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Wednesday, 30 December 2009

They still have not 'got it'!

Politicians and the press are becoming tired of repeating the mantra that the bankers have not yet 'got it'; but the point is that the bankers have got the lot!
They have mostly kept their jobs, they had banked their earlier bonuses before the crunch struck the system; and now they can threaten to walk away from London if they don't have their way into the future.

The politicians have not begun to 'get it'.
Their analysis of the events of the past couple of years is superficial: even the better onces, notably Vince Cable, are much stronger on description than on dissecting the causes of the crisis and making policy for the future on that basis.

The inter-party mudslinging is approaching election pitch, and will increasingly alienate voters.

The announcement by NHS auditors that 'international accounting standards' REQUIRED them to aggregate charitable giving to NHS-related causes within NHS accounts was rightly seen as an attempt by government to enable them to pretend that NHS funding by them was much greater than it is.
International accounting standards were a major factor in the exaggeration of the crisis in banking.
International accounting standards are an ego-trip for would-be masters of the universe; who depend on the same, nonsensical Economics that sanctioned the excesses of 'rational markets'.
This may seem a trivial matter, but - like the recent resurgence of the spurious authority of the rating agencies - it shows that the Economics establishment that bears huge responsibility for the global crisis is still wreaking havoc. Keynes wrote that most politicians are in thrall to some dead economist: the tragedy of our day is that the whole system is in thrall to living economists!

Friday, 11 December 2009

Brown & Balls Drop Darling in the Doo-Doo

Alistair Darling has 'had a good recession', in the way that some men have been said to have 'had a good war'.
 He was ridiculed for his prescience in recognising that the then-impending crisis of 2007-9 would be the most serious economic issue for sixty years. He kept his nerve through the collapse of Bear Stearns and Lemans [refusing to take Lemans' obligations onto his balance sheet, which would have been the case if Barclays had been allowed to buy the whole rotten empire]. He calmly took over Northern Rock and Bradford and Bingley, and bailed out the other banks that were essential to the UK economy.
He increased government spending and borrowing to keep trade and industry alive.
Then came his pre-budget report of December 9, 2009. It was crass electioneering, designed in painfully glaring detail to try to get the Labour vote out in the coming contest with the slightly-revived Tories.
National concerns, reducing the deficit and rebuilding international confidence in the UK, were set to the side; to be tackled by whoever will be the government after the election.
It is now revealed that Darling had intended to put the national interest first in his planning, but was overruled by his bully-boss and his sidekick.  What a pity: for Darling's reputation, and for the future of the country.

Thursday, 10 December 2009

Brown backs Sarkozy on Bankers

On the morning after the bugetary non-event in London, Gordon Brown has grabbed significant publicity with a joint 'editorial' in Murdoch's WALL STREET JOURNAL,in which he and the French President rail about the unacceptable face of international banking. They note that the bankers have been feathering their own nests in massive speculation that does nothing for the 'real economy'.
Brown spent his decade at the Treasury praising the bankers for precisely what he now condemns.
His entire economic strategy - if it may be described by such an elevated term - was based on taxing the banks at a rate that they found tolerable, encouraging mass consumption through borrowing facilitated by the banks, and allowing industry to fade away under the burdens of heavy taxation and increasingly intrusive regulation.
Now he is imposing a one-off tax on the banks, which they can easily afford; while they pay accountants and lawyers to find ways of substituting other means of remuneration for the bonuses that have been banned. The medium to long term increases in taxation that are needed,  because of the bail-out of those very same bankers, will fall on the broad mass of the population: starting with an increase in the second income tax [known as national insurance]. There's nothing else to be taxed!

Monday, 7 December 2009

The really significant [very bad] news of the week

This week, Her Majesty's Government in the United Kingdom will demonstrate that it has learned nothing of real significance in all the thirteen wasted years since they came to power.
The Thatcherite idiocy of selling-off what used to be the world's greatest concentration of high-grade intellectual property will continue, with the invitation to bid for the Metereorological Office, the Ordnance Survey and other scientific foci in which Britain has been a global leader since the respective sciences were first delineated.
Although these agencies have been denied much of the investment that could have improved them even further over the past three decades, they remain innovative and respected by their few peers. As has happened with other already-sold-off intellectual property, the key assets will quickly pass into alien ownership, so that the earnings from the existing investment - together with all the new output that will come from future investment - will pass away from the United Kingdom. The profits that should come to British taxpayers will go to the new shareholders; while the price for which the agencies are sold will simply be swallowed up in the black hole of the government's deficit.