Fiddling While Rome Burns 160


The nauseating smugness of the Davos gathering is sickening enough at the best of times. In these very bad times, it is unbearable. The idea that we just need to recover confidence and get credit moving again, was precisely what the promoters of the South Seas and Darien schemes said when those schemes collapsed. The Church of England were quite right to characterise New Labour’s proposed remedies as “An addict returning to his drug”.

Brown’s extraordinary reliance on paid advisers from the merchant banks themselves to devise the way forward is laughable – not to mention the hideously unpleasant Baroness Vedera, one of the endless stream of democratically unaccountable Brown cronies parachuted into the Lords as ministers. And if one more penny of public money gets put into the banks without all bank bosses and staff being put on civil service pay rates, I am organising a tax strike.

Am in the middle of moving house, so no more from me until the end of the week.


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160 thoughts on “Fiddling While Rome Burns

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  • shafiur

    I believe Alan Duncan had quite a trenchant dig at her only last week. Are you echoing his sentiments about Vadera or ….why is it that she is hideously unpleasant?

  • writerman

    Craig,

    Good luck with the house move. This is one of the most stressful things we have to go through.

    It’s facinating to think how the government would react if the Unions, or some group of workers had brought the country to the brink of collapse as the banks have. We’d probably have martial law and mass arrests of the leadership and talk about ‘holding the country to ransome!’

    Yet aren’t the banks really on strike at the present time, refusing to lend, with dire consequences for the economy. And what makes this even more grotesque is that the money they are so unwilling to lend is public money from the taxpayers/citzens!

    Considering how few banker there are, aren’t we talking about a handful of very powerful men? It seems extraordinary that they demand so much money from the government, to save themselves; and at the same time openly defy the wishes of the government that they begin to lend again, to stop the entire economy grinding to a halt.

    How, in a democracy is this possible? That so few people should have so much power over everyone elses lives and futures. And the government seems unwilling to confront the banks. It’s almost like the financial ‘aristocracy’ gives orders to the government and can get away with murder. Is there something about the character of our democracy that we are not being told?

    I believe we are heading for slump similar to the Great Depression and the government seems unwilling or unable to take the resolute action that needs to be taken to avert such a calamity.

    Capitalism credo is competition, a crude survival of the fittest, the best. This is the way capitalism is supposed to progress. Yet we are effectively rewarding failure on a massive scale and letting failure drag us all down. Instead we should let the banks fail, right off the debts, see where the debts really are and then begin the long, hard, process of rebuilding the economy from the ground up. Instead we are digging ourselves deeper and deeper into the debt hole. It truly beggars belief. But, I would contend, it does illustrate with extraordinary clarity, where exactly power in our society resides.

  • John K

    Writerman

    Capitalism isn’t about competition, or survival of the fittest, it’s about control and profit.

    When was the last time you heard a businessman say “we have too large a market share, we’re going to encourage cometititors” or “we are making to much profit, someone should come in and compete with us.”

    ps to Craig

    Does this mean the 12 people who hate you won’t know where you live anymore?…

  • writerman

    John K,

    I was being ironic. There is a capitalist ‘surface ideology’ the kind of absurd crap Thatcher and her acolytes spoon-fed the electorate; then there’s how things really function, what I call the ‘deep ideology.’

    Here, the state is the protector and enabler of capitalism – its ‘tool’ so to speak. ‘Competition’ is arguably far too costly and wasteful a process to be allowed to function ‘freely’ in the mythical market-place, now more than ever. Which is why I believe we are moving towards a new, or extreme form of capitalism, the post-consumer society form – authoritarian capitalism. Here the methods and attitudes of the ‘deep ideology’ increasingly break through into the ‘surface ideology.’

  • writerman

    How will we deal with a UK economy which is probably, objectively, 25% bigger than it should be? That is, if one subtracts the over-inflated financial sector, the property bubble and the revenues from North Sea oil and gas.

    Essentially, the last thirty odd years have been an exercise in how not to run a modern economy. A mixture of sellng the family silver and betting the lot on a gigantic roulette wheel, gambling with the future of the country.

    In the nineteenth century there was the battle over the Corn Laws, industry won over the landed interests. During recent decades we’ve seen a simliar conflict, between the City and our manufacturing base, industry. Industry lost out. The City took over the country because one could conjure far higher rates of profit, as long as it lasted, than one could be investing in the ‘old economy.’ We are all going to pay the price for this ‘victory.’

  • MJ

    Writerman:

    “It’s almost like the financial aristocracy gives orders to the government”

    Nearly there. Just delete “it’s almost like”.

    “Is there something about the character of our democracy that we are not being told?”

    Yes there is. It is that elected leaders are given a toy steering wheel. They are not allowed to drive the car.

  • lwtc247

    Craig. Got the book this morning. It’s great. If I may:

    “Nasser and Gloria screamed, threw their arms in the air, and ran together into the kitchen and out the back door of the house. This was not altogether helpful.”

    LOL. How very British.

    Being overseas, I’ve lost recognition of the latest slime to ooze through the NeoLabour reich. Watch and you’ll see ‘e-money’ being the ‘new’ proposal. a New World Currency for the oft said New World Order – don’t forget to sumit your DNA Iris and thumbprint for digitization to have the ‘opportunity’ to ‘enjoy’ this ‘solution’

    ‘Fraid Usury is the root cause and no-one seems to give a monkeys.

  • writerman

    Listening to ‘5-Live’ this morning; their somewhat forced joviality is wearing a bit thin – all things considered, they covered the latest government proposals to purchase ‘toxic assets from the banks to the tune of an extra £52 billion!

    At no point, did the cheerful chappies in the studio or there rather posh sounding chum from the city, called in to give ‘expert’ advice, mention how one would put a vulue on these ‘assets.’

    If the banks can’t sell them in the ‘marketplace’, which they can’t, do they have any real value at all?! So the UK government is buying, or rather giving the banks, another £50 billion for worthless ‘assets.’ But there was no discussion of any of this. The elaborate charade continues unquestioned, and this passes for financial journalism on the BBC! How do they get away with it?

  • anticant

    Other names for authoritarian capitalism are corporatism or fascism. Britain in the 2000’s is starting to smell increasingly like Weimar Germany in the 1920s and early ’30s.

    The snag about letting the improvident banks collapse is that honest small depositors would lose all their money too. What then?

  • writerman

    antcant,

    This is a problem, what to do about honest, small depositors? One could simply guarantee the deposits. I mean we’re are apparently awash with money, so let’s guarantee all the deposits in British banks. That should be easily done. What to do about the shareholders is more tricky, are they capitalists or are they not?

    I think we should nationalize all the banks right now, take them over; lock, stock and barrel. Look at the books and find out where the losses really are and how big they are, and clean out the stables.

    Maybe we should just have one state bank, or perhaps two. There would be no ‘fat-cat’ saleries or bonuses, and probably no shareholders payouts. They gambled and losts. That is supposed to be the essence of capitalism, isn’t it?

    At the moment, we all effectively own the banks already, because they are worthless as they are technically insolvent and the loans or bailouts are already larger than what the banks are worth. If this was a private company stepping in to save the banks with such colosal loans, that company would now own the banks, why dont’ we? Why are we bailing them out, covering their debts, yet we have no control? This is ridiculous. Why should the taxpayer/citzen pick up the tab for the losses but not the profits, in there ever are any?!

  • writerman

    Also, I just thought that authoritarian captitalism was easier to understand than ‘difficult’ concepts like fascism and corporatism, which I think sound like something from the past, one thinks one men in boots and uniforms marching. Whilst I always thought ‘fascism’ would return in a smart business suit, lead by a charming psychopath, with a winning smile, a lot of confidence and a guitar.

  • MJ

    The deposits of individual depositors are already guaranteed – up to £50,000 per account (unlimited with Northern Rock). That’s fine so long as the Government doesn’t go bankrupt.

    One solution might be to return to the Gold Standard. That prevents the creation of non-existent “funny money” (which lies near the heart of the current crisis) and ensures that the value of loans, fiscal insurance policies etc can’t exceed the amount of “real” money in existence.

  • algernon

    Regarding small depositors. They must recognise the RISK of investing money, read the signs and withdraw their investments if necessary.

    There shouldn’t be a need to ‘guarantee deposits’ if people took the responsibility and understood how finance works.

    And the argument that people don’t have the time or inclination to take care of financial matters is the wrong attitude too.

  • john

    George Dutton

    Or because people don’t vote against them ?

    I think we should have free trade in politicians, see if we can export ours to China and import some better ones instead.

  • Reason

    algernon:

    Regarding small depositors.

    These are DEPOSITORS not INVESTORS. There is an important difference. They are depositing their OWN MONEY, not making an investment. The question of investment risk is not applicable.

  • algernon

    Reason:

    You are wrong. The question of risk is applicable. If the deposit account is giving interest on your deposit this counts as a reward for your RISK in investing that money.

  • MJ

    “Let me issue and control a nation’s money and I care not who writes the laws.”

    Mayer Amschel Rothschild, 1790

    Since the current crisis appears to have originated in the USA, it’s perhaps useful to know how the USA’s modern banking system came about, particularly the creation of the Federal Reserve in 1913. It’s not exactly widely known that the Fed is essentially a private organisation, that it is not required to publish accounts (so no-one knows for sure who its stockholders are), or the jaw-dropping political shenanigans that took place to foist a Central Bank on a country whose citizens did not want one.

    G. Edward Griffin’s article at http://www.bigeye.com/griffin.htm is a very well-researched, accurate and readable account of the whole shocking story.

  • George Dutton

    “Since the current crisis appears to have originated in the USA”

    MJ

    To understand what is happening you have to go back to who was responsible for it all in the first place…The EVIL ones…and the two words that caused it all…”Deregulation”…”Globalisation”…The insanity off free market’ economics, or should that read GREED of the few at the expense of the many.

    “Milton Friedman, free-market economist who inspired Reagan and Thatcher, dies aged 94″…

    http://tinyurl.com/srzs3

    The influence that Thatcher had over Reagan as regards economic thinking (or lack off) was key to todays events.

  • George Dutton

    “Ian Gilmour served as defence secretary during Edward Heath’s administration, before becoming Lord Privy Seal in Margaret Thatcher’s first government”

    “In September 1981 he was sacked by Mrs Thatcher and remained a prominent critic of what he regarded as extreme Thatcherite policies”

    “He responded to his sacking by Mrs Thatcher by issuing a statement declaring that she was steering “full speed ahead for the rocks”…

    http://tinyurl.com/6cmprl

    He saw it coming.

  • Reason

    algernon:

    You are talking rubbish.

    There is an important difference between DEPOSITORS not INVESTORS.

    This is even confirmed in your link:

    “Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is realized, unlike saving(s) where the more limited risk is cash devaluing due to inflation.”

    algernon: stop spreading nonsense.

  • algernon

    Reason:

    I don’t see it as nonsense to take responsibility of one’s own wealth, instead of relying on a system of taxpayer backed savings. This is my argument.

    Where do you stand on such insurance of deposits?

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