The Guardian today published a photo of a bit of derelict yard where kids had been playing, as evidence that because of cuts the local council – Blackburn – could not afford a proper playground.
The reason Blackburn council cannot afford a proper playground is nothing to do with cuts. It is because. like most local governments in this country, it blows far too much money on the excellent lifestyles of fatcat senior officers. In the town hall of Blackburn there are an astonishing 16 council officers on over £75,000 per year plus allowances, gold-plated pension, car and benefits.
The chief executive is paid more than the Prime Minister. A council deputy leisure centre manager in Blackburn gets £42,000. A friend of mine is deputy food and beverages manager at a famous Central London hotel – he gets £26,000.
Yesterday saw the British establishment through pomp and show, and a display of jewels looted with violence and rape from foreign cities, announcing policies to worsen the lives of the poorest on benefits, and clamp down further on the immigrants who do so much to keep this ailing economy active. But despite their willingness to attack the vulnerable poor or foreign, what the political class do not do is attack their own. The point of the state is to divert money from the taxpayer to the political class and their paymasters.
The high-ups in Blackburn Council may be bottom feeders within that system of privilege, but boy! their bottoms are certainly getting fed. Doubtless they all take the Guardian, the newspaper of those “living high off the taxpayer” classes. Maybe they could have a whip round from their inflated salaries and build a little playground?
…. and so intelligent people ask the question :
If so many important people in the past believed that control of the money supply was paramount to a prosperous and independent nation, why do we never hear mention of the subject today?
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“That this House considers that the continued issue of all the means of exchange – be they coin, bank-notes or credit, largely passed on by cheques – by private firms as an interest-bearing debt against the public should cease forthwith; that the Sovereign power and duty of issuing money in all forms should be returned to the Crown, then to be put into circulation free of all debt and interest obligations…”
Captain Henry Kerby MP, in an Early Day Motion tabled in 1964.
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“Banks lend by creating credit. They create the means of payment out of nothing. ”
Ralph M Hawtry, former Secretary to the Treasury.
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“… our whole monetary system is dishonest, as it is debt-based… We did not vote for it. It grew upon us gradually but markedly since 1971 when the commodity-based system was abandoned.”
The Earl of Caithness, in a speech to the House of Lords, 1997.
I wonder what lorry and train drivers feel about people throwing themselves in front of their vehicles, leaving a horrifying mess for a complete stranger to clean up.
As an individual, if I want to borrow money, and thereby become indebted, I have to offer security.
A bank, when it lends money (assuming that it is a fractional reserve banker rather than a mutual, which has assets to cover its undertakings), transfers what is in effect a promissory note into my account, and credits itself with the money I owe it – and which, as I have given security, it has every chance of my paying. In other words, not only has it not parted with the money it has lent – it hasn’t even got that – but it has created it out of thin air and added it to its own account as well as mine. Come payday, it disappears from mine and remains in the bank’s account. Bonuses all round!
And what do we do about this? We make the law regarding financial transactions apply in the same way to banks as to individuals. Simples. If you haven’t got the money (fractional reserve bankers haven’t), you can’t lend it. And money lent is, for the duration of the loan, no longer the lender’s but the borrower’s, and appears on the debt side of the borrower’s account, not the credit side.
When the loan matures, it, and the legitimate interest due, become the rightful property of the bank again.
As a side effect, if it is necessary for the bank to hold funds to cover its accumulated loan debt, it will want to attract savers. Which means it might consider (as a totally revolutionary innovation) paying savers decent interest rates for the use of their money.
S**T! The reverse of what I meant to say: should read
“and appears on the debt side of the lender’s account, not the credit side.”
Precisely, Komodo, and to get back to the point that triggered my many posts, this power of the banks to create money out of thin air not only makes them rich, it gives them complete control over the money supply. Financial depressions don’t just happen, they are deliberately created. A nation can only be prosperous if the bankers allow it.
If the banks create lots of money out of thin air (i.e. make lots of loans), there is plenty of money swilling round the economy and the nation is prosperous. If they stop making loans, the money in the economy dwindles as people repay their previous loans until there isn’t enough money around for everyone to repay. The ones who can’t pay go bankrupt and the banks seizes their assets, often their home or business. Wham, bam, thank you Ma’am.
After a few years, when the flow of bankrupts eases off, they start lending again and the cycle begins anew. Boom and bust in action.
The reason businesses are finding it difficult to get a loan at present is not because we’re in a recession, it’s the other way round. We are in a recession because businesses can’t get a loan.
Does anyone have to create depressions, Node? Aren’t they inherent in the system? A bust is just the vacuum left by a boom passing…but the fat cats can make an equal profit from either, and do.
@ Habakkuk – Re Your comment – ““MPs have in the past asked in the Commons whether Geidt – now the Queen’s private secretary – was a member of MI6″ … Why is it important, what would it matter and what conclusions should be drawn from this if it’s true?”
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Why is it important? The answer is because it goes to the very route of what a democracy is or should be. Spooks can never really retire – they are always spooks with the connections and mindset of spooks. Now MI6 is an organization that is known to work in secret outside the law. Many believe it to have a history of assassination and murder, and it has been recently revealed that its own Baroness Park has talked about their involvement in the assassination of a former leader of the Congo – Patrice Lumumba. MI6 is also known for its manipulation of the media (it even has a specialist propaganda section it calls I/Ops to do it), and many (including former MI6 officers) have reported its involvement in intimidation, harassment and threats.
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Now I don’t know whether Sir Christopher Geidt is/was a member of MI6 or not. Nor does his involvement with military intelligence matter one way or the other. But MI6 is a different creature – It has a very substantial secret police component to it, and is very “establishment” political will little real democratic checks and balances on it. If Royalty were dealing directly with MI6 or MI5, rather than through government Minsters, it should, in my view, be seen as a threat to democracy.
Komodo, you say “Does anyone have to create depressions, Node? Aren’t they inherent in the system?”
Well certainly that’s what they constantly tell us but I don’t believe it. The clue is in your closing remark “…but the fat cats can make an equal profit from either, and do.” Exactly so, and what they DON’T make a profit from is a stable financial system.
Even back in 1809, the bankers’ modus operandi were well enough known for Thomas Jefferson to warn of the dangers of bank-induced boom and bust. They’ve been doing it for centuries, Komodo.
I wasn’t intending to explain all the ramifications of the financial system and am not attempting to do so now.
In any case, the appalling poverty and unemployment of the 20s had much to do with the obsession of the government to cut the national debt (the Geddes Axe). Mass unemployment led to cheap labour. If not the intention, it was certainly highly desirable for them. This made a bad situation worse. Much like today.
Then it led to the General Strike and the emergence of quisling Labour politicians such as Ramsay Macdonald and Philip Snowdon.
In 1945 Labour, with an enormous national debt, handled things very differently and laid the foundation for prosperity for 25 years. We shall see what the present crash brings and whether Labour will react as in 1945 or as in 1929.
Of course, fractional reserve banking creates opportunities for greedy bankers. They didn’t stop at ten times reserves, some banks went up to 100 times reserves. And they didn’t use the facility for lending to businesses; they were buying junk on a massive scale.
All they could see was the high interest rates and the AAA rating. They didn’t care to look under the high quality label to see the rubbish beneath. Nor did they understand the exotic financial instruments they were so keen to acquire. You can hardly claim they were successful in their endeavours as most of the players have been moved out although not prosecuted as they should have been.
The Bank of England is now taking this junk off their hands to be paid for by the taxpayer, so the banks can do it all over again. Hey Ho.
Don’t know about the fat cats but here are some circling vultures. La Thatcher lives.
Severn Trent receives takeover approach
Severn Trent water cleaning plant
Severn Trent supplies water to 7.7 million people in the UK
A group of international investors is interested in buying UK water supplier Severn Trent, the company has said.
The investors include a Canadian infrastructure company and the Kuwaiti government investment fund.
Severn Trent confirmed it had received an approach, but said it was “at a very early stage” and there was no certainty that an offer would be made.
The company’s shares jumped more than 17% in the first few minutes of trading on the London Stock Exchange.
/..
http://www.bbc.co.uk/news/business-22521235
http://en.wikipedia.org/wiki/Severn_Trent
Komodo, you say “Does anyone have to create depressions, Node? Aren’t they inherent in the system?”
Well certainly that’s what they constantly tell us but I don’t believe it.
Why not? If you spend a decade sucking all the real value out of the economy, and bearing in mind that all Ponzi schemes, including the legally approved ones, are necessarily finite, what’s left? A depression is what’s left. The fact that people with loadsamoney can profit from the decline as well as the rise is neither here nor there – indeed, it might be argued we would have a more stable system if bears and bulls had formally agreed to manipulate the market in competition – they’d cancel each others’ effect out, no?
My view (and Benoit Mandelbrot’s) is that “the market” is essentially and in the mathematical sense chaotic. Coincidences of unrelated tiny events can produce enormous and completely unpredictable consequences, and the system is prone to positive iterative feedback. “Trends” and “cycles” do not in fact persist long enough to be of predictive or analytical value, and changing parameters plot unpredictably in time on a multidimensional fractal attractor. In this view, saying anything sensible about an economy is a challenge, so I make no excuses for the immediately foregoing statement. :~|
That aside, this is an entertaining and extremely perceptive article (so’s the rest of the blog,for the most part) on the wrongheaded ideas of Milton Friedman, which have ensured that whatever the underlying mechanism is, the economy is structured to benefit the already rich at the expense of the increasingly poor:
http://hat4uk.wordpress.com/2013/05/12/message-to-dan-hannan-in-the-tyranny-of-the-status-quo-there-is-no-difference-between-chairman-mao-and-chairman-milt/
Because the banks are too powerful to allow themselves to be dependent on the natural swings of the market. Read all these quotes I’ve posted – prime ministers, presidents, chancellors and emperors, not to mention bankers themselves, all saying that bankers have the power to completely control a nation’s economy. They are not merely saying bankers have the power to exploit the vagaries of an economy, they are unambiguously declaring that whoever issues the currency controls the economy, i.e. they dictate when it booms and busts. For centuries, the movers and shakers of the world have known that it’s all about who controls the money. It is proof of how powerful the bankers are today that we no longer talk about it.
It’s not about money, Komodo. Just think about the proportion of her/his income the average person pays annually to the banks, through mortgage, interest on car and household loans, bank and overdraft charges, about 3% of every credit card purchase, PayPal, interest on the National Debt through our taxes, our government ‘bailing out’ the banks, reclaiming bankrupted homes and businesses. I would say that 10% is a conservative average. They get this EVERY YEAR FROM EVERYBODY. They’ve been doing it all our lives. Where does all that money go? It doesn’t add up! Vast quantities go into buying up energy and the industrial and military industries which make even more huge profits. Really, think about it, it doesn’t add up, they end up with all the money and we have to keep creating inflated new currency to keep going.
It’s about power, the power to dictate which technologies are adopted, which nations exploit which, where science researches, and of course to control the flow of information and thus the average persons very thoughts. Too conspiratorial? Too paranoid? We all have to make our own judgements on that. If you haven’t already done so, I urge you to watch the money as debt video, it’s an eye opener.
http://www.youtube.com/watch?v=jqvKjsIxT_8
…. and if that whets your appetite for a more comprehensive analysis, I recommend:
http://www.youtube.com/watch?v=U71-KsDArFM
And Benoit Mandelbrot? He was undoubtedly a brilliant mathematician and I personally will always be grateful for his contribution to chaos theory that changed the way I look at the world, but maybe he wasn’t such a good historian and didn’t realise there were factors other than mathematical ones involved in the movement of financial markets.
Here’s the ultimate tribute to him, the deepest ever journey into a fractal. (Clark, are you about?):
http://www.fractaljourney.blogspot.co.uk/ and click on “in memory of Benoit Mandelbrot”,
There’s a disconnect here, Node. The market is not the same thing as the means of exploiting it. The market is chaotic. The means of extracting, often purely notional, wealth from this amorphous cash-pump, are of course not. The market’s movements are not analyseable, and any attempt to input some bias in your favour is exactly as likely to have negative consequences as positive ones – in the bigger picture there will be no effect at all. Mandelbrot showed this with his analysis of US historical cotton prices, whose self-scaling property was immune even to major wars. And there’s more*.
However, if you can find a channel in which the money is currently flowing,no matter whether it is flowing in or out, it is a simple matter to divert this into your personal account by buying low and selling high. Bleed off too much from the system, though, and the volume flowing in your private golden river will diminish. The market continues to behave chaotically, though at less intensity, and you can only hope that your income will be restored eventually. When sufficient real value is returned to the system, that is.
I offer this as a thought only. I’d like to dispense with economists who think that their usually disastrous ‘solutions’ can have any effect on the problem…which they have failed to identify in the first place.
*See, eg: http://users.math.yale.edu/~bbm3/web_pdfs/tailsAndDependence.pdf
Pretty opaque, but you might get the drift.
I’m not claiming that there are NO rules to how the markets and economies behave. In fact, my point is borne out by the fact that Mandelbrot is able to use fractal mathematics to analyse them. If the system is fractal, it will exhibit typical behaviour at whatever level you examine it. I’m suggesting that just because Mandelbrot is able to discover consistent average behaviour, and create formulae to describe and predict it doesn’t mean that he has described the entire system.
It’s as though he analysed the behaviour of the H2O molecules in a tank of water and came up with a model which accurately described how the energy in the average collision slowly oscillates over time between two levels, but he he doesn’t need to know that there is a thermostat in the system for his model to work. His maths are fine as far as they go, but the person in charge of the thermostat is in control.
Hmmm, crap analogy, it’s not even a fractal system, but my point is contained somewhere between those 2 paragraphs, and I have to go out now. Night night.
I’m suggesting that just because Mandelbrot is able to discover consistent average behaviour, and create formulae to describe and predict it doesn’t mean that he has described the entire system.
The point about demonstrating that the system behaves chaotically is that this means it’s impossible to analyse or predict its behaviour, no matter how much you think you know about the system. And he’s not looking at “average” behaviour, but at the fit of a time series to his algorithm at any scale.
Total enthalpy – yes. It’s what I’m saying, in a way, except that there’s no-one in control. Suck hot money out of the system, and it cools down. And as everyone is intent on making money out of the system (whichever way the money happens to be flowing), hot money gets sucked out continuously, until diminishing returns kick in.
Anyway…glad we both had to think about this 🙂
Shame on Ms Simons. She, and others responsible for this betrayal of young girls in their care, should have resigned. She has been in post since 2005.
Simons was on Newsnight last night along with Keir Starmer, Sue Berelowitz Deputy Children’s Commissioner, Mohammad Shafiq Ramadhan Foundation and Alyas Karmani STREET. Maitlis seemed to interrupt Keir Starmer unnecessarily.
Oxford grooming case council boss to stay
http://www.bbc.co.uk/news/uk-england-oxfordshire-22535440#
Their salaries. Plus plus of course.
Chief Executive £182,431 pa
Director for Children, Young People and Families £137,500 pa
Director for Environment and Economy £128,194 pa
Director for Social and Community Services £128,194 pa
Assistant Chief Executive and Chief Finance Officer £106,282 pa
http://www.oxfordshire.gov.uk/cms/content/executive-salaries-and-expenses
The Newsnight link – from the beginning
http://www.bbc.co.uk/iplayer/episode/b01sjjw3/Newsnight_14_05_2013/
“Anyway…glad we both had to think about this :-)”
Agreed. I’m sure that it’ll crop up again on other threads … and again … and again …
Be sure to check out that ‘deepest ever voyage into a Mandelbrot set’ link. It’s awsome, and I mean that literally. And while you’re there, check out the processing time that went into rendering it.
http://www.fractaljourney.blogspot.co.uk/
Well worth a watch, Node. Mathematician porn even…love the way the symmetries modulate (pant, pant). Ta.
Reference the proposed takeover of Severn Trent Water.
The legacy of privatisation: dripping with cash
There are good reasons to be wary of the prospect of one of the UK’s biggest water companies being owned by foreign investors
Editorial
The Guardian, Tuesday 14 May 2013 22.16 BST
http://www.guardian.co.uk/commentisfree/2013/may/14/leader-the-legacy-of-privatisation
Nice article yet, and I say this as I have been realizing this myself, the ‘fat cats’ themselves can not do it without armed personel and thus the crux: if the armed personel, who are themselves the “middle class”, use their training, the weapons they are provided, the food, the clothing, the articles in their homes etc.. to do nothing else but enforce the inequity then what does it say about humanity in general? If they, the armed personel themselves enjoy their perks regardless of what it means for others, if they enjoy the opression, the sense of power they get from it all, then really what good does it do to even talk about ‘fat cats’? For as I grow older and realize more and more I see no reason to go on not because they are not physically able to use their training, the weapons they are provided, the food, the clothing etc.. to move for the freedom of others but because they have it not in their hearts to do so for if they did they would have so moved allready and none of us, the workers that have provided for them, none of us that have built and maintained social infrastructure would need to say a single word.
Thus is the state of the world.