Thursday, June 11, 2015

Q: When is a loan shark not a loan shark? A: Never. They are always scum even when they come in a suit and expensive aftershave and don’t carry a stilletto. And that is what Greece now knows: you want credit? We’ve got credit — but it will cost ya

We must all know that feeling, especially when we are younger and have less experience of life (by which I mean we have so far been in fewer scrapes, not that oldies are in some way wiser) that ‘things are just awful and there is no way out. None’. As it turns out, there is a way out, though quite often not the one we want.

Many years ago my bank talked me into - although it didn’t take much talking, they know a sucker when they see one - opening a kind of ‘credit account’, much like a credit card is now. There was no card, and I simply wrote cheques, but either way I maxed out my £3,000 limit within months, buying up all kinds of photographic gear mainly but also helping to pay the fees for a college photographic course I started.

To clarify a little, that £3,000 would today be worth between £9,000 and £18,000, depending upon which measure you are using. Stupid or what? Of course, bloody stupid, but the bank didn’t care - they knew they would get their money - the principal - back one way or another, but they also knew they would get more - the vig as gangsters like to call it - and probably far more, in interest over the years as I and others similarly suckered into borrowing the money paid back.

At times that £3,000 - actually, I’ve since discovered a relatively small sum compared to what others have owed and others still owe in credit card debt - seemed overwhelming and life was shitty. I ran out of money after two terms of my course and had to leave, and I was then unemployed for the following ten months.

The bank ‘kindly’ agreed that I could leave off paying off my debt while I was unemployed, although it would ‘of course’ continue to attract interest. And so the debt grew and grew. When I finally found a job, I began to pay it off, at £30 a week. And boy was that frustrating: we were paid weekly in cash in those days (I was working as a sub-editor on the South Wales Echo in Cardiff) and as soon as that small brown envelope was handed to me, it was down to the nearest branch of Lloyds, about three minutes away from Thomson House, near the rail station to pay in that week’s £30.

Every months I received my statement and would almost literally howl with fury: of the £120 I had paid in over the past four weeks, around £80 would go to pay of the interest, the vig. Jesus, I hated those guys, and ever since then I spit on banks and money men generally. Yes, we need them, but we most certainly don’t have to respect them or like them.

I was determined to pay off that debt, and I did. Over the years - it took about seven years - the principal came down and so did the vig, and boy was it a sense of achievement to pay it off and be
done with it. (I was by then living in London, but made a special trip to Birmingham to pay off that final £100 to the manager personally and to tell him exactly what I thought of banks and their invidious practice of inveigling customers to borrow ever more money. I was polite, but I didn’t hold back. But did he care? Did he fuck. I was just another schmuck and although I was now out of the bank’s debt and clutches, he knew there would - and will - more schmucks. I have no way of working out exactly how much Lloyds made out of me and my debt while it was still outstanding, but a rough guess would be about the same as I owed. You might say, of course, that ‘Patrick, me old mucker, you didn’t have to borrow the £3,000 in the first place. So, Patrick, old fruit, it was your own bloody fault’. And I can’t disagree with that. Of course, I didn’t have to borrow it, and no one, but no one forced me to fritter it away.

But that isn’t quite the point: lenders, from ‘respectable’ banks to loan sharks with a scar from ear to ear and a stiletto up their sleeve, know full well that they don’t have to force anyone to borrow money (except, of course, when they suggest we borrow a little more to pay off our interest, something my ‘respectable’ Lloyds manager in Birmingham suggested. I turned him down and instead embarked seven-year schlepp to pay off my debt). They know that to a man and woman we are pig-stupid enough to borrow what is on offer. And boy are they keen - for the very obvious reasons outlined above - to lend us money.

. . .

In the scheme of things, mine is a tiny, tiny story with a belated happy ending, and I am aware that there are far worse stories, many of which do not and will not have a happy ending (and please believe me that I am not feeling smug or complacent, just relieved that I managed  to emerge 
unscathed). But in a sense my story demonstrates what has happened to Greece, and there will decidedly not be a happy ending to this one. It is often commented that the Greeks didn’t have to borrow the sums they did to build their better roads and the rest.

It is often remarked that if successive governments had been far more diligent in collecting the taxes owed to the state, they might not have ended up in the utterly miserable situation they now find themselves in. Furthermore, we are told, Greece has a thriving tradition of corruption and bribery. But all three points miss the point by a country mile and do so wilfully.

Essentially, it is the same story with Greece and its lenders as it was with me and the ‘respectable’ bank manager of Lloyds’s Colmore Circus branch: they are not in the slightest bit concerned whether Greece or I should borrow to such an extent, because they know full well, one way or the other, that they will get their money back and make an additional healthy packet on top. Were Greece and I being irresponsible? Their attitude is: whatever. Because we don’t give a fuck. If the schmuck stupid enough to borrow from a loan shark announces he can’t pay up this week, he gets a severe beating to teach him a lesson. Make no mistake: Greece is also being given a severe beating and is being taught a lesson.

Oh, it might be couched in the oh-so-respectable terms and assurances that ‘we feel your pain’, but that is pantomime stuff. And ironically, it is no longer the Greeks who are now paying the vig but more or less the German taxpayer. The lenders don’t care, of course, they don’t care two hoots who

coughs up as long as they get their lucre. Yes, of course, it is more complex than that, but in a sense it is no more complex at all: Greece was and is just another schmuck who has been taken for a ride by the moneylenders.

Certainly, there are other dimensions to this problem: if Greece is let off the hook, the moneylenders say, it would ‘send the wrong message’ to the other eurozone members - Spain, Ireland and Portugal - who have been ‘financially imprudent’. Well, that’s what loan sharks always say: you’ll never catch a fully-qualified loan shark letting any of his clients off the hook - slitting his own throat would be a quicker way to get to where such an action would take him.

. . .

I started writing this entry after reading a good piece in the The Guardian by one Seamus Milne. It is not directly about the Greek austerity and euro crisis, but about the need for reform in the EU, but I recommend it. One of his main suggestions is that bit by bit the EU is being hijacked by the corporate world and used for its own means.

What with that alarming Transatlantic Trade and Investment Partnership (TTIP) being steamrollered through by the EU and the US (here’s another good piece, admittedly pretty anti-TTIP, but then I can’t see anything good about it) it does seem that the EU, which might even have seemed an old idealistic hippy dream when it was first established, is slowly but inexorably being turned into quite a different animal, and one in which ‘democracy’, by which I simply understand your and my right to stipulate how we are governed and by whom has little place, if any.

The irony of what I have just written is that it might make me sound like some unreconstructed Lefty, when, in fact, I am anything but that. But you don’t need to be a Lefty to use your nose and announce that something stinks if you sincerely think it stinks.

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