Thursday, 14 January 2010

It takes Obama to expose the audacity of hypocrisy of the banks

Once again President Obama has given the left a much-needed master-class on leadership with his dramatic announcement today that it is pay-back time for the banks. His bold statement that his administration will "recover every single dime the American people are owed" contrasts with the words we hear from our British politicians. Obama is in a different league on both style and substance. On substance, he is stating very clearly that taxpayer-funded support given to the financial sector was not given in the form of a blank cheque. On style, Obama goes much further than other Western leaders in the language he uses to criticise the banks. Many would argue that in Britain style has triumphed over substance, despite the Prime Minister's protestations to the contrary. But Obama shows that style and substance are two sides of the same coin.

In saying: "My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people", he is speaking for all of us on the left who remain astounded at the audacity of hypocrisy of elements of the banking sector. He criticises the "massive profits and obscene bonuses" of the banks who owe their existence to taxpayer support. While our Labour Government has become increasingly emboldened in its approach to the City, it remains unthinkable that Alistair Darling would ever use this kind of robust language. But powerful, even angry sounding rhetoric is what happens when a political leader truly feels and articulates the justified anger and craving for fairness of the ordinary person. With Obama, we see that rhetoric can become reality. The two are synonymous. This is the antithesis of politics in Britain, where deference to vested interests still reigns supreme and tough sounding rhetoric is deployed through gritted teeth on the advice of pollsters carrying their focus group flip-charts.

Obama's statement today shows us that the confident bluster and chutzpah of the banking sector can, and more importantly, should be challenged. Not for its own sake, but because it important that the audacity of hypocrisy showed by many banks does not go unchecked. Were any other sector of an economy to so imperil the whole, retribution would be swift. Yet banks have played their hand very well. They are even more untouchable than they were pre-2007. Or so they thought. President Obama is re-engineering the moral hazard that vanished as quickly as the bailout materialised. He is delivering a huge jolt to the body-corporate that the unthinkable is not only thinkable, but doable. The primary defence of banks against governments seeking recompense for their taxpayers has always been that such efforts must happen at a global level to be effective. Bankers threatened us that they'd flee London in droves. But with one speech, Obama shows that unilateral government action can have effect.

The audacity of hypocrisy - that banks which caused damage of monumental scale to the broader economy should be bailed out by ordinary taxpayers and proceed to take extraordinary profits and pay huge bonuses on the back of such state largesse. The funny thing about audacity - recklessness, boldness, fearlessness and impudence - is that it can be defeated if people and their political leaders dare stand up and challenge it.

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