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article imageOp-Ed: Banks given free money as hospital staff work for nothing

By Alexander Baron     Oct 8, 2011 in World
Last week, the Bank of England authorised the creation of £75 billion with the stroke of a pen to give to the banks. Meanwhile, hospital workers are being asked to give up their paid holidays.
The above may sound like a sick joke, but unfortunately it is not. This latest round of Quantitative Easing had been widely predicted; for an explanation of what the Bank actually does, check out this article.
Whipps Cross Hospital in London is said to have run up a £4.5 million deficit in 5 months, and for this, staff are expected either to take unpaid leave or to put in extra hours for free. While hospital staff are amongst the most committed of any profession, there are limits even for them. The big question is, or should be, how can the government - not just the British Government but governments worldwide - keep finding money for the banks, including for the so-called Greek bailout, yet not find money for hospitals?
Here is a trick question: your wife or husband suffers a heart attack; who do you call, a banker or an ambulance?
Here's another one: your son or daughter falls off a swing in the park, breaks a collar bone and dislocates the same arm at the elbow. There is a bank and a doctor's surgery a hundred yards down the road; which do you head for?
Much more could be written in this vein, but you should have got the message by now.
The recent and ongoing so-called banking crisis threatens the stability of the world; unless it is dealt with, we risk plunging into a new double dip global recession/depression. Says who? The banks and the mainstream media, that's who.
Now go back to that heart attack or park scenario, and ask yourself another question. If you were stranded on a desert island for a year and were given a choice of taking either a banker or a doctor with you, which would you take?
Modern society is extremely complex, and there are some people, or more specifically some types of people we can't live without. True, not everyone needs or owns a home computer, but there are seven billion people on this planet, and if every computer stopped working, many of them would starve. The world will not end if tins of sardines cease production, or if no one pickles red cabbage, but food is a must, as are doctors, nurses, hospitals...
All these contribute to the wealth of society, as do bankers, or rather as should bankers. Banking has two roles in the modern world, or it should have; it should be a system of book-keeping, and it should also act as a strongroom. Banks can and do do other things; they can act as trustees, for example, but basically they should fulfil those two time honoured functions: book-keeping and security.
It is well accepted now that banks do not actually lend the money of their depositors but create credit via the issuance of new loans, which are cancelled out of existence on their return to the bank, leaving the accrued interest as new (debt) money. For a simple explanation of this, refer to the Douglas money equation (below); for a more detailed explanation, refer to The Money Trick or similar publication including this excellent 47 minute cartoon.
However, the fact that money can be and is created at the stroke of a pen or by a few entries into a computer keyboard indicates that it is not real wealth. If the reader has any doubt as to the veracity of this claim, let him revisit the aforementioned desert island with a choice of people. The doctor may not be your first choice; you would probably want to take someone who knew something about producing food: a farmer, fisherman or such, perhaps a cook. You would need shelter, so a builder or carpenter might not come amiss.
Once you had sorted out the essentials like those who provide food, shelter and clothing, you would definitely want to consider someone with medical knowledge. At some point you would crave entertainment, so would invite a troubadour or pianist to join your community. At some point too you would need some sort of rudimentary legal system to deal with civil disputes, and even with criminal cases, but you would be able to manage for a considerable while without an actual police force. This and other emergency services would be dealt with initially on a voluntary or semi-voluntary basis.
At what point would you want or even need a book-keeper? An actual banker would be an extremely low priority, a long way down the food chain, and yet these men in expensive suits, who flit around the world in business class jets staying at £600 a night hotels lecturing all and sundry on how to tighten their belts due to the crisis they themselves have created, have somehow managed to fasten a debt around all our necks, including those of our governments and local governments.
Rather than low paid hospital workers giving up their paid holidays, the bankers and other self-styled traders should be forced to give up their bonuses, and the money they have extracted from us by charging interest on money they conjured up out of thin air.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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