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.
Fedup’s comments are every bit as shallow and pointless as “Stephen”‘s. What a coincidence.
Heart Of Darkness indeed.
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“These chaps were not much account, really. They were no colonists; their administration was merely a squeeze, and nothing more, I suspect. They were conquerors, and for that you want only brute force — nothing to boast of, when you have it, since your strength is just an accident arising from the weakness of others. They grabbed what they could get for the sake of what was to be got. It was just robbery with violence, aggravated murder on a great scale, and men going at it blind — as is very proper for those who tackle a darkness. The conquest of the earth, which mostly means the taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing when you look into it too much.”
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Joseph Conrad:Heart Of Darkness.
@ Angrysoba
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“The novel is set on the Thames, but the action takes place in the Belgian Congo. Where does Conrad make it clear that the real Heart of Darkness is London?”
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The river(s)as source-extended metaphor/meta-anaolgy?
Oh, I think I see what you mean. Yes, certainly imperialism was the darkness that Conrad was talking of but I don’t think it is quite as strong as to say London was the heart of darkness. Rather it is show there was a lot more darkness about than that “Dark Continent” idea that was prevalent. I think the story within a story technique was also used to show layers of darkness as well.
@ Angrysoba,
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“Oh, I think I see what you mean. Yes, certainly imperialism was the darkness that Conrad was talking of but I don’t think it is quite as strong as to say London was the heart of darkness. Rather it is show there was a lot more darkness about than that “Dark Continent” idea that was prevalent. I think the story within a story technique was also used to show layers of darkness as well.”
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I feel Conrad was implying,without mentioning London specifically,that in terms of colonial scale/reach,London/Britain was the real heart of the darkness.Certainly what Belgium did in the Congo was truly horrific but the British empire,in terms of reach,was the largest perpetrator,arguably.
Agree with the gist of this article. Merkel and Sarkozy have grasped the nettle and since they announced they were heading in the direction of fiscal union the world markets have settled. Cameron is playing a dangerous game, because as we are not in the eurozone our position in the EEC is kind of marginal anyway.
Alex Chancellor…oh dear oh dear…where does one begin?
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http://www.guardian.co.uk/commentisfree/2011/dec/08/cameron-should-forget-about-compassion
Sir Geoffrey Norman MP says No!
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http://www.youtube.com/watch?v=yITzZmhFjko&feature=related
Predictable enough…
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http://www.guardian.co.uk/business/2011/dec/08/goldman-sachs-whistleblower-threatened-sack
John Goss’s note is excellent, and raises a number of interesting peripheral points that are worthy of note. The economy of Germany is largely built on a regional/local level, the headquarters of multinational companies for example (like Bertelsmann) tend to stay where they are founded (in their case Gütersloh), they are not so “city” fixated, for much the same reasons, their shareholder base is largely built around where the company grew up with close ties to (again largely localised) banks & investment funds. Fairer societies tend, on the whole, to be more successful (see the “The Spirit Level” by Richard Wilkinson and Kate Pickett), whilst increasingly UK Inc. has become more “service” orientated as a result of successive policy “initiatives” by governments of various “shades” but all with a uniformly clear absence of any sensible industrial policy (largely due to the complete absence of any real (life or industry) experience, look at the current cabinet for example) leading to the absence of any real skills from which to establish a framework from which to build new companies.
“Apprenticeship” is often quoted as a kind of political talisman by politicians, but the simple fact is that this system (which as John points out did, at one time, offer a clear path to later professional qualifications/careers) is irrevocably broken as are the “localised” connections to industry / capital / education that once existed in the UK as they still do in Germany.
Indeed I observed on a recent trip to Italy that their industrial base remains largely intact whilst ours has withered. If Italy left the euro they have something left that could be resurrected, in the UK we have nothing other than incompetent financiers who quickly move back to losses once the “fiscal stimulus” teat dries up, the same financiers we must “protect” are the ones who fail to distinguish the difference between liquidity and solvency.
Camerons “veto” will have far reaching consequences, perhaps the SNP will feel it is time to bring forward the referendum once people realise that “bulldog spirit=Little Englander Views” – which are completely disconnected to the South East’s dependence on Europe for its success – the end is nigh.
Maybe we need our own unelected “technocrat” to take over from the “technoprats” that we have in office currently.
Nick Robinson BBC>
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“Update: Deputy Prime Minister Nick Clegg discussed the EU negotiations with the prime minister throughout last night and had agreed to the use of the veto, according to senior Tory sources. I have yet to confirm this with the Liberal Democrats.”
Welcome to the EU’s isolation ward, it has received its first patient since last nights non action on behalf of Cameron. He has singlehandedly created a two tier Europe by refusing to play ball.
To expect the same trade and benefits of a EU you have to be in it and part of it. To bray about the lack of resolve this has left Germany and France in is not good enough, because they do have plans and will carry them out. The EU will be weaker because the Commission will see its powers curtailed, the single market will not function for us as it has done and this will impact on the economy. As a dependent state that is relying on some greedy sharlatan bankers in the City to negotiate a double dip recession, we have got nothing to offer Europe. As already mentioned above, much of our most sensible engineering and science expertise is leaving our shores for better working conditions, team work and for a fairer more socially responsible system, leaving us to the wayside. Why should anybody feel obliged to let Britain trade for their obstinacy. The old EU treaty is dead, welcome to the leader of the second tier, but who wants to join Britain?
For the Lib Dems, sorry solo artiste Clegg, to sign up to this fiasco is an amazing feat of agility. As a dead body he has managed to dig his own grave, jump into the coffin and nail it shut, all in one fascinating move. Now the Lib Dems are being buried, its easy going, because their spineless body fits into a plastic bag.
Today is a good day to decide never to vote for any of the main parties again
ok Craig, Cameron is playing to patriotic sentiment and it is not a pretty sight. But as I have said earlier, I don’t think a financial transaction tax is a very efficient way to curb speculation. People surely have a right to exchange say euros for pounds if they have more confidence in the value of the pound than of the euro.
I would get rid of all transaction taxes, including stamp duty on housing and share acquisition, capital gains tax, Inheritance Tax, the lot. Replace them with a wealth tax. Far simpler, and fairer in my opinion. By the way, the wealth I wd tax would include houses (after a reasonable allowance is made) so as to prevent them being a tax haven for the wealthy.
By simplifying in this way you save time and energy on number-crunching (which might not please accountants) and free up time for productive, real work.
The Dutch have had such a system since about 2000. When living in the Netherlands, it actually took me only about 3 hours to file my tax returns and my accountant only charged me about 150 euros. Now that I live in France it takes me several days and my accountant typically charges me 400 euros. This is more expensive and represents an opportunity loss.
I strongly recommend that Brits study the tax systems of other countries and learn from the best practices while ignoring the worst (such as 6% transaction tax on house +sales+ rather than taxing house +ownership+).
Ingo, Today is a good day not to vote ever again. What chances Green, Independant,…. have got? basically wasted vote. A previous thread of Craig was headed ” People are not stupid”, and someone commented ” but they are , because if there is an election tomorrow, they will go and vote for one of the 3 main parties”. In case you have not notice, we have sheep mentality in this country. As the saying goes “people get the government they deserve”
Craig, thanks for your update. Whatever views one has about the Toibin tax, it is symptomatic of the poor quality of much of the UK media that the rational case for the tax is not being given a decent hearing. There are exceptions – for instance, Larry Elliott’s front page article in The Guardian on 8 December, arguing that “If he [Cameron] is serious about rebalancing the UK economy, he might be better off agreeing to some of these “dangerous” proposals, letting the City fend for itself (someting it is perfectly capable of doing) and devoting some tender loving care to Britain’s manufacturers.”
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Given Vince Cable’s past arguments for a Toibin tax, should he now be showing his Stalinist rather than Mr Bean side and rolling out his personal nuclear option?
It needs more than tender love and care Ian, it needs policies that establish a socillay responsible framework for employees, a more equitable society. What chances with an unrestrained and unreformable establishment?
We are dependent on Russia for our gas, the french for our nuclear energy, we are unable to feed ourselves and we believe that the world owes us everything. The free meal is over Cameron has set us on to a path of negligence and decline.
How could this society have ever elected such an inexperienced cabinet team, which, without hurrying the Lib dems into this cross road pact, would have never flown?
FTSE 100 up 0.58% at 11 A.M.
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Biggest movers Barclays,Lloyds,RBS…all up 3-4%
The way Cameron was shoved into the back rows of the mandatory photo shoot of the heads of the EU, said it all; the game is up boys!
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Taxes are good for the poor, the unemployed, the pensioner, the disabled, the driver, the drinker, the smoker, but these are not good for the bankers, and the money junkies. The disproportionate burden of the taxation that is being born by the poor, and less well-off, to keep the Oligarchs and Plutocrats from paying out for “services” these will never use.
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Ten percent of our GDP is from financial services, well so fuck? what has it done to better anyone’s lot, other than creating the fuckwit farrago we have come to be educated to identify as; credit crunch (ie better rates of return are paid outside of UK, hence the outward money flight, leaving less money, even to pay the account holders own money upon demand), Quantitative Easing (ie printing more money, and creating inflation, so that the assets of the money starved; not so well-off, can be bought a lot more cheaper by the money junkies). Too big to fail, (ie shoving the two digits in your face, and telling you; like it or lump it, that is how it has been, and that is how it shall be).
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What will the Liberals do? Vince the sell out Cable, will be wheeled out to give some more bullshit for the sake of keeping up appearance; having blown copious amounts of smoke up the “electorates” collective butts, then the boys will drive off for the champagne parties to relax a bit.
“FTSE 100 up 0.58% at 11 A.M.
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Biggest movers Barclays,Lloyds,RBS…all up 3-4%”
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Job done. Markets pleased. Bonuses planned. Camorrhoid futures soar. Until next
weektime.Very interesting documentary was shown few days ago on the BBC2. It is called an ‘Inside Job’. It gives very good analytical view of the current financial crisis and how Wall Street elite was orchestrating it. At the end it showed couple of academics from very elite American Universities who were with all their hands and minds involved in the promotion of the deregulations and were at the same time employed by investment banks with salaries much exceeding their academic salary.
Komodo,
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“Job done. Markets pleased. Bonuses planned. Camorrhoid futures soar. Until next week time.”
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Agreed,that’s how the club within the club within the club will see it.But it’s such short-termist thinking.What we’re seeing in these figures is institutional relief.An adjunct of isolationism is usually a spirit of defiance towards the “group” rejected,a martyred stoicism almost.I agree the champers will flow-for a while.But they are going to wake up,eventually,to a huge hangover because of this bulldog positioning.’Twas ever thus though.
There’s a serious deficit of long-term thinking among our, er, leaders. A financial transaction tax is not a panacea, although it plays to the fast-diminishing British love of fair play. On the basis of the Swedish experience, where tax-evading corporations found new and ingenious ways of creating funny money that would not be taxed, it’s not altogether wrong of Camerrhoid to reject it per se. But it should have been put to Parliament, and if he had submitted to the EU majority on this, it is arguable that the Sacred Markets would have responded encouragingly to that evidence of unity and determination…though possibly not favouring RBS.
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Also short-termist; just as we discover our economy has gone down the dunny, we are alienating everyone around us (including an essential market for whatever it is that we still produce), and we are expressly stating that we don’t want to change the system that got us here in the first place.
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The ideology is still Thatcher’s. It was a romantic dream when she dreamt it; it is completely out of touch with our present place in the world. It denies that we need to produce tangible products which we can sell or exchange for what we need. It thinks “growth” is a measure of success- it is only a measure of concealed inflation waiting to bite us. And now, it is plain that it is absolutely, abjectly, servilely dependent on borrowing money against future earnings we have no way of obtaining without pumping up a new, value-subtracted, bubble.
Come on guys, you’ve got to laugh at this:
Terry Smith, CEO of City broking firm Tullets, says…
“The UK is as isolated as somebody who refused to join the Titanic just before it sailed “
““The UK is as isolated as somebody who refused to join the Titanic just before it sailed “
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I bet Tim Bell wrote that for him.
Well it all comes to what priorities are. For Tories of course priorities are to make sure that City of London functions and that top banks and financial services firms feel themselves as comfortable as possible here in London. After all City is the most important economic unity of the UK (by tax contribution). Whether we like it or not if top banks decide to leave City UK economy will suffer in medium term at least.
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Then on the other hand how else we (UK) can compete with Europe and particularly with Germany. Their industries are more efficient and more productive. Everything they make is much better quality and have reputation not only in Europe but globally. What can we do to compete with such efficiency and productivity? The only golden egg we have in our basket is (again whether we like it or not) City. For banks or any other type of financial service firms is much easier to move out than for industry. And there are many of those around the world who would create City style conditions for all these banks. These banks like us, hunt for a bargain. They will operate in those countries where there are better conditions for them and where they are allowed to keep more profits to themselves. Can you blame them for this?
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It is of course our desire to see all this City boys taxed up their torsos but we live in real world. Unless every developed country in the world adopts the same policy towards financial services, we (UK) are risking losing our only golden egg. Both UK and Germany have different economic structures. UK industries will never be able to perform on the same level as German industries and this had been happening for the last 150 years.
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Whatever happening in Europe today is projection of German hegemony with French alliance. It is of course well deserved since it is Germany who is paying most of the deficit in eurozone.
here is another reaction from this morning by a French diplomat. He described Camerons last stand as a ‘man wanting to go to a wife swapping party without taking his wife’
sacre bleu…these french, tut tut.
“So if those braying conservatives are right about what makes economies grow, blah, blah, blah.”
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More lefty bollocks.
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Joining the Euro straightjacket under the rule of a representative of Goldman Sachs sure won’t make Britain rich.
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The wealth of the nation was undermined by stupid lefties who destroyed the education system believing the only important thing was to teach kids how to put on a condom, how to maintain a high self-esteem despite almost total ignorance and illiteracy, how to parrot the catchphrases of the politically correct and how to yell “share the welf.”
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Then there were decades of futility and waste due to nationalization of industry at the demand of the Commies in the Labour Party.
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Now the silly bastards think the only solution is to import people to replace the useless British lower class who find life pleasanter on the sick or some other form of dole than actually doing a job.
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Wealth is not created by overpaid lefty bureaucrats in Brussels. It is created through markets with rational incentives, including incentives to acquire an education and accept the discipline of work, i.e., nothing that you’ll learn about here.
Interesting food for thoughts.
http://blogs.ft.com/economistsforum/2010/10/the-director-of-inside-job-replies/#axzz1g3ZogtSA
@ Canspeccy
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Craig has posited his views,researched,reference-sourced and timelined.
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Other than vague sloganeering references to “stupid lefties” “silly bastards” and “lefty bollocks” etc can you offer some substance to your rant? I might understand a bit better what it is you’re trying to say.
CanSpeccy – no, the wealth of the nation was demolished by the flight of manufacturing, and a price race to the bottom of the market for most goods and services – and governments of all shades generally doing nothing about it. It has been accompanied by the creation of financial instruments that have in themselves no intrinsic value – for they are neither goods nor services – so it is no wonder we’re left with a bubble bursting. We should also look at the housing market that has been allowed to massively overheat – another bubble that could have been dealt with in the tax system.
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I struggle to understand your point regarding sex education within British schools – thankfully slightly improved over the last ten to 20 years – how has that destroyed the education system?
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Speaking from the Left, I somewhat agree with your point about condemning swathes of people to the dole queue. I’ve come around to the view that an unspoken agreement has been set up between the political and the broken classes: we’ll subsidise your life of poverty to keep you from causing serious unrest. I think this has mainly worked, but the rioting in the summer may be a signal that the bastards in charge have taken the mickey out of the ordinary and the underprivileged a few times too often.
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All our modern failures – banking, the greed of the wealthy, MPs expenses, the hacking scandal, the Fox/Werrity affair – can any of these *really* be blamed on the left?