From the BBC:
A Conservative government would seek to stop the payment of large bonuses across the banking system, shadow chancellor George Osborne has said. He told the Guardian that handing out big awards backed by state guarantees was "unacceptable", even for banks that were not part-owned by the taxpayer...
My knee-jerk responses to this issue are OT1H that taxpayers shouldn't be indirectly paying these bonuses but OTOH that banks, even state-owned ones, should be allowed to run their affairs as they like. Hmm. But that is missing the point as well.
The point is that the government should never bail out, take over or otherwise prop up private businesses. Neither windfarms nor nuclear companies; neither LDV nor Jaguar; neither Vestas nor Airbus; and certainly not the banks - who ought to be sorted out via debt-for-equity swaps - in which case the knee-jerk dilemma just does not arise.
Funnily enough, George nearly gets it at the end of the article, saying "You cannot privatise the gains and socialise the loss in the way that has happened", which is a cornerstone of the MW economic manifesto.
Saturday, 15 August 2009
George Osborne misses the point
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8 comments:
I wonder if Cameron and Osborne take the same view as yourself in private, but are wary of making those views public, for fear of cheesing off the banks.
While campaign contributions from them would be relative chicken feed, they can throw millions at destabilising politicians. A smear here, a smear there, planted 'evidence', bought 'witnesses', faked documents, bought [bent] cops ...
Osborne is probably still smarting from his brusing from Rothschild.
erm, bruising!
F, I don't think they think anything like me.
They are wedded to big state (for example NHS) and want to increase VAT and freeze Council Tax, whereas I am a small-state free marketeer who'd reduce VAT and wouldn't dream of reducing Council Tax (replace it with LVT, sure, reduce it, no chance).
Have you considered if any of those institutions should actually be private businesses in the first place. After all some of them control and keep the profits of priveleges granted by the community on the whole. Therefore (if you agree, which ISTR you do not) those profits cannot be privatised anyway?
OTOH I see no reason why a banking institution should not operate completely free from fettering by the state and be successful with it. Yet they would receive no special rights from the state either, that includes being allowed to take supernormal profits from "so called" interest on debt, which I can show is actually mostly RENT.
Osborne is an apprentice crook and demagogue. We all know this since he was caught on the oligarch's yacht. Get over it and call for his sacking before its too late
@ RS
"Have you considered if any of those institutions should actually be private businesses in the first place?"
Yes of course. And when I'm abroad, withdrawing a foreign currency from my UK bank account for a modest fee, and compare it with trying to change sterling for Euros at the local post office (where I had to book three days in advance and show my passport and airline tickets) I bless the wonders of competitive capitalism.
"... some of them control and keep the profits of priveleges [sic] granted by the community on the whole..."
Agreed. The banks profited from artificially inflated land values on the way up and profit from taxpayer-funded bailouts on the way down (which in turn are supposed to be passed on to 'home-owners). I don't agree with artificially inflated land values or with bail-outs.
"Osborne is an apprentice crook and demagogue... Get over it and call for his sacking before its too late"
You're the Tory, not me. You do it.
@MW
I'm already calling for Osborne to go at every opportunty. Why do you think I have difficulty getting selected?
I'm not talking just about the debt to buy land title, I mean the investment bank side of these houses (dont try and tell me they are different pleease!) They use existing money(they created) to make more money. Absurd. Its a monoploy. That is we cannot all do it. I suspect this "fake money" is used to transfer wealth in the end though by buying land again.
@ RS
"I mean the investment bank side"
As long as they are playing with their own money (or that of their willing shareholders) and not other people's (i.e. not from depositors or the taxpayer) then they can do what they like. They're just all stealing from each other AFAICS and apart from generating handsome tax receipts, is a zero-sum game.
The point is that the government should never bail out, take over or otherwise prop up private businesses.
Full stop. Period. Agreed.
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