Morons and Banking Regulation

In 2008, the US banking system collapsed, dragging down much of Europe’s with it. The problem was allowed to occur because deregulation in the 80s and 90s had taken away many of the rules that would prevent high-risk lending for short-term profit.

This much is well known… except by morons. Barely had the public been forced to rescue the banks and save the economy from meltdown, before free-market fundamentalists were rewriting history. The problem (they said) wasn’t too little regulation, but too much.

A recent tweet from Sam Bowman of the Adam Smith Institute (a poorly-named organisation, given that Adam Smith himself believed markets needed regulating) showed that refusal to face facts is still alive and well:

Or to paraphrase – banks DON’T need to be regulated, silly!

This is a moron meme that I often see on Twitter, so here are some quick and easy answers to the above question (thanks to contributors on Twitter).

  1. If you think the US banks were over-regulated, you must have missed out on all the deregulation since Reagan was elected in 1980. I’d recommend reading The Big Short, a detailed account of how stupidity was allowed to rampage unchecked through the US financial system.
  2. In Sweden, a poorly-regulated banking system faced collapse in 1992. The Swedes fixed their regulation and so didn’t face the same problems as the US, UK and other less-regulated places.
  3. A similar collapse happened in Spain in the 1970s; in response, Spanish banking regulations were tightened up immensely. When the UK’s poorly-regulated banks began collapsing in 2008, Spain’s banks were far less exposed. Who came to buy distressed British banks? A Spanish bank called Santander. Santander now owns a number of previously British-owned banks. Regulation clearly beats non-regulation.
  4. And yet again… Canada came through the crisis relatively unscathed, because its regulation was biased against low-deposit house purchases.

The Adam Smith Institute claims to promote market ideas; but the market has spoken very clearly. Banks in those countries with strong regulation are clearly stronger than in those without, especially the US. The US and UK economies and banking sectors have shrunk more than those in other Western countries, losing global share. Well regulated banks have gobbled up poorly regulated ones. The market has spoken, and the market says: regulation beats deregulation.

Here’s a simple question for those claiming the 2008 collapse was the result of regulation: specifically which regulation(s) led to sub-prime lending, forced the securitisation of bad loans into investment instruments, or pushed the ratings agencies to decide that these poor investments were AAA-rated? Morons can never answer this – it’s easy to claim regulation is bad, but apparently impossible to provide details of which regulations caused the problem (largely because they don’t exist).

Market fundamentalists make the false assumption that a laissez faire approach to bank regulation would allow the “good” banks to thrive as the “bad” ones go under; but it’s not that simple. Capitalism encourages risk-taking. The fact that one bank takes a bad risk and fails doesn’t stop other banks from risk-taking – their spin of the roulette wheel will come sooner or later. Only regulation can stop stupid risks from building up in the system – there is no free market mechanism to prevent them.

Perhaps I’m being unfair in assuming Sam Bowman has no clue on this subject – after all, he is (I assume) paid to dish out his market-fundamentalist dogma. The morons who repeat it unpaid have less excuse.

The Twitter Moronic Statements FAQ

Some phrases reappear so often from morons on Twitter that you’d think they’re all being fed the same ideas by the same media outlets… I often find myself responding to near-identical moronic tweets.

Here are ten of the stock concepts that reappear regularly in tweets and bios.

  1. Gays want to recruit our children: Of course they do… they belong to a secret organisation that plans to take over the world. Only the truly brave dare to even reveal its existence.
  2. Obama is a Socialist: or Marxist, Communist… an accusation always thrown by people who don’t know what any of these words mean (but it was on Fox, so it’s true).
  3. Muslims are taking over: Never mind that the Muslim population of Europe and North America is sub-3%; or that the majority of these aren’t devout; or that the majority of the devout ones have no interest in “taking over” anyway. Basically twenty attention-seeking nuts hold a rally in London waving placards that say “Islam for Europe”. The photos appear on Facebook. And rightwing racists copy these photos onto 1,000 blogs; and suddenly there’s a “Muslim problem”.
  4. Global warming is a myth: No matter that every scientific body in the world accepts man-made global warming, or that the evidence is so compelling that every serious political force in the world accepts the need for action. Or that the skeptic cause is funded by the fossil fuels business, which stands to lose billions of dollars if emissions are to be cut. What’s important is that the Republican Party has long ceased to be an independent political force, and instead is addicted to the oil dollar – and if morons like Sarah Palin and Michele Bachmann deny global warming, then it can’t be real, can it?
  5. Socialist-Fascist: Conservatives on both sides of the Atlantic once enthusiastically supported the rise of European fascism, and the Socialists, Communists and Anarchists were the only mass movements that actively opposed the fascists. But given the messy outcome of the fascist experiment, the right attempts to rewrite history and associate fascism with the left. Of course, nobody who’s studied the history of that era would believe such nonsense, but who needs to spend years reading when it’s all available in minutes on TV, blogs and Twitter? Fascism is on the rise once more, but because the scapegoats this time are Muslims instead of Jews, morons think it’s something altogether new.
  6. I want my country back: A black man was elected President of the USA.
  7. We can’t afford it: The Thatcher/Reagan experiment with free-market purity collapsed in 2008, leaving a tiny minority immeasurably richer and everyone else worse off. But morons haven’t noticed this carefully managed redistribution of wealth. If the super-rich say “we” can no longer afford public services, then who are we poor suckers to disagree?
  8. Life begins at conception: The so-called “pro-life” brigade (who perversely don’t seem to value anybody’s life except for that of “pre-born children”) are insistent that “science says” life begins from the moment of conception. While this may or may not be true, depending on your definition, it’s also completely irrelevant to the abortion debate. Although given the pathetic nature of the arguments, debate is too strong a word.
  9. Anti-semite: Someone who dares to criticise anything Israel might do, however illegal and barbaric. I’ve been called this many times, which given that I’m Jewish and the insult often thrown by non-Jews, I find hilarious.
  10. They want to destroy our freedoms: A Neocon special. “They” have an issue with your freedom to invade and bomb them for their oil. Try bringing the troops home – “they” might not hate you so much after all.

Morons, War and Oil Reserves

Sometimes it’s hard to keep track of which countries the US is at war with, or to guess who might be next. Without understanding the global picture, morons often believe the justification for each war individually: Afghanistan was because of 9/11; Iraq was about WMD; Libya was about protecting civilians… and so on.

Last week’s Economist magazine (a great read if you haven’t tried it) included a handy little table showing known oil reserves by country. Surprisingly (for morons anyway), the table correlates tightly with US foreign policy. As well as the bar showing the absolute number of barrels, the number on the right shows how much longer the oil will last, based on current rates of extraction.

A key statistic here is the size of the US reserves: only 11.3 years of home-produced oil left. Given that the US is hopelessly addicted to oil, and is by far the world’s largest consumer, it becomes easily understandable why America spends so many dollars (and military lives) on securing those territories that have most of the remaining oil.

Let’s run through the top ten countries in the list:

  1. Saudi Arabia: the US maintains a conservative Islamic dictatorship with a terrible human rights record. The presence of 5,000 US troops in Saudi Arabia led to the 9/11 attacks (15 of the 19 hijackers were Saudi).
  2. Venezuela: as every moron knows, Hugo Chavez is an evil dictator. Except in reality he’s been elected repeatedly in free and fair elections. In 2002, the Bush Administration attempted (and failed) to have Chavez removed in a military coup. America can’t tolerate a democratic regime outside its control sitting on 200bn barrels of oil – watch this space.
  3. Iran: they’re trying to make nuclear weapons! And the free world can’t have that, can we? Iran’s last democratic government was toppled by a CIA-backed coup in 1953. Sorry Iran, we simply can’t afford to let you have democracy.
  4. Iraq: over 100,000 civilians and 4,780 US troops have been killed to secure these 100bn barrel reserves.
  5. Kuwait: a US “ally” like Saudi Arabia (meaning a dictatorship backed by US military). Iraq’s invasion of Kuwait in 1990 triggered the first US Gulf War).
  6. United Arab Emirates: another US “ally” (two of the 19 9/11 hijackers were from the UAE).
  7. Russia: these reserves are probably beyond US military reach. Sorry America!
  8. Libya: we’re only bombing to defend the poor civilians, honest! (On the other hand, civilians in Syria, Palestine, Sri Lanka, Bahrain and elsewhere will just have to look after themselves).
  9. Kazakhstan: borders both Russia and China. Perhaps this reserve partly explains the long-term US presence in nearby Afghanistan.
  10. Nigeria: a country corrupted almost beyond repair by its large oil reserves. Other West African countries such as Ghana are also finding large amounts of oil. Watch out Africa, China and the US like the look of your oil!

The Sexualisation That Wasn’t

The British are known for being prudish about sex, but that’s not really a fair view; Britain’s a very secular country and religion has little sway over the views of the average person. Many Brits are far more relaxed and open about sex than our reputation would suggest. But for some reason, our political leaders and media are years behind the rest of us when it comes to sexual attitudes.

For the past year or so, there’s been a coordinated media campaign to persuade us that British society, and British children in particular, are being “sexualised”. A variety of news outlets, ranging from the obvious (the Daily Mail) to the more surprising (Channel 4) have been increasingly vocal in spreading the sexualisation message. Politicians have taken up the cry. The campaign, though apparently a grass-roots one, has been driven by Christian cash and PR expertise, much of it being driven from the United States.

The Conservative party, now in government, has helped pump up the fear. David Cameron commissioned a report on sexualisation from Reg Bailey (picture above), Chief Executive of the Mothers’ Union. Which happens to be a Christian organisation. Bailey has no expertise in the area of sexuality, but is paid to push right-wing Christian views into the mainstream. The secular British people have been pushed into a Christian-led moral panic without realising it.

The Bailey/Christian/conservative argument is completely circular:

  1. The media has been running scare stories based on Christian PR claiming that “our children are being sexualised”, without any facts or research to back up this claim.
  2. Bailey then surveys parental attitudes in a highly biased way and comes to the conclusion that “parents are concerned about sexualisation” (note, not a shred of evidence to show that these “parental concerns” are actually justified).
  3. The Conservatives in government then take Bailey’s worthless, biased conclusion and use it to propose some of the most draconian censorship seen in any democratic country.

The result of this masterful piece of conservative PR is that Britain faces new laws and regulations that will take our already high levels of censorship to new levels. Many British people, including many who consider themselves liberal, have been tricked into agreeing with the conclusions – because after all, what right-minded person wants children to be “sexualised”?

Think please, dear reader: what does “sexualisation” actually mean? Are children watching Rhianna’s music videos and rushing out to have underage sex as a result? Does the (completely-non-sexual) Playboy logo on a writing book send children into a frenzy of sexual experimentation? The answer of course is No. There is NO academic research to suggest that children are becoming “sexualised” – whatever that might really mean.

Sexualisation, if it exists at all, is what happens (and has always happened) to children when they reach puberty. Before this, they have little interest in sex, after this moment they become fascinated by it. Britain has made great strides in the past 15 years to improve sex education for children and teenagers, and the result is more confident, more educated teenagers.

If children have been so “sexualised” by the Internet, by music videos, or by “inappropriate” clothing, why have teen pregnancy rates more than halved since 1997? (See graph on BBC news item).

British small-C conservatives, as with many in Europe, are feeling stronger and more confident than they have for many years. The “sexualisation” story is just one front of a wider attack on freedoms that progressives have won in recent years and decades. Don’t believe the scare stories – your children are safer than they’ve ever been – and that’s because society has become more relaxed about sex, not in spite of that fact.

In the next few months, we will see the start of unprecedented levels of censorship in the UK. It will be sold as “protecting our children” or “protecting us from terror”, but the aim is to censor our home Internet connections (work is already in progress) and our TV channels (we already have the tightest TV rules in Europe). If we don’t resist these changes now, we may look back with nostalgia at a golden era of British free speech: beginning in 1994 with the widespread appearance of the web, and ending in 2011, as our fear of “sexualisation” overcame our belief that freedom of expression is at the core of a free, stable society.