Tuesday, 8 November 2011

The 99% were 'just asking for it'

It started with the banking crisis of 2008. A myth has grown up that 99 per cent of us were innocent in that, and have been forced to bail out the guilty 1 per cent. Actually, a majority of us were probably borrowing more than we should, and we can't just blame the banks for forcing the money into our hands, or the politicians for failing to regulate them. 

Writes Mary Ann Sieghart in the Independent. I'm sick of hearing this sort of pious nonsense about how we are all being miserable sinners who should turn the other cheek and forgive the bankstas and the politicians who told us that There Is No Alternative because we're all, in a very real sense, just as guilty as our abusers.

No we're bloody well not.

I wasn't borrowing more than I should have been, (due to a combination of instinctive risk aversion and dumb luck), but many of those who were didn't think they were being reckless. With house prices climbing further into the stratosphere with every passing year, many people took what they thought was a calculated risk to get an eye-watering mortgage, rather than wait until the tiniest starter home was way out of their reach. The poor saps believed the politicians and financiers who swore that everything in the market was for the best, now that we'd arrived in best of all possible economic worlds. Not to mention being ground down by the relentless hard sell of commission-hungry debt salesmen and the soft soap of the Property Ladder promise of securing your future by canny property speculation.

'But we all voted for the politicians who failed to regulate the banks, so it's our fault, isn't it?' This highly disingenuous claim would only hold water if we seriously assumed that a significant proportion of the population avidly hung on to the newsreaders' every word about the the state of the Hang Seng, the Dow Jones, the Nikkei and DAX, without their eyes glazing over, took a subscription to the Economist and actually had a clue about complex financial engineering, then, in full knowledge of what was going on, recklessly voted for politicians who they knew were negligently ignoring a coming crisis.

They didn't. Even an obsessive economics wonk like Gordon Brown got it memorably wrong, so it's a bit rich to turn round and blame the average guy or gal next door for not knowing about the problems of over-leveraged financial institutions, the US sub-prime market, collateralized debt obligations and sovereign debt. Not to mention the fact that politicians don't always deliver what they promise at election time - just ask anybody who voted Lib Dem last time round.

The argument that we all share the guilt because nearly everyone is in some sort of pension scheme which benefited, in the good years, from financial jiggery-pokery, this is just another unwarranted assumption about how well informed informed consumers are.

How may normal people have a clear idea of how their pensions work? If your eyes don't grow heavy when somebody starts going on about pension provision, then you're a better man than I am, Gunga Din. I've no idea whether my pittance of a works pension is invested in Italian government debt, pork bellies, ostrich farms, none of the above or all of them. Most of us just signed the dotted line and hoped that the out pension provider wasn't actively ripping us off, out of some vague idea that having a pension would be less likely to leave us destitute than just stuffing any spare cash under a mattress and hoping for the best.

Power and knowledge matter. The rest of us don't share the guilt of those who knew what was going on or had the power to change things. We weren't 'asking for it', any more than the rape victim who's accused of contributory negligence just because she wore a short skirt on the night in question. No ifs, no buts, no excuses.