Saturday, November 29, 2008
I love Disney movies, and obviously so does John Ashcroft over at his blog, jka- on- economics UK. Today I will run out and purchase Marry Poppins - you know, support the economy - and watch the UK Banking crisis of 2008 on film. If you like Disney metaphors, this JKA-on-economics post is for you:It had never occurred to me the Wizard of Oz was an allegory for the US depression of the 1930’s. The yellow brick road a reference to the Gold Standard, the scarecrow representative of plight of the US farmers and more. Imagine how surprised then to realise Mary Poppins was a prophetic allegory of the UK Banking crisis of 2008.
It really should have been obvious. The script included a run on the bank, lots of kite flying, the bottomless carpet bag, the credit crunch explosion from the fireworks of Admiral Boom, a run on the bank. It really is all there.
The film begins with the young and pretty Mary Poppins perched on a cloud high above London in Spring 1910 observing events below. Mary Poppins is the Chancellor of the Exchequer. The action descends to earth where Bert, a cockney jack-of-all-trades is performing as a one-man band at the park entrance. After the end of the show, he strolls down the street and introduces the audience to the well-to-do, but troubled, Banks family. (Bert the cockney chimney sweep obviously the Treasury.)
The Banks family is the British banking system headed by the cold and aloof Mr. Banks, who has formed the idea that a British household ought to be run with the strict authority of a British bank. Mr Banks is the Bank of England or the Governor of the Bank of England himself. His wife is the loving and spirited but highly distracted suffragette Mrs. Banks, (the FSA).
As the script develops, the Banks' latest nanny quits out of exasperation after the Banks children, Jane and Michael run off in pursuit of a wayward kite. The Banks' latest nanny is the FSA supervisor, the kite flying an obvious reference to off balance sheet activity relating to highly leveraged transactions, sub prime debt, CDO, SIV’s, toxic debt etc.
The bank crisis develops as Michael one of the Banks' siblings refuses to deposit his tuppence with the Dawes bank, a misunderstanding develops and a run on the bank ensues. Obviously the Dawes bank is Northern rock, the tuppence, wholesale funding and Michael and Jane representative of the major clearers.
Pyrothecnics ensue as the fireworks from Admiral Boom explode above the roof tops of London. The reference to Boom and bust so obvious, the credit crunch impacts, I can’t believe I missed this.
The crisis abates as Michael puts his tuppence into Northern Rock, Mary Poppins uses her bottomless carpet bag to inject liquidity into the system and re-capitalise the Banks family.
In the film, the next morning, the winds have changed direction, and so Mary must depart. Mr. Banks, now loving and joyful, reappears with the now-mended kite and cheerfully summons his children. The greatly-relieved Mrs. Banks supplies a tail for the kite, using one of her suffragette ribbons. In the park with the children and other kite-flyers, Mr. Banks meets Mr. Dawes Jr.. Mary Poppins her work now done, takes to the air with a fond farewell from Bert.
So there you have it. It’s all going to be OK. RW: I love Disney movies and this metaphor could certainly be applied to the U.S. banking crisis as well. What about Goonies - can anything be said about that? Probably a stretch.