The Bankwatch

Tracking the consumer evolution of financial services

“Eat the Wealthy”.

Everyone has become an economist over the last year.  Now it appears we can add historian to the list of armchair expertise, with references to the overthrow of the rich and oppressive in the course of the French Revolution.  First out was the Economist yesterday with Delacroix Liberty on the cover, with Wall St cleverly overlayed in the background.


This latest is the paraphrasing of the wrath felt by US citizens, exemplified in Barney Franks House committee hearings.  That wrath is for the blood of bankers, who seemingly glide around the world in 20 million dollar jets, gathering multi million dollar bonuses and no doubt eating a few babies en route.

Capitalism works better from every perspective when the economic decision makers are forced to share power with those who will be affected by those decisions.
Barney Frank

The French revolution in 1789 was a revolt against oppressive monarch with absolute power to do whatever they wished to the masses.  Next we have Mr Moisi conjuring up pictures of Michelle Obama as Marie-Antionette!

What the French revolution can teach America | FT

Of course, America in 2009 is not France in 1788, the year before the fall of the Bastille (the prison that embodied the oppressive nature of the monarchical regime) and the symbolic beginning of the French revolution. The fall of Lehman Brothers in September 2008 has nothing to do with the fall of the Bastille; symbols of wealth should not be confused with symbols of oppression. There is no guillotine around the corner and it would take a lot of imagination to compare President Barack Obama to Louis XVI, or Michelle Obama to Marie-Antoinette.

Mr Moisi turns the levity into a serious philosophical point.  There is an undercurrent that requires serious commitment to fix and more than words to regain trust.  This goes beyond addressing balance sheets and capital adequacy.

An interesting incident was reported by CNN last week. A group of protesters – very few, to be honest – rented a bus in Connecticut and stopped in front of the mansions of AIG executives to express support for those who had returned their bonuses and outrage against those who had not and were still living in grand style, in contrast with the many more who had lost nearly everything.

The greed of some was tolerated as long as most of society continued to progress. But today’s combination of fear and humiliation with a deep sense of injustice leads to anger that is potentially irrepressible. The strength of the American republic has been bolstered by the popularity of its new president. This capital should not be squandered on reliance on a media-savvy communication culture. As can be seen so often in history, less is more. The president of the US simply speaks too much.

Revolution is not around the corner; at least, not in America. But there are lessons Mr Obama can learn from the French king’s failure to manage dissent. He must not fall prey to populism. His goal is to save the economy, not punish the bankers. At the same time, he must not be seen to have too much sympathy for the world of finance and its excesses or to cut himself off from the suffering of his people. If he fails, the corporate laws of today will face the same fate as the ancien régime rights of yesterday.

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Written by Colin Henderson

April 3, 2009 at 13:27

Posted in Uncategorized

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