In 2008 bankers bet more than the entire value of the world economy for a whole year on complex financial derivatives that they didn't fully understand the value of. When these products rose in value they pocketed billions in bonus payments and made billions for shareholders. When they were discovered to be worth very little the bankers paid none of their bonuses back, the shareholders lost all their money and it was the governments that had to bail out the banks. Bankers had taken out so many sure fire bets on triple A bundles of mixed investments that when it was discovered that the investments were worth little more than tulip bulbs or shares in the South Sea they almost destroyed the capitalist system.
When a massive misjudgement on this scale is followed by a huge rescue from the IMF, the Bank of England and the Fed you might have thought that bankers would have at least acquired a degree of humility and adopted a low profile. But like Sepp Blatter they proved to be shameless. In the immediate aftermath of a massive programme of public financial rescue several bankers decided that the most appropriate way for them to behave was to fix the London Inter Bank Lending Rate known as LIBOR. Another group did the same thing with foreign exchange rates.
Most people don't understand the scale of what this kind of corruption involves so the FIFA scandal is a good benchmark comparison. The corrupt members of FIFA have probably taken £100 million. The corrupt LIBOR fixing is more likely to come in at £100 billion. In other words it is 1,000 times worse. It is the genuine world cup of corruption. It is Real Madrid versus Macclesfield Town.
FIFA is clearly a deeply flawed and dodgy organisation run by an astonishingly high proportion of people who will accept bribes to influence their decisions. Sepp Blatter got into power by doing something quite reasonable. He took some of the profits from big business soccer in very rich countries and gave it to football associations in some very poor countries. Their representatives have been able to spend a lot of money on grassroots football within their countries and have been sufficiently grateful to vote again and again for the dreadful Mr. Blatter. Clearly a large number of them have also developed a taste for staying in nice hotels and being paid life changing sums of money for a lowly official from a small nation in return for being daft enough to send the world cup to Quatar in the middle of a heat wave.
The banks are also deeply flawed organisations. They are driven by a business model that has lost all contact with the ordinary people that fund it. Old fashioned banking involves a rock solid business proposition to take the small savings of ordinary individuals and to invest them in secure assets like sensible mortgage loans or loans to well run small businesses. Rich London bankers gave up on that model a long time ago. They made much better money by taking the money you leave in the bank and using it as leverage for a series of complex bets on credit default swaps on bundles overnight foreign exchange rate futures counterbalanced by insurance policies on contrary movements in the market. In case you didn't entirely follow that sentence don't worry. Nor did the people who were buying the products. This isn't looking after people's money it is dangerous gambling. And when you get together with a few mates from Eton and Cambridge to fix the rates that determine the value of the gambles then you have moved way beyond the old fashioned world of "my word is my bond" into a brave new world of "who cares so long as we make money?"
And that is the point. In the real world cup of corruption no one did care so long as good money was being made. The bosses turned a blind eye. The shareholders turned a blind eye. Gordon Brown turned a blind eye and told us he had put an end to boom and bust. And when they took over the Conservatives also turned a blind eye. They asked the public sector to pick up the bill for all this corruption whilst doing nothing to fix the de-regulation of the banking system which their heroine Margaret Thatcher introduced. Not a single important structural change has taken place to the deeply flawed banking system that created austerity in the first place. There has been no separation of high street banks from the gambling merchant banking part of their business. There is no tax on financial transactions. There has been no clawback tax on bonuses made a taxpayers' expense. Most importantly of all nothing has been done to restructure our economy so that we have a vibrant manufacturing sector using the latest low energy technology instead of depending on oil sales and a hugely overbalanced emphasis on earnings from insecure financial services.
This is what is truly shocking about the FIFA scandal. We are being told that corruption on this scale must be punished and that those responsible for it must be driven out of office. I happen to think that this is entirely right even though it is curious that the USA courts take a sudden interest in events outside the US days before an important FIFA vote. But it is a judgement that only applies to the small scale FIFA villains. When it turns to the really large culprits in the banking sector we seem to want to forget that their extreme gambles have given us 7 years of economic pain and there is nothing to stop a repeat of the crash.
The really huge scandal has been played out without a single one of the real villains being held to account. In the 7 years since 2008 not a single banking boss has gone to jail for pushing the entire world economy to the edge of chaos. In the 7 years since 2008 not one banker has had their bonus payment taken back off them to help contribute the huge bills that taxpayers have paid to ensure banks don't collapse. In the 7 years since 2008 not one of the shareholders who lost all their pension money when their rock solid banking shares proved totally worthless has seen any of those at the top charged with corruption. And the Conservative government which utterly failed to act properly to prevent a repeat of the LIBOR scandal - the most enormous case of corruption that the world has ever seen - has just been re-elected on a ticket of being the party to trust with the economy.
If this is how to be trustworthy then perhaps I have misjudged Sepp Blatter. After all - he only let some relatively poor football officials enrich themselves at the expense of overpaid footballers and their fans. The Conservatives have let over paid bankers return to business as normal after enriching themselves 1,000 more significantly at the expense of nurses, teachers and taxpayers. That is what I call winning the World Cup for corruption. And it deserves punishment to match not a blind eye and a couple of low level scapegoats.