Michael Rosen – Britain: The Banks are Taking over our Universities. Why?

 The Banks crashed the economy in 2008 but then were bailed out, then the government needed to make cut backs as well as borrow from the banks. The banks cleaned up. 

The banks are now telling the universities to sell off assets and to get rid of staff. 

That the banks are taking over universities.

How is this happening and why?

We have to go back to the crash of 2008 caused by the banks overlending, selling debt and leveraging their debts by taking out more loans. To keep money flowing, governments borrowed money and then claimed that they needed to cut public services to pay for this debt. In the case of the UK this is much disputed for several reasons:

a) cutting public expenditure at a time of slump is likely to cut the tax-take and cause more slump.

b) the UK issues currency. It is a large economy. The idea that bondholders were knocking on the UK government’s door demanding their cash back is a myth. Bondholders hold UK bonds for decades so that they have steady, certain income. A large percentage of them are in fact people like pension funds held for many of us. 

c) over a third of the government’s debt isn’t really debt at all. It’s created by the government by issuing bonds which the Bank of England buys! It’s like buying stuff off yourself and telling yourself you owe yourself some money. That’s what they told the British public that and got everyone to believe them. Neat.

So how does this impact on Goldsmiths? 

Because the government claimed that they needed to cut funding of education to ‘pay’ for the government debt. 

(Remember it was the banks that crashed the world economy in 2008, so it’s incredible to think that they have become the repositories of financial wisdom now. No matter. Read on…) 

Michael Rosen – Britain: The Banks are Taking over our Universities. Why?