The pantomime season is under way and bankers are, perhaps predictably, cast as the villains in some shows. A London production of Dick Whittington has a banker cast as King Rat. Across the Atlantic, one Bernard Madoff has satisfied demand for a real-life pantomime villain. Are we just picking on chaps when they’re down, or is it fair to portray the banking classes as a new type of scoundrel?
A few weeks ago, I bumped into someone I had last seen on a robbery charge a quarter of a century ago. We chatted, and I asked what had become of his young sons. He chuckled. They had gone into the City of London, the UK’s financial hub, and made far more money than their criminal dad ever did. If only he had known how easy it was, he said, he would have done the same thing.
The fortunes made in the City and the subsequent collapse have many echoes in the criminal world. Armed robbers enjoyed their heyday in the 1970s thanks to a combination of unsophisticated security in banks, a corrupt detective branch in Scotland Yard and a code of criminal conduct that eschewed informing.
When all those three factors altered, many criminals looked for other, safer ways to make money. One popular scam was the long firm fraud.
It works thus: You set up a business in a warehouse using a bogus name, you order goods and pay on time; repeat, for a much larger number of goods and pay again on time; repeat for a much, much larger amount and disappear.
In many ways, some of our financial institutions have in effect been carrying out a fantastically sophisticated long firm fraud, although that may not have been their intention at the outset. They asked people to give them their money, they paid out on time; they asked for more, and paid out again; then they asked for even more — and announced they had nothing left. Essentially, a long long firm fraud.
The big difference, of course, is that the dodgy warehouse version of this operation is illegal, while the City version, involving supposedly venerable institutions, is legal — although the damage done by the legal long firm is much greater than that perpetrated by the illegal ones.
Years ago one of the regular sights on Oxford Street, one of London’s main shopping streets, was a handful of shifty-looking men and a cardboard box. They were engaged in the three-card trick, or “find the lady”: a Queen and two other cards would be placed face up on top of the box, turned over and shuffled around; the dealer would then invite bets from gullible members of the public as to which was the Queen. From the watching group a plant would emerge.
When the dealer was supposedly not watching, he would bend over the edge of the Queen card and bet on it. He would win, and generously tip off a member of the public on this fail-safe method of winning. The punter would foolishly place a bet and — hey presto — when the card with the bent edge was turned up, it would no longer be a Queen but a deuce.
I learned a painful lesson from these operators. This, too, has many parallels with the way people were encouraged by advertisements showing satisfied customers to stake their money on a sure-fire investment. The three-card men have long since gone from the streets, and I would wager that many of their sons and some of their daughters went to work in the City.
But what is to be done?