In the ongoing scandal about Barclays’ employees tampering with the “LIBOR,” or London interbank lending rate – which is to say, bank fraud – The Economist offers this brilliant cover. It’s not just the word “banksters,” or the fact that it shows bank executives dressed like the guys in Reservoir Dogs. It’s the little things, like the two guys whispering to each other, the two others on their cell phones, and – best of all – the fact that they’re wearing typical bankers’ power ties.
An accompanying piece in the magazine is entitled “The rotten heart of finance.” If this were a movie, this is the point where the Keanu Reeves character says: Whoa.
When The Economist joins the revolution, the world may very well be seeing one of those “tipping points” we keep hearing about. The magazine, while very well written and researched, has always represented the conservative mainline of economic thinking. It spent years mocking Paul Krugman, for example, for Krugman’s prophetic warnings about a housing bubble and imminent collapse.
Now it writes that the new revelations”not only betray a culture of casual dishonesty; they set the stage for lawsuits and more regulation right the way round the globe. This could well be global finance’s ‘tobacco moment’.”
The world’s most prestigious, mainstream financial publication is drawing a parallel between today’s banking scandals and the wave of revelations and multimillion dollar settlements that turned the public against an entire industry, eventually forcing the industry’s Tobacco Institute to disband and make its records public.
Word to the bankers: When you’ve lost The Economist, you’ve lost pretty much everyone. There’s a parallel between the magazine’s blunt condemnations and the International Monetary Fund’s change of heart toward austerity programs. Both The Economist and the IMF are essentially conservative, and they’re typically friendly (in the IMF’s case, much more than that) toward financial institutions.
But things have gone too far. Conservative or not, both The Economist and the IMF are somewhat reality-based, too,and they’re rightfully concerned that greed and short-sightedness are destroying the world economy.
We owe our friend Mary Bottari an apology, too. We told her a while back that we thought “Bankster USA” wasn’t the best name for the very informative website she manages. Sounds too marginal, we said.
But it’s not too marginal for The Economist. Maybe this really is a “tobacco moment.” Let’s hope so. That moment is long overdue.
In the meantime, as Jamie Dimon said to Bob Diamond: “Why am I Mr. Pink? Why can’t we pick our own colors?”