Throughout the phone hacking scandal, I've noted the parallels with the financial crisis in 2008. The concentration of market power in fewer and fewer hands; the negligence of regulators; the complicity of politicians; and the ultimate crisis of a conglomerate that was “too big to fail” - for Lehman Brothers read Rupert Murdoch's News International. The banks cut corners, out-sourced risk, relied on dubious practices conducted by third parties in the so called “shadow banking system”. Sound familiar?
Rupert Murdoch's people had followed the same path – explosive growth, moral abdication, using shadowy underworld figures to hack phones and blag information from official sources. Murdoch's halting appearance before the Commons select committee this week even reminded me a little of the octogenarian former head of the US Federal Reserve, Alan Greenspan, when he faced Congress in 2009 and admitted that he had been humbled by a crisis he failed to foresee.
No, I'm not apologising for Rupert Murdoch here, nor suggesting that he is to be equated to a central banker. His defence that he knew nothing about how his own newspapers acquired their greatest scoops, echoed by his son James and former Sun and News of the World editor, Rebekah Brooks, is patently ridiculous. As ridiculous as bankers like Fred Goodwin of RBS not knowing about sub-prime mortgage bonds. But I make the comparison because a number of commentators have been saying that the hacking scandal is trivial compared with other grown up issues, like the debt crisis sweeping Europe right now. I don't think it is trivial because it is a product of the same complex of lax regulation, political hypocrisy and naked self-interest.
