Should The Perversion of Capitalism Be Exposed?

Rolling Stone, that incomparable US magazine which eviscerated the Vampire Squid – Goldman Sachs – now asks a more important question: Are governments too frightened to expose the capitalist system as perverted?

The criminality of the banks is so gross that executives should be jailed and banking licenses should be withdrawn, reports RS citing a report from the Senate Permanent Subcommittee on Investigations.

HSBC, said the Senate report, laundered money for Mexican drug cartels, for Iran for North Korea and for Al Quaeda charging a 20% fee for the service.

That report came out last summer. Just before Christmas, US Assistant Attorney General Lanny Breuer, announcing a no-prosecution settlement for HSBC, said:

“Had the U.S. authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the U.S, the future of the institution would have been under threat and the entire banking system would have been destabilised.”

The next charge against the banks is the LIBOR scandal. UBS, Barclays, RBS and others conspired to cheat the entire industrial and commercial world by fixing LIBOR to their advantage.

‘This might be more than just a few guys messing with rates,’ says RS, “it could be a systemic effort to pervert capitalism itself.”

So why are governments agreeing no-prosecution deals with the banks?

The reason may be that Western governments don’t want it to be universally acknowledged that capitalism has been perverted. Governments don’t want public acceptance of capitalism to evaporate.

Maybe the French had a point when they elected a Socialist government last year.



  1. Absolutely SEPAM, people were fooled. The regulators and the customers were fooled, the banks fooled eachother, and sometimes the banks fooled themselves because they couldn’t understand some of their own products.

  2. SecretEuroPatentAgentMan

    Well, strictly speaking, was it capitalism that failed?
    Working capitalism absolutely requires transparency to work and what happened here was lack of transparency on many levels (such as dubious credit defaul swap agreements and packaging of sub prime debt and questionable rating) covered up by a whole lot of gloss (such as an apparently booming economy and house prises steadily going up making it seem everyone were becoming rich).
    To restore the situation it seems plausible that transparency must be brought in and with force. Capitalism is in itself the idea of private ownership of capital and production means. This doesn’t seem too impossible, particularly given the history of the alternatives.

  3. Absolutely, Mike

  4. So little real difference to the last four Italian leaders then

  5. The collapse of confidence is in Brussels and on the markets, the confidence of voters in Grillo seems high. At least he admits to being a comedian.

  6. Isn’t that what Snr Grillo is trying to do in Italy. Problem is he’s triggered a confidence collapse.


    Or else we could wrest control back from the morons that we’ve been permitting to rule the country and re-institute some sanity. That is what democracy is SUPPOSED to be about. It is time to clean house government-wise.

  8. It looks like it, Paul, because the governments won’t do what’s needed to prevent another financial collapse. Clearly investment banks should not be guaranteed by the State. For many years, in the US, investment banks weren’t protected under the Glass-Steagall Act which said retail and investment banking should be separate activites. But the US government won’t re-instate Glass-Steagall, and the UK government won’t split investment banks from retail banks and restrict the State guarantee to the retail banks – probably because no one would do business with the investment banks if they didn’t have a State guarantee. So we’re likely to see another banking collapse and that might spell the end of capitalism. People are getting fed up with lousy corrupt banks, a lousy pensions industry, a lousy inefficient food supply industry and extortionate suppliers of essential commodities. Capitalism, just like communism, may come to be be generally perceived by electorates as having failed except, of course, by the super-rich who will continue to think it’s jolly nice.

  9. It took capitalism just a little longer to reach outrageous perversion than it took communism. Question is, will capitalism fall like communism did?

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