Of course, 10 years on we all know why the banks were saved – because that is where the money is. If you have control of money, you have power – to paraphrase Al Pacino in Scarface with the Politically Correct part of his observations.
Saving the banks a decade ago was the equivalent of getting control of the airports and the State Broadcaster in a Banana Republic when staging a coup. Come to think of it, going for Heathrow and the BBC could work quite well in Blighty as well.
However, we were promised that the likes of Northern Rock and HBOS would never happen again, especially the part in which the taxpayer had to bail them out against the barrel of a gun. So far they have not, although in the wake of the Provident Financial meltdown, one imagines that this is only a matter of time.
Instead, we are looking at a Carillion “liquidation” where there will be bailouts left right and centre.
The incredible thing here with the “facilities management” group a.ka. middle man getting paid for doing nothing, is that it was not even up the ultimate lowly task. In just the space of a few months it has been revealed what a distrous smoke and mirrors idea having so many major public services contracts with one entity is, how weak corporate governance here has been, and what a money wasting gravy train Carillion was.
The irony here, as compared to the banks is that at least then there was the excuse that the collapse was a bolt from the blue delivered from external / foreign sources. Here the only thing the powers that be can say is that this calamity was hidden in plain sight.. Indeed, it is the banks, BHS, Polly Peck, Marconi et al, all rolled into one.
Perhaps though, one can save the worst until last. This is because even though Carillion has been a toxic disaster for at least 6 months, no action was taken to dismantle the house of cards, instead there was a doubling down, with more contracts thrown on the funeral pyre. One would expect the public inquiry here will take at least 5 years – but even this will not be long enough for the Titanic of Outsourcing to be forgotten.
Oh, and as a final sting in the tail, it really might have saved the country billions of Pounds if the hedge funds who knew Carillion was going under even before July’s warning had stepped forward. But then again they would perhaps not have made millions by being short of the shares, so a somewhat rhetorical point there.
What is interesting though, is that despite us being in an age of transparency courtesy of the internet and social media, forensic accounting, The Big Five Auditors” and of course the FCA and SFO, all of these aspects only seem to kick in properly after a ship has gone down.
The only explanation here is that it is the perceived “too big to fail” institutions who are sometimes the most vulnerable to the combined Achilles Heel of poor management, complacency, hubris, and perhaps in this instance, genuine wrongdoing.