In a BBC interview that has gone viral thanks to You Tube, a financial trader named Allesio Rastani made a stunning claim: “The governments don’t rule the world. Goldman Sachs rules the world. Goldman Sachs does not care about this (European) rescue package, neither do the big funds.”
Rastani left his interviewer shell shocked with other provocations. “For most traders, we don’t really care that much how they’re going to fix the economy, how they’re going to fix the whole situation, our job is to make money from it … Personally I’ve been dreaming of this moment for three years. I have a confession, which is, I go to bed every night, I dream of another recession,” he said.
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His remarks have caused jaws to drop around the world. Spanish finance minister Elena Salgado condemned Rastani as “mad and immoral”, though others pointed out that perhaps his intemperate remarks were merely a reflection of what the financial industry really thought but was too dishonest to say publicly. The missiles come at a time when protestors are in a midst of a two-week attempt to occupy Wall Street, getting support from people such as actress Susan Sarandon and film maker Michael Moore.
The financial crisis has clearly led to a lot of public anger. At his Oscar acceptance speech, Charles Ferguson, director of Inside Job, a documentary that blew the lid off the clubby cartel of bankers, regulators, credit raters and economists, had remarked: “Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong,” Ferguson said.
There have been some doubts expressed over Twitter whether Rastani is actually the independent trader he claims to be, or a member of The Yes Men, a protest group based in the US who claimed responsibility for a 2004 bogus report that the victims of the Bhopal gas disaster would be compensated by Dow. One could also say that Moore and Ferguson are film makers who understand little about the way the financial markets and the global economy actually work.
However, criticism of Wall Street power has not been restricted to street protests and celluloid imagery alone. Economists Simon Johnson and James Kwak have argued in 13 Bankers, their book on the financial crisis, how the concentration of power with a handful of banks has done immense damage to the US economy. The subtext of the book is that the implosion of 2008 was not rooted in financial practices alone but also in political power than allowed Wall Street banks to get rules rewritten to their benefit. The way banks were bailed out in the aftermath without giving up any of their powers is scandalous. As one economist sardonically commented, the Republican Party is now controlled by Big Oil and the Democratic Party by Big Finance.
The debate about the role of finance in a modern economy is an immensely complicated one, and there continues to be clear case in a country like India to have more financial deepening. But what the recent events show that public patience is running thin in many recession-stricken Western nations. The decision on how big banks should be and what they should be allowed to do will eventually have to be decided in the political sphere.