Good Value for the Taxpayer??
29 January 2012, 04:42 PM
#91
Scooby Regular
Join Date: Mar 2000
Location: Weston Super Mare, Somerset.
Posts: 14,102
Likes: 0
Received 0 Likes
on
0 Posts
...........
But ask yourself this: if the free market is no good (if it can't be permitted to exist in its pure form for ethical reasons), and if the government operated version doesn't work (with aspects of central planning that we have today) and leads to our current situation; if the mix of free-market and state intervention doesn't work for us; then what does work? Would a government be able to do a better job with their own design of an economy, working in a totally different manner from that of the market? Would that be any more sustainable? Would it be a moral improvement?
........
It may be relevant to compare 2 countries, both more or less free markets but quite different levels of people satisfaction, Greece and Sweden. I have been to both countries but have no deep understanding of their culture. But, or so I have told, the Swedes are pretty happy with their lot. They have had tight fiscal control and have largely avoided the present EU debt nightmare. Very high taxes but with terrific social care. AND paying taxes is seen as a duty and not paying is socially unacceptable, a bit like smoking in pubs over here
Greece, on the other hand has had hopeless fiscal control and a culture of not paying tax - result, huge unhappiness, poverty and riots.There are lessons here for this country.
Just a foot note to your comments.
dl
Last edited by David Lock; 29 January 2012 at 04:46 PM.
29 January 2012, 05:42 PM
#92
Scooby Regular
iTrader: (1)
Join Date: Jan 1999
Location: UK
Posts: 15,271
Likes: 0
Received 0 Likes
on
0 Posts
What is a realistic alternative?
Capped wages and values for talent? State intervention?
29 January 2012, 05:48 PM
#93
Scooby Regular
It may be relevant to compare 2 countries, both more or less free markets but quite different levels of people satisfaction, Greece and Sweden. I have been to both countries but have no deep understanding of their culture. But, or so I have told, the Swedes are pretty happy with their lot. They have had tight fiscal control and have largely avoided the present EU debt nightmare. Very high taxes but with terrific social care. AND paying taxes is seen as a duty and not paying is socially unacceptable, a bit like smoking in pubs over here Greece, on the other hand has had hopeless fiscal control and a culture of not paying tax - result, huge unhappiness, poverty and riots.
There are lessons here for this country.
Just a foot note to your comments.
dl
Greece, on the other hand has had hopeless fiscal control and a culture of not paying tax - result, huge unhappiness, poverty and riots.There are lessons here for this country.
Just a foot note to your comments.
dl
In all seriousness, though, how can one ever possibly justify spending money that will bankrupt them?
29 January 2012, 06:33 PM
#94
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
What about going even further back than that and asking what would have happened had politicians not intervened with the intention of 'improving' the market (i.e. using their control to promote growth and stave off the natural effects of the market). The whole 'failure of regulation' issue is something that appears on the surface; but what about the political decisions that led up to the situation we have now, where, over the course of the last 30 or 40 years, the developed western economies have become deindustrialised consumer economies reliant on unsustainable credit? No one ever talks about that. It's not a failure of the market mechanism as such, which always does what it's meant to do, albeit not always in a way that's politically favourable. It's a failure of the policies of governments, of their state-run pseudo 'free market'. They did things (like spent when they shouldn't have - changing the monetary and fiscal policies to suit) that drastically altered the workings of the market.
So you have to go back further than '08 if you want to 'question the efficacy of the free-market'. We wouldn't be sitting on this ledge overhanging an abyss (of greatly reduced economic activity and general living standards, in answer to your question) if it had been left up to the free market. It was government policies which led us here, so why should we question a legal framework which logically does exactly as it's supposed to do.
Now, you might say from a practical perspective that when people cry out for something to be done... for some extra spending, that the government has a duty to do it. That's an ethical question - it might be right or wrong, I don't know, it depends on your view of the situation at the time, and your view of life in general and what it should be about.
But ask yourself this: if the free market is no good (if it can't be permitted to exist in its pure form for ethical reasons), and if the government operated version doesn't work (with aspects of central planning that we have today) and leads to our current situation; if the mix of free-market and state intervention doesn't work for us; then what does work? Would a government be able to do a better job with their own design of an economy, working in a totally different manner from that of the market? Would that be any more sustainable? Would it be a moral improvement?
This reminds me of a part of "The Theory of Moral Sentiments" addressing happiness: IV.I.8 http://www.econlib.org/library/Smith/smMS4.html
Almost everyone agrees that the happiness or contentment of its people should be a government's goal. You do have to wonder, at this stage, whether a government mortgaging away a future to make people happier right now is morally acceptable - if it ever should be morally acceptable (like in the case of the decisions that led up to this point), even when it seems harmless at the time. We have this image that the state can grant all wishes and just make things better. But there is a reality that we can't cheat: the fact that what you put off now, you have to deal with later.
What makes our present situation so tricky is another reality of life and human nature: the way people have become accustomed to our quality of life. If this had happened post war we wouldn't have a problem; people would just get on with life, expecting very little. But take the same animal now and there's a very different attitude among the general populace. Attempt to withdraw some of their rights to sit about earning a living doing nothing but churning out kids (e.g. the proposed new ceiling on benefits of £26k!), or to free or subsidised further education, and you'll have riots on your hands. And that, in my opinion, is where it has all failed: because there is genuinely no way out of this mess with out reducing the amount of money we spend (or, to be truthful, borrow), and that can't be done without appearing to be unfair and making some people unhappy. But what we're destined for if we aren't 'unfair' to certain groups will ultimately be much worse for them, and there will be nothing anyone can do about it.
So, in hindsight, should the initial decisions (which corrupted the system) have been made to give them momentary happiness, or to be 'fair'? That's the question politicians should be think about before they enact new legislation or change the monetary system in order to make some people in society a few percent better off every year. Politicians very rarely think about the - sometimes far-off - unintended consequences of what they're about to do, and very few people ever pick up on them when they occur. It's much easier to find a convenient scapegoat.
Edited to say - sorry for the length (an apology I have to make often). It seemed much less rambling/droning as I typed.
So you have to go back further than '08 if you want to 'question the efficacy of the free-market'. We wouldn't be sitting on this ledge overhanging an abyss (of greatly reduced economic activity and general living standards, in answer to your question) if it had been left up to the free market. It was government policies which led us here, so why should we question a legal framework which logically does exactly as it's supposed to do.
Now, you might say from a practical perspective that when people cry out for something to be done... for some extra spending, that the government has a duty to do it. That's an ethical question - it might be right or wrong, I don't know, it depends on your view of the situation at the time, and your view of life in general and what it should be about.
But ask yourself this: if the free market is no good (if it can't be permitted to exist in its pure form for ethical reasons), and if the government operated version doesn't work (with aspects of central planning that we have today) and leads to our current situation; if the mix of free-market and state intervention doesn't work for us; then what does work? Would a government be able to do a better job with their own design of an economy, working in a totally different manner from that of the market? Would that be any more sustainable? Would it be a moral improvement?
This reminds me of a part of "The Theory of Moral Sentiments" addressing happiness: IV.I.8 http://www.econlib.org/library/Smith/smMS4.html
Almost everyone agrees that the happiness or contentment of its people should be a government's goal. You do have to wonder, at this stage, whether a government mortgaging away a future to make people happier right now is morally acceptable - if it ever should be morally acceptable (like in the case of the decisions that led up to this point), even when it seems harmless at the time. We have this image that the state can grant all wishes and just make things better. But there is a reality that we can't cheat: the fact that what you put off now, you have to deal with later.
What makes our present situation so tricky is another reality of life and human nature: the way people have become accustomed to our quality of life. If this had happened post war we wouldn't have a problem; people would just get on with life, expecting very little. But take the same animal now and there's a very different attitude among the general populace. Attempt to withdraw some of their rights to sit about earning a living doing nothing but churning out kids (e.g. the proposed new ceiling on benefits of £26k!), or to free or subsidised further education, and you'll have riots on your hands. And that, in my opinion, is where it has all failed: because there is genuinely no way out of this mess with out reducing the amount of money we spend (or, to be truthful, borrow), and that can't be done without appearing to be unfair and making some people unhappy. But what we're destined for if we aren't 'unfair' to certain groups will ultimately be much worse for them, and there will be nothing anyone can do about it.
So, in hindsight, should the initial decisions (which corrupted the system) have been made to give them momentary happiness, or to be 'fair'? That's the question politicians should be think about before they enact new legislation or change the monetary system in order to make some people in society a few percent better off every year. Politicians very rarely think about the - sometimes far-off - unintended consequences of what they're about to do, and very few people ever pick up on them when they occur. It's much easier to find a convenient scapegoat.
Edited to say - sorry for the length (an apology I have to make often). It seemed much less rambling/droning as I typed.
It's really simple, and all to do with human nature - the part of it that wants more than it can realistically have.
But ask yourself this: if the free market is no good (if it can't be permitted to exist in its pure form for ethical reasons), and if the government operated version doesn't work (with aspects of central planning that we have today) and leads to our current situation; if the mix of free-market and state intervention doesn't work for us; then what does work? Would a government be able to do a better job with their own design of an economy, working in a totally different manner from that of the market? Would that be any more sustainable? Would it be a moral improvement?
Last edited by JTaylor; 29 January 2012 at 07:23 PM.
29 January 2012, 07:00 PM
#95
Scooby Regular
Fuçking hell! Thank goodness for this:
The crux of the issue. So if the problem's human nature and particularly over ambition, unbridled desire, envy and greed, how does one square that that if its those very traits that power capitalism in the first place. Isn't the solution the problem and the problem the solution? Sounds self devouring to me, the ultimate expression of the hidden hand.
The crux of the issue. So if the problem's human nature and particularly over ambition, unbridled desire, envy and greed, how does one square that that if its those very traits that power capitalism in the first place. Isn't the solution the problem and the problem the solution? Sounds self devouring to me, the ultimate expression of the hidden hand.
The point is that it's human nature. The framework of capitalism ensures that people have specific rights with regard to what they can and can't do. Property can only change hands with the agreement of all parties. It isn't unbridled desire, envy and greed at all, in my opinion. On the contrary, it's self-control and fairness; the fairness of setting out such a framework in the first place.
The point is that governments consciously spending more than they can afford are not part of the framework of capitalism and the free market. So capitalism can hardly be criticised for the problems they cause. It's like crashing a car straight into a wall and then blaming the car.
You think communists aren't motivated by greed, by an unbridled desire for material things? You think any other central authority wouldn't have the same intentions as the central authority above a capitalist system. The invisible hand is a description of the effects of the workings of the framework itself... it isn't a description of some muppets assuming control with a blank cheque.
If someone is to restrain the human nature of others, by what authority do they do that? And what makes their nature so different and special? Are they not human?
Last edited by GlesgaKiss; 29 January 2012 at 07:21 PM.
29 January 2012, 07:27 PM
#96
Scooby Regular
Whatever it is, it'll have to be Global. We just happen to be living in a time when these things are being worked out. I don't know the answer, but I'm becoming increasingly attracted towards the idea of a form of Christian capitalism (if anyone starts banging on about ******* gnomes.....). It might be a form of control, a noble lie, an indoctrinated morality, whatever, either way it's less corrupting and futile and doomed and nihilistic than rampant materialism.
29 January 2012, 07:33 PM
#97
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
The point is that it's human nature. The framework of capitalism ensures that people have specific rights with regard to what they can and can't do. Property can only change hands with the agreement of all parties. It isn't unbridled desire, envy and greed at all, in my opinion. On the contrary, it's self-control and fairness; the fairness of setting out such a framework in the first place.
The point is that governments consciously spending more than they can afford are not part of the framework of capitalism and the free market. So capitalism can hardly be criticised for the problems they cause. It's like crashing a car straight into a wall and then blaming the car.
You think communists aren't motivated by greed, by an unbridled desire for material things? You think any other central authority wouldn't have the same intentions as the central authority above a capitalist system. The invisible hand is a description of the effects of the workings of the framework itself... it isn't a description of some muppets assuming control with a blank cheque.
If someone is to restrain the human nature of others, by what authority do they do that? And what makes their nature so different and special? Are they not human?
29 January 2012, 07:44 PM
#98
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
Cool. But not all people can actually have the widescreen tv, can they? Have we reached futility? What are we without belief? I see you believe in capitalism and are passionate about defending it. What about people who believe in nothing? They go out and borrow money to buy plastic shît and somebody with a belief in profit before people will lend them the money and it won't be paid back and we'll have a credit crunch. Or they nick it and set fire to London. Materialism is transitory and unsustainable.
29 January 2012, 08:49 PM
#99
Scooby Regular
Join Date: Jan 2005
Location: Lincolnshire
Posts: 15,623
Likes: 0
Received 0 Likes
on
0 Posts
Lets look at it another way. A bad CEO can ruin a company. ie Gerald Ratner. If i owned a 16bn company ie RBS would i mind paying a few million to the top guy to say "dont f*ck it up".
29 January 2012, 09:21 PM
#100
Scooby Regular
Cool. But not all people can actually have the widescreen tv, can they? Have we reached futility? What are we without belief? I see you believe in capitalism and are passionate about defending it. What about people who believe in nothing? They go out and borrow money to buy plastic shît and somebody with a belief in profit before people will lend them the money and it won't be paid back and we'll have a credit crunch. Or they nick it and set fire to London. Materialism is transitory and unsustainable.
The fact is that what you're talking about moving on to is something different entirely. It's simply you're vision for the way people should live; we've been over this before. While it's true that the market is a construct and to that extent it has to be enforced, the intention is simply that people leave each other alone - they have the same rights before the law. This talk of the drawbacks of materialism is just rhetoric. What you deem to be materialism is the way people have chosen to live; with respect, they don't want your prescription for their happiness - unless they freely agree to it, that is (something they can do at any time in the free society in which they live).
Coercion is never the answer.
29 January 2012, 09:36 PM
#101
We really are becoming a nation of those who have and those who don't.
I have no understanding of what this bloke does, nor am I interested, but to justify that type of salary beggars belief. I work bloody hard in my own business, yet I could never see my work being valued so high, even though the Companies I work for, rely on me to keep their finances correct and in the black. I must be missing somthing here
I have no understanding of what this bloke does, nor am I interested, but to justify that type of salary beggars belief. I work bloody hard in my own business, yet I could never see my work being valued so high, even though the Companies I work for, rely on me to keep their finances correct and in the black. I must be missing somthing here
He has many many people who do excellent jobs ; "keeping things in the black and keeping their finances correct" etc. That's not terribly valuable as many people can do it.
What he does that very few can is that he leads - he goes into a room and no one says this is what we are going to do today, tomorrow , next year. All the eyes in the room, and in every one of the tens of thousands of job positions below him, turn to him to say " what do we do now"? It's an extraordinary pressure and if it's handled well it deserved to be paid well.
I think he's doing a pretty good job and I have no problem with what he's being paid. I know many people who earn more but who deserve it far far less.
29 January 2012, 09:38 PM
#102
29 January 2012, 09:58 PM
#103
Scooby Regular
Thread Starter
Whatever it is, it'll have to be Global. We just happen to be living in a time when these things are being worked out. I don't know the answer, but I'm becoming increasingly attracted towards the idea of a form of Christian capitalism (if anyone starts banging on about ******* gnomes.....). It might be a form of control, a noble lie, an indoctrinated morality, whatever, either way it's less corrupting and futile and doomed and nihilistic than rampant materialism.
29 January 2012, 10:01 PM
#104
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
F*ck them. Again, the route of the problem wasn't just them borrowing money. It was the encouragement they wrre given by those who who intervened. A free market is perfectly sustainable, as it's logically self-correcting.
The fact is that what you're talking about moving on to is something different entirely. It's simply you're vision for the way people should live; we've been over this before. While it's true that the market is a construct and to that extent it has to be enforced, the intention is simply that people leave each other alone - they have the same rights before the law. This talk of the drawbacks of materialism is just rhetoric. What you deem to be materialism is the way people have chosen to live; with respect, they don't want your prescription for their happiness - unless they freely agree to it, that is (something they can do at any time in the free society in which they live).
Coercion is never the answer.
The fact is that what you're talking about moving on to is something different entirely. It's simply you're vision for the way people should live; we've been over this before. While it's true that the market is a construct and to that extent it has to be enforced, the intention is simply that people leave each other alone - they have the same rights before the law. This talk of the drawbacks of materialism is just rhetoric. What you deem to be materialism is the way people have chosen to live; with respect, they don't want your prescription for their happiness - unless they freely agree to it, that is (something they can do at any time in the free society in which they live).
Coercion is never the answer.
29 January 2012, 10:02 PM
#105
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
29 January 2012, 11:32 PM
#106
Scooby Regular
Thread Starter
Well that is what I thought too! 
But then why choose Christianity, in fact why any religion. You don't need religion for moral guidance. The system of capitalism works as it is and is self correcting and where everyone has a chance to acheive the best they can, one of which is money. Money is an enabler. Everyone wants more of it, but it is just a means to an end which allows some to have more freedom, freedom from work, freedom to see friends and family and freedom to spend less time working and have a better quality of life. Things get ugly when you talk of materialism and it is this that perhaps an individual needs moral guidence.
But then why choose Christianity, in fact why any religion. You don't need religion for moral guidance. The system of capitalism works as it is and is self correcting and where everyone has a chance to acheive the best they can, one of which is money. Money is an enabler. Everyone wants more of it, but it is just a means to an end which allows some to have more freedom, freedom from work, freedom to see friends and family and freedom to spend less time working and have a better quality of life. Things get ugly when you talk of materialism and it is this that perhaps an individual needs moral guidence.
30 January 2012, 12:14 AM
#107
SN Fairy Godmother
Join Date: Nov 2003
Location: Far Far Away
Posts: 35,246
Likes: 0
Received 0 Likes
on
0 Posts
Yes, you are missing something (as I am). I couldn't do what he does as well. Very few can and those who do get paid
He has many many people who do excellent jobs ; "keeping things in the black and keeping their finances correct" etc. That's not terribly valuable as many people can do it.
What he does that very few can is that he leads - he goes into a room and no one says this is what we are going to do today, tomorrow , next year. All the eyes in the room, and in every one of the tens of thousands of job positions below him, turn to him to say " what do we do now"? It's an extraordinary pressure and if it's handled well it deserved to be paid well.
I think he's doing a pretty good job and I have no problem with what he's being paid. I know many people who earn more but who deserve it far far less.
He has many many people who do excellent jobs ; "keeping things in the black and keeping their finances correct" etc. That's not terribly valuable as many people can do it.
What he does that very few can is that he leads - he goes into a room and no one says this is what we are going to do today, tomorrow , next year. All the eyes in the room, and in every one of the tens of thousands of job positions below him, turn to him to say " what do we do now"? It's an extraordinary pressure and if it's handled well it deserved to be paid well.
I think he's doing a pretty good job and I have no problem with what he's being paid. I know many people who earn more but who deserve it far far less.
As you have no idea of my qualifications or what my job really is, I don't think you are in a position to tell me my job "not terribly valuable as many people can do it".
Last edited by Lee247; 30 January 2012 at 12:16 AM.
30 January 2012, 12:36 AM
#108
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
Well that is what I thought too! But then why choose Christianity, in fact why any religion. You don't need religion for moral guidance. The system of capitalism works as it is and is self correcting and where everyone has a chance to acheive the best they can, one of which is money. Money is an enabler. Everyone wants more of it, but it is just a means to an end which allows some to have more freedom, freedom from work, freedom to see friends and family and freedom to spend less time working and have a better quality of life. Things get ugly when you talk of materialism and it is this that perhaps an individual needs moral guidence.
But then why choose Christianity, in fact why any religion. You don't need religion for moral guidance. The system of capitalism works as it is and is self correcting and where everyone has a chance to acheive the best they can, one of which is money. Money is an enabler. Everyone wants more of it, but it is just a means to an end which allows some to have more freedom, freedom from work, freedom to see friends and family and freedom to spend less time working and have a better quality of life. Things get ugly when you talk of materialism and it is this that perhaps an individual needs moral guidence.What I am advocating is a return to the notion of a higher power as an expression of the wonder of the 'all that is' delivered via the framework of Christianity to offer some depth and meaning to people's lives beyond Big fûcking Brother and Argos. In other words, what I and possibly you and certainly our parents had - Lord's Prayer each morning in school, cubs, scouts, nativity plays, carol services, the occasional church service and a basic understanding of Christ's message. Quite why this seems so alien and controversial to so many people is absurd! Believe it or not people like CS Lewis and JRR Tolkien knew a thing or two. It may be illusory - so what? It's a richer, more worthwhile illusion than the idea that things bring you happiness because (with the exception of an Austin Healy 3000 and possibly a vintage Les Paul in cherry) they do not. It's a temporary satisfaction of a need conjured up by that idiot box in the corner. All the consumer illusion does and has done is line the pockets of a tiny minority and saddle an entire generation with misery and servility to the banks and quite possibly re-arranged the world order to the West's disadvantage. This would have happened less had we remembered, developed and acted upon our Christian roots.
30 January 2012, 08:37 AM
#109
Scooby Regular
iTrader: (1)
Join Date: Jan 1999
Location: UK
Posts: 15,271
Likes: 0
Received 0 Likes
on
0 Posts
Let's take stock.
CEO of state owned bank has his non-contractual (all corporations say that - but they are well documented with specific rules for qualification) bonus announced and denounced by all and sundry. (BTW he has now buckled to political pressure and not-accepted it!).
The general view is that his salary/bonus is
- obscene
- undeserved
- the system/market is not a reason to pay him
- Lord Trout is somehow embroiled in this
What we don't have is
- a list of people who could do a better job at lower cost
- few, if any, people who understand what he does
- any sound alternatives to the current situation
It does not make it right of course, but equally it does not make it wrong.
The broader challenge I see is this.
We have created a banking system that is global and is incredibly intertwined with all parts of Government and economy. We can rail against that and throw tomatoes all day - but that does not change. We are where we are and we cannot change the past.
What we can change is the future. What I find lacking however in all the 'banking is evil', 'bankers are idiots', and 'bankers are obscenely paid' is a genuinely valid alternative.
I am not saying we should stay with the status quo - I am saying that we should be more intelligent about the alternatives that being philosophically arcane or optimistically impractical.
It will take people of very considerable talent, who are of the current system, to help unwind it (and BTW I think Hester is probably one of them). Many very experienced bankers clearly do not understand where we have got to and fewer have the vision to understand what the transformation is.
The first step of course is to eradicate toxic corporate and sovereign debt - this alone may take ten years and a wrong move on the journey could take down countries, corporations, as well as the banks.
So in all the noise of criticism, and some very reasonable questions, what is the real alternative. Not theoretical - real alternatives and what is the transition.
I hate to say it, but whoever works it out (and it ain't me by a very long distance) will probably end up being very wealthy indeed!
CEO of state owned bank has his non-contractual (all corporations say that - but they are well documented with specific rules for qualification) bonus announced and denounced by all and sundry. (BTW he has now buckled to political pressure and not-accepted it!).
The general view is that his salary/bonus is
- obscene
- undeserved
- the system/market is not a reason to pay him
- Lord Trout is somehow embroiled in this
What we don't have is
- a list of people who could do a better job at lower cost
- few, if any, people who understand what he does
- any sound alternatives to the current situation
It does not make it right of course, but equally it does not make it wrong.
The broader challenge I see is this.
We have created a banking system that is global and is incredibly intertwined with all parts of Government and economy. We can rail against that and throw tomatoes all day - but that does not change. We are where we are and we cannot change the past.
What we can change is the future. What I find lacking however in all the 'banking is evil', 'bankers are idiots', and 'bankers are obscenely paid' is a genuinely valid alternative.
I am not saying we should stay with the status quo - I am saying that we should be more intelligent about the alternatives that being philosophically arcane or optimistically impractical.
It will take people of very considerable talent, who are of the current system, to help unwind it (and BTW I think Hester is probably one of them). Many very experienced bankers clearly do not understand where we have got to and fewer have the vision to understand what the transformation is.
The first step of course is to eradicate toxic corporate and sovereign debt - this alone may take ten years and a wrong move on the journey could take down countries, corporations, as well as the banks.
So in all the noise of criticism, and some very reasonable questions, what is the real alternative. Not theoretical - real alternatives and what is the transition.
I hate to say it, but whoever works it out (and it ain't me by a very long distance) will probably end up being very wealthy indeed!
30 January 2012, 09:01 AM
#110
SN Fairy Godmother
Join Date: Nov 2003
Location: Far Far Away
Posts: 35,246
Likes: 0
Received 0 Likes
on
0 Posts
I don't think you are embroiled in this, David
In fact, I find your comments to be extremely helpful in trying to get me to understand this banking milarky. It might sink in some day
I still find their wages and bonuses to be obscene, but I do not find these people to be evil or idiots. Perhaps a little greedy.
Everyone who has a job is contributing in some small way to keeping this Country going, so everyone is equally as important, from the road sweeper to the Bankers. Just some get more reward for what they do.
In fact, I find your comments to be extremely helpful in trying to get me to understand this banking milarky. It might sink in some day
I still find their wages and bonuses to be obscene, but I do not find these people to be evil or idiots. Perhaps a little greedy.
Everyone who has a job is contributing in some small way to keeping this Country going, so everyone is equally as important, from the road sweeper to the Bankers. Just some get more reward for what they do.
30 January 2012, 10:05 AM
#111
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
Let's take stock.
CEO of state owned bank has his non-contractual (all corporations say that - but they are well documented with specific rules for qualification) bonus announced and denounced by all and sundry. (BTW he has now buckled to political pressure and not-accepted it!).
The general view is that his salary/bonus is
- obscene
- undeserved
- the system/market is not a reason to pay him
- Lord Trout is somehow embroiled in this
What we don't have is
- a list of people who could do a better job at lower cost
- few, if any, people who understand what he does
- any sound alternatives to the current situation
It does not make it right of course, but equally it does not make it wrong.
The broader challenge I see is this.
We have created a banking system that is global and is incredibly intertwined with all parts of Government and economy. We can rail against that and throw tomatoes all day - but that does not change. We are where we are and we cannot change the past.
What we can change is the future. What I find lacking however in all the 'banking is evil', 'bankers are idiots', and 'bankers are obscenely paid' is a genuinely valid alternative.
I am not saying we should stay with the status quo - I am saying that we should be more intelligent about the alternatives that being philosophically arcane or optimistically impractical.
It will take people of very considerable talent, who are of the current system, to help unwind it (and BTW I think Hester is probably one of them). Many very experienced bankers clearly do not understand where we have got to and fewer have the vision to understand what the transformation is.
The first step of course is to eradicate toxic corporate and sovereign debt - this alone may take ten years and a wrong move on the journey could take down countries, corporations, as well as the banks.
So in all the noise of criticism, and some very reasonable questions, what is the real alternative. Not theoretical - real alternatives and what is the transition.
I hate to say it, but whoever works it out (and it ain't me by a very long distance) will probably end up being very wealthy indeed!
CEO of state owned bank has his non-contractual (all corporations say that - but they are well documented with specific rules for qualification) bonus announced and denounced by all and sundry. (BTW he has now buckled to political pressure and not-accepted it!).
The general view is that his salary/bonus is
- obscene
- undeserved
- the system/market is not a reason to pay him
- Lord Trout is somehow embroiled in this
What we don't have is
- a list of people who could do a better job at lower cost
- few, if any, people who understand what he does
- any sound alternatives to the current situation
It does not make it right of course, but equally it does not make it wrong.
The broader challenge I see is this.
We have created a banking system that is global and is incredibly intertwined with all parts of Government and economy. We can rail against that and throw tomatoes all day - but that does not change. We are where we are and we cannot change the past.
What we can change is the future. What I find lacking however in all the 'banking is evil', 'bankers are idiots', and 'bankers are obscenely paid' is a genuinely valid alternative.
I am not saying we should stay with the status quo - I am saying that we should be more intelligent about the alternatives that being philosophically arcane or optimistically impractical.
It will take people of very considerable talent, who are of the current system, to help unwind it (and BTW I think Hester is probably one of them). Many very experienced bankers clearly do not understand where we have got to and fewer have the vision to understand what the transformation is.
The first step of course is to eradicate toxic corporate and sovereign debt - this alone may take ten years and a wrong move on the journey could take down countries, corporations, as well as the banks.
So in all the noise of criticism, and some very reasonable questions, what is the real alternative. Not theoretical - real alternatives and what is the transition.
I hate to say it, but whoever works it out (and it ain't me by a very long distance) will probably end up being very wealthy indeed!
30 January 2012, 10:46 AM
#112
Scooby Regular
iTrader: (1)
Join Date: Jan 1999
Location: UK
Posts: 15,271
Likes: 0
Received 0 Likes
on
0 Posts
I would hate to be a marketeer in my response - however I believe the market will ultimately provide the answer here.
The investment banking arena, which for many has been at the heart of problem, is shrinking rapidly around us. The overall volume of activity has shrunk radically in the past twelve months. This will change the nature of investment banking and there is growing evidence that the changes made at a global regulatory level, and a local country level are starting to make in impact.
For example, UBS (moving faster than others due to the big kick in the pants it got in September), is moving rapidly away from proprietary business to focus on flow business. It is dramatically reducing its risk weighted assets.
What does this mean? No gambling with our savings and only making investments following client instructions.
This is a fundamental change in the nature of a global bank.
Closer to home, the exemplar of the 'right' banking model in the UK is probably Nationwide. A mutual bank that focuses absolutely on balanced books and prudent lending of its customers money to appropriately assessed borrowers. It rewards savers if you like.
At a global scale the word of the day is deleveraging. Getting out of debt and getting books to balance.
So ultimately I guess I believe in markets - although the pain we needed to go through to get the markets to learn is unpalatable if not unacceptable.
I do not believe in intervention per se, however I do believe in encouragement. Governments and banks need to encourage people to save, companies to deleverage.
I also very firmly believe that all the hype about bonuses is ludicrous. I attended a lecture by a professor with a deep understanding of intrinsic and extrinsic rewards and their link to motivation.
He argued extremely thoroughly that the whole banking crises was caused by the use of extrinsic reward - bonuses to you and me.
At the end I asked him one question, a question he could not sensibly answer.
What if the extrinsic rewards that the banking world utilised were linked solely to capital preservation? What would have happened then?
I believe in markets, I recognise that there are other economic systems all of which have merits and demerits. I believe in encouragement not intervention, I believe that commercial mutuality is the best form of socialism. I believe that regulation is finally shaping a banking world that will be safer and driven to reform within a capitalist structure.
And if I do have favourite financial films - they are probably Boiler Room and The Smartest Guys in the Room. My most hated would be Zeitgeist for wasting time in my life I could have spent on somethink useful like playing on my PS3
The investment banking arena, which for many has been at the heart of problem, is shrinking rapidly around us. The overall volume of activity has shrunk radically in the past twelve months. This will change the nature of investment banking and there is growing evidence that the changes made at a global regulatory level, and a local country level are starting to make in impact.
For example, UBS (moving faster than others due to the big kick in the pants it got in September), is moving rapidly away from proprietary business to focus on flow business. It is dramatically reducing its risk weighted assets.
What does this mean? No gambling with our savings and only making investments following client instructions.
This is a fundamental change in the nature of a global bank.
Closer to home, the exemplar of the 'right' banking model in the UK is probably Nationwide. A mutual bank that focuses absolutely on balanced books and prudent lending of its customers money to appropriately assessed borrowers. It rewards savers if you like.
At a global scale the word of the day is deleveraging. Getting out of debt and getting books to balance.
So ultimately I guess I believe in markets - although the pain we needed to go through to get the markets to learn is unpalatable if not unacceptable.
I do not believe in intervention per se, however I do believe in encouragement. Governments and banks need to encourage people to save, companies to deleverage.
I also very firmly believe that all the hype about bonuses is ludicrous. I attended a lecture by a professor with a deep understanding of intrinsic and extrinsic rewards and their link to motivation.
He argued extremely thoroughly that the whole banking crises was caused by the use of extrinsic reward - bonuses to you and me.
At the end I asked him one question, a question he could not sensibly answer.
What if the extrinsic rewards that the banking world utilised were linked solely to capital preservation? What would have happened then?
I believe in markets, I recognise that there are other economic systems all of which have merits and demerits. I believe in encouragement not intervention, I believe that commercial mutuality is the best form of socialism. I believe that regulation is finally shaping a banking world that will be safer and driven to reform within a capitalist structure.
And if I do have favourite financial films - they are probably Boiler Room and The Smartest Guys in the Room. My most hated would be Zeitgeist for wasting time in my life I could have spent on somethink useful like playing on my PS3
30 January 2012, 11:08 AM
#114
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
I would hate to be a marketeer in my response - however I believe the market will ultimately provide the answer here.
The investment banking arena, which for many has been at the heart of problem, is shrinking rapidly around us. The overall volume of activity has shrunk radically in the past twelve months. This will change the nature of investment banking and there is growing evidence that the changes made at a global regulatory level, and a local country level are starting to make in impact.
For example, UBS (moving faster than others due to the big kick in the pants it got in September), is moving rapidly away from proprietary business to focus on flow business. It is dramatically reducing its risk weighted assets.
What does this mean? No gambling with our savings and only making investments following client instructions.
This is a fundamental change in the nature of a global bank.
Closer to home, the exemplar of the 'right' banking model in the UK is probably Nationwide. A mutual bank that focuses absolutely on balanced books and prudent lending of its customers money to appropriately assessed borrowers. It rewards savers if you like.
At a global scale the word of the day is deleveraging. Getting out of debt and getting books to balance.
So ultimately I guess I believe in markets - although the pain we needed to go through to get the markets to learn is unpalatable if not unacceptable.
I do not believe in intervention per se, however I do believe in encouragement. Governments and banks need to encourage people to save, companies to deleverage.
I also very firmly believe that all the hype about bonuses is ludicrous. I attended a lecture by a professor with a deep understanding of intrinsic and extrinsic rewards and their link to motivation.
He argued extremely thoroughly that the whole banking crises was caused by the use of extrinsic reward - bonuses to you and me.
At the end I asked him one question, a question he could not sensibly answer.
What if the extrinsic rewards that the banking world utilised were linked solely to capital preservation? What would have happened then?
I believe in markets, I recognise that there are other economic systems all of which have merits and demerits. I believe in encouragement not intervention, I believe that commercial mutuality is the best form of socialism. I believe that regulation is finally shaping a banking world that will be safer and driven to reform within a capitalist structure.
And if I do have favourite financial films - they are probably Boiler Room and The Smartest Guys in the Room. My most hated would be Zeitgeist for wasting time in my life I could have spent on somethink useful like playing on my PS3
The investment banking arena, which for many has been at the heart of problem, is shrinking rapidly around us. The overall volume of activity has shrunk radically in the past twelve months. This will change the nature of investment banking and there is growing evidence that the changes made at a global regulatory level, and a local country level are starting to make in impact.
For example, UBS (moving faster than others due to the big kick in the pants it got in September), is moving rapidly away from proprietary business to focus on flow business. It is dramatically reducing its risk weighted assets.
What does this mean? No gambling with our savings and only making investments following client instructions.
This is a fundamental change in the nature of a global bank.
Closer to home, the exemplar of the 'right' banking model in the UK is probably Nationwide. A mutual bank that focuses absolutely on balanced books and prudent lending of its customers money to appropriately assessed borrowers. It rewards savers if you like.
At a global scale the word of the day is deleveraging. Getting out of debt and getting books to balance.
So ultimately I guess I believe in markets - although the pain we needed to go through to get the markets to learn is unpalatable if not unacceptable.
I do not believe in intervention per se, however I do believe in encouragement. Governments and banks need to encourage people to save, companies to deleverage.
I also very firmly believe that all the hype about bonuses is ludicrous. I attended a lecture by a professor with a deep understanding of intrinsic and extrinsic rewards and their link to motivation.
He argued extremely thoroughly that the whole banking crises was caused by the use of extrinsic reward - bonuses to you and me.
At the end I asked him one question, a question he could not sensibly answer.
What if the extrinsic rewards that the banking world utilised were linked solely to capital preservation? What would have happened then?
I believe in markets, I recognise that there are other economic systems all of which have merits and demerits. I believe in encouragement not intervention, I believe that commercial mutuality is the best form of socialism. I believe that regulation is finally shaping a banking world that will be safer and driven to reform within a capitalist structure.
And if I do have favourite financial films - they are probably Boiler Room and The Smartest Guys in the Room. My most hated would be Zeitgeist for wasting time in my life I could have spent on somethink useful like playing on my PS3
30 January 2012, 11:22 AM
#115
Scooby Regular
iTrader: (1)
Join Date: Jan 1999
Location: UK
Posts: 15,271
Likes: 0
Received 0 Likes
on
0 Posts
One of the great transformations in India (and to a lesser extent Africa and South America) has been the democratisation of finance. This has come through co-operative banks or micro-finance initiatives. These have been invaluable in creating local responsibility for savings and finance with a personal stake.
This model has been repeated, with perhaps less penetration but no less personal impact with credit unions with the very unwashed in the UK and Ireland. Ultimately the same model as Nationwide*, for a less wealthy democratic.
I think these are great solutions in educating and encouraging personal financial responsibility. Giving back the banks perhaps?
I would like to see Government provide the right motivation and encouragement to these models - either through direct tax incentive or with the big corporates like Lloyds to set up such schemes.
Make no mistake - this is a long haul - but the conditions are ripe for making the journey.
* BTW Nationwide are so ****ing prudent that even when I was in senior role in a FTSE company, with six months of my financial records they still wouldn't give me a mortgage and this was back in the heyday of mortgage lending!!!
This model has been repeated, with perhaps less penetration but no less personal impact with credit unions with the very unwashed in the UK and Ireland. Ultimately the same model as Nationwide*, for a less wealthy democratic.
I think these are great solutions in educating and encouraging personal financial responsibility. Giving back the banks perhaps?
I would like to see Government provide the right motivation and encouragement to these models - either through direct tax incentive or with the big corporates like Lloyds to set up such schemes.
Make no mistake - this is a long haul - but the conditions are ripe for making the journey.
* BTW Nationwide are so ****ing prudent that even when I was in senior role in a FTSE company, with six months of my financial records they still wouldn't give me a mortgage and this was back in the heyday of mortgage lending!!!
Last edited by Trout; 30 January 2012 at 11:23 AM.
30 January 2012, 12:06 PM
#116
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
One of the great transformations in India (and to a lesser extent Africa and South America) has been the democratisation of finance. This has come through co-operative banks or micro-finance initiatives. These have been invaluable in creating local responsibility for savings and finance with a personal stake.
This model has been repeated, with perhaps less penetration but no less personal impact with credit unions with the very unwashed in the UK and Ireland. Ultimately the same model as Nationwide*, for a less wealthy democratic.
I think these are great solutions in educating and encouraging personal financial responsibility. Giving back the banks perhaps?
I would like to see Government provide the right motivation and encouragement to these models - either through direct tax incentive or with the big corporates like Lloyds to set up such schemes.
Make no mistake - this is a long haul - but the conditions are ripe for making the journey.
* BTW Nationwide are so ****ing prudent that even when I was in senior role in a FTSE company, with six months of my financial records they still wouldn't give me a mortgage and this was back in the heyday of mortgage lending!!!
This model has been repeated, with perhaps less penetration but no less personal impact with credit unions with the very unwashed in the UK and Ireland. Ultimately the same model as Nationwide*, for a less wealthy democratic.
I think these are great solutions in educating and encouraging personal financial responsibility. Giving back the banks perhaps?
I would like to see Government provide the right motivation and encouragement to these models - either through direct tax incentive or with the big corporates like Lloyds to set up such schemes.
Make no mistake - this is a long haul - but the conditions are ripe for making the journey.
* BTW Nationwide are so ****ing prudent that even when I was in senior role in a FTSE company, with six months of my financial records they still wouldn't give me a mortgage and this was back in the heyday of mortgage lending!!!
I can't find the episode, I wish I could, it would save me a lot of explaining. Still, it's really worth remembering the two thousand years of history that are woven in the West's fabric - thinking we can simply extract what has been the core of it's development is folly.
Last edited by JTaylor; 30 January 2012 at 12:33 PM.
30 January 2012, 12:26 PM
#117
Scooby Regular
iTrader: (1)
Join Date: Jan 1999
Location: UK
Posts: 15,271
Likes: 0
Received 0 Likes
on
0 Posts
So there's a conundrum, huh!!
Ideally I believe in personal responsibility. But that has been implied to be capitalist. I don't really believe in regulation - but see it has been necessary in the current context.
I don't really believe in markets at the macro-level as evidence suggests they run away with themselves.
However I do believe that the markets have learned.
In terms of politic - where does that leave me - I have no real clue. I don't see myself as either a capitalist or a socialist.
30 January 2012, 12:37 PM
#118
Scooby Regular
Join Date: Jun 2005
Location: Home
Posts: 14,758
Likes: 0
Received 0 Likes
on
0 Posts
So there's a conundrum, huh!!
Ideally I believe in personal responsibility. But that has been implied to be capitalist. I don't really believe in regulation - but see it has been necessary in the current context.
I don't really believe in markets at the macro-level as evidence suggests they run away with themselves.
However I do believe that the markets have learned.
In terms of politic - where does that leave me - I have no real clue. I don't see myself as either a capitalist or a socialist.
Ideally I believe in personal responsibility. But that has been implied to be capitalist. I don't really believe in regulation - but see it has been necessary in the current context.
I don't really believe in markets at the macro-level as evidence suggests they run away with themselves.
However I do believe that the markets have learned.
In terms of politic - where does that leave me - I have no real clue. I don't see myself as either a capitalist or a socialist.
30 January 2012, 12:47 PM
#120
Scooby Regular
Join Date: Mar 2000
Location: Weston Super Mare, Somerset.
Posts: 14,102
Likes: 0
Received 0 Likes
on
0 Posts
So there's a conundrum, huh!!
Ideally I believe in personal responsibility. But that has been implied to be capitalist. I don't really believe in regulation - but see it has been necessary in the current context.
I don't really believe in markets at the macro-level as evidence suggests they run away with themselves.
However I do believe that the markets have learned.
In terms of politic - where does that leave me - I have no real clue. I don't see myself as either a capitalist or a socialist.
Ideally I believe in personal responsibility. But that has been implied to be capitalist. I don't really believe in regulation - but see it has been necessary in the current context.
I don't really believe in markets at the macro-level as evidence suggests they run away with themselves.
However I do believe that the markets have learned.
In terms of politic - where does that leave me - I have no real clue. I don't see myself as either a capitalist or a socialist.
I use to be indecisive - but now I'm not so sure.....
You're right about the micro finance stuff being a success in India but that is mostly used by women allowing them to start up tiny businesses which grow and they are socially responsible enough to pay the loan back (charged at manageable interest rates). But if this was adapted for UK it would hit a brick wall with rules and regulations in business start up.
Odd that you have never mentioned customer satisfaction in your "how to be a good banker" comments? Would you support the John Lewis model for capitalism with a dash of social responsibility?
dl