By The Landlord
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford
“At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.” – James Buchan, The Fire Next Time, New Statesman, 17 November 2008
“For he that hath, to him shall be given.” – John Lanchester, How to Speak Money
The world turns on work that hasn't been done yet. At least that’s how the financial world operates, and banks most of all. And perhaps that’s where the problem lies. Banks exist on the very assumption that we’re going to get up in the morning, slowly chip away at our debts, while money is made and invested off the interest, and meanwhile they encourage us to take out further loans on an endless hamster wheel of cunctatory scrambling. Now that’s a fact that you can certainly bank on. But how can a topic that’s apparently as dry as banks and banking be colourful and nuanced enough to be a song and musical topic? Perhaps, aside from the facts and figures, it’s because banking requires humans, and humans are full of flaws and emotions that are daily affected by banks.
Banks used to be boring, and something safe and sound worth ignoring But long gone are the days when you’d turn up to your local branch, take out a small amount of cash for your weekly shopping, chat to the person at the teller about the weather, and then only occasionally have to talk to a person in a grey suit, who resembled Mr Mainwairing from Dad’s Army, about a loan.
Now things are very different. As the Dragon’s Den businessman, Theo Paphitis puts it: “We survived for hundreds of years under the old banking structure. You'd have clearing banks, then merchant banks doing the racy stuff, and then building societies where you'd join a waiting list for a mortgage. But then banks started buying stockbrokers, doing mortgages, and you ended up with these big banking groups doing everything.”
And so things went badly wrong, particularly coming to light between 2006 and 2008, with the US sub-prime mortgage crisis, Enron and more, very much because of deregulation which had originally begun in the 1980s. Things simply got out way of hand. Of course crisis has occurred before with the Great Depression, but this time on an unprecedented scale of overstretched investments and loans, bonuses, futures, unreal hedge funds and criminal activity that has mostly never been brought to justice.
The banking crash cost the British economy £7.4 trillion and the world economy around $200 trillion. The British government spent £850 billion bailing out banks. Well I say the government, but that’s us, the taxpayer. But there was no choice. The fast-acting chancellor in 2008, Alistair Darling, basically saved the world’s economy from far greater crisis when he had a call from RBS’s CEO Tom McKillop with a call for urgent help. At the time RBS was not only the biggest banks in the world, it was about the same size as the entire UK economy and was haemorrhaging money at such a rate that it was “going to run out of money in the early afternoon”.
Just to show the scale of all of this, in 1971, the total US national debt was $75 million. In 2010, the debt rate rose that much once an hour. Two years ago the US government was paying more than a billion dollars each day just on debt interest on and was still borrowing $5 billion every business day because of the banking crisis of 2008.
“Regulation is necessary, particularly in a sector, like the banking sector, which exposes countries and people to a risk,” said International Monetary Fund chair, Christine Lagarde, but when will that really happen? Banking is run by people with short-term interests, who gain massive bonuses and move on before the trouble they create can be traced to them. In his book The Psychopath Test, Jon Ronson identifies the banking sector to be one that attracts a particular type: “There's definitely evidence that capitalism at its most ruthless rewards psychopathic behaviour. When you look at the worst corners of the American health insurance industry or the sub-prime banking market, it really feels like the more psychopathically someone behaves, the more it's rewarded.”
Banking used to be about safety and caution, but now it is all about greed gambling. Here’s that caustic writer Charlie Brooker: “Banking, as far as I can tell, seems to be almost as precise a science as using a slot machine. You either blindly hope for the best, delude yourself into thinking you've worked out a system, or open it up when no one's looking and rig the settings so it'll pay out illegally.”
And John Lanchester, in his brilliant novel about the financial crash and the banking industry, Capital, says that lessons are never learned, that “knowing that you had gone wrong, and knowing how you had gone wrong, were not the same thing as knowing how to put it right,” because banking now lacks “the seven Ps: Proper Planning and Preparation Prevent Piss-Poor Performance.”
So the bankers and the investors have robbed us but what about robbing the banks? There are plenty of songs about this of course, but to inspire them here are a couple of examples from film. Of course one of the classic psychopaths in the sector is Gordon ‘greed is good’ Gecko in Wall Street, but taking back the money perhaps the most glamorous and romantic story is of Bonnie and Clyde, who robbed banks, but were still picky about who they steal from:
What goes around comes around. In another scene in the film, they hole up in an abandoned house, which it turns out has been taken from a family when the bank threw them out:
My favourite bank robbing film is perhaps Dog Day Afternoon, one of Al Pacino’s early great performances as Sonny Wortzik, who alongside his friend Salvatore "Sal" Naturale (John Cazale) portrays a character based on the true story of John Wojtowicz who tried to rob a Brooklyn bank to help pay for the sex change operation for his trans girlfriend Elizabeth Eden. It’s a wonderful depiction of a decent man driven to desperation and gaining cult popularity because of his cause.
But are banks always bad? In It’s A Wonderful Life, set in in more in Depression-era America, Jimmy Stewart’s George Bailey runs the Building and Loan, the good bank to the bigger, greedier organisation run by Henry Potter. In this wonderful scene, he strives to stop the bank run by persuading the community that their investment is in proper housing, rather than being controlled by the exploitative Potter. It’s a David vs Goliath cliche of course, but a fantastic scene, and one I still find quite emotional:
A good bank is based on trust, and without that the system fails. And I have plenty of trust that all of our Song Bar customers have very sound musical investment. So what might you invest in the Song Bar musical bank this week? Will we rob for the rich and give to the poor? Will it all be about money, or could blood and sperm also feature? Whatever happens no doubt our hallowed vaults will be full of musical treasure by the time we’re done. Our highly trusted branch manager this week is the fiscally and aurally astute Ravi Raman. Welcome back the the chair, Ravi! Deadline for investments in comments is this Monday evening 11pm UK time, for playlists published on Wednesday. We’re now open for business …
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