The peasants' revolt
Woah! The ship just settled further in the water. Perhaps we have been sailing on a financial Titanic after all.
Justin Webb, the BBC's man in Washington called the House of Representatives' rejection of the Paulson bail out plan, a "peasants' revolt." That's just the kind of high handed remark that is inflaming public opinion.
I'm a little bit sick of economists describing the bail out plan as a "sophisticated response" as if the opinions of ordinary people should count for nothing in the financial system.
It is not just the banks that have lost trust in each other. The electorates are losing trust in the banking system. But people are not stupid. The anger has been directed at those who have played fast and lose with our banks, not the banks themselves.
No we can't afford the banks to topple like dominoes. If the financial system grounds to a halt then so does most economic activity. Businesses will struggle to get credit, more will go bust, jobs will be lost and we'll all end up planting carrots.
But will it be the end of the world as we know it? So we might not be able to buy MFI kitchens, so what? House prices will no longer dominate dinner party conversations and within the industrialised nations we might all need to get used to the idea that we are not quite as well off as we thought we were.
But wealth is relative. The definition of poverty is not a Wall Street investor down a few million dollars. It is, as it was before these past three weeks, the lives of people struggling to survive in the Eastern Congo, Darfur, Zimbabwe and other stricken parts of Africa. A failing bank means nothing to those with nothing to lose.
Justin Webb, the BBC's man in Washington called the House of Representatives' rejection of the Paulson bail out plan, a "peasants' revolt." That's just the kind of high handed remark that is inflaming public opinion.
I'm a little bit sick of economists describing the bail out plan as a "sophisticated response" as if the opinions of ordinary people should count for nothing in the financial system.
It is not just the banks that have lost trust in each other. The electorates are losing trust in the banking system. But people are not stupid. The anger has been directed at those who have played fast and lose with our banks, not the banks themselves.
No we can't afford the banks to topple like dominoes. If the financial system grounds to a halt then so does most economic activity. Businesses will struggle to get credit, more will go bust, jobs will be lost and we'll all end up planting carrots.
But will it be the end of the world as we know it? So we might not be able to buy MFI kitchens, so what? House prices will no longer dominate dinner party conversations and within the industrialised nations we might all need to get used to the idea that we are not quite as well off as we thought we were.
But wealth is relative. The definition of poverty is not a Wall Street investor down a few million dollars. It is, as it was before these past three weeks, the lives of people struggling to survive in the Eastern Congo, Darfur, Zimbabwe and other stricken parts of Africa. A failing bank means nothing to those with nothing to lose.
Labels: BBC, Congo, Darfur, Hank Paulson, MFI, Peasants' Revolt, Titanic, Wall Street, Zimbabwe
posted by Richard Donkin at
9:36 PM
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