Make Australia Safe Again
Pauline Hanson is the Australian Trump in many ways. Minimal upper class, maximum working class. Working class meaning that section of the economy who produce things, who work for a living.
Now and then, during his campaign run, Trump hinted at reviving the US Glass-Steagall Act, the Act designed to split the banks in two. One half holds deposits and only goes on secured lending practices – no investment banking, no hedge fund bullshit, no insurance activities and no private equity activity. The other half is the investment section which does all those things but does not hold our deposits.
Y’see when things get rough, our deposits and the assets that secure them, are basically what allow the banks to speculate.
Enter Bill Clinton. He organised the repeal of the US Glass-Steagall Act in 1999 and set off a chain reaction ending with the GFC – the global financial crisis, the effects of which we are still suffering from.
We have just finished the Bank Enquiry and there was no recommendation to split our banks here. When that became known, the champagne flowed all night.
What has all this to do with Pauline? She has just introduced the Banking System Reform (Separation of Banks) Bill into the Australian Senate, for a Glass-Steagall-style structural separation of the too-big-to-fail (TBTF) banks.
On the 12th February, while everyone was focusing on the rubbish plan to allow anyone into Australia who might have a cough, Pauline moved “That the following bill be introduced: A Bill for an Act to re-establish confidence in the banking system, to separate retail commercial banking activities involving the holding of deposits from wholesale and investment banking involving risky activities, and for other purposes.”
This will do what the banks and government ensured the Hayne Royal Commission didn’t do — break up the structure that has transformed the banks into predatory profit-gouging machines at the expense of their customers – us.
Virtually every hearing threw up evidence that the vertical integration of banks—the combination of normal banking with insurance, financial advice, funds management, stockbroking and superannuation—was a massive conflict of interest which the banks exploited to lure customers into products they didn’t need and charge fees for no service, including to the dead.
In essence, by not recommending separation, Hayne’s punishments in his final report did not meet the crimes revealed in his hearings, and the banks know they have got away with it. Many experts have criticised this as the biggest failing in Hayne’s final report.
Pauline dares to go where Hayne couldn’t. As my dear wife said the night before she died, “Say what you like, that woman’s got guts.”
This, if passed, will end the trading in risky securities and derivatives, which exposes deposits to dangerous speculation. As already said, the banks not only use deposits as collateral for their gambling, but when their bets blow up and they face collapse, as happened in the 2008 crash, they use their deposits to extort the government to bail them out, under the threat that if they crash they will take their innocent customers’ savings with them. This is what it means to be “too big to fail”.
Recently Australia enacted “bail-in” laws to preempt the collapse of TBTF banks by seizing our deposits to absorb the banks’ gambling losses. Hanson’s Separation of Banks bill ends TBTF, and protects deposits by not letting them be exposed to risky activities.
At the conclusion of her speech introducing the bill, Pauline said: “The Australian population are appalled at the bad behaviour of bank management. The quest for greater profits to the detriment of their own depositors is disgraceful.
“The quest for greater bonuses has transcended into pressure on staff throughout the banking system to push their depositors into taking that bank’s financial services advice which results in those depositors taking out related company insurance and superannuation policies without concern as to their suitability. Of course, the epitome of that bad behaviour is taking fees from estates of deceased persons.
Keep watching and if you have no other reason vote One Nation wherever you can get the opportunity. If One Nation holds the balance in the Senate, she can frustrate until the right of the government to take away your deposit to save bank shareholders will be gone.
This Bill of Pauline’s is our Brexit. Our chance to escape.