Back in my Liverpool home, New Year was a serious celebration, with
firstfooting at midnight being an important tradition. As a redhead, I was toxic bad
luck, so I reserved firstfooting for enemies, drinking the proffered
drinks while wondering what the year would bring.
This New Year Eve it would have been good to go firstfooting with the
guy one
cop friend introduced me to -"The Doorman." His job was to kick in doors
on police raids, and it would have been a good new year resolution for
the FBI
and the SEC to go firstfooting in like manner all the Masters of the
Universe who brought the world economy to its present state.
Sadly that would have been as unlikely to happen as the ICC enforcers
banging on
the doors of the latter day thumbscrew and rack wielders around the
White House.
Even so, one big unanswered question of 2008 is, where did the money go?
One clue to the mystery has just emerged. In Scotland, where they take
Hogmanay seriously, as 2008 came to an end, a student went to his ATM,
which my oldest son had always presciently called magic money machines,
since cash came from nowhere with little perceptible effort. The
student, Donald Moffat discovered that it disappears even more
mysteriously when he learnt that he had run up a £100 billion overdraft.
Even in these beknighted days for sterling, that still weighs in at
around $150 billion worth of hole in his account.
It took him many phone calls to persuade Barclays Bank that there may
have been an error. Many of us are still scratching our heads wondering
"could the Masters of the Universe have been that stupid?" and if
Barclays, one of the survivors of the financial debacle did not notice
this little glitch, you can see why the others went down like the Titanic.
Pundits intone about the "destruction of value" that the crisis has
caused. The houses, buildings, factories and fields are all still there.
If money has the connection to the real world economy that we usually
assume, then the money did not disappear down some quantum black hole.
It is still out there.
People sold those stocks, those hedge funds and funny bonds when they
were high, unloading them onto others. In fact investigators on the
Madoff money trail are already reporting that much of it was siphoned in
fees and commissions by various fund managers even before he got his
sticky mitts on it.
When the band starts again, I suspect that, once again, we will have
seen a massive transfer of wealth from the not so well off to the
stinking rich, not least with reverse redistribution of the bailouts
shoveling taxpayers' money to the crooks and incompetents who brought
about the present situation.
2008 was of course the 160th anniversary of the Communist Manifesto, voted
by uber-Conservative Human Events
the most harmful bookever (Keynes came in at tenth). The Manifesto hymned the achievements of
a different sort of capitalism in reshaping the world in a triumphant
tone that makes Ayn Rand in her novels seem laid back..
"Constant revolutionizing of production, uninterrupted disturbance of
all social conditions, everlasting uncertainty and agitation distinguish
the bourgeois epoch from all earlier ones…All that is solid melts into
air, all that is holy is profaned …All old-established national
industries have been destroyed or are daily being destroyed. They are
dislodged by new industries, whose introduction becomes a life and death
question for all civilized nations, by industries that no longer work up
indigenous raw material, but raw material drawn from the remotest zones;
industries whose products are consumed, not only at home, but in every
quarter of the globe."
But that was the old-fashioned kind of capitalist who profited from the
production of goods and services, engineering bridges, canals and
railways, not the financial engineers whose virtual webs of derivatives
indeed turned what was solid into air, electrons or whatever. Even if
Lenin got the prescription wrong, crusty old Karl was no mean
diagnostician. Maybe in 2009 we can finally seal Milton Friedman in his
sarcophagus and get a creative combination of Keynes and Marx extending
to the world the benefits of West European social democracy.
But first we have to find what they did with the money.
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