Bank Robbers

A new "bankocracy" made up of the "Masters of the Universe" speculators and spivs is being created on the ashes of financial capital.

Stockbrokers and bankers who trousered million dollar bonuses by taking massive risks with investors money and then placed them in safe US treasury bonds could be the biggest winners from the economic crisis.

New "boutique investment banks" are now springing up around Wall Street where the people who risked most on sub-prime loans and complex and toxic financial packages can invest, according to Professor David Harvey.

The eminent Marxist economist also warned that the speculators would influence US government policy through the Part of Wall Street, which has significant presence in both the Democrats and Republicans in Congress.

He said today: "There is a new class in formation.. a bankocracy if you like. There are boutique investment banks opening on Wall Street. They are taking the place of Lehman Brothers and those that went down.

"They are more slick and smarter. It will be a lot more careful in how they go about doing its business."

Double Dip
Any success of the bankocracy could drive US policy towards a "concentration of capital" solution to the financial crisis.

This would see those who risked and lost most - and whose companies were bailed out by taxpayers' money - having the most to gain. They can force down wages because of mass unemployment and buy up assets cheaply - and start to make profits again.

However, Professor Harvey warned any new boom created in this way is likely to be short lived - because people on the dole or earning low wages will not be able to fuel the consumerism that dominates the US economy.

He argued the ruling class could try to "double dip" by trying the concentration solution before turning to "real Keynes": full employment, massive investment in infrastructure and a reduction in the working week.

UPDATE: Professor David Harvey said: "The way I would think of a crisis is as an irrational rationaliser of an irrational system. The irrationality of the system right now is fairly clear.

"You have masses of capital and masses of labour unemployed side by side in the midst of a world of massive social need. How stupid is that."



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