Lynching greedy bankers is not the solution by Finian Cunningham

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by Finian Cunningham
Featured Writer
Dandelion Salad
20 April, 2010

Six out ten Americans have a hostile view of Wall Street, according to a recent poll. And this survey was taken before the news last week that the US government is charging top Wall Street bank Goldman Sachs and its vice president with fraud over trade in mortgages and derivatives. The charge is serious, given that Goldman Sachs is accused of being aware that there would be an imminent collapse in the US housing market. Nevertheless, the bank went ahead anyway, merrily trading its toxic assets.

Other leading banks and their chief executives are likely to be probed for acting likewise. Such investigation is necessary and long overdue, especially given the trillion-dollar bailouts these profiteers have received from the majority of ordinary tax payers who have borne the brunt of the misery, many of them losing their jobs, houses and retirement plans.

But from the way the mainstream media is reporting the Wall Street shuffle, there is a danger of the wider public seeing the economic misery across the US and many other parts of the world as simply the fault of greedy banks and greedy bankers. This viewpoint was exemplified when British Prime Minster Gordon Brown got on his high horse to denounce Goldman Sachs for its ”moral bankruptcy”.  The trouble is that this view tends to personalise the problem as the fault of individuals as opposed to seeing it as the result of systemic failure. Yes, individuals made decisions that led to disaster (and should be prosecuted accordingly). However, it must be kept in mind that these individuals and their decisions operate within a system. It’s not so much a case of moral bankruptcy as systemic bankruptcy.

What we are witnessing is not just the sins of errant bankers, but the historic exhaustion of capitalism as a system of economic production and organisation. The long decline in working conditions (pay etc) for most workers in the US and Europe, including the middle class, can be traced back to the 1970s when western corporations and the rich began a taxation revolt. Wages were cut in real terms, both parents had to go out to work, credit cards became common currency, and national wealth was shifted to the already rich through regressive taxation.

Since then the productive, or real, economy in the US and Europe has been decimated, replaced with a speculative property/finance, or fictitious, economy. This acted as a subsidy to most working people and temporary palliative for their pain and also served as a cover for the gross embezzlement that governments of all stripes were facilitating for the corporate/financial elite making a killing. But sooner or later the reality of massive indebtedness had to crash through this expedient fiction. Karl Marx had this historic dead-end trajectory of capitalism pretty well taped when he said that speculation and in particular property speculation was the “last refuge of the capitalist scoundrel”.

People need to address the current crisis in terms of criticising capitalism as an economic system, rather than personalising it in the form of merely greedy bankers who are “morally bankrupt”. That mindset leads to demagoguery and reactionary populism, where deeply rooted problems are “sorted out” by a lynch-mob approach. The sooner we realise that capitalism has outlived its usefulness as an organising system, then the sooner we will address a viable alternative: socialism.


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7 thoughts on “Lynching greedy bankers is not the solution by Finian Cunningham

  1. Vera

    If you read my article again, Lynching Bankers is Not the Solution, you will see that I do urge thorough prosecution of financial criminals. My main point however is that merely going after individuals, lynching so to speak, is by itself not an adequate solution. This is what political leaders and the mainstream media want us to do in order to deflect public attention away from the main problem – the systemic failure of capitalism. For if we do that, we may come up with some pretty discomfiting conclusions to the elite and even more discomfiting to them we may also come up with a real alternative to the bankrupt system – socialism.

  2. Mr. Cunningham and Mr. Hedges go out of their way to avoid or denounce the unspeakable act of armed revolt. Secessionist movements, insipid lawsuits against Goldman and its evil cohorts will work instead?

    My friends and I often speculate that if there were a sort of Jedi Knight concentration on Wall St., Banking and corporate CEOs, most Americans would cheer this on. Be honest with yourselves and imagine how you too would react. This would be a controlled, smallish expression of revolt aimed at the few who caused the global collapse. Jail is nice too, but does anyone seriously see that happening?

    General strikes are far more effective than secession movements and they are easier to organize.

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  5. Vera, he said they should be ‘prosecuted accordingly’, & I agree. Where the article falls down is I think that it doesn’t look at *why* (at least western) capitalism is exhausted. But I guess that might be part of the discussion of a socialist alternative.

  6. It isn’t? Perhaps more bonuses? “Fuckers jump” and right into jail – this is where these people belong until they have repaid every single cent they stole.

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