Politics

[ewerk 26606]

Shouldn't the bankers that got us into this mess be forced to do more to bail us out. It seems more than a little unfair that public sector workers, mostly on modest wages, are the ones set to feel the pain. What have they done to deserve it?

 

How do you suggest that the bankers pay?

[Dr Gloom 19883]

I don't get osborne's obsession with cutting the deficit so quickly. It seems his plan of a couple of years of pain followed by the Tories romping the next election on a wave of optimism was misguided. We're looking at years of this shit now. And any sane economist will tell you that you don't get growth after years of austerity.

[Dr Gloom 19883]

Shouldn't the bankers that got us into this mess be forced to do more to bail us out. It seems more than a little unfair that public sector workers, mostly on modest wages, are the ones set to feel the pain. What have they done to deserve it?

 

How do you suggest that the bankers pay?

 

Higher taxes on bonuses would be a start

[Guest alex]

I don't get osborne's obsession with cutting the deficit so quickly. It seems his plan of a couple of years of pain followed by the Tories romping the next election on a wave of optimism was misguided. We're looking at years of this shit now. And any sane economist will tell you that you don't get growth after years of austerity.

It's partly through necessity but mainly ideological. I also think they've realised that Labour are a bit of a joke with the Miliband at the helm and that the Lib-Dem vote will be decimated at the next election, i.e. unless things get a lot worse, they'll win a majority next time round. Hope I'm wrong like.

[ewerk 26606]

Shouldn't the bankers that got us into this mess be forced to do more to bail us out. It seems more than a little unfair that public sector workers, mostly on modest wages, are the ones set to feel the pain. What have they done to deserve it?

 

How do you suggest that the bankers pay?

 

Higher taxes on bonuses would be a start

 

In the long run is that likely to help the UK economy though?

[Dr Gloom 19883]

If it forces investment banks to relocate to Asia probably not but in the short term they should be feeling the pain more than public sector workers on the bread line who had fuck all to do with the crisis

[ewerk 26606]

Are we talking about all banks here or just the ones that needed a bailout?

[Matt 0]

If it forces investment banks to relocate to Asia probably not but in the short term they should be feeling the pain more than public sector workers on the bread line who had fuck all to do with the crisis

 

Investment banking jobs are being culled left right and centre, so I'd say there is rather a lot of pain being dished out. It's also very hard to tax one group of people more than others- how do you define a bank? The man in the street seems to use the term to use a plethora of businesses, only some of which are actual banks.

 

The Bank Levy, which was supposedly a tax on risky borrowing, was yesterday outed as a revenue generator first and foremost to the tune of £2.6bn a year. This is, in reality, the tax you talk about- but in a less legally contentious way.

[Dr Gloom 19883]

no, investment banks full stop. it's not just the ones that need to be bailed out that caused this mess.

[Matt 0]

no, investment banks full stop. it's not just the ones that need to be bailed out that caused this mess.

 

OK, so now we just need to determine what an investment bank is.

 

Do you think investment banks alone caused this unholy mess?

[Dr Gloom 19883]

no, investment banks full stop. it's not just the ones that need to be bailed out that caused this mess.

 

OK, so now we just need to determine what an investment bank is.

 

Do you think investment banks alone caused this unholy mess?

 

no, arguably governments and regulators played their part too.

 

it seems entirely unfair to me that public sector workers are feeling the pinch when they had fuck all to do with causing this crisis. meanwhile the city bonus pool is looking pretty good again this year.

 

you can make the argument that taxing and regulating the city further will damage the uk's competitiveness. i don't buy it. london will always be a global financial hub. the city played a big part in getting us into this mess. they should play a big part in getting us out of it.

[ewerk 26606]

you can make the argument that taxing and regulating the city further will damage the uk's competitiveness. i don't buy it. london will always be a global financial hub. the city played a big part in getting us into this mess. they should play a big part in getting us out of it.

 

It's a fine balancing act. HSBC are headquartered in London but review that situation every few years. They're obviously a major international player but they pay very little tax in the UK. But add to that the jobs they create, the employees who pay income tax, the companies that are based in London because of HSBC etc then is it worth raising the level of tax that the bank pays and having them leave the country?

[Dr Gloom 19883]

you can make the argument that taxing and regulating the city further will damage the uk's competitiveness. i don't buy it. london will always be a global financial hub. the city played a big part in getting us into this mess. they should play a big part in getting us out of it.

 

It's a fine balancing act. HSBC are headquartered in London but review that situation every few years. They're obviously a major international player but they pay very little tax in the UK. But add to that the jobs they create, the employees who pay income tax, the companies that are based in London because of HSBC etc then is it worth raising the level of tax that the bank pays and having them leave the country?

 

the same case is made about stanard chartered. i just think london still has so much to offer - its employment laws, its geographical position and timezone, the fact that it's one of the world's leading cultural centres and most desirable places to live - mean it won't lose its status as a global financial hub.

[ewerk 26606]

Shareholders don't give a fuck about how desirable a place is to live. Part of it is a race to the bottom, less regulation, less tax etc. Though obviously there are other factors involved, like the ones you've stated.

[Dr Gloom 19883]

Shareholders don't give a fuck about how desirable a place is to live. Part of it is a race to the bottom, less regulation, less tax etc. Though obviously there are other factors involved, like the ones you've stated.

 

i think having a hq in london is a status thing many big banks won't give up. regulation here is till pretty light touch and for all the rumours about stanchart and hsbc leaving, they're still here. i'd be very surprised if we were to see an exodus of banks out of the city to asia anytime soon.

[Matt 0]

no, arguably governments and regulators played their part too.

 

it seems entirely unfair to me that public sector workers are feeling the pinch when they had fuck all to do with causing this crisis. meanwhile the city bonus pool is looking pretty good again this year.

 

On what basis is it 'looking good'?

 

The cost of providing public pensions has been a looming headache for years. HMG doesn't fund its pensions liabilities- it just pays as it goes.

 

If public pensions were being axed in 2006 when banks were throwing off massive profits and Gordon Brown was beaming about the UK's system of financial regulation as he hoovered up the tax receipts- who would have been asked to take the hit then?

 

Peversely, it plays into the hands of the Government to suggest that these changes are vital because of where we are now- this is not true- these changes are being put in place in order to shape the future and force a smaller state more in line with right-wing ideology. Many of these pensions liabilities will not fall due for decades and are likely to be subject to much further tinkering before today's younger workers recieve a penny. To suggest this is a necessary course of action to save our economy is false and is used as a ruse to trick middle Englanders who are attracted by the idea that they can 'do their bit' by telling other people to tighten their belts.

 

The whole issue boils down very simply- if the current tax regime is insufficient to cover future pensions offered to public sector workers, then either those workers will have to suffer, or others will have to contribute more. And taxing a selection of millionaires will do very little- it will be ordinary priavte sector workers who will make up the difference. So, do we or don't we pay?

[Happy Face 29]

The whole issue boils down very simply- if the current tax regime is insufficient to cover future pensions offered to public sector workers, then either those workers will have to suffer, or others will have to contribute more. And taxing a selection of millionaires will do very little- it will be ordinary priavte sector workers who will make up the difference. So, do we or don't we pay?

 

Why not do both, let those millionaire's defray some of the cost of saving the banking system as we know it?

 

 

Already at pre WW2 level of income inequality, and heading quickly towards pre WW1 and pre social security. Undone in 30 years since thatcher what we'd achieved in the 70 years previous.

 

Shameful.

[Dr Gloom 19883]

no, arguably governments and regulators played their part too.

 

it seems entirely unfair to me that public sector workers are feeling the pinch when they had fuck all to do with causing this crisis. meanwhile the city bonus pool is looking pretty good again this year.

 

On what basis is it 'looking good'?

 

The cost of providing public pensions has been a looming headache for years. HMG doesn't fund its pensions liabilities- it just pays as it goes.

 

If public pensions were being axed in 2006 when banks were throwing off massive profits and Gordon Brown was beaming about the UK's system of financial regulation as he hoovered up the tax receipts- who would have been asked to take the hit then?

 

Peversely, it plays into the hands of the Government to suggest that these changes are vital because of where we are now- this is not true- these changes are being put in place in order to shape the future and force a smaller state more in line with right-wing ideology. Many of these pensions liabilities will not fall due for decades and are likely to be subject to much further tinkering before today's younger workers recieve a penny. To suggest this is a necessary course of action to save our economy is false and is used as a ruse to trick middle Englanders who are attracted by the idea that they can 'do their bit' by telling other people to tighten their belts.

 

The whole issue boils down very simply- if the current tax regime is insufficient to cover future pensions offered to public sector workers, then either those workers will have to suffer, or others will have to contribute more. And taxing a selection of millionaires will do very little- it will be ordinary priavte sector workers who will make up the difference. So, do we or don't we pay?

 

i have a lot of friends that work in the city that have assured me their bonuses this year are on track. my wife is investment management and despite taking 6 monthss maternity leave this year, her manager told her recently her bonus is looking good too.

 

it seems to me that the financial services sector is getting away quite lightly in the circumstances.

 

reform of public sector pensions was inevitable i agree but it's striking that the poor are being hit hardest here when they had fuck all to do with the banking crisis that led to the debt crisis. i think the con-dems want to take on the unions just as thatcher did in the 80s.

 

michael gove described the union leaders as "militant", francis maude is saying the strike is "inappropriate" and the biggest sell out of the lot danny alexander threatened to withdraw the offer on the table if the unions didn't accept it then continued with the n30 strike.

 

i also have a lot of sympathy for teachers that will now be expected to disclipline unruly teenages at the age of 68.

 

the upshot is, these cuts aren't working. a long and deep recession, possibly a second great depression, is looming. meanwhile, inequality is growing. that doesn't seem right or fair to me but then what do you expect when the country is being run by characters from a richard curtis film?

[Dr Gloom 19883]

from martin wolf in the FT:

 

The UK now faces a ‘lost decade’

 

It is the foreigners wot done it. That was George Osborne’s excuse on Tuesday for how far the economy and the public finances are now off track. This was, of course, also the excuse used by Gordon Brown, Labour chancellor of the exchequer and prime minister, for the disaster that befell the economy in 2007 and 2008. Mr Osborne scorned Mr Brown’s excuse. Should we now scorn the chancellor’s?

 

Like Mr Brown, Mr Osborne is right to point to global events, particularly the rise in commodity prices and the crisis in the eurozone. Yet he is wrong to ignore his errors. He is trapped by his own rigid fiscal framework. He might indeed shatter confidence if he were more flexible. But that is partly his own fault.

 

The big action is, in any case, not with the chancellor, but with the Office for Budget Responsibility. In its latest Economic and Fiscal Outlook, it has done four important things. First, it has concluded that the shrunken economic growth this year, down from the 1.7 per cent forecast in March to today’s 0.9 per cent, is primarily because of higher-than-expected inflation. Second, it has downgraded its forecasts sharply, with growth forecast at 0.7 per cent in 2012, down from 2.5 per cent in March, and 2.1 per cent in 2013, down from 2.9 per cent. Gross domestic product is now forecast to be 3.3 per cent lower in 2013 than it was last March. Third, the growth shortfall is forever, since the economy’s potential output in 2016 is estimated to be 3.5 per cent lower than in March – and 13 per cent lower than was forecast before the crisis. Finally, not just actual, but also structural, deficits and debt are forecast to be worse. The UK is set for a “lost decade”.

 

The outcome for public sector net borrowing is forecast to be 9.3 per cent of GDP this financial year, slightly better than the March forecast of 9.9 per cent. Thereafter, it is slippage all the way compared with the March forecasts: by 0.5 per cent of GDP in 2011-12, 1.4 per cent in 2012-13, 1.9 per cent in 2013-14, 2.0 per cent in 2014-15 and 1.4 per cent in 2015-16 – a total of 7.2 per cent of GDP. Extra borrowing will be £111bn ($173.2bn) over these five years. Given downwards revisions to potential output, the slippage on cyclically-adjusted borrowing is worse – a cumulative total of 8.1 per cent of GDP over the five year period. Inevitably, the forecasts for public sector net debt have also worsened, with a peak of 78 per cent of GDP in 2014-15, against the March forecast of 70.9 per cent in 2013-14.

 

Perhaps the most important lesson is that we have barely a clue about what is going to happen to the economy. Similarly, while the chancellor thinks he knows how financial markets would respond to the slightest change in his plans, he does not. Indeed, he is now offering far more red ink, no further fiscal tightening this parliament and a prolongation of the spending squeeze until the next one, as in the once despised plan of Alistair Darling, his predecessor. Nonetheless, the markets are not (yet) blinking. This suggests that investors are far more sensible than the government supposes: markets recognise that unexpected events do change outcomes, but that the UK also enjoys a freedom of manoeuvre unavailable to the eurozone.

 

My view remains that it is indeed prudent to have a plan to bring current spending back to a sustainable level, in the long run, relative to GDP. But there was never a good reason to rule out measures to raise borrowing to finance extra investment or lower taxes, if the economy underperformed.

 

Instead of such action, we get the gimmicks characteristic of all chancellors under stress. I am strongly in favour of additional spending on infrastructure. But it must be evident, even to the Treasury, that if the government borrows from pension funds to fund infrastructure, the impact on national balance sheets will be exactly the same as if the latter fund the same infrastructure directly, as is now proposed – except that the infrastructure will cost more. This is another in a line of wheezes to get round self-inflicted constraints, themselves partly reflecting ludicrous public sector accounting practices.

 

What can one say of some of the other proposals? Raising the state retirement age to 67 is probably justified. But the measure is also regressive, since the poor live shorter lives. That is consistent with the Treasury’s own charts, which show that the bottom decile of the income distribution will suffer the second largest proportional losses from all the tax, tax credit and benefit measures.

 

“Credit easing” seems an important idea. But the underlying aim seems to be just to lower the interest cost. That is likely to be less of a constraint than outright credit rationing. A better idea would be for the government to assume the tail risk, so acting as an insurer.

 

It is disappointing that the country cannot liberate itself from the desire to subsidise borrowing to finance house purchases? Why should the government subsidise people to speculate on property prices? Again, why should gifts be made to people fortunate enough to live in social accommodation? This is not really a “right to buy”. It is a right to loot.

 

In sum, we are seeing almost Gordon Brown’s levels of “initiative-itis”. Yet the ideas also seem to be fairly small beer.

 

The big facts are that the UK is set for a lost decade and a longer period of stringency than expected. The government’s position is that there is no alternative. That has now become a self-fulfilling prophecy. So blame foreigners: that always works.

 

http://www.ft.com/cms/s/0/f1b5d790-1a84-11e1-ae14-00144feabdc0.html

[Meenzer 14112]

I feel genuinely sorry for those who have been and continue to be struggling to make ends meet, but it's become far too easy to place all the blame for the current situation on Those Evil Bankers and pretend that a good proportion of the population didn't love it when their house prices were inflating and they could get cheap credit for this, that and the other. Of course the economy is in real trouble, of course we have some tough times ahead, and of course the government could be handling it better, but those who were quick to benefit when (they were being told that) times were good shouldn't be moaning now that (they're being told that) times are bad.

[Happy Face 29]

I feel genuinely sorry for those who have been and continue to be struggling to make ends meet, but it's become far too easy to place all the blame for the current situation on Those Evil Bankers and pretend that a good proportion of the population didn't love it when their house prices were inflating and they could get cheap credit for this, that and the other. Of course the economy is in real trouble, of course we have some tough times ahead, and of course the government could be handling it better, but those who were quick to benefit when (they were being told that) times were good shouldn't be moaning now that (they're being told that) times are bad.

 

That's like blaming an obese kid for being fat. If sweets and Maccy D's are available, they'll gorge themselves.

 

It's not like in the 50's all this credit was available and people had a more level headed view about taking it on. Regulations that served a purpose were relaxed to the point of non-existence.

[Meenzer 14112]

I feel genuinely sorry for those who have been and continue to be struggling to make ends meet, but it's become far too easy to place all the blame for the current situation on Those Evil Bankers and pretend that a good proportion of the population didn't love it when their house prices were inflating and they could get cheap credit for this, that and the other. Of course the economy is in real trouble, of course we have some tough times ahead, and of course the government could be handling it better, but those who were quick to benefit when (they were being told that) times were good shouldn't be moaning now that (they're being told that) times are bad.

 

That's like blaming an obese kid for being fat. If sweets and Maccy D's are available, they'll gorge themselves.

 

They'll gorge themselves when times are good, but what will they do when sweets and Maccy D's suddenly become less affordable?

[Park Life 70]

People have been made pudgy and weak (inc me) by design.

[Happy Face 29]

I feel genuinely sorry for those who have been and continue to be struggling to make ends meet, but it's become far too easy to place all the blame for the current situation on Those Evil Bankers and pretend that a good proportion of the population didn't love it when their house prices were inflating and they could get cheap credit for this, that and the other. Of course the economy is in real trouble, of course we have some tough times ahead, and of course the government could be handling it better, but those who were quick to benefit when (they were being told that) times were good shouldn't be moaning now that (they're being told that) times are bad.

 

That's like blaming an obese kid for being fat. If sweets and Maccy D's are available, they'll gorge themselves.

 

They'll gorge themselves when times are good, but what will they do when sweets and Maccy D's suddenly become less affordable?

 

Starvebalate.

 

And it'll be their parents fault they were both fat and starving.

[Guest alex]

I feel genuinely sorry for those who have been and continue to be struggling to make ends meet, but it's become far too easy to place all the blame for the current situation on Those Evil Bankers and pretend that a good proportion of the population didn't love it when their house prices were inflating and they could get cheap credit for this, that and the other. Of course the economy is in real trouble, of course we have some tough times ahead, and of course the government could be handling it better, but those who were quick to benefit when (they were being told that) times were good shouldn't be moaning now that (they're being told that) times are bad.

Aye, same as it ever was really. A bit like moaning about the state of any number of public services whilst being happy to elect governments that got elected on a low taxes ticket.