The Economy

My views on the economy

Is there no end to government corruption?

In 2008, the government nationalized the bankrupt bank Northern Rock and injected $1.4 Billion of taxpayer’s money to save it.  This was in addition to the £25 Billion that Northern Rock owed the Bank of England.  The bank had got over-extended by lending  too generously, way beyond its deposits, and relying on inter-bank lending, which then dried up when the American banks got caught out by their bad loans to unreliable borrowers.

At the time of the bailout, we were told by the last government that in due course the taxpayers would get their money back.  At no stage did Gordon Browns and Alistair Darling – or their cheerleader like Lord Skidelsky – qualify that pledge with the word “some.”  They said we would get our money back.  Yes it would take time, but in the end we get our money back.

They even said that we would probably make a profit!

But what have they done now?  They have sold Northern Rock to Richard Branson’s “Virgin Money” for £747 million, plus a  further £50 million within six months. According to press reports “an additional £150 million will be realised in the form of a financial instrument.”  Finally the deal promises “up to” an additional £80 million if Northern Rock is sold or publicly floated within  five years of the deal. In other words it is being sold for £947 million, with the possibility of a further £80 million.

In other words, we taxpayer’s poured in £1.4 Billion, we assumed the full risk when the bank was going through that critical period and now that the risk is over, Richard Branson is going to get his greasy paws on our property for less than three quarters of the price that we taxpayers paid for it!


What is interesting, is that so far the politicians of the last government haven’t contradicted the claims of the Chancellor of the exchequer, George Osborne, that this is good deal for the taxpayer.  In other words, they do not dispute that Northern Rock is worth less than we taxpayers were forced to pay.  By the same token, George Osborne and David Cameron didn’t criticize the bailout at the time on the grounds that we were paying too much for what the asset was actually worth.  Although they criticized the incompetence that led to the collapse, they supported the bailout -presumably because they wanted to stay on the right side of their cronies in the banking sector for that rainy day in the future.


This is not the first time Branson tried to buy Northern Rock.  he tried when it first got into trouble, but on terms that would give him the profit while the risk would still be with the taxpayer.  But now he has got his way.  And of course the bank is still some £8.9 BILLION in debt to the Bank of England.  They have been repaying this faster than expected – which no doubt explains why Branson is so anxious to get his paws on the bank.  It will be a cash cow for him and the British taxpayer will carry the burden.

But that’s no skin off Branson’s nose – most of his companies are registered abroad… IN TAX HAVENS!!!!!!

 

So with halloween over and Guy Fawkes night almost upon us, we are now entering the Christmas rush, when shops start selling like mad as frantic customers venture out into the cold, dark streets to buy presents for family and friends, big gifts, little gifts, special gifts for that special person and stocking fillers.

A few years ago, a survey showed that the Scots are actually the most generous people in Britain but that Yorkshiremen lived up to their miserly reputation.  Then a couple of years later another survey showed that the people of Yorkshire are the most generous but that the Scots lived up to their reputation.  So is this just a case of you-can-prove-anything-buy-surveys?  Well actually, no.  The surveys contained a lot of useful information once you actually looked at their methodology.

The first survey – in which the Scots came out on top – looked at how much people spent on Christmas presents. The Scots led the country at £401 (this was quite a few years ago) whereas our friends from Yorkshire averaged a mere £80.  But in the second survey, the basis of comparison was how much they gave to charity.  And here the roles were reversed, with the Yorkshire people showing as the most generous and the Scots coming out as misers.

But this all serves to illustrate a very good point made many years ago by James (the amazing) Randi when he dismissed palmists, astrologers, dowsers, tea leaf readers and phrenologists et al over their alleged ability to discern human traits from unscientific and obviously irrelevant “evidence.”  He pointed out that it is meaningless to say that some one is “generous” not only because it is what most people want to hear, but also because people can be generous in some respects and mean in others.  The same can be said of intelligent, friendly, courageous, introvert, extrovert or any other human characteristic.


But to return to generosity and Christmas, I would venture to suggest that it is a time when lonely people yearn not for others to be generous, but for the kind of human company that would enable them to be generous – i.e. some one to buy Christmas presents for and some one to go Christmas shopping with.  Of course one can treat oneself to an iPad, iPod or iPhone or an amazon Kindle or any one of the countless gadgets or celebrity books or cookbooks that flood the shops at this time of year.  or even go on a holiday abroad.  But it’s not the same as having some one to share it with.

At least if your a Scotsman.

 

Although my father lives outside of the UK he has been closely following the events in the phone hacking scandal.  A few days ago he sent me an excellent article by the great Melanie Phillips called The smell worsens around the Metropolitan Police and followed up by asking me “And what are we to make of this? Is there honesty and integrity left anywhere?”

I thought about this for a while and then sent him the following reply:

British dustmen and roadsweepers have integrity
British coal miners still have integrity
British factory workers still have integrity
British farmers still have integrity
British shelf-stackers in supermarkets have integrity
British nurses have integrity.
British firemen have integrity.

Now I am not saying that every blue-collar worker is a paragon of virtue.  There are a few cowboy builders and rip-off plumbers – along with train drivers who strike at the drop of a hat or bus drivers who delight in driving off when they see you running for the bus.  And of course there are some shop staff who seem to be miles away when they’re counting your change.

Similarly, there are still quite a few Trade Unionists who display an “I’m all right jack” attitude when it comes to the public – whilst working for legally-enshrined monopolies that protects them from the corrective mechanism of the free market.  And then of course there is also no shortage of students who believe that taxpayers should be compelled on pain of imprisonment to subsidize their studies of whatever subject they choose, regardless of its value to society.

But that pales into insignificance when it comes to the example set by their so-called “betters”.  If you want to find integrity in Britain, do not look to politicians, lawyers, judges, journalists, newspaper editors or policemen.  Nor even overpaid doctors – and don’t even think of looking for integrity in your local bank or in the Square Mile, where the city-slickers work, lunch and play.

If you want to find the last bastion of integrity in Britain, go down to your local pub.  You will find it in the British working class.

 

Those of you who read the tabloids – and most of you who don’t – will probably have been made aware of a debate that is going on in Britain over the use of so-called “super-injunctions” in which judges acting on whatever criteria take their fancy can rule not only that something (usually true) cannot be published, but also that the fact that they have ordered its suppression may itself not be mentioned.  A lesser version of this is that it can be reported that they have suppressed something but not who asked them to suppress it.  In one recent case they even ruled that indirect information that might identify the man, like saying that he was a leading banker (no that’s not rhyming slang) could not be published.

Now personally I think that the private life of that “leading banker” was of rather less public interest than the known fact that he had taken several hundreds of thousand pounds of taxpayers money to which he was not entitled in a pension settlement in return for resigning from the bank that he had led to the brink of bankruptcy because of his arrogance, greed and total lack of business acumen.  Indeed the “leading banker” in question – Sir Fred Goodwin – was and is such an incompetent businessman that he isn’t fit to be in charge of a hot dog stall, let alone a bank.  And any bank that hires him is putting depositors and investors money at risk.

The pension that he received would not have been possible if the bank that he mismanaged to the point of near bankruptcy had not been bailed out with money expropriated from the taxpayer (on pain of imprisonment).  Thus the taxpayer was mugged and some of the ill-gotten gains found their way into Sir Fred’s pocket, with the connivance of the bank’s directors and the government.  It is this and not his alleged sexual activities that is of genuine and legitimate public interest.

The matter has resurfaced in the past week or so with news that a footballer who can’t be named had obtained a super-injunction and was also in dispute with Twitter over disclosure of the matter on their website.  The problem is of course that the world-wide web is just that – worldwide – whereas injunctions by the courts in England and Wales don’t even extent as far as Scotland let alone across the Atlantic.  And in the United States, it is virtually impossible to get an injunction (or “gagging order”) as they call it, except in criminal cases.  Thus it is virtually impossible to suppress information from the internet.

Now speaking for myself, I am not interested in the sex lives of footballers, golfers, bankers or even politicians.  (I won’t mention editors and journalists because we rarely get to hear about their sex lives, for some reason.)   But I would like to take the argument even one stage further and say that there is no simple answer to the question of where the right to public’s right to know ends and the right to privacy begins – or should that be the other way round?

For example, should the right to know apply only to sexual infidelity or should the quality of some one’s sexual performance also be fair game for the tabloids if one of the parties wishes to report it?  is “My ex has a small willy” be a legitimate subject for the tabloids?  Some would say that the answer is it depends on whether the ex-partner is a public figure.  But this isn’t really helpful because then it begs the question, how public is public?  Does it refer to fame?  Or holding public office?  Or receiving money from the public coffers?

A politician – as in one who holds public office?  What about one who used to?  What about a candidate?  What about a former candidate who has since abandoned his or her political ambitions?  A footballer?  Only the Premier league?  or also the  Conference league? Or one of the local leagues?  Perhaps one might say that a footballer in a local league is off-limits to this sort of tabloid intrusion.  But what if the newspaper that reports the activity is also local?  Does not a local newspaper have the same rights to report on the sexual proclivities of a local footballer as a national newspaper to report the bedroom activities of a premier league hot shot – or at least a footballer who thinks he’s a hotshot?

And of course the same could be said about a singer or actor?  Not all people in the entertainment industry are household names.  Is it only the nationally recognized figures whom the public may be said to own a piece of?  What about a semi-pro who performs in local clubs or in a minor repertory company?  Are their sex lives legitimate material for at least the local papers?

Of course one might say that the test is whether they receive money out of the public coffers.  But a local theatre company funded by a grant from the arts council falls into precisely that category.   And what about a civil servant?  I am not talking about some smooth-talking “Sir Humphrey” in a rosewood-paneled office in Whitehall.  I am talking about some low-paid functionary in a regional jobcentre trying to help people find employment? Or a teacher at a state-funded school?  Are all of these people fair game?

And what about some one who becomes a “public figure” involuntarily such as a person accused of a crime, but subsequently cleared?  I am thinking in particular of Colin Stagg who was falsely accused of murder and who endured years of hounding by the tabloids – including a sting by a paid prostitute with the collusion of one of the leading red-top tabloids.  Was he fair game because his name had been launched into the public arena by an accusation that had already been proven false?  Was he too a “public figure” though he never chose to be?

I am not arguing for the gagging of the press.  But the simplistic belief that there is no right to privacy and an unlimited public “right to know” is singularly unhelpful.  Perhaps the tragedy is that many people care more about what footballers do in the bedroom that with what politicians do with our money and what they do with the lives of young men who have signed on to defend the country for a pittance that is dwarfed by what footballers are paid for their inept attempts to win international competitions.

But then again, maybe I am out of tune of tune with the national ethos.  I am one of those 14% of the people who supported the AV voting system – not the 28% who opposed it or the 58% who were too lazy to get off their backsides and state their preference.   And I am one of those people who thinks that Tiger Woods’ sex life is of no interest to anyone but Tiger Woods, Mrs Woods and however many floozies it actually was.