UPDATE
Exactly as predicted, the broadcast media this morning are hailing Cameron’s patriotism in opposing a financial transaction tax and “Protecting the City of London”, as though this were the Blitz.
Both the BBC and Sky News have featured economists “explaining” what a bad thing a financial transaction tax would be for the City of London. Both were employed by institutions which would have to pay the tax – a fact which was not pointed out.
Despite the fact that a large majority of academic economists, the European Commission, 23 European governmnets, the Obama administration, and Vince Cable before he got his ministerial chauffeur, all believe that a transaction tax is an essential step towards preventing the banking speculation that caused this whole mess, the media are not presenting anyone who believes in the transaction tax.
No, the media narrative is simple. It’s fighting off the Johnny foreigner, Batting for Britain.
What a load of crap.
End of update: here is yesterday’s piece:
The xenophobic yaah-booing of the Tories over the demand for Cameron to show the “Bulldog spirit” is Europe is quite sickening. It is astonishing that the broadcast media have universally bought in to the spin that Cameron is “Defending Britain” by opposing the banking transaction tax, that all other major European powers want.
Cameron is not defending Britain. He is defending his banking paymasters. A transaction tax is essential to discourage multiple speculative transactions and other banking practices which have shown they can wreck entire national economies. Cameron’s opposition to the transaction tax should be vilified as reckless and a blatant pursuit of class interest, not universally lauded as “patriotic”.
Our schadenfreude at Germany’s difficulties is misplaced. Germany remains a much better economy than the UK. They manufacture a great deal more and thus have a much better balanced economy. Despite having swallowed East Germany, German GDP per capita is once again higher than that of the UK, by about 3%.
Crucially, as shown in the recent OECD report, income in Germany is much more fairly distributed than in the UK. The UK in fact is twice as unequal. In the UK the top ten per cent of the population have an average income that is twelve times that of the bottom ten per cent. The same figure for Germany is six times. What is more, inequality in Germany has been falling for the last six years, whereas in the UK it is accelerating.
Yet the German economy has outgrown the UK economy in the same period. That is impossible, according to every TV pundit I have seen in the last month. “It is massive reward for thrusting executives that encourages them to put the dynamic effort in, that leads to economic growth and drags the low paid mere mortals along behind them. If the gap between rich and poor is not colossal and widening, the economy cannot perform as well. Otherwise these vital high earners will desert us and move to Singapore.”
The mantra that economic growth must entail a widening wealth gap is scarcely challenged in the mainstream media narrative. But it is plainly untrue. In Germany in 1990 the top 1% of income “earners” received a staggering 11.1% of total national incomes. By 2007 that figure was – still 11.1%. By contrast in the UK in 1990 the top 1% took 9.9% of national income. By 2007 that figure had shot up to 14.2%. And all the indications are that in the last four years it has accelerated still faster, almost certainly now over 16%.
So if those braying conservatives are right about what makes economies grow, our economy should be streaking ahead of Germany. But it isn’t, quite the opposite. Meanwhile the “right wing” Merkel has overseen a greater drop in inequality than Britain has seen in two generations.
A period of humility from Britain is called for. Those braying Tory MPs are fools.
Even if Davey cannot summon up the bulldog spirit, I’m sure something or other starting with “bull” will be much in evidence.
The statistical analysis is for wimps. Adam Smith fantastic, and Keynes bad, Euro will fail, etc. The dyscalculic bastards selected to “represent” we the people, are only interested in faith based economics, and analysis is something they wouldn’t have any truck with.
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So bulldog spirit and tally-ho pip pip and all that, trouble is Britain no longer is punching above its weight, in fact we can hardly punch our way out of a paper bag, and Dave wants to set the terms of reference for others?
Excellent post Craig.
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Succint analysis backed up with pertinent stats and facts that even an economic ignoramus such as myself can grasp.
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When laid out as clearly as this it makes it even more ridiculous that the media economic “experts” and politicians dare parrot out the same old lies and guff.
I wonder how many people who cover the Tobin/Transaction tax debate know that it has been tried elsewhere in the world, with predictable results.
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I mean, could have foreseen that Hong Kong and Singapore would have remained major (and by some measures, become increasingly important) financial centres despite continuing their Tobin tax regimes?
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As an aside, I’m actually quite a lot less sympathetic to Germany’s predicament – they aren’t the nation having crippling austerity and unelected governments imposed upon them, yet they are as responsible as the periphery for the current account imbalances that have precipitated this crisis. The one hint of light is that finally, there are signs that Merkel is shifting away from the fiscal profligacy narrative which she has long clung to.
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So what an irony it would be if Britain scuppered a Eurozone deal that begins to address the real structural weaknesses of the single currency, because Cameron is wedded to his dick-swinging macho austerity madness. I have some faith Cameron is pragmatic enough to make a deal, but no question he’ll need Libdem support to make it stick.
good points well made Craig.
the most depressing aspect of what you rightly point out is that Dave and his cohorts know full well that they are lying.
I particularly liked Cameron’s comment “It’s the devil’s own job to collect,”
Since when did that stop the taxman?
“It’s the devil’s own job to collect,” – even at the wrong end of a shotgun barrel, or facing down ferocious dogs/geese/goats/bulls – you’re still expected to collect. Speaking from experience.
Craig – thank you for another excellent article.
Actually the German economy has always outperformed the British one, long-term – ever since there was a Germany, i.e. since the 1860s. They didn’t need to start wars, and if they hadn’t they would have been running Europe by 1950. They are just much more sensible and efficient.
As for the supposed need for motivation by immense salaries and bonuses, when I worked for a big multi-national our masters were always quick to assure us that “money doesn’t motivate” when we asked for modest salary increases to keep up with inflation. It seems that money doesn’t motivate, unless you already have far more of it than any decent person could ever possibly use.
Tory MPs are not fools, they are self serving so and sos, they have been purchased by the banks and corporates. To have a parliament who serves the interest of UK rather than interest of top 1%, we should have laws to stop the business fund the parties, none of the 3 main parties in UK are willing to give that up. We are doomed…
“A period of humility from Britain is called for.”
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It is I agree Craig thank-you, yet propriety and concord, the precursors of being humble exist only to retain the coalition’s ability to appease the banksters. Who cares a shit for our friends next door; our government’ allegiance, homage and obedience is to the Trident masters across the pond – they are the meal ticket, they bring home the dollar bacon in blood money.
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We note the parliamentary debate on one-sided extradition lead to a ‘no-vote’ – obviously the Scott-Baker decision holds as Theresa May day-dreams, meanwhile Dave Davis remains gagged and Janis Sharp continues weeping for her ailing son Gary.
Great stuff Craig. They seem like obvious points, but they need making and you do it brilliantly.
The Tories have been bought and sold for bankers’ gold and are indeed a parcel of rogues in the nation.
We are brainwashed by this bulldog, and we must fight for Britain nonsense. I wonder if that means fighting for road sweepers and council workers, nurses and office workers, joiners and painter and decorators.
I doubt it.
I’m sick of hearing these people who brought the country to its knees telling us they’ll go to Mumbai or New York, Singapore or Tokyo. It seems to me we should be better off without them.
But of course they won’t go. It’s empty threats to make sure that the Tories do what they want. They can’t finance the Conservatives from Tokyo.
As for Clegg, ‘in lockstep, hand in glove’, didn’t he say. I can think of another expression which better describes his connection to Cameron. I don’t know why. The bankers aren’t going to give the liberals a brass bean.
So, what is the position of the Lib Dems and Labour on this tax? If they have none, are you going to form a political party in which it will be a central part of the manifesto?
Both the EU and the UK are hellbent on reinflating the collapsed balloon of the economy. Which even when it is working, drifts unsteerably with the financial winds. Even a bicycle would be better.
I am a toolmaker by trade. Before going to university I spent 19 years (including a five-year indentured apprenticeship) making tools, jigs and fixtures for production engineering departments. The decline in engineering has been all too evident. CNC machines made toolmaking easier for a while, but apprenticeships were becoming increasingly scarce. Seven years ago a company I worked for ran out of cash and I tried to get back into mechanical engineering. There were few engineering companies taking anyone on, and I had to settle for a job well below my capabilities as a setter-operator making automobile components. Directors of the company pleaded poverty and I was earning little over minimum wage while they were getting the best components they had ever seen. The work was basic and I worked long hours (including Saturdays) to earn a living wage. After four months there I asked for a wage increase. I was on friendly terms with the directors but they claimed there was nothing left and, probably to save themselves further opprobrium from me, made me redundant at Christmas. I asked for a testimonial which I received. It praised everything from my punctuality to my skills. The company must have been telling the truth because shortly afterwards it closed down and is now a squat for students and others who have taken over the building, students who have come out of university in debt.
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Recently Land Rover, in Solihull, has been advertising for time-served toolmakers. There are few of us left and I wonder from where they will get them. I’m past retirement age, though I am still tempted because of worries about pension reserves. After mine there is probably only one generation with any significant number of toolmakers – so these are likely to be 45 plus. This is what has happened to industry in the UK. If you want a banker, a financial advisor, service industry workers, and council employees there is no shortage – though there is no guarantee that is for much longer. From the seventies onwards industrial investment went overseas where labour and materials were cheaper. It killed mechanical engineering in this country and it will be difficult to get that industrial base back, if we ever do. I wanted to go into further eductaion when I left school. My father gave some sound advice. “If you serve an apprenticeship you will always be able to get a job. You can go into further education when you have a trade.” It was certainly true at the time. Land Rover is an exception. It is one of the few UK companies that has managed to beat off the competition.
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If countries do not produce goods themselves there can be no economic growth in the long term. If people are not fully-trained in the skill in which they are employed they will produce shoddy goods and lose out to precision engineering companies, at home or abroad. It hurts me to have to write it, but our country has been mismanaged by consecutive governments of all colours and shades. The industrial revolution started here in the Midlands. For 250 years it was the bedrock of invention and ingenuity. What it has become is an indictment on greed and avarice where profit reigns supreme and the solution to every economic ill is to print more money. There are no figures in this comment to justify my argument. What I have seen, I have seen with my own eyes. I have seen the decline and fall of our manufacturing industry. And it hurts.
Exactly, John. Same story in electronics. And shipping. And…anything that does not involve selling other peoples’ money at a profit.
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Oxford arts graduates simply have no conception of the pace of technological development, and less of the urgency of being at the leading edge of this. But it was Thatcher, who trained as a chemist, and should have known better, who set the country on the service economy path. The siren voices promising something for nothing never say anything about who pays in the end.
Cameron was quite prepared to capitulate on all points until a corporation, the city of London was threatened.
Germany are streaking ahead because they still have a manufacturing industry.The Chinese are in love with German and Japanese engineering quality and don’t mind spending the money to buy it.
Made in Britain used to have a bit of Kudos, I dont think that is the case anymore.
The relationships in the UK between politicians, the media, and large businesses -including funding, lobbying and social nepotism [loyalty to/ pressures from or on one’s peers]have a great deal to do with why “they do things better [in other countries]”. I agree that Cameron’s latest wrapping himself in the Union Jack is evidence that Dr Johnson pre-Darwinian diagnosis of “patriotism” as the last refuge of a scoundrel While it was phone-tapping for sensational stories which led to the Leveson Inquiry, there are areas of ethics and the media which have hardly been looked at so far by Leveson, notably:
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Deliberate distortion of facts in political and economic stories;
Financial journalism and relationships with companies;
Why some stories are ignored by the mainstream media – plenty of examples from this website and others.
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Let’s not leave it to celebrity victims, the Information Commisioner’s Office, the PCC and a few full-time journalists and academics to make the running with Leveson. This has so far meant that the Leveson Inquiry’s emphasis has largely been on the tabloids, with little attention to the “serious” newspapers, radio and TV. In the case of TV and radio that is partly because they are already regulated by the state through OfCom. In our rather imperfect democracy, we cannot rely on either politicians or journalists [or tyhe PCC or OfCom] to identify and defend the real public interest in truthfullness, diversity of views and limiting the scope for corrupt influences on public policy and its discussion in the media.
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Would anyone be interested in contributing to a number of case studies on news/ investigative stories that have NOT appeared in the “serious” mainstream media – or of indisputable bias and inaccuracy/lies in those that have appeared – to be part of a submission to Leveson?
You missed out a word, Craig: “Those braying Tory MPs are ALWAYS fools.”
@John, a great heartfelt post. I’ve nothing to add to that, other than thanks!
Thanks Komodo. I knew I wouldn’t be alone. My personal observation was another way of looking at what has happened over the years for us to lose our place in manufacturing industries. Craig Murray’s superb analysis of the current situation had its historical causes. As he writes Germany has a much better balanced economy because it manufactures more.
Sadly, very true!
Also, Germany has not been strangled by a quasi-religious adherence to the principle of ‘the old boys’ network’, which allows mediocrity to self-propagate.
In the UK, unlike in Germany, competence and talent are seldom allowed to rise to the top. This is why management skills/techniques in the UK are so appalling and long-term economic vision and competitiveness has been painfully missing.
As we all know, the manufacturing industries in Britain have been allowed to decline mainly in order to destroy the power of the unions. Cutting off the branch we were sitting on!
There are also many other reasons, some of which, I think, it’s against the law to mention.
Well we can now all see how Thatchers policies turned out. She claimed that privatizing all the energy firms would lead to lower prices because of more competition and she was wrong,all we have got is a load of different energy companies charging a similar price. She deregulated the financial industry and that has caused the economic crisis of the last 3 years. She sold off council housing and did not build anymore and now we have had an inflated housing market and a lack of new houses being built so we have 2 million people who cannot find decent housing and have been forced into the private over priced renting market. Of course she privatized everything she could and look at the prices we are paying now. Cameron is just following on from her policies. The Tories destroyed the manufacturing industry in the UK and decided to make a large chunk of the economy reliant on the financial industry and look t what that has done to us. As for Germany,the Germans are very good workers and have great social care as well. I worked there for a few years in the 1990’s and it opened my eyes to working practice. Having worked in the British engineering industry I was used to people staring work at 8am but they did not start then they had a chat with their mates,went to the toilet etc and maybe started at 8.30 and skived all they could thru the day whilst demanding more wages.The Germans on the other hand started work at 8 am on the button and worked until it was time for their break,they were back at work directly after their breaks,productivity was high all the time and the wages were good as a result of that. Let’s be fair,the UK is f**cked.it makes very little and if we took out the arms industry and banks then this place would be a ghost country consisting of people selling overpriced coffee and bagels/sandwiches/bagettes..Neo liberal policies do not work for the majority of people,they only seem to work for the few percent at the top. Cameron is one of their lackies,he does not represent the people of the UK and the MSM follow along not protesting that much really.
Thanks Craig for this fitting analysis and comparrisson between Germany’s economy and ours, it is fantastic how this media is living in a cocoon of their own making, rather than have a hard look at why this special relationship has copied bad examples from the west. To serve up tittle tattle, election rattlin’ from over the Atlantic always plays well in the media, whilst European policies and the interpretations of what is happening in Europe is almost zero.
John Goss resumee of the downfall of engineering in general, his pinpointing to the lack of real apprenticeships and inward investment is hittting the nail on the head.
The heart of the German economy is its workforce, always trained in updated technologies. A firm in Germany thst does not invest in modernisation, not just once in a blue moon but in reguilar intervals, almost every year, is seen as backward. Germany’s manufacturing model incorproates social reasponsibility, worker involvement and constantly updated apprenticeships. There are special engineering colledges whith superb teachings staff which, they are teaching youngsters the basics, but most importantly, the latest, most modern practises and innovative technologies as they happen. This teaching staff is constantly retrained and updated by industry itself, they are the guarantor for the cutting edge of their manufacturing industry.
To emulate the German system, once would have to rid this country of their OBN, the hangers on in the establishment who think it more appropriate to pocket the money they should be investing in modern practises and appliances.
The british motorcycle industry failed because it was making shoddy bikes with ancient old machines. They were good enough for 50/60 years of service but by the year 1965 they were clapped out and finished, still it was more important to fetter shareholders than invest in better equipment.
Finally this sentence
‘ A period of humility from Britain is called for. Those braying Tory MPs are fools.’ If at the next election, the masses are once again fooled by this cheating lying and braying lot, then I shall seriously consider looking for a more civilised country to live in, if there is such a thing.
Craig: “The mantra that economic growth must entail a widening wealth gap is scarcely challenged in the mainstream media narrative. But it is plainly untrue”
Indeed.
‘The Spirit Level:Why Equality is Better for Everyone’ Richard Wilkinson, Kate Pickett. Penguin 2011
Says it all!
As a PS to my posting at 15.35 above, in today’s afternoon session of the Leveson Inquiry there was some good discussion of non-celebrity/privacy issues, including anti-Romany and Islamophobic stories. All the witness statements are available on the inquiry’s website, but a particularly good one was from Julian Petley ( see http://tinyurl.com/blrso6r )
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A key point in his analysis is that it is wrong, as has been the approach in the UK, to treat media ownership as simply a specialised type of private property right.
“… it is extremely important to grasp the fundamental point that the so-called ’de-regulation’ of the broadcast media in the UK has come about because of deliberate changes to statute law – in particular the Broadcasting Act 1990 and the Communications Act 2003, both of which have replaced regulations designed to protect the public interest with regulations designed to promote corporate interests; this is a process of re-regulation, not de-regulation. The ’free market’ so highly prized in neo-liberal dogma is made possible in the first place only by a highly complex system of laws and regulations. Governments everywhere organise and enforce economic relations, rendering market structures no more ’natural’ than political ones.”
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The inquiry is already stimulating a useful debate on whether the “the public interest” can be defined in a way that will contribute to a better regulatory framework.
They say patriotism is the last refuge
To which a scondrel clings
Steal a little they throw you in jail
Steal a lot and they make you king
O/T, but you might like to have a look:
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“Iran state television displays downed U.S. surveillance drone”
Video: Revolutionary Guard top officer tells Fars news agency that military experts are ‘well aware how precious the technological information of this drone is.’
http://www.haaretz.com/news/middle-east/iran-state-television-displays-downed-u-s-surveillance-drone-1.400377
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(I wouldn’t recognise a genuine stealth surveillance drone from a clever piece of Lego, but others here might)
Nuid. From your link. [But experts said Monday that even if the Iranians found parts of the unmanned spy plane, they will likely get little from it. And since it probably fell from a high altitude, there may be very few large pieces to examine. ]
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Obviously these guys have not seen the Iranian video on your link. Looks pretty much intact to me.
Notice how the American right wing punditry have stopped gushing over the UK’s austerity measures as a model they should be implementing. In fact, they’ve stopped talking about the UK economy altogether.
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You might find this interesting:
http://www.debtdeflation.com/blogs/
The economist is an Aussie, but talks at some length about the UK. He concludes that what our gov’t is doing is the exact opposite of what’s necessary, which can be seen not only by the results in so far, but by any number of historical examples, besides simply using logic and reason.
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