On the current craze for blaming "greedy bankers"

It is striking how fashionable it has become in the last week or so, indeed since the financial turmoil really got going in 2007 and 2008, to pile blame on "greedy bankers". The latest well-known people to indulge in this, both politicians, are the current Prime Minister, David Cameron, and the Leader of the Opposition and Labour Party, Ed Milliband. My motto tends to be: Always beware a politician making 'policy' by talking about 'morality' instead, as it is usually a sign that they have no idea what to do about a particular problem, or don't want to state an obvious truth for fear of upsetting the voting public.

A couple of days ago I read an article in the Douglas Carsewell blog (he is a Conservative MP) that reported on a Coffee House article by Spectator editor Fraser Nelson. Being a politician, Douglas Carsewell, really a sort of Essex 'bovver-boy' with presumably a decent education and defintely with decidedly 'radical' views, focussed on one particular aspect of what Fraser Nelson had actually written, that if one was going to blame bankers, then one should not forget to include central bankers as targets. Fair enough, but that is not the whole story, certainly of what Fraser Nelson wrote and even more so of how I think 'blame', if it is a worthwhile exercise at all (which I tend to doubt), needs to be placed, so I wrote a comment in Douglas Carsewell's blog which I reproduce below, because I think it is probably a fairer and more complete analysis. Politicians, in particular, don't like to tell the truth to their electorates, because they depend on public votes to get elected or re-elected - but sometimes 'naughty kids' (in this case 'the public') do require to be told a few home truths; the comment was my small effort at correcting this omission:

Well, it is convenient for politicians (of all political parties, but specially that of the government of the time), to blame 'greedy bankers' and they must obviously share some of the blame, but as you - and Fraser Nelson writes - the macro-ecnonomic policies put in place by central banks, specially in the US and UK, but even more specifically (as you conveniently forgot to mention) the governments of those two countries carry an even more major part of the 'blame' or 'responsibility'. It would be neglectful and dishonest too, although politicians who need votes always seem to gloss over the matter, not to mention the third major component of what went wrong - the borrowing public, which was very happy to run up enormous credit card debt and think that property investment and the high borrowing which almost always funded it was a one-way bet. No-one forced these borrowers to take on more debt than they could handle and in very many cases it wasn't to fulfil real needs, merely to take part in the consumer-led bonanza going on all around them. Not everyone did this and a few people, such as myself (for example) were counselling anyone who would listen amongst my acquaintances and family not to become swept up in it. And I'm not talking about 2007 or 2008, I'm talking about as early as 2002. - the signs were already very clear then of the way things were developing. All political parties in the UK, including the then Opposition (i.e. the Conservatives), were egging on the public to borrow more, but of course without the idiocy and greed of the borrowers the disaster could not have happened. Most politicians are venal, but then most politicians are no worse than most of the people they represent who, given the opportunity for what seems like 'easy money' will not hesitate to indulge themselves. Politicians (and central bankers) don't like to tell voters the truth, but them most voters don't really want to hear the truth!

Until the borrowing public who fund much of their discretionary expenditure by borrowing on credit cards or loans (for example to fund several foreign holidays a year, or regular clothes shopping for reasons of 'fashion' rather than utility, or to have a new car every year or other year, etc) realise they are just as responsible for the financial mess we are all in and, more importantly, accept they must modify their own behaviour in the light of this, then I am afraid to say it is 'they' the public (and far too many politicians) who still do not get it!