Newstead setback reminds us where power now resides

Changes began with the Theatre Boycott of 1959, the formation of the Progessive Labour Party in 1963, changes in the voting system and a Constitutional Order in 1968, the riots and disturbances of 1977, the decline of the tourism industry and the shift to international business (1981-2001), and the coming to power of the PLP in 1998.

By 1993, to astute observers, it was clear that the old oligarchy’s economic power had clearly begun to recede. In 1998, their political power was snatched from them. In 2004, with the sale of the Bank of Bermuda, a big chunk of their economic power had gone. In 2010, with the rescue of BNTB, the last bit of the economic power once held by the ‘ol Forty’ had gone — completely.

All good news — if you’re a hot eyed radical.

But Newton’s second Law of Physics applies equally to the human and political and economic world. “To every action there is an equal and opposite reaction.”

Back in the day, that ‘ol Forty’ — crusty racists that they were — were still Bermudian. If Bermuda sank, so did they, If Bermuda rose, so did they. They were in the same boat as all the rest of us black, white, Portagee, and St. David’s Island Bermudians. If we sank — they sank. And they knew that.

Bermuda in 2011 is a  different place. Social power? Probably shared between black and white Bermudians. Certainly, no one group holds social sway as was the case in 1960.

Political power? It’s exceedingly difficult to find even one powerful white Bermudian who has or can be said to have anything like the political power that Sir Henry Tucker or Sir John Cox had, back in the day. (Try naming one).

Economic power? Here Isaac Newton’s Second Law kicks in. In 2011, neither black nor white Bermudians have the kind of economic power that the ‘ol Forty’ had. Black politicians, severely over-borrowed, don’t have that economic power. Of the total of seven white politicians — less than fifteen per cent of the entire House/Senate group — six are in the wilderness of the fractured Opposition or sit in Senate.

So who now holds economic power?

When BNTB put the Newstead/Belmont operation into receivership, BNTB was demonstrating the New Economic Order. When HSBC ran the book for the Minister of Finance’s $500 million Bond Issue, HSBC was demonstrating the New Economic Order. When HSBC, and HSBC alone, was extending $100 million worth of Overdraft Facility to the Government of the day between November 1, 2009 and March 31, 2010, HSBC was demonstrating the New Economic Order.

The policy and practical economic decisions that are taken about Bermuda are no longer taken by Bermudians — as it was ‘back in the day’. Since the takeover of BNTB by the Canadian investors, all the major decisions are in the hands of non-Bermudians — not like it was ‘back in the day’.

‘Back in the day’, and racist as they were, they still held hands with blacks, whites, Portagees, and St. David’s Islanders. They might also — at the same time — extract political dues; but they still held hands and kept some bad loans and non-performing mortgages and too large overdrafts going. They did — but at a price.

Since the BNTB buyout, all changed. No more hand-holding. Now loans, mortgages, overdrafts are handled according to the rules set by the Boards of Directors who, for HSBC sit in London; and for BNTB, sit in Canada. These Boards set rules that are meant to be adhered to globally as befits their global operations. Yes, minor tweaks for local situations, but largely all loans and advances are treated the same — globally.

So if Bermuda sinks, the boards ‘write-off’ items and ‘adjust’ their balance sheets and carry on business as usual. If a Bermuda operation — Newstead/Belmont, Pink Beach, (who is next?) — gets in trouble, it’s simply a case of looking at the book of rules and applying the formula. ‘Hand-holding’ is not in the rule books of the people who run Bermuda’s New Economic Order.

Newstead? New Rules. But we saw that when it began with the 2005 demise of Trimingham’s, didn’t we? At least I did.