Regulate the people, not the banks!
I do recommend you watch the documentary Inside Job by Charles Ferguson. It details the corruption in Wall St where individuals walked away from failed banks with multi-$100 million dollar packages, regularly took bonuses of a similar size while sending their institution down the taxpayer funded tubes. They went in and out of government in successive administrations, supported by academic economists paid to write what was wanted. Anyone for ethics? The resulting tented cities of newly homeless people was heart-breaking.
Another thing to watch – if your blood pressure and tissue box can stand it – is the BBC Panorama programme about the collapse of the Royal Bank of Scotland. Again arrogance, ignorance of what was actually going on in the bank – and that’s the most charitable explanation – ‘light touch’ due diligence, excessive spending on goodies and a flash new headquarters opened by Her Maj. You can find this on YouTube in two parts. Continue reading
What did the Romans do for us? A story of banks and tax
Today it is our son’s 11th birthday and at the weekend we ordered a new BMX bike for him. Spendthrifts? Well he has worked very hard at school this year and his is the future which we will not sacrifice.
But tomorrow is Budget Day here in the UK and here I suspect Mr Osborne will take a different view.
So I was thinking about taxes. We all complain about taxes but, as Reg asked in Monty Python’s Life of Brian – What have the Romans done for us? Romans? They were the government of the day.
Compare the taxes we pay with another major cost to households – one over which we have even less control than over the government that we can, in principle, remove from office at the ballot box.
Not energy, insurance, repairs or you daughter’s wedding. No, it is interest paid to the banks on loans they have made to us.
Some people pay no interest because they borrow no money, they were born with a silver spoon in their mouths or they have stolen it. Bully for them. The rest of us need to borrow money at some time, if only to buy a house. How much do we as a nation pay? Continue reading
Could I say ‘no’ to 2 million dollars?
Well a bit more than 2 million actually! What is at stake is the very tempting sum of $2,201,920: this is almost exactly how much the chairman of the Royal Bank of Scotland (RBS), Sir Philip Hampton’s, was reported to have refused to accept as a bonus. On the other hand, the boss of the same bank, Stephen Hester, has reputedly decided to accept a bonus of $1,514,606. These reports of the bonuses that bankers are continuing to pay themselves are causing public distrust and outrage, and political debate. Continue reading
Positive Money – Part 2
Last week I posted that there are two particular proposals from Positive Money that I like. So now to the bad news.
Positive Money propose that the lending banks are not allowed to generate money at all. All necessary funds should instead be generated by the Central Bank (Bank of England). This would elevate electronic money, which is the vast majority of money – to the same status as bank notes and coins which have had to be centrally controlled in the UK since 1844. This sounds a good idea. Certainly it would prevent the unstable creation of new money, secure the taxpayer from failing banks, separate payment and investment, ensure transparency, remove (in theory) the power from politicians and bankers and in some way ‘democratise’ the creation of money. Continue reading
