He’s the Chief Executive of Tullet Prebon, one of the largest inter-dealer money brokers in the world (according to Wikipedia), and of late has become one of the BBC’s favoured independent commentators on the current ructions in the financial markets.
At least I assume the BBC regard him as an independent commentator or else they wouldn’t have paired him with George Magnus on the Today programme this morning. Magnus, after all, is senior economic adviser at UBS; they are two of a kind.
And when the other two contributors to a ten minute segment are Robert Peston, with whom, as Smith helpfully reminded us during the interview, he used to work; and Evan Davis, who jumps through hoops daily to avoid giving the impression there might be an alternative to the current economic system; then you know the direction the discussion is headed.
It’s worth analysing the unchallenged statement with which Smith was allowed to conclude the segment: "There is," he said, "a political crisis rather like the thirties. When I look around, what I see is a paucity of leadership to deal with the crisis."
The comparison is accurate: an out-of-control financial system has once again brought the world economy to its knees with the connivance of politicians who lack the courage to stand up to the feral beast. Back in the 1930s, politicians flailed and disseminated with the same disdain for their democratic mandate as their successors today. Until, that is, a leader of unique courage and determination emerged: Franklin D. Roosevelt.
Strangely, Smith didn’t mention Roosevelt, nor did Davis see fit to ask him about the four-time President. Perhaps, like most of their audience, they know full well that it was Roosevelt’s New Deal that saved the world from the ravages of financial capitalism. But to acknowledge that universally held truth would open up a can of worms that everyone at the BBC would, in the current climate, prefer to keep shut.
In any case, Terry Smith doesn’t need any lessons from history: he knows there’s no alternative to austerity. He went on to say:
"Somebody probably needs to bring to the notice of the population, in the developed world, in the west, that for about the last twenty to thirty years, they’ve been living beyond their means. They’ve borrowed too much to sustain their standard of living, they haven’t saved enough, and that successive governments have made them wilder and wilder promises in terms of pension entitlements, retirements ages, health care and education, none of which are sustainable now. Public sector jobs have burgeoned in order to maintain employment and I’m afraid that particular modus operandi has got to come to an end because there isn’t any third party whose going to finance this."
Somebody probably needs to tell Terry Smith that people don’t want a third party to finance their reasonable aspirations. They want an economic system that allows them to do it for themselves. While he was building his business into one of the largest inter-dealer money brokers in the world, ordinary people were struggling to make the best of an unbelievably bad economic deal.
Why shouldn’t we all be able to look forward to adequate pensions, earlier retirement, and decent healthcare and education, as long as we’re prepared to work for it. Why are these aspirations no longer sustainable? Because, for the last three decades, the economy has been restructured to reward the interests of those who own capital and land, and against the interests of the majority of people who own neither.
Given the unwillingness of BBC journalists to challenge the establishment view, balance demands that people with a clear vested interested should at least be pitted against someone with an opposing viewpoint. Will Hutton would do. Or, if the BBC wants fully to insulate itself against claims of political bias, it might ask Ann Pettifor, or even pick up the phone to New York and get Joe Stiglitz or Paul Krugman (Nobel laureates both) on the line. All have a far stronger grasp of the realities of the financial system and its impact on the lives of ordinary people than those the BBC routinely puts up to feed us the establishment line.