STAFF NEWS & ANALYSIS
Why Not Stop the Free Cash and Call the Bankers' Bluff?
By Staff News & Analysis - August 12, 2009

The deal we have decided to do with the bankers can seem uncomfortably close to the sort of deal the Aztecs did with their high priests, says Alasdair Palmer. … Just how much government money do bankers need to do their jobs properly? I ask because they have received vast amounts of cash from the rest of us – but are still not doing what they are supposed to, which is help the economy out of recession by lending to struggling businesses. Since the year began, lending to British businesses by British banks has fallen by an average of £580 million a month. In the first quarter, the economy recorded its biggest ever contraction, with GDP falling by 2.4 per cent. It shrank by a further 0.4 per cent in the second quarter. Unemployment continues its relentless rise, and may soon surpass three million. These dismal statistics are no doubt what persuaded Mervyn King (pictured left), the Governor of the Bank of England, to continue the policy of "quantitative easing", or printing money. The Old Lady of Threadneedle Street has already given £125 billion to Britain's bankers in this manner, and King now proposes to hand over £50 billion more. – Telegraph

Dominant Social Theme: A reasonable proposition?

Free-Market Analysis: The Daily Bell covers dominant social themes. And we have pointed out that these themes may have a kind of spiritual significance. While organized religion seems to have lapsed in the West in the 20th century, the monetary elite launches sociopolitical perspectives that bring out passionate responses. The spiritual aspect we have commented on in the past as follows:

We've pointed out that in our humble opinion, the real religion of the 20th century (and perhaps the beginning of the 21st) is central banking. Society is never so well served, so faith suggests, as when the financial sector and specifically money center banks are well-heeled and healthy. Seldom, it would seem, has their been such a happy alignment between self interest and the public good. If big banks — their management and their employees — have sufficient capital, are properly incentivized and appropriately regulated, then society will generally hum along. Prosperity beckons for all.

While we see central bankers as high priests of a spiritual enterprise, we agree that you could compare them to Aztec priests as well. And there is something more to this. The dominant social themes that the monetary elite promotes also have a quasi-religious connotation in our opinion. We make this comment because we see how much passion environmentalism and other social memes arouse these days. Whether it is peak oil or green approaches to energy, over population or health care, dominant social themes – sociopolitical concepts promoted in our opinion by the monetary elite to generate additional wealth or control – arouse all the passions of organized religion in the past. Here's some more from the article excerpted above:

It's great for those guys and their acolytes. But what have we got out of it? How have we benefited from the transfer of money from us to the bankers? Talk to the recipients of our largesse, and they become indignant that you could even ask the question. They insist that their expertise, their knowledge and their hard work is essential to the smooth functioning of the economy: without them, businesses would collapse, because they could not get access to credit. Disaster would follow.

After Thoughts

People are spiritual creatures: We seek issues around which we can organize an emotional core. For those who do not focus on religion, various socio-political issues provide a convenient vehicle. This is the reason, in our opinion, that top politicians and bureaucrats are often treated with a certain amount ritual reverence. In fact, those who believe in a given politico, are often apt to approach him or her with a courtesy often seen within the religious arena. This conflation of spirituality with secular issues may be one reason why elite memes are often received gladly and are difficult to resolve.

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