We’ve all been equally horrified with the revelations of phone hacking and bankers’ irresponsibility.
Hacking celebrity phones was something we didn’t get too worked up about over the years, I even remember the story of the phones of the royals being hacked and nobody cared too much. Then it turned out they had hacked the victims of terrible crimes, families of murder victims and we all got up in arms. Many of us have long felt uncomfortable with the self interest of the British press. Before the hacking we’ve seen stories with blatant bias or bare faced prejudice, but we’ve had to shrug and get on with life.
Meanwhile we’ve all felt that the financial services industry has not been ‘serving’ us for decades. There has been one miss-selling scandal after another: endowment mortgages; inappropriately risky investments; payment protection insurance; hedged interest rate risks on small business loans; churning; section 32 pensions; unsalable auction-rate securities; interest rate swaps; long term care funds; free-standing additional voluntary pension contributions; state earnings related pension opt-outs; and that’s to name but eleven. However, we’ve all known this for years. We instinctively know this when the spotty oik in the electrical superstore tries to persuade us to take out an extended guarantee on the fridge we are buying. We know that the policy is just a financial scam to increase their profits and will most likely be a total waste of money. In short we know not to trust it.
So what’s the connection between the two? Why have they been able to get away with this for so long? The answer is fairly obvious, they’re both influential in the corridors of power.
The media are able to hold the government to ransom, that’s any government of any colour. Don’t get fooled by the suggestions that the previous government didn’t regulate the media so this government aren’t as bad as the last lot. They are all cowed by public opinion and that public opinion is massively manipulated by the press. If the press doesn’t like what the government does, any government of any colour, they manipulate the coverage, sometimes in subtle ways but often less subtle, and make life hard or impossible for the government. And so they influence government policy.
The financial sector, meanwhile, hold the purse strings of power. Granted left wing governments are more likely to get funding from unions but by no means all of it comes from them and to survive in the modern world they have to have funding from industry. Plus once they are elected the markets have much greater power as we can see every day in the levels of interest paid by government to fund the country’s borrowing. That’s governments of every colour.
So the problem seems to be one of democracy. The people we vote into power don’t really have any control over what happens. Governments can fiddle around the edges with tax and spending but they are ultimately operating at the discretion of the major corporations be they banks or the media.
As alarming as that may seem there are plenty of other examples. The Olympics (perhaps I shouldn’t use the word lest I get my collar felt for naming the official brand?) is now on us and the event is sponsored by food manufacturers that peddle the sort of food that the athletes just wouldn’t touch; McDonalds, Cadburys and Coca-Cola, laced with sugars that make us fat no matter how much exercise we do; Dow Chemical infamous for the Union Carbide disaster in India; throw in a couple of financial institutions, an oil company a credit card company and you get the picture. Then we hear that deals have been struck where the sponsors get exclusive use of the word Olympiks (while the café round the corner has to paint out the O and become the ‘lympic café’) and they get away without paying tax.
To state the obvious the thread through this whole series of issues is that the companies are too powerful and hold us and our elected representatives to ransom. However, there is a fight back and it’s the Olypmics that might be showing us the way.
For the last week we’ve been hearing about the massive cock-ups at G4S the company tasked with supplying security staff. Consider that this is a mission critical responsibility. We’ve heard all sorts of stories about them not being able to recruit enough people. Today on the BBC Radio 4 World at One a reporter said, “Staff are paid only after they do the training and when they do the job.” Then on the day significant numbers don’t turn up for work. What could be the possible reason for this?
“Now Mr Smith, you’ve been on benefits for six months now so you have to take a job if it’s offered.” Mr Smith nodded cooperatively at the young woman opposite and kept a poker face while he waited to find out what the deal was. “There is a guarantee of work for you working for the security company at the Olympics. I think they are called S4C.” Mr Smith looked a bit surprised having been to Prestatyn on holiday the previous year but didn’t say anything to the clerk. “You’ll get free training (but won’t get paid for your time) and a nice uniform with a badge. Of course if you refuse to do it you might lose your benefit because it is guaranteed work. I’m afraid it’s quite low wages but what else are you going to do? And I promise they won’t take you to London and drop you under a bridge in the middle of the night and tell you to sleep on the pavement.” Mr Smith looked unsure. “I promise Mr Smith, that won’t happen again. Of course you have to be available for work and when it’s all over you can go back on the shelf,” Mr Smith looked taken aback by the sudden attack of honesty, “…err back on benefits.” she added hastily. “And we expect you to be grateful, reliable and loyal to your new employers for the trouble they are going to on your behalf.”
Anyway, I don’t suppose it was like this at all, well not much anyway.
We are told that market forces are the way to run the economy. Laissez-faire policies came in with the deregulation of the financial markets in the eighties and that conventional wisdom has tied the hands of any politician who might have recognised we were in a bubble before the 2008 collapse. It didn’t take divination skills to see that it was coming, the only doubt was when. At the same time we’ve had hands off regulation of the media, particularly with the Murdoch empire but others too and if any government tried to reign in the media they were crucified for their efforts. (The most memorable criticism I can remember of Neil Kinnock was that he had red hair! I mean what the fuck?) In the mean time corporations refuse to pay their tax or use their muscle to push governments into doing as they say.
The problem isn’t so much the colour of our government (although politicians that have connections with these corporations will be less likely to reign them in). Laissez-faire means letting the corporations have their way. If we want things to change we have to stand up to these people.