HSBC’s Version of the Brave New World
Around the time of the second millennium, a whole slew prophets appeared to warn of grave dangers threatening the people.
They turned up in Congress, in academia, in the media and in the boardrooms of America, all touting the same myths of corporate efficiency, corporate responsibility, corporate benevolence as they argue for privatization, deregulation, and tax cuts. They have identified the great evil threat facing civilization as Big Government.
We all know the speeches: let business do it. Business does it so much better, cheaper, faster.
In the course of my life, as a responsible citizen, as an employee of various corporations and institutions and as a customer of many, I’ve never seen it.
Big business is rigid, bureaucratic and bloated. This myth of efficiency is a scam, a three-card Monte hustle. Businesses waste money right and left and if they get in squeeze they dump employees by thousands and tens of thousands, these job creators, and they raise prices on the rest of us.
When they screw up, they give each other raises, and lie to the unwashed public, and even to each other as they unload worthless securities.
There’s not a business executive alive who would deign throw expense account money on such a meager lunch as a government per diem allowance permits. And free lunch is just one of the many invisible perks these people find necessary.
Yet, so many people, citizens who can still vote, seem anxious to decimate the government and discard the things the government does, like police, schools, highways, and rely on businessmen.
I have a personal anecdote to offer you, that I think is instructive. My
latest run-in with a giant corporation is not in the least significant to company, or even to my own well-being beyond some aggravation and inconvenience. But there is a literary lesson in that illuminates the way businesses are likely to take care of society should we let them.
It is especially galling because my corporate tormentor is a bank, a giant, multinational bank, one of the biggest in the world that, like its peers, nearly sank itself making bad loans, and in turn nearly sank the entire global economy.
I’m talking about HSBC, the big British bank that rapidly expanded its retail operations in the Americas, and then proceeded to lose $2.6 billion on $17 billion in assets here. The bank had bigger problems in Europe and is struggling to clean up its act. Keep in mind that the two top guys at the bank, Donald Flint and Stuart Gulliver, together still earn around $10 million a year, and both of them, especially Flint, run around arguing strenuously to prevent any limits on executive pay, or any other regulation of banks.
Meanwhile, to solve the bank’s weaknesses, they started out by announcing plans to dump 30,000 employees, and I wonder why such a lean, and mean job creator had all those excess employees in the first place. Then, they began huge pullbacks in business, selling off various pieces of the bank in the U.S.
This is where I come in. In early April, I received a certified letter (via the U.S Postal Service, rather than the lean and mean privately owned Fedex or UPS) informing me, “a valued customer”, that all of my accounts at HSBC were being closed. No reason was given, but they pointed me to some fine print that said they had the right to do this at any time. I had until June 1 to clear up all my business.
HSBC was my local bank. Indeed, it advertised itself as the world’s local bank for many years. I had been a customer for around 20 years, as they had a convenient office and numerous ATMs around the city. Over time, I opened several accounts, even my mortgage plus some credit cards, at HSBC. A small, but trouble-free customer who regularly cycled a couple thousand dollars a month through the bank. All of these accounts were to be summarily closed.
I tried to telephone to find out what the problem was. Actually, I first thought that they had made a mistake. They gave me a number to call, but it wasn’t easy to actually reach a human being. I ended up talking to three people over the next few days, and not one of the people could explain what happened, but all of them were clear, the bank’s action was irrevocable.
In the long run, I was a minuscule customer of this giant bank, but untangling myself from things like automatic credit card charges and direct deposits was a pain. I’m not claiming this was a big deal. What got me was way this bank, this big institution that is so much more efficient and responsive than government treated the whole affair. For arrogance and arbitrariness, no motor vehicle department ever came close.
I was always addressed as a “valued customer” and they were always “sorry for any inconvenience”, but their decision was the law. My role was just like the absurd hero in Kafka’s The Trial. People burst into his room one day and “arrest” him and inform him he will have a “trial”, but he cannot find out who is arresting him nor what the charges are nor what court will conduct this trial.
This, I realized, is exactly what the brave new world of privatization and deregulation brings us. Capricious, irresponsible is the way you have to describe big business. And the rest of us, human beings, pay a premium for each and every one of their mistakes.
Health insurers operate that way. They flee states at a moments notice and send their policyholders a lawyerly letter at the end of the term, informing them that they are sorry, but their former customers are now free to choose from among the other one or two companies that do business in their state.
Imagine if all public schools were in the hands of a lean and mean company like HSBC. They overextend their reach, and they’re sorry, dear parents, but no more school for your children. It’s not profitable; they have losses to make up. Imagine if social security were in the hands of some other lean and mean company like HSBC. Dear valued customer, we’re sorry but the market turned against us and we have to cut your pensions. It’s in the fine print. Another lean and mean company that lobbies hard and administers the roads in your state, but it encounters some unforeseen expenses. They’re sorry, too, but they have to impose tolls in order to earn a profit. That is the brave new world we will have if you buy what business is selling in the elections.
The moral of this story, dear valued citizen, is to watch out for candidates who know how to create jobs and run companies.
The epilogue to my story is interesting. Late in the game, after I started opening accounts and shifting all the automated banking stuff, I marched into my local HSBC branch with my wife, who happens to have a fancier kind of account — one you need a little more money to maintain — at HSBC. It happens that HSBC’s policy is to be very solicitous of these “premier” customers, so she was able to get to talk to a bank employee in person.
We outflanked them. She introduced me and I told my story and asked, why? The bank employee we talked to never exactly explained what happened, but suggested that it was some kind of mistake. She was very nice, and had several discussion with other workers, disappeared into offices and finally came out and said, “I think you will be all right.” So money does talk. How much money? Just enough to qualify for the super duper account. That’s all.
In the end, the bank closed one account but inexplicably left the others alone. When June 1 came, I closed what was left, and my wife did the same.
But there’s scant satisfaction because that’s all HSBC wanted in the first place. I read up on the bank. It’s withdrawing throughout Europe and the Americas and will refocus on Asia, where it thinks the money is. It’s actually a return to their roots, as the acronym stands for the Hongkong Shanghai Banking Corporation. I don’t have to wish them ill. I know they will do it all by themselves.