A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Thursday, July 31, 2008

Credit Crunch v. South Sea Bubble

Almost 300 years ago the British people were subjected to an elaborate con. It became known as the South Sea Bubble. As it was the case then, so it is now. In 1720 another dodgy Chancellor of the Exchequer put great stock (literally) into the monopolistic trading company which went by the innoccuous title of The South Sea Company.

The sale of shares to raise cash caused such fevered financial overheating of the company that a great implosion was caused.

Joseph Spence, an author of the time, wrote that Lord Radnor reported to him "When Sir Isaac Newton was asked about the continuance of the rising of South Sea stock, he answered 'that he could not calculate the madness of people'. (Spence, Anecdotes, 1820, p368). Madness of people did he say? Sir Isaac Newton would see very clearly that nothing much has changed in that department 300 years on.

As then, so it is now. The legalised crooks get off. How come it has been right for these sub-prime loans (modern versions of south sea Bubble shares), which have been granted to impecunious people, to be parcelled up and sold on as something worthy of financial purity. It is a monumental scandal.

On top of that the bosses of the banks and loan shark operations, who enjoyed mutual back-scratching sessions, continue to rake in bonuses and bottom-line benefits. The madness of people is still with us. Why have we not demanded that these legalised crooks, who have almost brought our countries (it's vitually global!) to their knees, be arrested for high treason?

If I was sold an old rusty BMW, recently sprayed and cleaned, as a brand new vehicle, I'd complain. If a supermarket sold me a piece of meat that was unfit for human consumption, I'd have something to say. How come the banks and financial institutions are so much different?

Oh, of course, THEY JUST GOT DRUNK!


Post a Comment