'Capitalism has corrupted politicians'
Sun Jan 29, 2012 10:20AM
Interview with Shabbir Razvi, economic commentator, London.
The United States and Europe's banking policies are creating serious economic troubles for the global economy. While regulations exist, it appears they are not implemented.
Press TV has interviewed Shabbir Razvi, economic commentator in London about the systemic problem of corruption in the international banking system that corrupts politicians that has resulted in a banking regulation 'soft touch' and not being policed, but ignored. What follows is an approximate transcript of the interview.
Press TV: Do you think Greece would be fairing off better had it not joined in the Euro countries?
Razvi: I don't think it was the issue of joining in the European Union as I think Max (Keiser) was alluding. When Greek first joined in sort of the late 1990s it was Goldman Sachs who, in accounting terms what they call 'creative accounting' to portray Greece's situation as being extremely good, which allowed it to join the European Union. Hence, Goldman Sachs made huge amounts of money out of this.
Currently in Davos (Switzerland) we have the four musketeers from the banking fraternity of America - Mr. Vikram Pandit, Mr. Monahan, Mr. Jamie Dimon and the fourth one who are altogether at this moment talking to the European politicians and the leaders for 'soft touch' regulation.
You know, the issue of regulation we've touched on many times and many of the commentators have said that there has to be more regulation so that these bankers can be regulated properly; however, I believe that regulation is really elasto-plaster at this moment. It needs a whole change of the system. It requires what our prime minister in the UK called 'bold steps' and he meant bold steps in a different way than I am about to say.
Bold steps meaning that the whole capitalism; the crisis of capitalism has to be seen from that perspective, that capitalism stinks because it is corrupt; it has corrupted the politicians; it has corrupted the whole society by way of bankers having the final say as to what happens in each of the countries and Greece is a very good example whereby the bankers are trying to have their way.
There has been discussion that Greeks debt should be written off at least 50 percent. We'll see what happens because it has to be done before the end of the month in the next couple of days.
Press TV: How do you see, is the problem the bankers themselves or is it systemic of the system - What's the overall problem with this situation that we're seeing?
Razvi: Of course there is a systemic problem - there is no doubt at all - just like in the UK, what happened recently only a couple of days ago, the chief of the Royal Bank of Scotland, which is a sort of tax-payer-owned bank with 84 percent stake by the tax payer is being awarded one million pounds as bonus.
I mean, how can this be ever justified because that's the total income of an individual working in the UK for the next 40 years and this chap gets a million pounds as a bonus.
There is something wrong with the whole banking fraternity; the manner in which banks are operating; the manner in which the whole economy is operating and as I said earlier the corruption that the banking system brings about to the politicians i.e. the politicians say we want light weight or light touch regulation. In reality, as has been commented earlier, there is regulation, but no one is implementing those regulations.
We've had this crisis for the last four years and we are in 2012 and still talking about how to regulate the banks; how the bankers do not get away with the bonuses that they are getting away with at this moment.
And the whole reality of the situation is because capitalism awards greed. And the more greedier the bankers become, the more bonuses they get, the more higher salaries they get, which in turn corrupts the whole system because the politicians are having Jolly knees-ups at the banker's parties so you can't expect the politicians to regulate or even if there is regulation to really police that regulation effectively.
They (the politicians) are in the pockets of what I would call the vultures of our economy who have destroyed the economy globally and now four years later in Davos at this moment, they are trying to carve out more deals with the politicians of Europe of the benefit of themselves.
And that's the reality of it.
Press TV: Our other guests were talking about the American banking system and the banking fraternity. You're laughing at our other guests comments, why is that?
Razvi: I would actually call Jamie Dimon not Jamie Dimon, but Jamie demon. He has created a situation whereby people are so frightened and as Max (Keiser) was saying, the politicians are not going to do anything because they are corrupt and they have been corrupted by the banking system and the financial services industry.
The issue of regulation, you know, everyone says that there has been too much regulation that in fact the financial services sector has been over-regulated. Yes I would agree that it has been regulated, there is regulation on the statute books, but no one has really applied those regulations to incarcerate, to emasculate, to really make the situation impossibly difficult for these bankers to get away with what they have been getting away with for the last few years.
Press TV: If this is the case as both Max and you have said, you have the political situation and the financial system intertwined, what is the key then for the world's people who are suffering financially and economically?
Razvi: Absolutely. People are coming out onto the streets and I think they will take the power in their hands. It may take a bit of time; we have seen what has happened in the Arab world in Tahrir Square, in Bahrain and other places where people are coming out on the streets and realizing that the only way to get justice is to really make the situation difficult for the ruling elites in the respective countries, in the European Union and in the US where the politicians are really working in hand with the exploiters, the abusers of the ordinary masses and the masses will have their say.
I cannot see that happening too far away and I am hoping it will happen quite rapidly as perhaps in the next 12 to 24 months we will see rapid changes occurring both in Europe and America.