Rule of mob

 Civil Liberties, economics  No Responses »
Jan 312012
 

As is ever my want I’m a little late to press with my ponderings on the matter of Stephen Hesters bonus, but this does mean I can mainly point you at articles written by better authors than I. Which is a good thing for everyone I suspect.

As I may have commented once or twice in the past, I’m rather keen on the rule of law and of contracts being honoured, and as far as I can tell Mr Hesters bonus was a matter of contract. Mr Hester didn’t cause RBS to need a massive bailout he was brought in after the fact by the last Government to sort out the mess. This is by any stretch of the imagination likely to be a tough task, so to get him to leave the rather good job he was in the offered remuneration had to be something to make him want to take the job. This something including bonuses would have been agreed when he signed up for the job, and now due to a baying mob he’s in the position of being told:
“You’re doing a great job, but people who don’t know what you do don’t think you deserve your bonus and will make your life miserable if you take the money we al agreed you should have if you do a good job, which by the way you are”
Not exactly likely to motivate him is it? Can’t help but suspect if say this had been a tube driver being told he couldn’t have his bonus ‘cos the public didn’t like that there might be a strike in the offing and trade tribunals happening, or you know if the Government decided to change public sector workers pensions people might say that was unfair. As he was head hunted from a rather nice job, on the ground of the total package including bonuses which he’s now not taking, it makes you wonder if he wouldn’t just say sod it and look for another job.

As someone who gets a performance related bonus, I rather worry when I see other people in the private sector being hounded like this over private contractual matters. After all there’s nothing but publicity and arbitrary levels of greed separating me from Mr Hester. So if people feel that despite his contract and him reportedly doing a good job it’s fair to call to “occupy this guys house till he donates his bonus to charity”, why not occupy my house? Why is it that it’s terrible for a banker to potentially earn this much but it’s fine for footballers? They’re both employed by private companies, both industries receive Government funding, so surely there should be calls for footballers to give up their bonuses as well? Except of course Footballers generally get cash bonuses where as Mr Hester was being awarded share options so to get any benefit from them he has to stay with the company, and in fact the value of those options are dependent on his making RBS a success. Which is very much in the Government and tax payers interest as if it’s not a success we lose all that money we used to bail them out with.

Ultimately I don’t know if Mr Hester deserves his share options or his wage, I didn’t interview him. Those that did interview him and took the decision to employ him obviously thought they were getting a reasonable deal though, and two Governments seem to have agreed. Yet because a small but vocal part of the population who also didn’t interview him or work with him, think the value of his share options (which he might or might not have ever got) was too high he was forced to give up his fair wage. This hardly seems likely to motivate anyone to take the job, or to take any high profile job in the UK, too big a bonus the mob will take it from you, too much profit the mob will take it from you, doing just a bit too well generally and the mob will pull you down – and then we wonder why our industry isn’t doing so well.

To end on a few slightly tangential points, in their triumphant e-mail message at having “pestered” Mr Hester out of his legal wage 38Degrees said:
John: “A small enough victory but I hope a significant one. On to chasing tax dodgers and saving our NHS :)”
So I’m guessing they’ll be fully behind whistle blowing on people that pay cash, and are every happy to have lost the half million tax Mr Hester might have paid on that bonus. Once the 1% are dealt with, will they then work their way down to those in the top 25%?

 Posted by Giolla at 19:00  Tagged with: , , ,

A green revolution?

 activism, Drinking, economics, politics, taxes  No Responses »
Jan 222012
 

Revolution in suburbia A recent post by Fausty reminded me that I’d written this a while back, so… enjoy.

As many people have observed one of the best ways for an individual to very quietly combat the creeping power of the state is to “starve the beast”, don’t give it any money you don’t have to. Now this doesn’t need to mean doing anything illegal, in fact you could even say you’re just following their advice. Follow the example of those early radicals pictured at the top of this article and grow your own, and if you can’t do that just spend less ask yourself:
“Do I need that enough to give this government 20% of the price?“

If we buy less we reduce our carbon footprints, if we grow our own we reduce our food miles, if we do our own repairs and help each other out for free we’re taking part in the big society – see we’re just doing what the Government wants. We can kill it by just following it’s own advice. Though of course they already worrying about (though not yet for tax reasons) the radical actions of picking wild berries. Really annoy them and Brew your own not only do they not get their double hit of taxes but you screw up their statistics as well. By preparing more of your own food you might even be able to avoid the fat tax if it makes it over here.

No single huge act that raises any of us from the crowd or attracts unwelcome attention, just hundred of small acts of refusal, starving the Government by a thousand cuts.

Become a dissident:

“Say no to government in any way you can, in the workplace, among friends, on the internet. There are a hundred little soapboxes to climb onto. Don’t be quite so concerned that you think left-wing bloggers are chuckleheads or right-wing bloggers are evil Tories. If you are not an apparatchik, you’re little people and you’re all the same to the ruling class, who went from being public servants to being autocrats in a remarkably small space of time.”

Become part of a clever revolution, we only need to convince 10% of the people.

 Posted by Giolla at 15:13  Tagged with: , , ,

Taxes and trade

 economics, taxes  No Responses »
Nov 222011
 

With economics so to the fore front and the idea that the way to solve the problem is to tax the rich more, or maybe tax the “banks” on every thing they do I thought maybe it was time to dig through the pile of open tabs to try and pull together a few thoughts. So do forgive the incoherence as I’m trying to work this all out for myself.

As I may have mentioned before I really don’t get this whole economics stuff, as clever people assure me that it all works very differently for countries and large companies than it does for us mere mortals – though it would seem they can go bust just as well as we can. As Douglas Carswell has observed we do seem to have tested public spending to death, and maybe it’s time to look at the supply side. On the supply side we’re told that we have to stay within Europe to be able to survive, yet we’re a net contributor to the EU, so in theory they’d miss us more than we’d miss them – and more than that it seems an awful lot of our trade doesn’t involve the EU anyway. So how to encourage that supply side further, well traditionally what’s worked has been to have lower taxes, so that more businesses can set up and employ more people for more profit. Oddly for reasons I can’t fathom the idea of generally having low and simple taxes is disliked by politicians and protesters. Yet surely more industry means more work, means fewer benefits, means it’s more profitable to invest in industry than it is in debt and well everyone wins. With 20% vat, and more on fuel and booze the Government might even make more money. Rather than throwing all that money at the banks and such they could have cut tax, taking those on minimum wage and on tax credits out of tax entirely would have stimulated the economy as they bought more and had less debt and also reduced costs of the paper work invovled in administering that lot – really how could you object? The other plus of a simpler tax system is it makes tax evasion harder. Whilst those trying to occupy various financial centers are focussing on the banks estimates suggest that “half the workers of the world — close to 1.8 billion people — were working in System D: off the books, in jobs that were neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes.” (H/T Samizdata). So it’s no where near 1% that are evading taxes, and that number is for out right evasion not avoidance, surely it would make more sense to get rid of taxes we’re not collecting anyway decriminalise that activity and make up the revenue on sales tax which is effectively an elective tax, and if basics aren’t taxed it’s even progressive*.

As other people have observed when we talk about taxing businesses we’re taxing a fiction. Businesses are just people organised to work together, so we’re taxing people – even banks are just ultimately groups of people. A transaction tax (tobin, or employment tax) will just become factored in as part of the cost of business and passed onto the customer. So as we’re ultimately just taxing people why not remove the fallacy of that businesses are some how not people, and skip the middle man to just tax people directly, after all evidence suggests lower business tax means more business. A simple flat rate of income tax (if we want to keep that) would cost less to administer and be far less worthwhile avoiding, raising the base rate of tax so that people on minimum wage didn’t pay it would allow for a lower minimum wage (leaving take home income unaffected), making it cheaper to employ people and thus more people are likely to be employed. OK getting from here to there may not be simple, but really if we moved far more of the tax collection into sales tax, it’d be harder to avoid, have less impact on the less well off – how’d it be a bad thing exactly?

* Whatever “progressive” means this week, but a higher rate of tax on larger TV’s would surely impact the better off more than those at the lower end which is we’re told a good thing.

 Posted by Giolla at 15:29  Tagged with: ,

Marching while Rome burns

 activism, economics, EU  No Responses »
Nov 092011
 

Whilst the students march under the banner of “9th Nov”, with the demands in smaller paler print, it seems that Italy is heading rapidly under water with Barclays Capital saying Italy Is Finished: “Mathematically Beyond Point Of No Return” (H/T Katabasis). The global markets aren’t doing so well, so an excellent time to be campaigning for your Government to keep spending more money than you’ve got. If of course that’s what the students are doing, as the small print says:
“Fight privatisation, defend eduction”
Given how many universities started as private enterprises one wouldn’t have thought that defending education would have to entail fighting privatisation but hey what do I know?

For anyone still confused by the economic situation Small dead animals has it explained (H/T Samizdata):

 Posted by Giolla at 13:48  Tagged with: , , ,

Having just watched the flaw

 debt, economics, politics  No Responses »
Nov 092011
 

Sorry to be posting so much in such a small space of time, rest assured this will not be kept up and normal lack of service will soon be resumed (not being on holiday will no doubt help). However this evening I actually remembered to watch some TV I’d seen trailers for, this is a bit of a calender event but the trailer had annoyed me which is a great motivation. If you didn’t watch it do make time to watch Channel 4′s “the flaw” it’s really rather good, even if not entirely convincing. The highlight of course being Alan Greenspan admitting he was wrong, but to look at a slight hint of the incoherence from the blurb:

“He’d placed too much faith in the self-correcting power of free markets. In a system based on the unsustainable lending necessary to fuel continued spending, the world found to its cost what happens when that credit bubble bursts.

Drawing on interviews with leading world economists, The Flaw attempts to explain – in unprecedented depth – the underlying causes of the global financial crisis.

Unless the root causes of the problem are addressed, the system may collapse again, and next time it may not be possible for governments to rescue it.”

As I’m going to mutter about most of that I’d just ask if anyone’s noticed the governments actually managing to rescue the system this time round?

But anyway onto my notes, this may not be entirely coherent as I’ll address things as they came up in the program. Apparently there’s been a total failure of markets, which seems odd as the idea of the markets I thought included the capacity for anything to fail so that prices can be corrected – that the various markets haven’t been allowed to collapse would seem to me tend to suggest that market forces haven’t actually been in play. The efficiency of markets only operating when prices are allowed to move downwards as well as up, which is something governments aren’t terribly keen on. Amusingly for me markets were described as the wisdom of the crowd reaching a consensus on prices, which seems a lot like the consensus wisdom of the crowds decision making the anti market occupy/anonymous groups use. So you’ve one consensus model saying a very similar consensus model has been proven to have failed.

Also on the amusement front was a New York Times economist, so one of the experts that’s telling us all how to fix it and what’s wrong, took out a mortgage based purely on his having a job with no regards for his income and is now hugely in debt and at risk of losing the house he couldn’t afford. He did at least admit he should have known better and that he was taking out a dodgy mortgage – one does have to wonder if he can screw that up so well why should we listen to anything else he has to say. He may of course be atypical of economic experts – I’ll enjoy the schadenfreude regardless. It does however highlight that whilst we all busy blaming the greed and short termism of the banks we’ve been behaving in exactly the same way (I am of course painting with a broad brush here). The lesson of the program for me was that a lot of the people that invested in the idea that property prices would keep rising ignoring the age old adage of:
“Don’t invest what you can’t afford to lose”

In that regards one thing I’d never considered was the difference between “goods” and “assets” – something I hadn’t to be fair given any thought to. “Goods” are apparently things we buy to use, “assets” we buy to sell on, people buying “goods” to treat them as “assets” screws up the market. So the popular trend of buying houses not to live in but as things to sell to make money, stops the usual supply and demand price correction. Of course once we were all buying to get rich Governments weren’t going to let the market operate and cause us all to expereince the fact that “prices can go down as well as up”.

Now onto to the fun bit of Greenspan saying he was wrong, this was obviously quite enjoyable – except he said he believed that markets were self correcting but then said he didn’t let the market self correct and this proved his model was wrong. The governments during his tenure of being wrong acting to prevent asset markets slowing down thus proving that markets didn’t self correct? Which as I may have mentioned does kind of make me think we’ve not seen free markets actually in action. A side effect of asset prices being supported by the Government is that the rich get richer as by and large the richer you are the more assets you own (after all you only need so many ipods, cars etc.). Which would seem again to suggest to me that the income inequality we hear so much about is less due to the deliberate evilness of the rich so much as the Government acting to make the rich richer whilst borrowing more from the rich to do so. Why the Government would do this is an interesting question, almost as interesting as why we let them.

The current inequality in incomes was last matched by the 1920′s, when there was the same debt based inflation of the value of “assets” (unless I misunderstood what was said). Then I got confused again as apparently until recently house prices have been quite static as have wages (both adjusted for inflation), at least until we all started borrowing to buy houses as investment. The idea of wages and house prices being fairly stable doesn’t seem a terrible thing to me – until we all decided we need to borrow money we can’t afford to lose to invest in property we’re complaining is too expensive. Once we were all borrowing to invest it became a lot more profitable to lend us the money than put it into factories, and banks and the “evil” rich being sensible sorts lent us the money so they could make more of it. Quite what would have happened if we hadn’t all wanted investment properties and easy credit is another good question, but once enough of us were demanding it there was no way our Governments would deny us our bread and circuses and so the bubbles had to keep inflating and the printing presses had to start running. Quite why stock holders followed the civil servant and governmental lead of paying bonuses for failure, is a mystery the program didn’t touch on.

The last take away message of the program, which is the bit which annoyed me in the first place, was that over the last 30 years living standards have decreased for all but the very top. A quick poll on the walk the other day suggests either we were all at the very top or that this is abject nonsense. Anna Raccoons recent article also seems to suggest it may not be quite true (Claiming benefits? There’s an app for that).

I’m sure I’ve made many foolish mistakes in the above, if someone could be so kind as to explain it to me.

 Posted by Giolla at 01:39  Tagged with: , ,

Best walk so far

 activism, anonymity, bloggers, Civil Liberties, conformity, Cuts, Drinking, economics, Free Speach, London, photography, police, Video  3 Responses »
Nov 072011
 

All activities monitored by video camera Another November the 5th gone and another “quiet” walk around London with the indomitable Old Holborn, Olly Cromwell, Katabasis and others whose presence has been erased by alcohol (remind me if you want) – which was an utter blast. As has become our want we met in the pleasing environs of Chandos to exchange niceties, don costumes and imbibe a bracing drink before braving the autumnal air. Our dapper and well presented crew headed off down Whitehall, pausing to admire the security in place at that bastion of democracy that is Downing street. Setting the theme for the day they didn’t seem pleased to see us, undeterred we continued unto the very doors of the palace of Westminster where some terribly nice people told us that as the politicans don’t work on a Saturday it’d cost us 15 quid a head to get in:
Continue reading »

 Posted by Giolla at 20:25  Tagged with: , , , , , , ,

Look out there’s a monster coming

 economics, EU, WTF  No Responses »
Nov 042011
 

Look out there's a monster comingThanks to Katabasis for this lead, it seems that having thrown loads of money at the Eurozone via the European Financial Stability Facility – the EU Zone are going to extract even more money from it’s indebted members and indenture them forever into the service of the European Stability Mechanism. London loves Business has the low down but for a quick tour of the highlights:

  • Total immunity from prosecution
  • Employee’s don’t pay tax
  • Eurozone members can never leave
  • If it asks for money members have to pay within 7 days, and it has no limit on what it can ask for

Oh and bankrupt Ireland will have to pay in 11Bn Euro’s that it doesn’t have for the privilege of giving all hint of sovereignty up to this unelected unaccountable quango.

 Posted by Giolla at 15:10  Tagged with: , ,

Yes you have no referendum

 debt, economics, EU  No Responses »
Nov 042011
 

In a shock and startling turn of events after being summoned to the G20 to explain what he was doing suggesting asking the people if the wanted to accept the austerity package or not – the Greek prime minister has decided that maybe the people don’t need to be asked after all. Having got that out of the way rumour has it that he’s off to resign – presumably to encourage anyone else that thinks referenda are a good thing. The EU’s allergy to asking the people their opinion on things really is quite impressive. it’s not after all as if the Greeks rejecting the current package would force anyone else to accept any other deal. They just get to discuss it again, of course if the Euro isn’t as sound as they’d have us believe that might cause further problems I suppose.

Of course none of this is proof of a totalitarian regime, the Greeks problems are of their own making. But that the prime minster thought he should check with the people first isn’t reneging on a deal either, last I checked most such treaties are subject to ratification.

Of course allegedly a lot of the debt isn’t real debt and could in fact be got rid of by everyone seeing what they owed each other. Pass the IOU’s round and see what’s left at the end, but then of course all those countries wouldn’t be able to point at the huge piles of money other people owe them.

Update Over at Septic Isle there’s a good round up of events from a different perspective – though the conclusions don’t seem hugely different – Greeks should have defaulted, EU(zone) doesn’t like referenda and the Euro zone is doomed roughly speaking

 Posted by Giolla at 00:33  Tagged with: , ,

Revisitng the 99%

 activism, debt, economics, follow up, taxes  No Responses »
Oct 262011
 

Whilst this may be a bit like a dog going back to it’s vomit, or picking a scab – I’m afraid on the day when the big news seems to be the rapid approach of the collapse of the euro I’m going to sort of revisit the whole “occupy where ever you feel like” movement.

Firstly because The Nameless Libertarian has said what I was trying to say the other day far better than I did, especially with this bit:

However, there is a second reason why I think these protests may be deriving such scorn from many people. It is the arrogance of those involved to claim that they speak on behalf of the 99%. Put simply, you don’t. You don’t speak on behalf of me, and I am neither a banker nor a politician – ergo, I am one of the supposed 99% you claim to represent. And I would guess that you don’t speak for at least 85% of those including in your spurious figure of 99%. From what I can gather, the vast majority of people don’t want radical change; they want to be allowed to get on with their lives – preferably with the bills (tax ‘n’ all) being considerably lower. They don’t want to take to the streets to occupy financial districts, and even if they did then they couldn’t as they have jobs to go to and families to provide for. They just want life to a be a bit easier. And to have urban campers claiming their voice to back up a shambolic act of civil disobedience is bound to stick in their throats a bit.

The other reason I thought I’d go back to it is that a friend of mine did a bit of number crunching on the US version of things:

“Here are some numbers for you: 1% of the US population is about 3 million people. Roughly 2 million will be of working age. 1.4 million of those actually earn an income (that they reported to the IRS). In the top 1%, each of those made upwards of $380,000 in 2009. That’s 24% of the total income. They control about 43% of the wealth, and they pay about 38% of the taxes. The top 2% of earners (back to 3 million people, roughly 1% of total US population including kids and grandmas) made upwards of $225,000. If you made less than that, you are the 99%.”

Pretty scary huh? Unless you’re on over $225,000 you’ve in the 99%! Except well notice the other numbers in there:
that 1% controlling 43% of the wealth are paying 38% of the taxes – which is just 5% off being paying an equitable amount surely? Given another site apparently claims it’s 33% of the wealth they control and this is just for federal income tax. So it would seem to me that the 1% are probably paying their “share” So it seem it’s just that the idea of a smaller government spending less money so that the poorer elements (and everyone else) can pay less tax is just too strange a concept. So trying to take more money from people with the resources to avoid you doing that is obviously the only sensible alternative, followed by occupying random places when that doesn’t work how you hoped?

 Posted by Giolla at 23:41  Tagged with: , ,

Monday shorts

 economics, politicians  No Responses »
Sep 262011
 

I was going to post about something else but then I watched The Wonderful World of Tony Blair – which reminded me of just what a total smegging cock that waste of skin actually is, and we’re still bloody paying for him!

“Dispatches shows that at the same time as Blair is visiting Middle East leaders in his Quartet role he is receiving vast sums from some of them. If Blair represented the UK government, the EU, the IMF, the UN or the World Bank, this would not be permitted.

He would also have to declare his financial interests and be absolutely transparent about his financial dealings. But no such stringent rules govern the Quartet envoy.

However, he could opt to abide by the rules and principles of public life. They were introduced by John Major, and Tony Blair endorsed and strengthened them for all holders of public office – but chooses not to himself.”

And in other news a trader has told the BBC that:
“This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late!”.
(H/T Zero Hedge)

Video thanks to his Grace:

 Posted by Giolla at 20:31  Tagged with: , , ,
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