Bankers/Rich/Poor/Bailouts

[Staunton]

I agree about the lobbying though.

 

I fear that our parliament here in the UK is hardly immune from corporate interference and the power of the lobbyists. And I suspect that they find themselves pushing at an open door when the coalition cabinet is populated with millionaires with their own offshore fortunes to preserve.

[L00b]

L00b has related a shocking circumstance here. I am sure that all of us here on sheffieldforum would join in expressing our hope that justice is done for your relative, and to send our best wishes to your grieving family.

Thank you for the kind words, Staunton. They are appreciated.

Do you think that this would have had a big impact on the average person?

Depends on what you mean by 'average person' and what do you call a 'big impact'.

 

I certainly don't think that, in the theory posited (allowing certain large banks to collapse), the Gvt would or should have "done nothing" (as in, leave every Tom, Dick and Harry to fend for themselves).

 

I doubt it would have been as severe as what we are seeing in Cyprus, and here's to hoping the Gvt would have implemented/assumed their deposit garantees for those "average persons" impacted by the failures (i.e. those with deposits in the failed banks).

 

The more prescient question, is what would the effect have been on businesses banking with such failed banks and, by association, their employees...how much of their cashflow would have been wiped, that is not covered by the Gvt deposit garantees, and how would that have affected their survivability short to medium term?

[Staunton]

Supertramp is gracious and conciliatory, and this must be acknowledged and respected. However, I would resist the notion that the analysis I offer is in any manner prone to fantasy. No doubt the tory right would characterise my words in such terms, but this should come as no surprise. However, the tory party does not have a monopoly over the intellectual initiative associated with social commentary. Indeed, their rhetoric is underpinned by a clear tactic – to muddy the waters and poison the wells, since their policies do not withstand critical scrutiny. Neoliberal policy does precisely what it is designed to do – deliver wealth to a tiny fraction of the population at the expense of everyone else. Of course, this means that the true nature of neoliberal doctrine must be obscured. So the conservative agenda is to divide and rule, And the shouty mainstream media are enthusiastic allies in this project.

 

President Clinton's case is instructive, providing us with an insight into the way that the FM shock-jocks and Murdoch's cronies at Fox News operate, and revealing an agenda that has scant relationship with the facts and everything to do with corporate interests.

 

What we can easily discern in the Clinton case is the echo chamber of the right wing US media at work. Miss Lewinsky's semen stained dress was just one element of a media frenzy that was ramped up to encompass astonishing and foundless claims of corruption, narcotics traffiking and murder. With the Lewinsky affair, the right wing media suddenly had something tangible, and they immediately began running ludicrous adverts asking people who had suffered sexual harrassment from the President to seek their support. Reality becomes a remote concept as ordinary people are served such nonsense as the frenzied media saturate their homes, cars, workplaces and public space with their ideologically laden message. With Miss Lewinsky's revelations, social liberal ideals at last had a weakness that the conservatives could exploit, and it was open season on Mr Clinton.

[Mister M]

No the losses should not have been socialised, I don't think you have read what I am saying. If the losses were not mitigated by the government do you think the banks would have carried on doing the same thing?

 

No I quite agree - I think at the time some were saying that it would have been more effective to give the money to the public to spend on the high street rather than the banks, since they have simply held onto the cash rather than issue loans to business to kick start the economy.

 

I think it is also important to note that the credit crunch caused immense damage for which the tax payer rather than the banks per se are responsible for. Such as people losing jobs, homes, bsinesses and livelihoods -pure free market theory sees people as individual economic units.

 

As Staunton has quite rightly indicated Free Market theory is also an ideology which has captured the politicians for the last 35 years at both sides of the Atlantic. It has enabled the transnational class to get wealthy beyond their wildest dreams, while it's the stick for the rest of us.

 

There are signs of recognition that such thinking has caused irreporable damage; and there has also been something of a paradigm shift in political and economic orthodoxy.

[Hillpig]

The problem is debt, the countries inability to pay it off, despite austerity the debt is rising.

 

The debt has risen under 25 Prime Ministers and goes back to 1909 when the Liberals introduced the Old Age Pension for men aged 70.

 

The equivalent age today would be over 100. Men live longer on average because of advances in medicine and not working in heavy dangerous industries.

 

In 1909 Ten workers to one pensioner was the ratio. The position is not far from reversing.

 

All governments have funded thier social welfare spendng by borrowing. It has now got that high that a catastrophe is looming.

 

The catastrophe will happen when interest rates go up. At that point the UK government will be unable to service its debts.

 

This will happen about 2015 on current trends.

[epiphany]

As Staunton has quite rightly indicated Free Market theory is also an ideology which has captured the politicians for the last 35 years at both sides of the Atlantic. It has enabled the transnational class to get wealthy beyond their wildest dreams, while it's the stick for the rest of us.

 

What's interesting (to me anyway) is how these so-called free trade agreements are, upon closer scrutiny, actually more about managed trade, and predominantly favour a particular class of business (as you rightly mentioned) - the capital intensive transnational corporation.

 

But this scrutiny isn't just from "the left", it is also a critique used by libertarians on the economic right. That alone should tell us this is far more compelx than simply a "socialism vs capitalism" dichotomy.

 

Agreements such as NAFTA and GATT were sponsored heavily by the transnationals. Do people honestly believe that such institutions would support measures that actually increase competition, that challenge and potentially decrease their market share? Of course not. They want to minimise competition and maximise market share, that is the whole point.

 

That's why they send their agents into the centers of government, to work from the "inside" in an attempt to change laws that give them a competitive advantage (read about the investment theory of politics by Thomas Ferguson). In that sense, corporations see more substantial gains in their competitive advantage are to be made outside of the free market and inside the corridors of government power.

 

Inevitably, the definitions of free trade and free market, at least in the political realm are grossly constricted, and are nearly always referenced in the context of capital intensive corporations, as if the corporate structure and its licenced behaviour is the embodiment of free market economics.

 

Adam Smith and many of history's great liberal economic thinkers would have a lot to say about how perverse the current definitions of free market and free trade are.