Talk of 'rogues' in the industry has been part and parcel of politics since the beginning of the financial crisis, from all sides of the spectrum. In fact, many believe that the recession was caused by 'bankers taking unforgiveable risks for the sake of high profits'. More surprisingly, David Cameron has stated that 'shamed' bankers should not receive their bonuses for leaving their jobs in disgrace. Upon reflection, when Cameron - a man who has championed free enterprise as promoting morality - seems to agree that a few bankers are to be blamed for global recession, I'm forced to reflect. Have I been taken in by classic political scapegoating ?
It is possible that politicians have raced to be the harshest on the City in an attempt to play to the gallery. Naturally people caught up in the whirlwind of bad credit, possibly losing their jobs - and even their homes - are looking for someone to blame. In the minds of most people, the banks filled that void. And all political parties will be aware that appearing to be the one to trust on reining in those individuals would be a politically favourable position to occupy.
However, I believe banker bashing to serve a more significant purpose. Simply put, directing the blame at bankers for acting inappropriately avoids the buck stopping much closer to home for each of the main political parties.
One would usually expect Labour to jump on the recession as an opportunity to talk about regulation of the banks. However, former Prime Minister Tony Blair and his successor Gordon Brown turned New Labour into the party of bank deregulation, and current party leader Ed Miliband won't want to leave himself open to accusations of hypocrisy. Deregulation aside, New Labour was particularly guilty of creating a Britain over-reliant on the City and the jobs they created for ordinary people were based in retail, public services and social programmes which became unfeasible in times of bust. Failure to implement any real industrial growth in Britain, which could have supplied the nation with skilled, dependable, well-paid jobs, meant that after the credit bubble burst any minor achievements were immediately eroded.
The Conservative Party, on the other hand, are not about to change Blairite policies of deregulation and are therefore unable to discuss a problem of culture which stems predominantly from Parliament-led decisions. Instead, we are told Bankers’ apparent moral failings are to blame. Alongside this, the conservatives have turned the global world recession into a crisis of government spending, ignoring the uncomfortable truth that the Tories planned to match Labour’s spending for three years from 2007. Chancellor George Osborne’s rhetoric rapidly shifted from 'there will be real increases in spending on public services, year after year. The charge from our opponents that we will cut services becomes transparently false' after the seriousness of the financial crisis hit home. Blaming Labour’s spending and the bad behaviour of bankers, of course, frees the government to claim their policies are part of the solution rather than part of the problem.
The similarities between Conservative and New Labour fiscal policies have led to a scramble for someone to blame for the financial crisis, as neither party can truly point the finger at the other. The left rightly chooses to concentrate on supporting disadvantaged minorities and other groups being treated as though they are to blame (such as the disabled and those on benefits), and are unlikely to express sympathy for the bankers. However, it is vital for all of us to hold governments to account and not allow them to pretend that they had no hand in the state of the country’s coffers.
If they are not challenged, can we really expect substantial change ?
image: © Jeffrey Kontur