The London Review of Books is a rare Ruby of great worth, and once you've sharpened up the cerebrum sufficiently to inbibe the erudition, a thoroughly enjoyable read, amongst the finest of our online resources. In the current edition is a review by Benjamin Kunkel that rivals at least one of the books concerned for length, but bear with it. With impeccable logic he charts his way to the following:
The most striking aspect of the current era is that it emerges as the rare period of virtual money that has so far failed to set up strong protections for debtors, whether in the form of bans on predatory lending or periodic jubilees: ‘Insofar as overarching grand cosmic institutions have been created that might be considered in any way parallel to the divine kings of the ancient Middle East or the religious authorities of the Middle Ages, they have not been created to protect debtors, but to enforce the rights of creditors.’ The IMF is Graeber’s main example, to which the European Central Bank and the Federal Reserve could be added. The response of Western officials to the economic crisis, with its proximate cause in unsustainable consumer debt, has been to ensure that banks suffer as few losses as possible, while relying on the same indebted consumers – in their role as taxpayers – to keep the bankers whole. The Fed and now the ECB have loaned banks money at virtually no cost, encouraging those same banks to purchase government bonds paying much higher rates of interest: a direct subsidy of finance by the public, while millions sink into unemployment and bankruptcy. A far simpler and more effective monetary policy would have been for the government to print a new batch of money, distribute an equal amount to everyone, then sit back and watch as stagnant economies were stirred to life by the spending and debts were paid down and eroded by temporarily higher inflation. The inconceivability of such a policy is a mark not of any impracticability, but of the capture of governments by a financial oligarchy.Quite. This is exactly the point being made by Simon Jenkins, and which evokes such vehement denial by those in the financial sector. BASEL II is just so much bollocks once you actually decide that it's the financial oligarchy and not the taxpayer that can go to the dogs.