robbery, and aided and abetted  by subservient economists, the Treasury remains within the firm grip of Britain’s most powerful oligarchy.

What is at stake is not just ‘savage cuts’ inflicted on the innocent and the vulnerable, shocking though such an injustice will be.

What is at stake is nothing less than Britain’s democracy, and the peoples’ right to control over the nation’s finances.


7 thoughts on “Bankers tighten their grip”

  1. Couldn’t you be a little more direct, Ann, and say exactly what you mean, rather than being so soft on the issue?!!! 🙂

    My biggest regret is that so many people will never get to read this! It just rings so true and shows that the Tories are still in bed with the bankers! And even Mervyn King is praising the government’s approach to reducing our national debt!

    I think the phrase “Be afraid! Be VERY afraid!” is appropriate at this time.

    I shall be sending a copy of this to my new Tory(!) MP and seeing if he bothers to respond! Maybe I should send it to David Laws & Vince Cable as well?

  2. the.Duke.of.URL

    Ann, I like better “Con-Dem” though understand whatever resevations you may have had.

    Agree with BPS. I think Cable was neutered before the deal was done. I hoped it was a bad dream when I heard his new stance and a whisper about his new, impotent, position in the new government. I wish it were a nightmare from which I would eventually awake. More years of Thatcherism I don’t know whether I can stand.

  3. the.Duke.of.URL

    The whole thing is sickening. What was really disturbing was the pathetic coverage by the media, except perhaps for Gary Gibbon. It was difficult to believe some of the things that were said as they indicated a serious level of ignorance or degree of mendacity by many, while others appeared simply to be just stupid.

    Why wasn’t this information about Laws available before the election? Once again, senior commentators in the media fail to do their jobs. Some junior commentators seemed to try but appeared to be out of their depth.

  4. Sooooooooo true, Ann, what is at stake is the nation’s finance:

    — as money supply for everybody
    and as budget for the government – generally around 40% of a national money supply!

    See “Sovereignty & Seignorage” on and “Green Credit for Green Purposes” on

    People talk about the national debt as if it was god given and the deficit as if it was Labour’s fault.

    The reality is:

    1. the first national debt was established in 1694 by setting up the Bank of England; see; it resulted in a general debt-based economy world-wide

    2. the purpose of the crisis was revealed by the 10-year budget analysis and the “kink” in 2008; see

    3. there are fundamental differences between the Bank of England’s “quantitative easing” and the Treasury “printing money”: interest, aka vested interests of greed and unaccountability.

    Keep at it against all odds!!!

    Organiser, Forum for Stable Currencies

  5. Pingback: Bankers tighten their grip «

  6. Exactly right, Ann.

    Let’s hope that the next Labour leader is not some Nu Labor stooge but a person who actually dares to blame the bankers.

  7. The Labour leadership contestants should be asked whether they agree with Martin Wolf’s opinion in today’s FT: “Mr Brown made big errors. But more significant is how wrong the conventional wisdom on which he relied turned out to be.” Balls in particular should answer that one. I want the ‘chosen one’ to prove he understands real economics. That rules out Ed Milipede right away – I know, I’ve heard him display his ignorance on more than one occasion.

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