(originally posted to Farcebook Notes on the 4th of November 2011)
I woke up this morning after a rather disturbing dream. A man was being drowned by a money lender. The money lender kept ducking him under the surface of the water, the man struggling to breathe, and off to the side was the man’s little daughter. The money lender kept telling him he had to make a payment to what he owed the money lender, he had to make a payment or his daughter would end up fatherless. “Do you want your daughter to grow up without a daddy?” he said to the man. Then he turned to the little girl and said “It’s your daddy’s fault that YOU are going to grow up without a dad.”
Now I’m not exactly sure why the man had borrowed money from the money lender. And I really don’t care. What I was thinking as I watched this scene in my dream was, how can the money lender tell the little girl that she is going to grow up without a father because her father borrowed money? She’s going to grow up without a dad because the money lender is drowning the man!
The reason I mention this, is because of the way most Government, City/finance pundits and general idiots keep blaming the financial crisis on people who borrowed more than they could afford to pay back. It’s ridiculous to say that! And way over simplifying the problem.
Back before the crash, people were being bombarded with offers of ‘Credit’. Credit cards, loans, mortgages…and no doubt in my mind some people took advantage of the offer of free money, knowing full well they had no intention of paying it back. But the percentage has to be almost insignificant.
There was also the huge percentage of people that were tricked by unscrupulous lenders, who told people their minimum monthly repayments would be ‘X’, so they took the ‘credit’, but when the first payment was called for the minimum amount turned out to be twice as much as ‘X’, which they couldn’t afford to pay back.
The majority probably accepted the offer of ‘Credit’ after seeing the monthly repayments and knew full well that on their current salaries, they could afford it. And then came the crash. Those people lost their jobs and only then could they no longer afford to pay back the ‘credit’ they had accepted. Thus adding to the financial crisis. And suddenly, it’s now called a ‘Debt Crisis’.
This relates slightly to what Cameron said at the G20 yesterday. He said that the UK would be willing to give more to the IMF, so long as the cash didn’t go directly to Greece as part of a bailout package, because he knows the UK public will never allow us to bailout Greece, much in the same way the German people don’t want to have to pay for the mistakes of the Greek Government. Once again, you have to look at it a lot closer.
Let’s say Nick Clegg wants to borrow a tenner off David Cameron, for 20 fags and 4 cans of strong lager. But Cameron knows Clegg is a bit of an alcoholic, and fags are bad for him as well. So he tells him, no. But he will give £10 to Clegg’s wife. The end result is still the same. Cameron is down ten quid!
If the UK ups the amount of money it gives to the IMF, the taxpayer is still the one who is out of pocket. And where will the money end up? In the hands of the banks. When Osborne decided to contribute £7billion to the Irish bailout fund, it didn’t go to the Irish people, it went from us, to the Irish banks, who then paid off loans they borrowed from UK banks. And yet when it comes to people in the UK being told by Cameron and Osborne that we have to get our debt under control, we have to cut public services to reduce the deficit because “You can’t solve a debt crisis with more debt!” But that is exactly what they are doing! Paying off the debts of corrupt bankers, politicians, various government officials and greedy corporate CEO’s, and then piling the debt onto the 99% of people, who have never benefited out of the boom years, or at least, certainly not as much as the 1% did.
Do I have a point? Not really. Except maybe this. If you are one of the ones that truly believe that the cause of the financial crisis was people borrowing more than they could afford to pay back, then when ever the likes of Bob Diamond or George Osborne or Ben Bernanke goes on telly or radio, and blames ‘people’ for the financial crisis, well they are talking about you!