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The new Robber Baron Empire |
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News Comment
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Saturday, 04 July 2009 |
 Stephen Hester the UK Government appointed head of the nationalised bank RBS is in line for a potential £9.6 million payout should the bank recover in the stock markets. RBS whose share price is currently languishing at 36 pence (30% less than at the time the government bought 70% of its shares) was on the verge of complete failure last October before the government agreed to step in to underwrite its losses. Since then the bank has declared UK record losses of 24 billion pounds for the 2008 year. Losses which the UK taxpayer will cover.
Reeling from the controversy over former RBS Chief executive Sir Fred Goodwin who walked away with a £16 million pension as he was NOT sacked from his position. Controversy is now surrounding the new executive who has already sacked 11,700 jobs from the bank in an effort to balance the books. Despite the meltdown in the share price - it was only 2 years ago that it traded at 605 pence (17 times its current price), in this light a doubling of its share price is not so ambitious particularly with the government dropping interest rates to record low levels to gild a banking sector recovery.
It is bad enough that the Government in the UK has unilaterally decided to bail out the failing banks - the RBS became grossly over-extended gambling on Credit Default swaps and other highly leveraged security plays (at its absolute depth it had CDS’s equalling more than twice the size of the full UK economy!). We are now witnessing a new form of robber baron. The government are in full collusion with the banking community to protect their monopoly over finance, issuance of money for lending, right to confiscate lendee assets and now protection of these failed “gambler” banks.
History will mark this period with a huge exclamation mark. People will wonder how society accepted that such a parasite (banking) industry could dominate governments, and elected politicians to get away with such largesse. And why we 'the public' should fund £10 million salaries for 'public servants' to administer more gambling schemes built around usury to feather their pockets.
It is surely just one more sign of the demise of capitalism in the same way that the gross excesses of the Roman empire’s rulers heralded the failure of that corrupt way of life.
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