What the hell is going on?! We now know that Taxpayers may become liable for £500bn worth of bad loans and investments made by Royal Bank of Scotland and Lloyds Banking Group.
And now, Sir Fred Goodwin, having run the bank appallingly, has paid himself off early at the age of 50 with a retirement package of £650,000 PER YEAR and is refusing to pay it back!
This was discussed on Today’s 08:10 interview, 27/02/09 (click to listen)
Yet more bailouts – and of course, now a precedent is set, all the pigs are squeeling at the trough – why should massive Indian conglomerates like Tata and oligarch-run Gaz get bailed out? If they shell out for an unprofitable business like LDV and it doesn’t work out, fuck ‘em. That’s business. I didn’t get my Northern Rock shares back.
But still people are defending Fred the Shred:
Last week a new form of pension indexing was proposed. Instead of linking pensions to either prices or earnings they would be linked to competence.
The pension agreed upon retirement would be subjected to periodic review of the important decisions made by the recipients during their professional career. If, in retrospect, the decisions didn’t look as wise as they appeared at the time, money could be removed from the pension pot.
No no no! You’re missing the point by a mile, Mr Finkelstein. This was a discretionary payment, and he was NOT contracted to ruin the bank. He broke his contract. Simple as that. Fortunately, the letters page comes to the rescue
Shall we remember some quotes?
Gordon Brown – “the end of boom and bust”
Mandelson a few years back – “We [Labour] are intensely relaxed about people getting filthy rich”
Now we’re hearing “We have to pay bankers bonuses to keep them or they’ll run off”. To which country and industry, FFS?! The USA? India? Japan? Kick some reality.
Same goes for the mindless and bizarre immigration policies of the last 10 years. Here’s part of an editorial from The Telegraph:
When the Office of National Statistics (ONS) published its latest figures on employment 10 days ago, it was attacked by Labour for being “unhelpful”. The problem was actually that the ONS was being truthful. Their figures revealed that while employment for British workers has fallen by 250,000 over the past 12 months, the number of foreign workers employed here has increased by 200,000. So much for Gordon Brown’s famous promise of “British jobs for British workers.”
Labour’s immigration policy has been predicated on the idea that Britain needed a larger workforce. With an ageing population, Britain, it was said, needed an influx of young immigrants to provide the services and the pensions for the increasing number of old and economically inactive Britons. The fallacy in that argument was exposed almost from the moment it was made: immigrants get old just like everyone else, which means that immigration can at most delay our facing up to the problem of an ageing labour force. It cannot provide a solution.
They do? No shit, Sherlock! You know that, I know that – but what were the government playing at? Even now they appearing to be shitting themselves over appearing protectionist. We NEED to be protectionist! Goodness me, we’re the only country in the world that isn’t. We seem quite happy to farm all our work off to India and import people, then Brown sits there scratching his head wondering why no-one told him so. But they did! “Sir James Crosby has dramatically quit as deputy chairman of the Financial Services Authority following revelations that he fired a whistleblower who warned of dangerous lending practices at HBOS.”
This was Gordon Brown’s advisor. Can the mire get any deeper? Can the snouts push any further into the trough?
Here’s an editorial from The Week, an excellent magazine that compresses the week’s news into one Friday delivery!
What to make of the 200 eminent American economists who last week wrote an open letter to Barack Obama telling him, “with all due respect”, that he was crazy to think Keynesian-style government spending would haul America out of recession. Well first off, even if they’re right, it’s probably wise for them to avoid signing open letters. Remember the 364 British economists – Mervyn King, now Bank of England governor, among them – who in March 1981 wrote one such letter to Mrs Thatcher, warning that her “monetarist” policies would “deepen the recession”? Almost as soon as the letter from these pro-Keynesians economists appeared, the long economic recovery of the 1980s began.
Not that that put any of them out. We were still “perfectly right to complain”, says Steve Nickell, one of the 364, who now sits on the Bank’s monetary policy committee: there would have been less unemployment in ensuing years, he insists, if policy hadn’t been so tight. But just as Thatcher’s apparent success does nothing to dislodge their Keynesian convictions, so the success of FDR’s New Deal – the great validating piece of evidence for Keynesian spending policies – does nothing to dent the monetarist confidence of the 200 Americans. It was World War II that brought the US out of the Depression, they say, not Roosevelt.
What’s depressing is not that the experts disagree; it’s that they have been having the same fundamental disagreement for 75 years. It’s as if the physicists were still deeply split over the existence of phlogiston. A dismal science, indeed.
You see, there ARE limits to growth. There must be, by definition. A fellow blogger and verbal sparring partner, Rob, has an entry in his blog which claims that growth does not equal resource use. But a lot of the arguments are based on the same “perfect world” argument as not having gun control or allowing anyone to take any drug they want. It just breaks the laws of physics, finance and they way people are.
Here are some other links and notes I’ve not had time to write about – follow them at your own interest:
BBC Recession tracker (some great charts and graphs on there) and jobs tracker is very interesting as is the “how quickly could the UK recover?” item and the “your questions answered” page
http://www.guardian.co.uk/business/2008/nov/17/recession-cbi
STOTTY: BACK TO THE 80s, DAVE? – Sunday Mirror article from 2006
