Tuesday 12 November 2019

We can't let the markets monster rule the world

Christina Patterson

IT'S quite hard, when you're lying in the dentist's chair, with a funny mould thing in your mouth, to shriek.

It's quite hard, in fact, to make any kind of noise when your jaws are stuck in what feels like cold clay. But on Monday, to my dentist's surprise, I did. I shrieked not because the mould was cold, or because being told not to move always makes me want to. I shrieked because a man on the TV monitor above me was saying things you couldn't possibly hear and keep your mouth shut.

The man, who was wearing a pink tie, was an "independent trader". He was being asked about the latest eurozone rescue plan. "It's not going to work," he said, "because this problem can't be solved". The euro, he said, was "going to crash". But when the interviewer asked what he thought might work, he looked confused. "I'm a trader," he said. "We don't care whether they're going to fix the economy. Our job is to make money from it."

And then he offered us all some simple advice: "Be prepared". This was "not a time" to think that governments would sort things out. "Governments," he said, "don't rule the world. Goldman Sachs rules the world."

Certainly, as the euro crisis unfolds on our TVs, it's beginning to look as though it's not absolutely clear that governments do rule the world, or at least that they're all that sure what they're doing.

Here's Obama, telling Europe that it needs to find a "more effective strategy" for dealing with the crisis. Here's David Cameron, calling for "leadership". Here are pretty much all the world leaders, in fact, calling for other people to lead. As models of leadership go, it's less "be prepared", and more "after you".

On the BBC's 'Newsnight' on Monday, even Jeremy Paxman admitted that he was struggling to understand what was going on. In the studio full of flashing screens, Paul Mason explained how a group of "movers and shakers" (but not world leaders) had taken part in a "war game", looking at possible solutions to the euro crisis.

The "war game" was organised by a think tank called Bruegel. The "movers and shakers" went to a chateau in Chantilly. What they came up with -- in a document that is, apparently, now doing the rounds in Washington -- was a $3-5 trillion fund to be used to rescue European countries, and banks. A $3-5 trillion fund donated largely by the European taxpayer. Paxman asked various men whether they thought the plan would work. An American economist called Austan Goolsbee said we'd had two years to raise capital, and it was all a bit late. And Jim O'Neill, who's the chairman of Goldman Sachs Asset Management, said that "to work all this stuff out" was "not easy". We were, he said, "talking big numbers".

When one of the top people at the company which some people think "rules the world" thinks that you, as a European taxpayer, could be paying for something for the rest of your life that might well not work, it doesn't really cheer you up.

It makes you think of the way that the company they work for helped to create the global economic crisis by selling sub-prime mortgage debt, and how that company made even more money by betting on a collapse in the sub-prime market, and of how it made money by underwriting bonds, and later advised other clients to short those bonds.

IT makes you think of Greek debt, which is a very big part of the euro crisis, and of how some people said that Goldman Sachs helped the Greek government hide the true scale of it for years. And it makes you think of all the Goldman Sachs people who have become very senior advisers to governments, or even very senior members of them, or even secretary of the treasury of the most powerful country in the world.

What it also makes you think is that you're really quite tired of being lectured by these people, and being told that you can't ask them to pay even 50pc tax on annual incomes that are often paid in millions, and that you can't do things because "the markets" won't like it, even though the only things that markets like is things that make them rich.

I hope that the euro bailout works. I hope that we don't have another recession, or a depression, or a crash, and I hope that we, and the other countries that have made the same mistakes, get the chance to build an economy that's made less of hot air, and more of things you can see and touch. (© Independent News Services)

Irish Independent

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