13th February 2013
Does any of it matter, really?
There have been two contrasting, but in a perverse way, similar news items yesterday both on channel 4 news. One a report on gun crime in America highlighting Chicago as having the highest level of gun crime with over two thousand five hundred fatalities a year with the police only solving one in four shootings. Community workers there claim that a lack of jobs and poverty is at the root of the breakdown in law and order.
The other story concerns Barclays Bank who reported on 2012. They announced a bonus pot of £1.75bn, averaging £185,000 per employee, when its profits were reported to be only £250m. It was disclosed that Bob Diamond has received £120m. The lack of profits was after making provisions for fines and compensation for miss selling PPI and interest swaps, and rate fixing. It seems likely that the provisions are too low as they keep on rising; legal and regulatory actions are still not settled and compensation payments are ongoing. The new CEO who previously headed Barclaycard was culpable for much of the PPI miss selling and took a year, whilst many customers committed suicide, to alleviate the customer hardship arising from the miss selling of interest swaps. He was interviewed by John Snow. He announced the closure of the tax avoidance division (I had read earlier that just 100 employees were earning Barclays £1bn profit a year from this activity!) and that there would now be a new era of transparency and less aggressive self serving practices. He then refused to answer whether Barclays had lent £7bn to the Qataris to buy shares in order to avoid a government bailout. Instead he deferred to the impending SFO criminal investigation and said he “guaranteed to disclose their findings”. From his reply it seems that the complex web of deceit at Barclays will thwart the SFO in their efforts to get to the truth.
On the one hand there is breakdown of law and order because of poverty and on the other because of the amoral holding of riches and the inexorable pursuit of even more wealth however obtained.
Both occur because there are neither laws nor regulations in place to remove guns from the streets or stamp out the fraudulent practices of bankers and the criminal activities of business; and yet, even if there were, there has never been an appetite by politicians to enforce laws and regulations which would otherwise prejudice the cosy relationships they enjoy with the vested interest groups which keep them in power and allow them a share of the spoils of all their wrongdoings. Now the politicians have an answer to their critics for their inaction by alluding to the prevailing economic climate and the need for austerity cuts.
It begs the question then as to where the “developing” economies may be heading as they too have adopted the same business model “globalisation and unfettered capitalism” that has ruined the “developed” economies which they strive to emulate; but then, many in the developing economies are just glad to have food on their plates and are not concerned that the lack of enforcement of inadequate regulations means they do not necessarily know what they may be eating and whether it may kill them.