The True Speculators Are the Politicians Themselves

Amid the applause of governments, a worldwide protest is forming against the power of financial institutions. With the hounding of the bankers politics is stealing out of responsibility.

The bankers are the scapegoats of our times. Whether the Christian Democratic finance minister Schäuble or head of the left-wing faction Gysi, whether EU Commission President Barrosso or U.S. President Barack Obama — they are all sympathetic to the demonstrators who have been camping near Wall Street, the most powerful financial center in the world.

Film stars and musicians also like to be seen here. The anti-banker movement is in vogue deep into the milieu of the middle class. Financial institutions have led the world to the abyss with their “greed” and “rip-offs” and the taxpayers must now bleed for the sins of the rich, goes the accusation that is generally made against all money institutions in general.

In the meantime the protests have also washed over to Europe. One sees just as many tents in London’s City as in the Frankfurt banking district. And the politicians follow the spirit of the times. “We have understood the message,” assures EU President Barroso. Obama has already promised higher taxes for the “rich,” and the government in London is already in the process of splitting the banks into credit and investment houses.

Left-oriented organizations like Attac or “Occupy Frankfurt” hope that the manageable demonstrations will turn into a mass movement. In light of the attention that the media and politics are giving the protesters, an expansion of the movement is very probable. Especially since bank-bashing in difficult times is as old as the money business itself.

The Prejudice of “Dishonest Interest”

Money lenders were frowned upon even in ancient Greece. Interest was considered usury. At the same time, no merchant vessel put out to sea without the cooperation of the banks, and anyone who could brought his savings to the money houses to get interest.

In the Middle Ages the church called for the hounding of the money lenders. Jews, who were barred from access to trades or public offices, were often only left with the credit business.

Repeatedly it came to pogroms because heavily indebted rulers or citizens mobilized sentiment against the alleged usurers in order to avoid the repayment of their loans in this manner.

Into the present day the advantage of “honest work” as antithesis to “dishonest interest,” also used by Karl Marx, has survived. The bankers as parasites who live form the work of the hands of other people — this caricature is being conjured up again, just like the quote from Bertold Brecht, “What is robbing a bank compared with founding a bank?”

Political Decisions were the Origin

It’s more than right for the politicians in Europe and America if the citizens castigate the banks as the cause of the current financial crisis; this criticism conceals that in reality, it was political decisions that led to the present turbulence.

For years — and already long before the onset of the world economic crisis in 2008 — nations like Greece and Italy piled up more and more debt. Public expenditures in the U.S. were also driven up as if there were no tomorrow.

And likewise in this country, meanwhile, people also acted as if it didn’t matter how many guarantees the federal government granted in the name of saving the euro. But these guarantees threaten to quickly become national debts if the beneficiaries are as weak as the Greeks or the Portuguese.

If this worst case scenario should come to pass, politics will probably again point fingers at the banks who will be to blame for everything once again.

In reality, however, the true speculators are the politicians themselves, who have wanted us to believe for the past year and a half that they will overcome the crisis with increasingly reckless rescue maneuvers.

When the demonstrators thunder against the power of the banks, they forget that only over-indebted nations have lost their political leeway — not, however, solidly managed countries.

The players in the financial markets as a rule are not working at their own expense, but rather with the money entrusted to them by their customers. If banks no longer want to voluntarily provide credit to Greece, it bears witness to a matter-of-fact risk/return calculation and in no way a conspiracy against the country or the euro.

Risks were Underestimated

It is true that the financial institutions have often underestimated risks in the past. Particularly French banks that bought up exceedingly many southern European government bonds are therefore stuck in serious difficulties.

German institutions, too, must possibly be supported by the government if it should come to debt rescheduling in Greece. This will have as a consequence an intense political debate about a renewed bank bailout, which could give the protest movement more impetus.

The danger is that the populist cry for a divestiture, or even nationalization of the banks, is getting louder and louder. Yet the financial crisis has demonstrated that here in this country primarily the governmental state banks speculated on the wrong investments, and now it will cost the taxpayers dearly.

That the money institutions additionally do not have to provide security for government bonds in contrast of all other loans shows a further political omission.

Black Sheep in the Financial Sector

As in any other branch of the economy, there are also black sheep in the financial sector. It is not, however, necessary to suppress the entire branch. When the left demands to only permit savings banks and credit unions, they show that they understand nothing of the needs of globally networked corporations.

Meanwhile, it is urgently necessary to develop a procedure so that badly managed banks as well as ailing nations in debt can go bankrupt without unsettling the world economy. Currently not only the large financial institutions, but also all euro countries are considered “system-relevant” and are therefore gotten off the hook by the taxpayers again and again.

It is up to politics to develop such an insolvency procedure. Otherwise the dangerous poker game will continue.