Are the bankers to blame?

Last night the Oxford Union debated the motion “ This House blames the bankers”.

Months ago in a moment of weakness I had agreed to speak against the motion. By yesterday, steeped in the theatre of the Westminster Show trials of bankers, and fresh from the hothouse atmosphere of the Commons smelling blood in the water surrounding the government’s own favourite bankers, I made my way through the driving snow and rain of this economic winter wondering why I hadn’t opted for a night off instead.

I looked on the cheerful side. I had not agreed to defend Dr Shipman’s approach to care for patients, or to defend the actions of the Australian fire razers. Even in the cauldron of censorship of current British politics there were far worse things that everyone must agree non bankers had done.

The debate itself was not what I expected. Geraint Anderson, the City columnist, laid in to his former City colleagues with a gusto, accusing them of serious crime as well as of bringing the financial house down. A communist don reminded us of the lack of power of Marxist analysis, condemning capitalism more generally for the very income inequalities which allowed him as well as the other guest speakers to earn more than the average, whilst Rachel Elnaugh of Red Letter days didn’t seem too impressed by bankers either.

On my side of the argument Ron Sandler, now head of Northern Rock, quietly reminded the House of the complexity, importance and diversity of the modern financial industry, asking why just the bankers, and did they mean bankers. He pointed out that many people got jobs and bought homes during the long period of growth. Dr Yaron Brook from the Ayn Rand Institute made an impressive speech explaining how the Federal Reserve Board and the UK monetary authorities were to blame, cataloguing their mistakes with interest rates and the volume of money and credit which they are meant to control. I also had a few words to say on the roles of the Regulators and governments.

To my surprise, after the debate, I was told the Motion had been defeated . Indeed it had been overwhelmingly defeated, by 131 votes to 51 votes, with a substantial number of abstentions. Well over half those present had voted No.

Many will say Oxford is not representative. There may have been other special factors at work. It is nonetheless interesting that an audience of bright young people who will have to get jobs in a difficult climate and help to pay off all the debts the government is taking out voted the way they did. It shows that outside the Westminster and media bubble blaming the bankers is not the automatic and easy way out that it is in the spin doctors scripts. The students, in a debating chamber known for its love of entertainment and funny quips, were eager for something serious and for some explanation of what had happened. They did not take the easy way out. Let’s hope the government listens.


  1. Stuart Fairney
    February 13, 2009

    I don’t know Ron Sandler, but I’ve read much of Yaron Brook’s work as well as some of your books and I’d say your opponents faced quite a formidable challenge to put it mildly. It must be a great and refreshing change to have a meaningful debate before a non-whipped house where the outcome was uncertain.

    Congratulations for winning the debate and congratulations to the OU for listening.

  2. Bazman
    February 13, 2009

    It was and still is like the belief in communism. Everyone is involved to greater or lesser extent. Their careers and lives are formed by these ideas and even if they do not really believe, have to take part to function in society.
    To quote the poet John Hodge:
    Choose Life. Choose a job. Choose a career. Choose a family.
    Choose a £££££££ big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suite on hire purchase in a range of £££££££ fabrics. Choose DIY and wondering who the ££££ you are on a Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing £££££££ junk food into your mouth. Choose rotting away at the end of it all, croaking your last in a miserable home, nothing more than an embarrassment to the selfish, ££££££ up brats you spawned to replace yourself. Choose your future.
    Choose life.

  3. rugfish
    February 13, 2009

    In a world of banking where all those involved are running along the same unregulated track, literally in a do or die situation, then it’s not the passengers who are to blame nor is it the engine driver who has no stop peddle, but it is the fault of the guy who built a train without a stop peddle and a track which had no red lights.

    Brown is firmly to blame for tipping financial regulation over on its head.

    Brown is to blame for appointing the signalman to his advisory team.

    Brown is at fault for this crisis we are in, the signalman is culpable but the bankers and their passengers are simple victims of the crash which only a fool who knows nothing about the financial industry ( or trains ), could see as about to happen when banking, or the train with no stop peddle hit a corner at 125MPH.

    1. Waramess
      February 13, 2009

      …and of course Brown was responsible for house price inflation not being included in CPI. But let us not forget that Mervyn King, great intellectual and monetarist was a willing conspirator.

      Not a lot we can do about it however until the election although I did read a fascinating piece this morning by Gary North, in which he included the following profound statement:

      “You can’t fight city hall, but you can pee on the steps and run.”

  4. Mark Brentano
    February 13, 2009

    Reports from ‘outside the Westminster and media bubble’ so often seem to show ordinary people at variance with what is now a very insular political climate. It always amazes me that, with their notorious legions of special advisers and policy wonks, politicians seem reluctant to acknowledge this and appeal to it. It smacks of a worrying contempt for democracy, with more attention paid to kratos than demos.

    1. Brian Tomkinson
      February 13, 2009

      I agree Mark, politicians are out of touch with public opinion. There is a pent up anger which I fear may explode in undesirable ways if politicians don’t wake up and offer real leadership.

  5. StevenL
    February 13, 2009

    Judging by Labour’s poll ratings, not everyone blames the bankers.

  6. Johnny Norfolk
    February 13, 2009

    Its good to see our second best university is a hot bed of common sense

    1. Stuart Fairney
      February 13, 2009

      Cantabrigians to the left of them, Cantabrigians to the right of them… etc

  7. Tony Makara
    February 13, 2009

    The banking system and government has to learn from its mistakes, errors of judgment have been evident on all sides. However for the Marxists to smugly believe this offers some sort of vindication of their historical materialistic perspective is nonsense and takes us into the other realm where ‘rules’ have a lifeforce of their own and determine events, leaving man powerless to make corrections.

    Mistakes have been made in the banking system, but these mistakes will become a benchmark for future banking practice, they will serve as a guiding light, and a better banking system will emerge. The fact is we need bankers, they do a very difficult job, for the most part brilliantly. Sadly, it has become political fashion to kick these fellows, particularly in our country.

    I am reminded of a commercial that I saw abroad several years ago. The product being advertised was a chocolate snack bar and the advert used national stereotypes to promote the snack, certain professions were used to show each nation. The American was shown as an oil prospector, the German as a scientist and so on. The example chosen to show a Briton was that of a banker, replete with bowler hat, brolly and a copy of the FT, that’s how British banking was seen abroad, a symbol of competence and excellence, that’s how it will be seen again. Indeed, mistakes have been made, but let’s not throw the baby out with the bathwater.

    1. Alfred T Mahan
      February 13, 2009

      I quite agree that the reputational damage to the City will be less internationally than the doomsters now think. The banking problems are worldwide – the UK doesn’t stand out as having a worse banking system per se than anyone else, only a more corrupt and incompetent government, which with any luck will soon be gone.

      It’s less than twenty years since the Lloyd’s debacle was supposed to herald the City’s doom – it didn’t happen then, and it won’t now.

      That’s not to sat that financial services will quickly recover to their 2006 levels – but sometime they will and I expect the City to remain up there at the top of the tree – provided the government don’t ruin it with cack-handed regulation, tax, etc.

    2. Adrian Peirson
      February 14, 2009

      We have not had Capitalism, The Marxists have doen this Deliberately.
      Is it an Accident when the Communist Manifesto openly calls for the collapse of free market capitalism.

      All by design, the Head of Global Banking, I don’t mean the sacrificial lambs we saw on TV recently are all commited One World Communists.

      At least one of whom is mentioned here :-

  8. Neil Craig
    February 13, 2009

    God for you. It may be that the community’s best servants are those who stand up to be counted when the popular view (or often nowadays the media view) is engaged in a stampede in the wrong direction. Not a comfortable position but a vital one.

    I have earlier compared the performance the MPs put the bankers through as akin to Stalin & Mao making their enemies publicly recant (though the bankers didn’t actually suffer). The responsibility for how the country is run lies with those who run it & to a debatable extent depending on the amount of real choice, those who vote for them.

    I also have great respect for the ability of almost any audience to listen to & accept the evidence in the conditions of a real formal debate. I suspect those in power do too, which is why the BBC have always refused to air a real debate on “global warming” or indeed almost anything else of substance.

  9. Neil Craig
    February 13, 2009

    Soory John that should have read “Good for you”.

  10. Tom Knott
    February 13, 2009

    Do we blame the bankers who were working in the banks, or do we blame the people who ran the banks? It seems that in some cases it has not been the same thing. There seem to have been too many station staff trying to drive the trains. Then there are people who were supposed to be overseeing the banks one way or another. Beyond the world of finance there are the politicians and the media. Some of us are aware of the problems created by the elite of the London Mediocracy, but most people forget that Washington DC too often behaves like a branch office of Manhattan Inc., New York. Did confusion breed chaos, or the other way round? Answers from your nearest headless chicken.

  11. Andrew Duffin
    February 13, 2009

    @Rugfish – you don’t really believe the banking industry was unregulated, do you?

    If you do, I have bridge you may be interested in.

  12. Rhys
    February 13, 2009

    Great performance last night, especially the “wallowing in ignorance remark”!

    As leader of the economic competitiveness policy group, have you got any thoughts on this train deal going to the Japanese?

  13. adam
    February 13, 2009


    enjoyed reading this post

  14. Simon D
    February 13, 2009

    In this country we love historical analysis and playing the blame game. But how many Oxford academic economists (Marxist or otherwise) were standing on soap boxes warning us about what was going to happen? They were no better at looking into crystal balls than Gordon Brown, the Conservative party, the bankers, the regulators and the mainstream media.

    The real challenge is to fix the country’s problems – the broken banking system and an economy sinking into serious recession. The Conservatives must ensure (1) that Mr. Brown’s “plan” (as announced before the select committee) is subjected to proper debate and challenge and (2) that they win the next election with such a thumping majority that the Labour party is put out of business for at least the next ten years.

  15. Atlas shrugged
    February 13, 2009

    Ayn Rand Institute made an impressive speech explaining how the Federal Reserve Board and the UK monetary authorities were to blame,

    I was not there of course, OR WAS I?

    The Ayn Rand institute may have radically misunderstood Ayn Rand herself. However they understand her writings, which is what matters.

    They made an impressive speech as you call it John, because they know as does myself what this is all about. Who has the power to make it all happen. Who has the power to stop it from all happening, and who has the power to cover it all up before, during ,and after the event.

    John, if you had been properly listening. I am sure you would as well by now. You strike me as having at least as much common sense as you were born with. Which is a far above average amount, when it comes to MP’s of both parties.

  16. Bazman
    February 13, 2009

    Million quid a year? Guys Like us? MP’s shaking their heads? Who is to blame?

  17. mike stallard
    February 14, 2009

    Well done for winning!
    I think the Labour Party has a sort of knee jerk reaction to the bankers. Partly it is the traditional loathing of the toffs who run the country. Partly it is “wasn’t me guv, it was him”. It is no coincidence that John Prescott is organising the petition to stop bonuses.The reality, of course, is that the Labour party has got a lot too close to the rich, and that includes bankers. This is now coming out quite clearly.
    The wunch of bankers are certainly not blameless. They accepted the dud loans in their ridiculous greed.
    And that ought to be punished, not rewarded.
    Also, of course, there ought to be real regulation again.
    Otherwise we can kiss London as the banking hub of the world goodbye.

  18. Matt
    February 14, 2009

    Call me cynical but the Oxford undergraduates are possibly hoping that the bankers don’t take the blame as so many of them will see themselves in the city in a few years time being those very bankers. There was probably a considerable proportion with current family links to city workers.

    To be involved in a rather pointless debate about blame at this time is, I expect, a necessary part of modern politics which insists on politicians being excellent self publicists.

    I’m re assured that John seems to spend rather more time trying to work out how to deal with where we are than on trying to find someone to blame.

  19. Ed Thompson
    February 14, 2009

    For a firsthand understanding of Yaron Brook’s position on the financial crisis – and an appreciation for the rapt attention to which he was afforded when he spoke, go to the Web site of the Ayn Rand Center for Individual Rights:

  20. Rory
    February 14, 2009

    I’ve heard Dr Brook talk about the Financial Crisis in America, but nothing about what he thinks are the specifics of it here in the UK. Can anyone give any of the more detailed points he made regarding the British economy?

  21. Will
    February 15, 2009


    I hope to hear you defending capitalism on moral grounds in due course now that you have heard Yaron Brook.

  22. […] to be fair, John Redwood seemed as surprised to have won as Geraint Anderson was to have […]

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