Tuesday, October 14, 2008

Systemic crisis, or redefining class boundaries

The bailout of the banks is considered a great success by governments and people in finance, that has saved we serfs from a financial cataclysm.

Of course it can also be viewed another way: we now have confirmation that if you are in relatively successful in finance, you are safe from penury, unlike those people who rely on finance, who are now at the whim of central banks (via interest rate control) and the directors of these invulnerable institutions.

Given they are now incentivised to pay off the government as quickly as possible, will they really want to loan more money out to you, their benefactors, and extend new and greater lines of credit?

The idea that we will *make a profit* is, for a lay person, ridiculous. Are you expecting to make an income stream from this money? Will you ever be able to appreciably see the improvement in your public services, or transport?

Realistically, for those people not in London, you will not see a penny of this. I can see spin in the future that the profits are going to the Olympics, or Cross-Rail in London.

So what's just happened? You, and this means the "middle" and "working" classes, are, and will always be, the backstop for these financiers. So perhaps the world has shifted.

Meritocracy in industry is dead. Be part of the club, and you are safe. Be a suitor to it's members and you are at their whim. Perhaps it's always been this way, but never so publicly announced by a Prime Minister.

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