Stories of 'rogue traders' being brought to justice always make for gratifying copy. And it doesn't get much better than the news that the notorious 'champagne trader' Alex Hope has been arrested by the Financial Services Authority on suspicion of unauthorised trading.
A month ago, the 23-year-old Hope hit the headlines for reportedly spending more than £125,000 on champagne at a Liverpool night club. Hope explained his motivations to the HuffPost in an interview published earlier this week:
"I got invited to a club in Liverpool. There's this big bottle of champagne called Ace of Spades, 30 liters, it's a very unique bottle. People like Jay-Z have bought it. It's specially made in France. I'm not a drinker at all but I've always wanted to buy this bottle. And I thought to myself, 'I never treat myself, I don't have a flashy car, but if I go out let me buy this bottle,' and for me it will be like an achievement thing to say: 'I've done well, I'm having a bit of fun and that's it.' It was more for the other people around me. I spent a lot of money at a nightclub for a normal person, but to me it wasn't such a large amount because of the fact that I've done very well in my field."
As the UK economy continues to stumble through the wasteland of austerity, it is harder to think of a more striking illustration that we are not 'all in it together' than Hope's uber-conspicuous quaffing of a 30-litre bottle of Ace of Spades. As we live through the consequences of the financial industry's grand bender - and tens of thousands of people lose jobs, access to services and reasons for optimism - it would take an especially noble soul not to feel at least a tinge of schadenfreude at the thought of young master Hope being cut down to size. After all, very few of the individuals who caused the financial crisis seem to have suffered any adverse consequences as a result of their greed and bungling.
In the UK and the USA, the Hopes and the Madoffs are anomalies. In contrast to last August's English riots - or even the still-evolving News Ltd hacking scandal - there was no swathe of investigations or arrests following the financial crash. None of the officials in the US or the UK have faced criminal proceedings.
In any event, the real problem with a few eye-catchingly rotten bad apples being prosecuted by the authorities is that it draws attention away from the failure to respond to the systemic causes of the crisis. It is that any single trader is 'rogue', so much is that the whole damn industry is off the rails.
Allegations should be investigated and criminal prosecutions should of course take place when appropriate on the facts. It might assuage public anger at the swinging-big-dicks who bankrupted the world if a few more high profile city boys were banged up in the hoosegow to contemplate their portfolios. But just locking up the crooks will not of itself bring about any structural change.
As any number of fine books (Whoops!, Fool's Gold and The Strange Non-Death of Neoliberalism are just the first three that come to mind), op eds and even the Academy Award winning documentary Inside Job have made abundantly clear, the financial crisis was not a consequence of individual wrongdoing. The global economy was not stuffed by criminal behaviour, but by the lawful functioning of a dysfunctional system.
And very little has changed since the last crisis. The world's political leadership took a peek at the banking and finance industry after 2009 and decided it was just all a bit too hard. In the UK, George 'the millionaire's millionaire' Osborne has taken the view that it may be possible to achieve modest reform of the banking sector by 2019. Or, to put it another way, the Chancellor would have us believe that it will take longer to implement moderate changes to the way banking is done in Britain than it took to win the Second World War.
A banking and finance system that malfunctioned terribly has not been fixed, creating the mother of all moral hazards. Alex Hope may have downed his last bubbly for some time, but the banking and finance industry at large can just go on partying. And it almost certainly will.
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