An end to bankers' bonuses?

Steph

If the Government were to introduce a 100% tax on all earnings over £2million a year where the loop hole there? Its simple if they mean it.
(£2mil is a number plucked at random)

The reality that the financial services industry is now underpinned by the taxpayer in many countries and the UK in particular should have been sufficient for every employee of a bank to think for a moment as to whom they owe their jobs. They are all under a moral obligation to the taxpayer and need to recognise that fact. Any bonus that is rendered belongs to the taxpayer: end of story.

I am puzzled that this is even subject to debate.

The issue which should be subject to debate is that raised on Today this morning. How beneficial to the UK is the financial services industry? How far does it constrain the success of other industries?

Given the amount of collateralised debt in the world are we just entering a cycle of perpetual bust?

Surely the Tobin tax idea from Lord Turner must be higher up on the agenda for the G20?

The best way to stop the ficticious transactions is to tax them. This is because a monetary disincentive to continuously flip paper money "ownership" actually taps into the only sense organ these bankers possess.

Trading a good (or worse still a paper based claim to stocks or bonds) does not create wealth, but instead the making of things does:

https://bbc.kongjiang.org/www.bbc.co.uk/blogs/thereporters/stephanieflanders/2009/08/qe_more_to_do.html

Every other "value adding" economic transaction is deemed to incur a transaction tax, so the burden of proof rests with the financial sector to demonstrate why they have been allowed to be exempt for so long!

Stephanie:

An end to bankers' bonuses?

That would be a horrible day for the bankers; in reality, means, the pay scale for bankers would have to be increased.....

=Dennis Junior=

Do bankers bonuses come from a banks pre or post tax (profit/losses)?

"When politicians talk about capping bonuses they sound like they're playing to the gallery. And they are. But for once there is also a kernel of good sense in the populism.
If we're going to build a safer financial system, banks earning good profits need to be putting more of that cash aside, as a safety buffer. Regulators can't make them do that if bonus season means the money's already gone out the door."

This sounds to me as though there's been an outbreak of Afghanistan Justification Creep in government and media circles dealing with the financial crisis. Is it a coincidence that now, when world leaders can find no concerted action to agree upon other than banker-bashing, there has suddenly been unleashed a brand-new negative accusation about bankers bonuses? That not only do they create incentives to do the wrong things, but also that are sufficient in volume terms to cause an significant weakening in the banks' capital structures. And, despite this obviously being of major importance, it's taken two years of financial chaos before anyone's chosen to mention it.

Why not just cancel the G20 meeting if they can't find anything worthwhile on which they are collectively able to take action? Why go through the charade of blowing out of all proportion the status of a peripheral problem that has an importance only by virtue of being one of the few things the leaders can agree about.

Comment 2 : stanilic

"The issue which should be subject to debate is that raised on Today this morning. How beneficial to the UK is the financial services industry? How far does it constrain the success of other industries?"

Of course this is the key issue. There are two areas of questioning that need to be addressed:-

1. How much of the Financial Sector's contribution to GDP has been ficticious earnings? Aren't many of the losses of the last two years better considered as reversals of earnings declared in previous years? And, having ascertained this, how would a restated GDP table for the last 10 years vindicate government decisions taken during that period?

2. How much of the restated Financial Sector GDP contribution is real wealth-creation, and how much is transfers of already created wealth as a result of rent-seeking activity - the conscious creation of make-work circumstances that add cost but little benefit to the productive sectors of the economy.

Questions that are too close to the bone for any government to ask, I fear. Better to pretend it's not happening.

It does not matter a dot what a company pays any employee/supplier/director. I can set up my own company and pay myself 1 million a day, the problem - actually the solution - is my company will go bust. That's how what is called Capitalism works - but if my company is too big to fail and the government steps in to bail out my company after I have messed up then the generic solution is to not allow companies to be too big to fail - TBTF. Part of the Monopolies and Merges Commission should be to assess the TBTF criteria and order a company that is this large to be broken up into smaller units.

Is there no limit to corporate/media contempt for the general population?

Today we learn from the BBC that there has been a "surprising return to profit of some of the world's biggest banks - particularly in the US"

So presumably the unwashed masses are to assume that the change in accounting rules was a mere shot in the dark with neither foreseen nor predictible consequences.

High Frequency Trading (what a bore) that allows Goldman Sachs to "guarantee" profits of $100 - $200 million per day from "high risk trading." Why have Goldman been allowed to site their server right next to the NYSE server? Do you think anyone can just wander up to the NYSE and install their own server?

If you fund a tiny elite with aggregate subsidies of $13 trillion then would it would not be reasonable to suppose some short term benefit would accrue to that elite?

Oh no none of this can form the basis of any kind of explanation. It is all just a "surprise." All a bit mystical really. If there is to be any explanation then it is probable that the people who work in banks are even cleverer than was first thought. Maybe the only mystery is why bonuses are so low.

Maybe bonuses are so low because the general populqation are too dumb to understand, and such low bonuses are a mere act of alturism by the elite to placate the primitive feelings of jealousy that may cause the masses some indigestion as they are forced to swallow the consequences of ever more sequestration of their futures.

"If you limit the amount of a bank's profit that can be distributed to employees, you are at least addressing the key issue, which is whether those employees - as a group - are taking cash out of the institution which ought to be saved for a rainy day."

No Stephanie, that's not the key issue with this. The key issue is that bankers' pay and bonuses are linked to short term profits. But this creates a moral hazard, as the incentive is for bankers to follow overly risky policies thus driving up the profits and stature of the bank in the short term (e.g. Fred Goodwin and RBS), without heed to the long term stability of the bank (which, taking RBS as an example again, was not good). This moral hazard was one of the (many) failures in the chain that led to the economic crisis. It is this moral hazard that needs to end. You don't need a cap on pay or anything like that, as all the governments need to do is link pay to the long term stability of the bank.

As for "saving cash for a rainy day", I agree that banks didn't keep enough capital and should be required to keep more in future, but I think this has less to do with the amount they've been paying themselves, and more to do with how much they've been lending out relative to how much customers have been putting in e.g. if you put £70 in the bank, they would keep £1 as part of its capital, and lend out the other £69 (or similar figures). That's obviously too risky, and needs to stop once the recession's over and bank lending loosens up again.

Here is list of some US banks which have not experienced a "surprising return to profitability" on account of the fact that they have failed.

https://www.iii.co.uk/news/?type=afxnews&articleid=7502798&subject=general&action=article

Now I wonder where depositors funds may have ended up?

Is it cheaper to set up a fully fledged marketing campaign to attract depositors, and then fund a network capable of dealing with a multiplicity of depositors, or is it cheaper just to be handed an existing portfolio of depositors by the captured Federal Authorities? Maybe this would make a good MBA research project.

# 71. From Yesterday 03 Sep 2009, StevieYorkshire wrote:
"the idea that creating lots money as new debt makes you richer is just about the dumbest idea I've ever heard. All it does is create inflation. Well if I Borrow 1p from a bank to pay you to make a car and I try to sell this car to you for 2p you will not be able to buy it and will be poor. If Bob borrows a mortgage of 1p to buy your house then you will then have 2p and will be able to buy the car - so bob borrowing the extra 1p makes you richer, before bob no car, after bob you have a car ! - It also causes house price inflation but this is a side effect - it's main effect is to put 1p extra ( 1 Trillion) in the pockets of people with which they can buy goods and services that companies can supply to them at profit - (profit = Getting more money in that you paid out) - i.e. the mortgage market funded the economic boom.
"what is important is that the average debt per worker is serviceable - as the average debt / earnings ratio has increased it is now less serviceable.”
If I want to make say a 10% profit per year then I pay you 10p to make a car and want 11p back - the extra 1p you borrow, your debt to wages ratio is 1 to 10.
Next year, if I pay you 10p and want to sell it to you for 11p again you will have to borrow another 1p so your debt to wages ratio is 2 to 10. If you want inflation to re-balance it back to 1 to 10 well imagine you had an inflation rate of 100 percent so I have to pay you 20p to make a car and sell it to you for 22p - this time you have to increase your borrowings to 3p and your debt to wages ratio drops to 3 to 20 - so you are half way there. Essentially what you are saying about maintaining a stable debt to wages ratio requires hyperinflation so that last year's debt is essentially zero in terms of this years wages. A stable debt / earnings is not mathematically possible under our present system unless someone else - the government/ a foreigner (in a Net Export situation) takes on more debt – show me a schedule of it happening otherwise.
"If we didn't have this extra cash we would be broke - there would be no economy." Erm, we are broke" - Erm my point is we would have been broke from the off without the extra debt - show me how I can pay you 10p to make a car year after year and sell that car to you with a 10% profit without someone somewhere going into more and more debt, the What's wrong with Keynes ? What's wrong with Monetarism ? article at https://www.worldnews.blog-city.com schedules this in more detail and there is a spreadsheet in the NEFS article on the site that covers similar ground.

G 20 must address company law and the bonus structure the present system where executive directors appoint non executive directors to form their own remmuneration committee is far too cosy for comfort A fair and proper system for all companies should be formulated. We are informed that the massive sums earned by banks and thence the bonus culture are brought about by sophisticated software in their own computers being able to intercept the two tenths of a second interval that a company needs to make a trade thereby making a profit on a sure bet for themselves

Banker's bonuses go to the very heart of the crisis in capitalism. They are emblematic of the crisis. In themselves they are insignificant, reflecting, as they do the gigantic pay differentials in society. Can these differential be sustained? I don't know, but my gut reaction is that as the rest of the developed World seems to be against this huge differential in pay, so not at the present time.

Genuine action needs real controls, not tinkering as in this modern age of access to information peoples' pay is quite visible. This an aspect of 'the too big to fail' and 'socially useless' debate.

The only practical solution that I can see is a maximum wage to match the minimum wage, if we want a real solution - however the consequences of a real solution may be more interesting! This would also solve the Jonathan Ross and footballer situation!

The basic problem is the too big to fail problem and this has to be tackled too. We need at least 20 banks and hundreds more associated financial institutions in this country alone to give us back a market, or we will have to admit that the banks have a monopoly and nationalise them all (without compensation!), break them up and sell them off again with share ownership systems that prevent them re-consolidating, by law.

We should face facts unless something drastic is done we are not going to recover in any meaningful or stable way! We are on the brink of a precipice - even now 2 percent mortgages (HSBC) are back available - this is insane! But the man that created to problem, the unfit, Mervyn King is causing this to happen again - not content with destroying the country once he is doing it again! Get interest rates up to 5 to 6 percent NOW! By the way Mervyn - money is still worthless! When is hole the first thing to do is to stop digging! It cannot be a good way to run an economy or society to sack 135,000 nurses so that bankers can steal their redundancy, can it!

Hi Stephanie

Wellcome back I hope you enjoyed your holiday.

As to bankers bonuses is this not just more political grandstanding? If the politicians really wanted to do something they have had plenty of time but they have in fact done nothing. They have failed to realise that many of their policies such as QE have turned the position of the banks around very quickly. Indeed so far banks profits are the only place that QE is having much of an effect.

Surely the real issue is what insurance premium the banks will pay in future in return for taxpayers acting as bankruptcy preventors for them. I would suggest that the riskier a banks structure the more they should pay as an insurance premium or tax. This would indirectly affect pay but not directly.

Also another positive move would be to strengthen the power of shareholders going forward. Ideally we would have more active shareholders. In our recent problems our big investors such as pension funds have kept under the radar but they should have been questioning bank boards more.

Rather than grandstanding these are moves which are likely to help prevent future problems..

#14
Sorry but interest rates ARE at 5-6% already. Or haven't you seen that banks are charging way over base rate, which is becoming meaningless (at least for borrowers, if not for savers). Are you seriously suggesting that banks should maintain their current rip-off differential so that if base rate goes back to 5% secured money will cost 10% ? Caledonian Comment

Playing to the gallery, indeed.

A company states what (it believes) its profits are for any given period. This is independently audited, assessed by the regulator and credit rating agencies, and sets the price both for the company's debt and equity.

In agreement with its shareholders, the company pays out an amount to those who provide labour to the equation (bonus to employees) and those who provide capital (dividends to shareholders).

In other words, the basis for paying out bonuses is the same as that which decides the value of your pension (think about that for a moment).

From the narrower point of view of this article:

Dividends are subject to restriction due to solvency regulation, bonuses are not. This is not trivial in the investment banking industry, where bonus payouts are not insignificant relative to overall profit.

However, if the concern was (as Stephanie suggests) that the company would be depleting its solvency capital by paying out large bonuses, you have to consider that any bonus payout would directly reduce the amount of dividend that could be paid out, because it would reduce profit by the same amount.

Hence bonuses only affect the solvency position of the company if worsens the company's profit beyond the point where the company can no longer pay out dividends due to regulatory constraints (not an undue concern these days).

If this was the *real* concern (which it is not, but nice try Stephanie), rather than capping bonuses, you would be much better served by insisting that bonuses are paid in shares, readily convertible to cash in the market. Any solvency issues around retention of capital would be resolved, and we could get away from the convenient untruth that bonuses have anything to do with the current state of affairs.

Unless the 'regulator' also has control over the creation and administration of individual bankers' employment contracts, then it is virtually impossible to cap bankers' bonus payments - as these deviously clever individuals and their employers will always find a way around controls and red tape - after all, that is how they make a good deal of their (our?) money!

This is a point which is all too often 'over-looked' and linking bonus payments to 'profits' is very easy indeed - remember that even a loss making bank will still find profitable areas within the bank to pay its elite in hefty 'bonuses'.

The current debate about bonuses and profit by leading politicians sounds incredibly naive.

Bonuses should be exceptional rather than the norm and payable only in deferred shares in the organisation. That way the employee is less likely to defect to a competitor and employees rank alongside shareholders for reward in the equity of the undertaking. Significant cash bonuses are obscene in this day and age.

No 17 and Stphanie
I read somewhere that while the crisis essentially knocked out most of the market value of bank equity from 2007 to 2008, the cumulative dividend of over $400 billion still represents around one-third of the 2007 market capitalisation of $1.3 trillion.This would be effective negative equity issuance wouldnt it. In itself the habit of the banks paying out dividends during this crisis has itself depleted their capital. Could management's habit of doing this ( bank management hardly reduced their dividends in the first fifteen months of the crisis, I have read) have anything to do with the fact that management themselves own shares via bonuses? Perhaps someone should compare the dividend payout to bonus payout. I remember the clamour for improved shareholder value as being the driving force behind the RBS expansion, amongst many others.

Ah, the truth comes out. It's nothing to do with economics, it's everything to do with spite and envy. Those nasty bankers shouldn't have so much so let's take it away from them.

I have no problem with bonuses being tied to long-term performance, it makes far more sense than short-term performance. As it stands now a trader in exotic instruments can make their positions look very good with some assumptions, bank a huge bonus and disappear before the reality meets the assumptions. But at some point performance is rewarded, that's the way the game works. If a car dealer made vast profits by selling lots of cars nobody would bat an eyelid if they made a fortune on the back of it. So why are traders different?

But no, bankers as a whole are the latest bogeyman and must be punished even if individually they have only done what they were paid to do.

And for the record, I don't get a City bonus.

The proposals to curb bonuses take little or no account of market mechanisms. In my view it would be better to limit the bid/offer spreads that market makers can charge. www.bondscape.net (Barclays, HSBC et al) is used as a reference by many brokers. If this is a true reflection of prices, then arguably many of these bid/offer spreads would have been considered as "gouging" a few years ago when there was supposed to be less competition than now. The gilts market is supposed to be amongst the most efficient. Really?

So, force the market makers to honour price and minimum size across the range of products at reasonable spreads. This would prevent excessive profit from distortions, which would influence the risk attitute, and curb the excesses in bonuses.
Who can complain? The customers benefit, and the banks get the opportunity to match their proclamations of service to the customers with action. Where is the regulator?

There seems to be a lot of misconceptions floating around about the paying of bankers bonuses !! Most of the people and the media are mesmerised by the numbers and do not understand the true underlying problem !!

It is *NOT* the bonuses themselves that are the problem; it is *the way in which bonuses are calculated* and *what they are based on* !!

The problem is that bonuses are paid out on the annual *perceived* profit !! This is not the real and true profit as many of the transactions on which these bonuses are based on have not come to the end of their contractual life. One good and extreme example is the bonuses based on the sale "insurance" derivatives !! They are paid out on the *assumed* profit for that year even though the contract/policy still has a fair while to run.

When the by-products meet the rotating object and the "insurer" cannot cover the sum insured, where is the profit in that contract ??

The major hit that most of these banks got clobbered by are in the CDOs and CDSs market where strange products are re-packaged and sold as "good investments". Profits, and therefore bonuses, are taken at that point. When they are found to be "not as described on the tin", were any of the profits/dividends, and therefore bonuses, returned/clawed back from the receipients ?? Not on your nelly !! They were off to some sunny climes, crying all the way to *THEIR* bank !!

If the life of a mortgage is for about 25 years, how can profits, and therefore bonuses be paid out in the first or second year ?? Do any of these people have crystal balls ?? Can any of them give cast iron guarantees that the mortgage will stay good for the whole of its life, i.e that they do not become "negative equity" or "sub-prime" mortgages, and that the borrowers will have the means to pay off the loan totally/eventually ??

This is where the problem truly lies. It is not the size of the bonuses but the fact that they were paid out on assumed or fictitious profits !! There is a very, very thin line between this and what Bernie Madoff was doing !! This is Enron or Worldcom writ large !!

Several commenters above have pointed to various aspects of this problem. For what it's worth, my view is that there should be regulations that forbid the taking of profits until the whole of the transaction is finally unwound. This is especially true in manufacturing where defective product recalls are *NOT KNOWN* !! The cost of recalling duff/exploding batteries hit the profits of Sony *hard* !! Spontaneously combusting laptops and power supplies hadn't done much good for Apple too !! Then again, spontaneously combusting CDOs, CDSs, sub-prime packages and such like can't have done much good for most of the big banks and insurance companies either !!

No 17 There's solvency and then there's solvency !! In these days of "off-balance sheet items", etc. what exactly defines solvency ?? Most of those companies that clamoured for state bailout were "solvent" if one ignored the off-balance sheet UXB (UneXploded Bomb) waiting in the wings. When that bomb went off, it shredded their solvency !!

AIG, for instance, was "solvent" until it got hit by claims against those foolishly written policies covering dubious financial transactions !! But did anyone know (or care, if they did know) that those transactions were dubious ??

Britain's dodgy assets fund is yet another UXB waiting to blow Britain's solvency to smithereens !! As various commenters have mentioned, perhaps we should take the hit now, write off those dodgy assets *AND* the companies that owned them and start afresh !! Of course, it would be politically unsafe for this government to do so since it will wipe out Scotland (the taxpayers ??) largest bank and destroy whatever election hopes they may have !!

Is a small handful of people are responsible for carrying out the vast majority of the monetary volume of investments, then naturally the incentives in that community are going to be huge multiples of what others might expect.

The problem is that such a small handful of people are responsible for handling so much of the money.

What needs to change is the banking system full-stop. End this exponential debt growth and base money on something that can limit trade imbalances.

Ishkandar

"The major hit that most of these banks got clobbered by are in the CDOs and CDSs market where strange products are re-packaged and sold as "good investments". "

The underlying motivation for such products was to preserve the ability for foreigners to reinvest dollars. If dollars were backed by adequate gold reserves for example, then such products would not have come in to being.

FrankSz # 26

"The underlying motivation for such products was to preserve the ability for foreigners to reinvest dollars. If dollars were backed by adequate gold reserves for example, then such products would not have come in to being."

That's the discipline of gold! Thanks for (unintentionally?) stating the case for a gold standard Frank.

;)

Comment 7 ExcellenceFirst

You introduce two valid points which probably undermine the bonus argument. Were the bonussed earnings really added value?

I don't think they are added value in the conventional sense. They are added value in a virtual sense but you cannot live on virtue alone; unless you are Diogenes of course.

We have to equate the reality that the banking bust has not led to an end to bankers' bonuses but to a massive increase in unemployment in many real value adding sectors of the economy. This inversion of reality is quite obscene.

If this peculiar state of affairs is not reversed then as a country we have a serious problem as the banking bust will continue to repeat until we are all naked, starving and homeless. At the expense of a cliche: enough is enough!

#16. At 9:18pm on 03 Sep 2009, CaledonianComment wrote:

"#14
Sorry but interest rates ARE at 5-6% already. Or haven't you seen that banks are charging way over base rate, which is becoming meaningless (at least for borrowers, if not for savers). Are you seriously suggesting that banks should maintain their current rip-off differential so that if base rate goes back to 5% secured money will cost 10% ? "

The interest rate differential problem is directly due to the Banks of England's (Mervyn King's) loss of control of the interest rates and the value of money. When the Bank sets absurdly low interest rates the monopoly banks, whose power has risen to unimaginable levels during this crisis, (and this is a huge, so far untackled problem) are able to act to widen differentials.

The Bank and the FSA and their fellow travellers are even assisting the banks to do this with free money from the rest of us in the form of Quantitative Easing, which has only gone to the Banks (notice!!!) and further insisting that the Banks reinforce their capital ratios! So, I note what you say, but I think I fundamentally disagree with your underlying assumptions.

ishakandar (#23) "For what it's worth, my view is that there should be regulations that forbid the taking of profits until the whole of the transaction is finally unwound."

As I've tried to explain to John_from_Hendon (and others) many times, the problem is profoundly political. In the Liberal-Democracies, legislation was passed to keep the state out of the markets. That's what it means to say that the Liberal-Democracies are libertarian (just look at some of the Lib-Dem websites for concrete evidence). All three major UK parties pressed for deregulation and just differed in how they go about doing so (hence 'New' Labour which has nothing in common with Old Labour when judged on outcomes rather than rhetoric).

Sadly, 'learning', for most, is just another intenional idiom of propositional. We see no change in the posting behaviour in the wake of education here, just as we see no change in the behaviour if those working in the Financial Service sector, or politics. That's because people rarely change unless they're changed physically (through brain or other forms of injury usually).

The fact is that population/demographic trends in the Liberal-Democrcies mean that forces on behaviour have been changing. Behaviour is driven by genes and emitted behaviours are selected and shaped by the environment (this is what we mean by 'leaning' extensiomally speaking). It's a case of horses for courses, but the course has insidiously been changing. Some are still trying to run on the old track, as it's all they can do. It's all that they 'know'.

In the final analysis they will have to be replaced. This means changing the entire political system. Japan is trying, but it will be just as hard as it will be for the USA, as the USA created their (and other Liberal-Democratic nations') system.

People need to start posting something radically different to these blogs, SF included.

#30. At 10:12am on 04 Sep 2009, JadedJean wrote:

"ishakandar (#23) "For what it's worth, my view is that there should be regulations that forbid the taking of profits until the whole of the transaction is finally unwound."

As I've tried to explain to John_from_Hendon (and others) many times, the problem is profoundly political "

Sorry but you are wrong again. Your profound and impenetrable blindness comes from you 'understanding' of how things 'are'. This blinds you from seeking any change - that is your only position is that of an apologist for the status-quo. You reject any possibility of change and this is why (almost) everything that you write is fundamentally philosophically mistaken. The one thing that is always true in life and everything is that things change - you reject this and this is, and will always be, where we differ.

You write that "People need to start posting something radically different to these blogs" while yourself criticising anyone who proposes or seeks to change anything! Your write seeking change in order to reject all possible changes! (I also profoundly and absolutely reject your malthusian arguments and orientation.)

I want to see change - I doubt that you do!

John_from_Hendon (#31) "I want to see change - I doubt that you do!"

You really must try harder to discriminate between reporting on your own mental (intens/tional) states and that of physical reality. The latter includes the content of posts of others, more specifically still, my posts. You clearly do not understand (the evidence being the false attributions which you make), what I post.

That's a bit of reality for you to take on board.

#30 Jadedjean How unsurprising to read that you remain fundamentally in error in your understanding as to what is going on, and how casually you ignore 13 trillion facts that serve to prove the error of your position.

No legislation has been passed to keep the state out of the markets. A lot of legislation has been passed to limit the role of the state in supervisising the day to day operation of the markets. The two are discrete and hence different.

If you are correct that legislation has been passed to keep the state out of the markets then what is it? Given that whatever it is it allows for the state to commit $13 trillion of public money to support the financial integrity of major market participants then it is self evidently not effective legislation.

A more accurate charge is that in key respects the rule of law has been arbitarily suspended in order to accommodate the short term interests of financial oligarchs. Ignoring the law is an option that is open to any criminal in any sphere. A failure to enforce the law is the key concern.

Is there market manipulation? If there is then it is illegal. Catherine Austin Fitts (a former member of the US Administration) claims that there is market manipulation and advises clients to stay out of the markets because they are rigged. Never reported, never investigated.

There has been a fusion between government and big business - the evidence is all around you. Look at Mandelson and his coterie of "friends." I would have thought that this would have been right up your street as it neatly fits with Mussolini´s view of the world: "Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power."

This is what we have, not the kind of free market free for all that so eloquently imagine, but a ruthless hijacking of the law to support corporate interests.

The bonus system was the fuel for the fire of risky loans and qualifying unqualified borrowers. If the lender became responsible for the bad loans they created the situation would be different. They get bonuses because the public now owns the bad loans that they reaped high rewards for origniating. I know that sounds silly that someone could knowingly write a bad loan, be rewarded, then have the public buy the bad loan and be rewarded for having dumped the loan on the public with another bonus. With all this additional money flowing around you would think that someone might bring up the matter of the individual retirement losses and the banking communities responsibility to repopulate those accounts. No integrity, no sense of responsbility and no accountability for the betrayal of the public trust by both banking and government. And if anyone really wanted to look, probably illegality as well.

No 30 "Japan is trying, but it will be just as hard as it will be for the USA, as the USA created their (and other Liberal-Democratic nations') system."

You truly don't understand the Japanese political system, do you ?? If you did, you wouldn't make such patently untrue statements !!

Aside from that, proper financial regulation has nothing to do with politics of whatever hue; be they Red, White, Blue or Green with Yellow measles !! The Communist Chinese are just as happy to apply the same proper financial regulations as Guided Democracy Singapore or Democratic Switzerland !!

Only those with a flawed grasp on reality will try to turn proper regulations into political arguments !! Politicians of all hues have had their turn and, one by one, they have all failed. It's now time for the realists to grasp the nettle or, surely, we are all doomed !!

Re post 31 "You really must try harder to discriminate between reporting on your own mental (intens/tional) states and that of physical reality. The latter includes the content of posts of others, more specifically still, my posts."

I may often disagree with John_from_Hendon's thinking, but I do not think he misunderstands to contents of my posts. Of course, I cannot speak for others.

Meanwhile, back at the home front, - https://news.bbc.co.uk/1/hi/business/8235763.stm

So the "green shoots of recovery" were all mirages, at least for the UK !!

Marks:- 1/10
Remarks:- "Tend to be over-optimistic. Must try harder !!"

Then again, the Far East has been popping out of recession one by one for some time now. They must have tried harder and done the right things !! So, Oh Glorious Leader, how are we "best placed to come out of this recession" ?? Facts speak louder than words, or spin, for that matter !!

#35 Ishkandar. Do you need to understand the Japanese political system to understand Japan, or is a knowledge of US hegemonic power sufficient to inform an explanation?

Do you not find it strange that one of the "big stories" to emerge from Japan concerns the wife of the Japanese premier and her belief in alein abduction?

Almost completely off topic - https://news.bbc.co.uk/1/hi/entertainment/8237512.stm

She added: "When you make a living throwing stones you expect that one day someone is going to lob one back.

"This was that day."

At least, she had the grace to admit that she was wrong and he had the grace to help her in her time of need like a proper gentleman.

#32. JadedJean wrote:

"You really must try harder to discriminate between reporting on your own mental (intens/tional) states and that of physical reality. The latter includes the content of posts of others, more specifically still, my posts. You clearly do not understand (the evidence being the false attributions which you make), what I post.

That's a bit of reality for you to take on board."

Let me de-construct your post:

Sentence 1: you contrast some gibberish psycobable with 'physical reality' - Why? the two are so obviously different there is no point at all in the sentence.

Sentence 2: You then go on to say the latter ('physical reality') "includes the content of posts of others" - Point 1: the content of posts is not 'physical reality' it is the contents of posts. Point 2: You raise the 'value' of your posts above others. - clearly a nonsensical arrogant stupidity in itself.

Sentence 3. You then state that I do not understand your posts - I am afraid that you do not understand your own posts! And what you do not understand is my fundamental moral and ethical objection to your geneticist allusions about racial and genetic superiority - something which I will most probably never forgive you for - this was irrevocably evidenced to me and I believe all rational people by your objection to immigration as a 'solution' to the population crisis a while back - this to me is unforgivable and this itself requires that all future contributions from you are subjected to the very serious examination as to what may be behind your assertions, values and views.

Final Paragraph: "That's a bit of reality for you to take on board" - Remove the plank from your own eye first! The sight of your id causes me to have serious misgivings about everything that you write because of the implications (as I explain above) behind that which your write - I see you as having a repugnant agenda behind everything you write. The closet racism behind your views will I fear forever cloud my view of your contributions as beyond the pail.

Please try to be constructive and seek change - and not point out that all change is impossible! I'll not write any more on the subject.

armagediontimes (#33) "No legislation has been passed to keep the state out of the markets. A lot of legislation has been passed to limit the role of the state in supervisising the day to day operation of the markets. The two are discrete and hence different."

You mistakenly think so. You have not been part of what has happened to the UK state over the last 30 years or so. Are you in the USA? You should look into progressive legislation which amounts to deregulation over many years. Go back at least as far as prices and incomes policy under Old Labour. Legislation on both sides of the Atlantic (1999 USA) and (2000 UK) amounted to just late salami cuts in a long anarchistic/Trotskyite/Neocon... process.

If you are correct that legislation has been passed to keep the state out of the markets then what is it?"

Frogs heated up slowly in a pan of water don't jump out, they just die.

Ishkandar. Look up intensional. I know what you are saying.

Try to learn to listen instead of arguing your own (intensional) point of view. Japan was 'democratised' like Germany after WWII. Bottom up, shop floor democracy is Trotskyism.....

The PRC is Stalinist - Democratic-Centralist.

Finally, don't describe governments in intensional terms.

;-)

LITTLE DO THEY KNOW

John_from_hendon (#39) "Let me de-construct your post:"

I wish you wouldn't. You don't seem to appreciate how you've been subverted by the intensionalist Derrida. Read chapter 6 of Quine's 'Word and Object' (1960) instead.

The rest of you post is just more dramatic fiction. After you've read the above chapter you may begin to see why. It will come as a shock I suspect. At present, you are persistently just describing your own mental states and confusing those with reality.

Alas, it's how the West was 'done'.... ;-)

`The PRC is Stalinist - Democratic-Centralist'

According to China it is `Socialism with Chinese characteristics'.

I find that quite unanswerable. It makes me smile and respect them even more.

JadedJean # 30

"In the Liberal-Democracies, legislation was passed to keep the state out of the markets."

JJ, have you looked in the mirror recently? You might find your nose has grown a little longer!

You know full well that the opposite is true. That is to say the state has always legislated (and continues to do so) to interfere in the markets.

;)

#41. JadedJean wrote: more gibberish and seems to be unable to think for his/herself in a rational or logical manner without references to irrelevant literature! You cannot seem to comprehend that your abstruse nonsense is simply - how do I put this politely - wrong!

Get back to the subject, and stop these needless diversions. Bankers pay needs limiting as the bankers have subverted the state with their monopoly/cartel with the connivance of the powers that be.

No 37 "Do you not find it strange that one of the "big stories" to emerge from Japan concerns the wife of the Japanese premier and her belief in alein abduction?"

Well, some others think they are international pop or movie stars whilst a wife of a former national leader had the world's largest collection of shoes !!

Top income tax rate will be 50%
Top corporation tax rate for large companies will be 28%

Government has a vested interest in high pay, doesn't it?

If we all earned £25,000, it would have to draw in its horns even more than it ought to be doing anyway, correct?

No 42 "According to China it is `Socialism with Chinese characteristics'.

I find that quite unanswerable. It makes me smile and respect them even more."

Nothing really new here !! When Buddhism reached China in the early first century, they re-invented it as "Buddhism with Chinese Characteristics" to such an extent that, now, most people forget that Buddha, himself, was an *Indian* prince and the religion started in *India* !!

The Chinese have this incredible ability of taking foreign ideas, philosophies and concepts and re-inventing them as "Chinese" !! The ubiquitous "Egg Tart" found in most good Chinese restaurants in UK is actually a Portuguese dish, brought to China and first popularised in Macau. It's now a "Chinese" dish !!

Then again, the Portuguese took chillies and spices from the East to West Africa, propagated them there and then "invented" a fiery, spicy roast chicken dish - Peri-Peri Chicken. This is closely related to all those fiery, spicy roast chicken dishes of the South and East Asia !! They, probably, will not tell you this at Nando's !! :-)

#40 Jadedjean - The multiplicity of laws and regulations in the US and UK over the last 30 years or so that you obliquely refer to were enacted with one simple aim in mind; Namely to further the transference of wealth from poor to rich. Take a look at some objective data and you will find that real incomes as a percentage of total wealth have been in constant decline since around 1978. This has not happened by accident.

No matter how hard you dissemble, spin or obsuficate you will still find 13 trillion reasons suggesting that government is fully engaged in markets. Who do you think authorised the "mark to fantasy" accounting rules for global banks? and why do you think they did so?

Your misunderstanding is to think that government works for the good of the people. Government has been bought and paid for and consequently it works for the good of the financial oligarchs. The interests of the oligarchs are diametrically opposed to the interests of the people. Try thinking from the perspective of an oligarch and you will readily see the depth and breadth of government engagement in markets.

#45 Ishkandar - I think you will find that initially the shoe collection was fully authorised by the US. When it became politic to dump La Señora Marcos the press were instructed to run stories about shoes. It helped to divert attention from the crimes of the regime.

#44 John_from_Hendon You seem confused. On the one hand you recognise that the elite has subverted the state, whilst on the other you express a desire to limit the pay of the elite. Who exactly do you expect to do this limiting? and why do you think the elite bothered to subvert the state unless they calculated that it would be in their best interests to do so?

#50. armagediontimes wrote:

"#44 John_from_Hendon You seem confused. On the one hand you recognise that the elite has subverted the state..."

In the way that markets work monopolies; act for their own short term perceived interests, but within monopolies there is their own self destruction (see esso, exon, etc..., US Steel etc.., etc..) The Banks are no different they self limit, but not until they have nearly killed the goose that they are strangling (forgive the mixed metaphor). Just like empires, and wars, monopolies come to an end - there is something within them that destroys them, but not soon enough for those injured by the actions of the monopoly (doubtlessly another blogger will give us chapter and verse on this phenomenon - nevertheless) I think I'll call it 'the swimming off the canaries effect' (in memory of Robert Maxwell!)

Like the Roman Empire the bank monopolies will end. It is our job to make these bloated turkeys vote for Christmas as quickly as possible! The 'fact' that the banks have enormous monopoly power is well knows and seen to be socially unacceptable to say nothing of economically insane and destructive - those too big to fail will fail. The banks have almost completely destroyed the country that they leech upon and this will give then pause for thought! As I said earlier (in #14) bank bonuses are the acceptable problem we are allowed to discuss - the real problem is the huge and ever widening chasm in wealth in the country - this is the topic about which we are not allowed to speak - like Belgium to cite Douglas Adams! (and I apologise to both of the Belgiums!) I hope I have explained from where I am coming?

John_from_Hendon # 51

"Like the Roman Empire the bank monopolies will end."

Would you like to see an end to the private banking cartel? Then maybe you should look at ending the power of the institution (established by the Bank Charter or Peel Act of 1844) that cartelized them to begin with. True monopoly power lies with this institution and not the private banks themselves.

#52. LibertarianKurt wrote:

"Would you like to see an end to the private banking cartel?"

These things are relative - the Banks have become too monopolistic in recent years that I believe has two consequences: the first is that they become increasingly unstable and second the roots of their own destruction are within them.

A story of Banking: not so long ago almost anyone possessed of a top hat and tail cost could set themselves up as a bank for the inconvenience of turning up in Threadneedle Street once a month. Then came the secondary banking crash of the seventies and things were made more difficult and progressively we have permitted the creation of just four banks. This situation is I believe innately unstable and this is not just me even the Governor, whom I despise, agrees with me (c.f 'too big to fail').

This is the problem - bankers' bonuses are a side issue, and an insignificant one at that! I recall it was, when I started in the business, still possible to have a personal account at the much despised organisation, now there are very few account holders and they keep being given (QE) money that does not exist and that they will never have to repay. Plainly this cannot go on and it must stop if we are to start on the road to recovery. The Bank and the banks cannot be allowed to hold the Nation to ransom! There is no free market banking to save; there are just unacceptable leeches sucking the lifeblood from the Nation's poor.

By the way, it is quite easy to encourage me to seek the dismissal of Mervyn King - you don't need to beat about the bush, in 1844!

John_from_Hendon # 53

Simply removing the Governor of the Bank of England misses the point. It is the very idea of having central banks in the first place that should be "dismissed".

BTW, I agree with you. This entire furore about bankers' bonuses is a deliberate deception to dupe the populace and deflect/divert criticism/blame away from where it really belongs; that is, of course, the central bank and its almost incestuous relationship with government.

POLITICS AND SPIN: PLUS CA CHANGE...

stanilic (#42) "According to China it is `Socialism with Chinese characteristics'.

Yes. They also have a constitution. It's worth reading ..at least the beginning.

It's also worth having a look at this and #7 and #9.

armagediontimes (#48) "Your misunderstanding is to think that"

Note how you run one intensional idiom into another? Nobody can accurately claim to 'know' what others 'think' and 'understand'. All one can do is look at overt (here written verbal) behaviour. Attribution of mental states (even to oneself) is just a crude, folk psychological, way of theorizing about other people's overt behaviour, but to do that properly, one has to be trained in Behaviour Analysis. Oddly, there are many here who are not, and yet claim to be able to do the impossible.

Stick to what's written, and question whether you have properly read it. Like John_from_Hendon you have leapt to creative writing, confabulating what you have 'thought' with what was posted. It's all too commonly done, and it really is a bit mad - but socially acceptable oddly. It's certainly good for anarchism (see Derrida and others) - which seems to be the agenda behind those who foster intensionalism...

Be sure to follow up the links....

#56 Jadedjean. Very good, technically correct, but practically useless unless this is a blog wholly devoted to linguistics.

Let us resolve the issue: Do you, or do you not, consider that government either does or should represent the interests of the people?

If your answer is in the negative then you should be very happy with the current position.

If your answer is in the positive then you will find that you have a lot of explaining to do. It is unlikely that any part of such an explanation will involve recourse to intensional idioms or Bahaviour Analysis. It is highly likely that intensional idioms and Behaviour Analysis may assist in further obsufication - something that appears to be a particularly well refined forte of yours.

#51 John_from_Hendon. I would love to be able to agree with your analysis. However the exercise of unconstrained corporate power is similar to the actions of a parasite - It only ends when the host is dead.

Look at how long corporations supported the use of lead or asbestos or tobacco - long after they knew perfectly well that these products were harmful. Often long after the propenents themselves had suffered adverse health effects.

Try reading The Iron Heal. The power is not self limiting except in extremis (which today means the ecological destruction of the planet). Only active resistance can end the tyranny.

No 58 "Look at how long corporations supported the use of lead or asbestos or tobacco - long after they knew perfectly well that these products were harmful. Often long after the propenents themselves had suffered adverse health effects."

Despite partially agreeing with your statements, I would like to point out that the use of "corporations" is the same as the use of "banks" in various posts above and in previous blogs - as a blanket term. This is obviously not true just as stating one or another race is this or the other just because some of them had done a certain thing.

Certainly, there are a lot of bad corporations just as there are a lot of bad banks. Just as certainly, there are good corporations, too, just as there are good banks and equally certainly there are bad people and good people.

Many may argue that *ALL* international banks are bad but it just shows that they have not looked into banking in depth !! One Good bank, whose founder and main shareholder, Mohammad Yunus, won the Nobel Peace Prize of 2006 for his efforts in helping the poor people and that bank is the Grameen Bank !! Then there are the HSBC, Standard Chartered and Barclays who have not had to take the Queen's shilling. Therefore, in this context, they can be considered as "good" banks !!

On the other side of the scale, Union Carbide of America has still *NOT* settled their court-ordered compensations for polluting and poisoning and killing the people of Bhopal, India, when their factory there blew up and killed or poisoned thousands in its vicinity.

Monopolistic tendencies arise from Imperialistic tendencies. It is the need to dominate the market to the exclusion of all other competitors. The Spanish and British Empires have long and convoluted histories of monopolistic endeavours - the Spanish New World, the British East India Company, etc.

Even in this blog, there are many who call for protectionism, which is another form of monopolistic behavior - the monopoly of the local market to the exclusion of all others !! This is Imperialism at its worst - self-destructive.

Japan went through 400 years of protectionism and exclusion and left them weak and at the mercy of others at the end of that period. However, the opened up and modernised very rapidly after the Meiji Restoration and went on to become a world power.

China, too, underwent a similiar period of isolationism under a foreign dynasty and it took them until the foreign (Qing or Manchu) dynasty was overthrown before opening up and modernisation could begin. Then they had to deal with 20 years of civil war and warlordism followed by 10 years of occupation by the Japanese and a further 30 years of Communist isolationism before they could truly start to modernise in a big way. In the last 30 years, they covered ground that took Europe 200 years to achieve at great human and materiel costs !!

So, unless Britain is looking forward to a New Dark Ages, protectionism is out of the question as an economic solution. International banks are not all of one stripe !!

THE BIGGER PICTURE

armagediontimes (#57) "Very good, technically correct, but practically useless unless this is a blog wholly devoted to linguistics."

No, unless what you and I post to these blogs is unambiguous and has clear referents and logic, it becomes nonsense/metaphysics/confusion.

"Let us resolve the issue: Do you, or do you not, consider that government either does or should represent the interests of the people?"

It should represent the people's best interests. In the UK, the incumbents currently do not. Neither will the opposition parties. ALl three parties have polices which devolve power to the people which amounts to abrogation of government.

"If your answer is in the negative then you should be very happy with the current position."

Why? Why would I be happy with anarchism? I believe we need a strong stae and Civil Service. That the means of production and communications etc should be in public ownership. This, to me, is National Socialism. The Neocons and New Labour (think back to Militant Tendency (and who founded/led it), and how they helped undermine Old Labour and thus helped the Conservatives - also anarchists) peddle International 'Socialism' i. consumerism (see the Socialist International), which, as anti-nationalist comes down to globalism or cosmopolitanism, i.e. free-market anarchism - cf. Lisbon Treaty.

"If your answer is in the positive then you will find that you have a lot of explaining to do."

I've been doing precisely that. You don't appear to have been paying sufficient attention.

Addendum (#60) "It is highly likely that intensional idioms and Behaviour Analysis may assist in further obsufication - something that appears to be a particularly well refined forte of yours."

On the other hand, maybe you are just very self-centred (narcissistic) like many others in our culture, and, as a defining function of that, don't put very much effort into trying to understand other people's points of view, but have a sense of entitlement that they should spell it all out in your terms? That too might explain why you'd experience what's unfamiliar to you as 'obfuscting' or just get other people's views wrong would it not? If I am right, such (narcissstic) behaviours are selected and reinforced in our Liberal-Democractic (anarchistic) cultures, and that's a big part of our current problem.

Banks do not make money for the enrichment of society, they make money to enrich themselves. Is this so difficult to understand? If you count the bonuses, shares and salaries paid by the financial elite to themselves over the last decade in banks, hedge funds, pension funds and other financial businesses, if you add to that the values lost in pensions funds and private portfolios over the past two years, is there anyone who believes that the 350.000 people working in the financial services industry in the UK have enriched society as a whole?
They have enriched themselves, that's all. The unregulated madness in this 'financial exploitation industry' needs to be stopped. Maybe then pension values will actually grow by a decent percentage in the UK and an average London employee would have a chance to live in his own city without being priced out of the housing market by the deceptive weasels that seem to dominate the higher salary ranges of the financial sector.

#60 Jadedjean. OK so we agree that government should represent the interests of the people and that currently it does not, and that there is no mainstream alternative that is likely to change this situation.

You claim that current political parties devolve power to the people, and that this is an abrogation of government.

So, what power is devolved to the people? Was there some kind of vote or popular demand to bail out banks with uncountable trillions? Do you think that most people in the UK support the EU, or that most people support the expenses regime for MPs? Do you think that people support the wars in Iraq and Afghanistan? Was there a popular demand to invade these countries. Do you think the people were clamouring for the rule of law to be suspended insofar as it applies to the activities of the oligarchs? Exactly what power do the people have? Do you really think that "the people" met in secret and decided to demand a downgrade in the average quality of food so that they could create the basis for an obesity epidemic?

You imply that the current situation is akin (or is) anarchism. Here is what anarchism means: https://www.katesharpleylibrary.net/cnp66m

Do you seriously think that this in any way describes the position in the UK.

What you have is a proto fascist state and people like you serve well the oligarchy by constantly claiming or implying that the situation is the opposite of what it evidentially is.

#59 Ishkandar. You are in danger of emulating Jadedjean in terms of your narrow and misleading interpretation of the language.

The corporations that supported lead tended to be those that were marketing the product or otherwise derived a direct monetary benefit from its sale and application. Specifically you will find that Du Pont, the then Standard Oil of New Jersey and General Motors formed a JV to market lead (which they called ethyl) as an additive to petrol. Take a look at the history of this entity, and specifically the PR employed to explain away the nuerotoxic effects on its workforce.

Similarly the corporations that support(ed) tobacco and asbestos tend to be those with a direct commercial interest in the product in question. How many tobacco companies do you know that have voluntarily wound themselves up owing to the agregate harm that their product causes society. I would not expect a computer software business to have any particular view on either lead or tobacco. I would however be surprised if such an entity elected not to do business with a lead or tobacco company on moral or ethical grounds. And if they did then they could and would be sued by their shareholders.

HSBC, Barclays and Standard Chartered have all taken money from the taxpayer since they are all beneficiaries of QE, low interest rates and ongoing BoE Open Market Operations. They also know that government support continues to be available should they require.

armagediontimes (#63) "You claim that current political parties devolve power to the people, and that this is an abrogation of government. So, what power is devolved to the people?"

I have explicated this clearly and operationally many times. 'Grass roots' democracy, or Worker's democracy, i.e bottom-up democracy is cyncial Bolshevism in the vein of Trotskyism (which today has mrophed into neoconservativism/anarchism). The original Jewish Bolsheviks were sent into Russia in 1917 by the Germans not to run the country but to bring it down (as the Rusians were on the Germans' Eastern front). The only reason the British Parliament did not make the ethnicty of those leading this hit on Tsarist Russia at the time (1919, see the link provided days ago) was out of concern for 'innocents' in the East End iven teh loss of British lives on the Western Front as a consequence, as I read it.

What we have had in the UK sibef the late 70s, is an ever more Balkanized country, with Thatchr as a Front like Blair, which is insideiouly becoming a group of Regional Development Agencies, each about 6 million demographically (an EU NUT). We have an ever weakend Public Sector through engineered poor recruitment and retention and now even the BBC is under attack. Financial Services/the Service Sector in general can pretty much do it wishes as regulation is a sinecure - the only force which keeps any of these 'service providers' on their toes is fear of losing customers/income.

That's what the free-market means. That's what 'power to the people' means in anarchsistic (aka Libertarian) Liberal-Democracies. It's power to those who benefit from asset-stripping the old state/nation. That's not fascism or Nazisim - they control business along with the means of production and communication. What you are seeing here is Trotskyism.

Sorry jj anyone who has followed this blog has ample evidence that your understanding of the likes of history, biology, philosophy and psychology are at odds with any academic consensus.

At best you you are a third rate pseudo-intellectual. At worst a bigot.

In fact even your propaganda is substandard by comparison.

https://en.wikipedia.org/wiki/Sergei_Nilus

Comment 63 armagediontimes

I have treated JJ to definitions of anarchism before but she has a fixation on Hayek. I know he entertained sympathies with the philosophy as he had visited post-revolutionary Barcelona in 1936.

I whoilly agree with your proto-fascism comment.

superiorsnapshot (#66) I expect your posts to be abuse and nothing else. You may as well just post 'I don't agree/understand, but like to be abusive'.

stanilic (#67) Not just Hayek. I'm describing what has been going on in the UK for 30 years at least, or more accurately, what's been politically done to the UK. I'm amazed far more people don't see this for what it is. To the Civil Service/Public Sector it's been obvious.

Addendum (#68) In fact, conceiving any of what is happening politically as proto-fascist just reinforces the anarchism as people become even more prone to attack the state! Your line is perhaps inadvertently akin to LibertarianKurt's in this respect? The target has always been the state as created by Old Labour, which taking a long time to stip/sell off. There are still those who dearly paid into it after all. Yonger generations don't see the change, so they don't see/care about what they're slowly losing.

JJ

The modern state is a bureaucracy that serves the interest of its own apparat. One can be as much a conservative as an anarchist to know that. There is nothing beautiful about the modern state; even Civil Servants agree with me on that one. I have posted elsewhere that it exists in a condition of osmosis: it does nothing yet it still gets bigger.

However, I have counted all the lamp-posts in Britain and I can assure you that there are enough to go around once the revolution comes.

stanilic (#70) "..even Civil Servants agree with me on that one"

Are you sure you understand what 'insidious' means? Of course some who are left in the contemporary Civil Service will agree with you. The Civil Service (Public Sector) has been eroded through restructuring, privatisation, market-testing, 'agencyization', 'NGOization', 'charitization' (The Third Sector) etc etc and subject to equalities recruitment etc for years. Have a look at Probation (and recent legislation) for one very clear example.

From your posts, I'm still not sure that you understand what I've been posting. The 'revolution' started with Thatcher's/Joseph's government which was anarchistic. Their enemy was the state. Trotskyites'/Bolsheviks'/Neocons' enemy was the state. Stalin was a statist. The Cold Was was essentially a political war against statism (both abroad and especially ...at home). The domestic aspects has been cleverly waged, hence all the 'holocaust' propaganda and proscription of denial. At the moment, the bad guys are the sexist Taliban. There is a fear that such values over here would be very bad for business.

No 62 "Maybe then pension values will actually grow by a decent percentage in the UK and an average London employee would have a chance to live in his own city without being priced out of the housing market by the deceptive weasels that seem to dominate the higher salary ranges of the financial sector."

Since pension funds "invest" their money in either shares of companies, or other riskier financial instruments, in order to derive that "growth" that you talk about, then either the companies they invest in has to "grow" at a greater percentage (to allow for corporation and other taxes) or greater risks have to be taken in other financial instruments !! But over everything else, the National Currency has to be *stable* !! The current 10-15% devaluation of the *Quid* has already lost that much to those pension funds that invest in British companies *BEFORE* even considering profits or losses !!

It also doesn't help when the *then* Chancellor and *current* PM loots them to fund his political agenda !! He makes Chancellor John Morton (1420-1500), of the "Morton's Fork" fame/infamy, look like a philanthropist !!

***Morton's Fork - "If the subject is seen to live frugally, tell him because he is clearly a money saver of great ability he can afford to give generously to the King. If, however, the subject lives a life of great extravagance, tell him he, too, can afford to give largely, the proof of his opulence being evident in his expenditure."

According to the book "1066 and all that", Chancellor Morton used to stick his Fork into people he thinks have not paid up their due taxes and will not remove it until they have paid up. On being paid, he is said to have shouted "Fork out", which is believed to be the origin of that phrase. Believe it or not, as you will !! :-)

ishkandar (#72) "Since pension funds "invest" their money in either shares of companies, or other riskier financial instruments, in order to derive that "growth" that you talk about, then either the companies they invest in has to "grow" at a greater percentage (to allow for corporation and other taxes) or greater risks have to be taken in other financial instruments"

Given the ageing (i.e below replacement level TFR and dysgenic) population, the hit on pension funds is a very large part of why we're being shepherded back towards 'ersatz/faux growth'. But what' going to drive that growth now - surely that's the question that nobody dare ask or even discuss? Isn't that why we got 'funny growth' in the first place, i.e. nobody dared talk about its funny nature for fear of it stopping?

Message 71

Jean your style is very boring and pedantic. I tend not to read all of it for fear of falling asleep. Therefore it is quite likely I have not got a clue as to what you are talking about. I blame your teachers as what is the point in being clever if you cannot communicate.

Since you use definitions that are not mainstream; those of us who compromise our language, beliefs and emotions so that we may participate in a wider discussion than that found in looking up our own fundaments find you a very puzzling act to follow.

I have often remarked that it is not what one says but how one says it that is more important.

stanilic (#74) "Jean your style is very boring and pedantic. I tend not to read all of it for fear of falling asleep."

You are clearly here for entertainment rather than enlightenment (the latter is invariably painful, socking and ego-bruising).

"Therefore it is quite likely I have not got a clue as to what you are talking about."

That is very clear. I suggest you try not to fall asleep. This may require some effort on your part as falling asleep is just extreme behavioural inhibition akin to freezing. It's a defence mechanism - think of it as self-esteem protection.

"I blame your teachers as what is the point in being clever if you cannot communicate."

On the other hand, maybe it's genetic? Teaching has nothing to do with it. It's a selective process...

If the banking system has recovered sufficiently well enough to payout a large bonus to their executives, I would like to know how the banks have made such large sums of easy money. Someone, somewhere but be paying the price for this excess profit.

The government has created an artificial market by bailing out bankrupt banks. In doing so the current Labour government has sidestepped partial responsibility for the collapse. At least Alan Greenspan, the former Federal Reserve chairman had the integrity to admit a mistake. These banking organisations (and their employees) argue that without bonuses they will not be able to compete with other banks and similar institutions - in other words to compete in the market for the best employees. If many of these banks were truly left to compete in the market they would not exist, on the basis that they have failed. Any other business (in particular small to medium sized businesses) would have been bankrupt in a similar situation.
Now the government has created an artificial market whereby banks that are partially state owned (and in some cases fully owned by the government), continue to pay bonuses. In fact even those that are not state owned are in fact indirectly state owned by the way of the government backed insurance scheme, guaranteeing any future bad debts - many of these banks would not have survived otherwise. The recent spate of bonuses should go to paying back the tax payer, instead of the tax payer having to deal with cutbacks in public services and higher taxes. People involved in the banking industry are still arrogant enough not to see that what is happening now is not only morally wrong, but also against basic market principles which they claim they adhere to. I do believe that these banks should have been left to fail. I do not agree with the argument that allowing this to happen would have resulted in the economy collapsing. Those with guaranteed savings should have kept their savings (and correctly backed by the government), shareholders and investors should have been the ones to bear the burden of the banking collapse. They were content with their returns on investment when the banks were doing well, they should then be prepared to deal with the risks of those high returns. If they felt that the banks dealt fraudulently with their investments then this is a separate issue, they should have taken the banks and their previous directors to court to try and get back some of their investments. In other words let the market and law deal with the consequences. In fact we probably would not have the situation that those who presided over the collapse and disappeared when things went pear shaped would have got away with it, they would have been hunted down by investors.
The consequences: you cannot live by the market when it suits you, and when the market turns against you, go completely against market principles and create an artificial market financed by the government. Ordinary people will be paying for this for generations to come – in the meantime banks have not learnt any lessons. In fact we have now sown the seeds for future collapses. Banks will continue to operate in an unsustainable manor, lining the pockets of senior executives and major investors – because they have been given the green light by government. The government deficit will also have a negative impact in that other critical areas - the environment and global poverty will now take backseat to the deficit and its consequences. The banks would have survived but at what price to the country?
Nothing is free in life. The cost of propping up the banks will ultimately have an effect on Britain and the USA’s international competitiveness. This will enable Asia, other eastern countries and hopefully developing nations to take centre stage. So in the end the market will have its say.