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
How did the banks mess it up?
Last week I showed how the apparently benign (or not so benign) interest charged by the banks translates in their perspective into a real bonus. How they make many hundreds of percent interest per year which means they are multiplying their assets by substantial numbers. This is of course how some of them have managed to repay their debts so rapidly – which raises the question of how did they end up with such massive debts? Continue reading
Ups and Downs in Europe
We feel compelled to offer a timely response to both the Euro and British positions during the shenannigins this week in Brussels; particularly as many of our readers are in the US.
The benefits of a Euro are clear – one currency, one way of pricing (in theory) across the whole area of some 330 million people, cutting out the expensive transfers of one currency to another. Before the Euro, a traveller moving across Europe would have to change his or her currencies a number of times – or have a lot of space in his wallet for different notes and coins. It would cost a fortune each time he changed money and at the end of such a journey it was doubtful whether he would have had 10% of what he started with even if he spent nothing at all. Now it is a lot easier – the change you get from the restaurant in Lisbon can be used Helsinki, that from a taxi in Dublin can buy you a coffee in Larnaca and you don’t have to go into numerical overflow in Italy. It seemed a logical extension of the single market in goods, services and labour. Continue reading
