I’m reading Geraint Anderson’s book City Boy at the moment. I’ll do a full review when I’ve finished it as there is plenty in there that will be of interest to this blog’s readers.
Whatever else you might think of him, Geraint is clearly a bright chap. By his own admission, he is also hyper-competitive and hates losing. Which is why it’s doubly surprising that he managed to lose a debate on the causes of the financial crisis to John Redwood.
The motion which Geraint proposed to the Oxford Union was “This House Blames The Bankers“. Now, as an easy brief, that’s not quite up there with “This House Blames The Nazis For The Holocaust” but it’s not far off. So why did he lose?
Well, he tries to blame an Oxford conspiracy against a Cambridge man and it’s probably true that the jokes about his hosts’ university didn’t go down too well. But the horrible reality seems to be that he was out-argued.
He takes up the story:
I have to admit that my opponents came up with some fairly credible arguments.
Are you sure, Geraint?
Tory MP John Redwood argued, somewhat unsurprisingly, that it was all Gordon Brown’s fault because he had deregulated financial markets and removed the banks’ capital constraints that had once ensured less risk-taking.
Hang on a minute! It was the Tories that did most of that when John Redwood was on the government benches. OK, Gordon Brown might have tinkered around the edges but deregulation was primarily a Conservative initiative.
Then there’s this:
He also blamed Bill Clinton for pressurizing US banks into lending poor trailer trash wonga they were unlikely ever to pay back.
Not that old chestnut again. This spurious argument has been rolled out by the American right in an attempt to blame the Democrats for the financial crisis. It rests on the claim that an obscure piece of legislation brought in by the Carter government in 1977 effectively forced America’s banks to lend to people who were too poor to pay their loans back. The very idea that US banks could be forced to do anything is laughable, as is the suggestion that a thirty year old law and Democratic administrations caused the dramatic rise in sub-prime loans after 2003. The attempt to blame the Community Reinvestment Act for the sub-prime crisis has been well and truly trashed by people who know what they are talking about. That John Redwood should have deployed this argument shows just how close to the bottom of the barrel he was getting.
Perhaps Geraint was too busy making money or writing his book to have read about any of this. Whatever, his poker player’s instinct failed him and he didn’t see that John Redwood was clearly getting desperate. As a result, he allowed himself to be well and truly beaten on what should have been an easy platform.
Actually, to be fair, John Redwood seemed as surprised to have won as Geraint Anderson was to have lost.
Regardless of the outcome of the debate, though, his conclusion on his blog is bang on:
Trying to find anyone who will accept blame for the credit crunch is like trying to find a virgin in Shepherds Bush – near impossible. However, I believe that when the history books are written it will be the bankers who are most commonly accused. Sure, the politicians and regulators were asleep at the wheel but blaming them is like accusing an incompetent police force for a crime spree. Likewise, blaming the central banks for making debt ‘cheap’ is like blaming ammunition manufactures for a gun battle. My mum always said that adults should take responsibility for their actions and until we bankers start doing that we’re gonna remain about as popular as a turd in a swimming pool.
Of course the bankers must take most of the blame. Others may have contributed or looked the other way but it was bankers, motivated by greed, who created the financial instruments, made the toxic loans and hid their activities from the public gaze. They and no-one else created the financial crisis.