Reversing Robin Hood
Fears that nationally-owned banks might redistribute wealth ended with bank profits made up by taking from the most vulnerable.
This week Australia’s central bank, the Reserve Bank of Australia (RBA), did pretty much the opposite of all the others and increased interest rates.
They looked at current inflation data and decided that making (more) unemployed people and those struggling to pay rent or mortgages carry the cost of getting inflation under control.
Needless to say, the excellent folks at The Australia Institute are not impressed.
Also this week, the latest issue of the wonderful literary journal Griffith Review is out, with artists, poets, journalists, academics and literary types writing about money.
I have an essay in this latest issue.1 It is based (in part) on analysis of the 1937 Royal Commission into Australian banks, conducted in the wake of the Great Depression. In the Commissioners’ report, future Prime Minister Ben Chifley gave an account (a dissenting position from the rest of the Commissioners) of the ways that banks are a utility (think…sewage. Maintaining the flow matters, and it is also full of shit) and what this means for democracy.
There is also some Gold Rush banking in the essay. And a bit about the scandalous 2018 Royal Commission into banking. And the transformation of the central bank from the People’s Bank to the Bankers’ Bank.
So that instead of using this utility in the interests of everyday folk, the system now operates to take money out of the hands of those most exposed to increases in interest rates, reducing their standard of living to pump their money safely into ENORMOUS bank profits, where it will not circulate in the economy, or push up the inflation that erodes bank profit rates.
If you would like to support Griffith Review you should - look at what recently happened to Meanjin, tragically shut down just recently. If you are in Oz you can buy Griffith review bookshops. If you are elsewhere, or prefer digital reading, the link to the On the Money issue is here.
I have two spare hard copies of this issue. If you live in Australia and would like one, pop in a comment and I will arrange for you to DM your address (for goodness sake, don’t put your address in the comment) and post one to you. In the so likely event that I am overwhelmed I will do some sort of draw.