Commenting on the pay deal struck between Shell’s tanker drivers totalling 14% over two years, a BBC ‘reporter’ during an interview with UK government minister John Hutton (BBC World News, 18 June 2008) made the following statement (not exactly verbatim but accurate as to content):
BBC: But when other workers see the 14% pay deal, they’re going to demand the same which will surely set off an inflationary spiral?
Hutton: Oh yes, if we all start asking for 14% it will set off an inflationary spiral … blah, blah, blah … [my emph. WB]
So what’s wrong with this statement by the BBC ‘reporter’ (never mind Hutton’s inane response)?
Aside from (conveniently) putting words into the minister’s mouth, the entire interview was more of a duet than an interview, with the BBC rewriting immediate history with a single phrase! The statement is an outrageous lie and one fed to the politician by a complicit BBC. With Shell making £1.4 billion a month profit, coughing up a few quid for around 650 drivers is chump change. But it’s the BBC blaming the tanker drivers for “spiralling inflation” that takes the biscuit!
Clearly the devil lives in the details, a word here, a phrase there, designed to reinforce the illusion that in turn becomes received opinion, that is to say, the twisted interpretation of events becomes the accepted truth.
The global crisis of capital has gone through the same transmogrification by the BBC, again an unholy alliance of state and mass media with the ‘credit crunch’ (itself a meaningless phrase much like the ‘war on terror’) now being the accepted ‘cause’ of the crisis. This is how the BBC News Website tells it under the heading, ‘Broader, deeper, longer slowdown’
“When the credit crunch began last August, many policy-makers believed that the disruption to financial markets was likely to be short-lived and have only a small effect on the economy.” — Analysis By Steve Schifferes, Economics reporter, BBC News
Analysis? Hah! Schiffers’ ‘analysis’ (written on 10 April, but amazingly still up on the BBC’s website) ends with following piece of shifty buck-passing,
“As the crisis has originated in the US, it may be that a political resolution of the housing market problems cannot be reached until after the presidential election in November.”
Yet earlier in the same piece we read,
“But the growth of the UK financial sector has been driven by its connections with the international economy, with many foreign banks locating in London, encouraged by the light touch regulation of the government.”
“Light touch regulation”? More newsspeak from the masters of deception, the BBC. The 1970s saw the beginning of the complete ‘deregulation’ of the financial sector, initiating a free-for-all eg in the US the Savings & Loans Scandal.
So on the one hand it’s all the fault of the US housing market yet on the other, with fully 1/3rd of the so-called UK GDP directly attributable to financial speculation (again, the source is the BBC Website) in the self-same global market.
So how can it be that the cause is the US mortgage crisis given that the major banks of the world are no longer national institutions? This is yet another crisis of capital only this time it is truly global because of the way the global circuit of capital works. In a later story written on 30 May by the same Steve Schifferes he informs us that,
“The boss of one of the world’s most important economic organisations has said the lack of regulation in world markets was the root cause of the financial crisis which has hit world economic growth.” — ‘Trade boss criticises financial mess’ Pascal Lamy, the director-general of the World Trade Organisation (WTO)
But the deregulation of the financial markets is at the heart of the so-called neo-liberal economic agenda, a fantasy land where the ‘market’ will solve all problems. Steve Schifferes tells it like this,
“Mr Lamy’s remarks put him at odds with the so-called “Washington consensus” that liberalisation, privatisation, and open markets are the only way to bring about economic growth.”
But it is precisely the financial free-for-all that is one of the causes of the current crisis, not the mythical ‘credit crunch’ which is the effect not the cause, of vast amounts of speculation initiated by the major banks and investment firms.
Following the Crash of ‘29, in order to minimize the risk of it happening again, stringent rules governing the activities of banks (and other financial institutions) were put in place under Roosevelt’s New Deal. These laws were all abolished in the 1970s-80s under Reagan/Thatcher (leading first to the Savings & Loans Scandals which cost the taxpayer a couple of trillion dollars), freeing up the banks to use depositors money and instruments such as mortgages and other kinds of loans bundled together and sold on to other investment corps (so-called securitization).
In turn, the banks made a bundle on the transactions in the form of fees, effectively, the banks had been given a license to print money. It is important to understand that no real wealth was being created, it’s all pure speculation largely based on futures trading or Hedge Funds, dozens and dozens of complex packages that nobody, except the whizzkids who invented them, understood. This from Danny Schecter’s Media Dissector,
“Last May, Taleb published The Black Swan: The Impact of the Highly Improbable. It said, among many other things, that most economists, and almost all bankers, are subhuman and very, very dangerous. They live in a fantasy world in which the future can be controlled by sophisticated mathematical models and elaborate risk-management systems. Bankers and economists scorned and raged at Taleb. He didn’t understand, they said. A few months later, the full global implications of the sub-prime-driven credit crunch became clear. The world banking system still teeters on the edge of meltdown.”
But without the BBC and the rest of the mass media being totally complicit in the coverup, this massive deception could never have taken place. It’s the reason why something that is intrinsic to capitalism is papered over with meaningless terms like ‘credit crunch’.
Fundamentally, speculation and the other frauds being perpetrated on the public, are symptoms of the inherent nature of capitalism: falling rates of profit have to be jacked up and as always the only place it can be stolen from is labour (machines can’t generate profits as they don’t get paid wages though they certainly increase the profit extracted from labour by making it more productive).
Words like inflation get bandied about by the mass media without a single, coherent explanation of what inflation actually is, except its effect, the money in our pockets buys less because it has been devalued through the simple act of printing more and more of the stuff without actually increasing real production.
Thus bailing out the banks with billions of our money feeds inflation as money doesn’t actually grow on trees, it’s printed by a government monopoly and unless the money in circulation actually represents a real increase in production (as opposed to financial speculation which is like finding it growing on trees), it can only have one effect, to devalue the currency.
The same goes for the way the media treats ‘insider trading’ and the so-called rogue traders. Firstly, insider trading is literally impossible to stop let alone prosecute those who practice it and for the simple reason that every financial trader knows what’s going on with a particular firm’s shares, it is after all their job to know what’s going on with a share’s value. Worse still, nobody knows how much of it goes on.
In the UK for example, although there have been hundreds of cases of alleged insider trading documented, there has not been a single prosecution because it’s almost impossible to prove without fundamentally altering the nature of capitalism, and don’t hold your breath for that to happen.
‘Rogue traders’ are simply people who made a bad judgement about the future value of a share. There’s not a single investment corp on the planet that doesn’t do it, it’s what the business is all about! A trader is only a ‘rogue’ when he (or she) screws up big time and loses investors big chunks of moola. Indeed, ‘rogue trading’ is actively encouraged by the big investment houses (traders who complain about making risky investments won’t last the time it takes to be frog-marched to the exit).
Quite obviously the BBC and the rest of the mass media are in cahoots with the state and big business over the issue of the causes of financial crises, how could it be otherwise?