London Bonus Tax - Have the English gone bonkers?

[Gambit]

Damn you, and your ability to see typos.

It was a typo?

 

[peterstorey]

Most People are incapable of imagining a World organised along different principles to the one they inhabit on a daily basis. Capitalism has been the dominant culture for over two hundred years, its all most People have known for Generations, and large scale change scares the living crap out of them.

History will look back on capitalism as we now look back on slavery and say: 'How could people accept a system that's morally bankrupt?'.

 

[Gambit]

History will look back on capitalism as we now look back on slavery and say: 'How could people accept a system that's morally bankrupt?'.

I look at it as part of our next social evolution, we removed power from the monarchies and churches in politics next will hopefully be businesses.

 

[nickm]

History will look back on capitalism as we now look back on slavery and say: 'How could people accept a system that's morally bankrupt?'.

Short of a technological revolution that removes scarcity from the world (much as the industrial revolution destroyed the value of slaves), I cannot see how that could happen.

 

[peterstorey]

Short of a technological revolution that removes scarcity from the world (much as the industrial revolution destroyed the value of slaves), I cannot see how that could happen.

We've had a technological revolution that largely removed scarcity the problem is that the plenitude is not shared. The driver will be when the have-nots insist on getting their share.

 

[nickm]

We've had a technological revolution that largely removed scarcity the problem is that the plenitude is not shared.

Anything truly plentiful, like the air we breathe, does not need sharing. That is the point.

 

[peterstorey]

Anything truly plentiful, like the air we breathe, does not need sharing. That is the point.

The point is that many other resources such as food are relatively plentiful but stockpiled by the few.

 

[Gambit]

The point is that many other resources such as food are relatively plentiful but stockpiled by the few.

Replace stockpiled to wasted.

 

[peterstorey]

Replace stockpiled to wasted.

I didn't want to get into an argument about what food is produced or where it goes. Basically we have enough capacity to feed 6Bn people quite easily despite which about 1Bn suffer from various degrees of starvation

 

[RapidRed]

What baffles me is that we've just seen IN BIG LETTERS what a feck up laissez faire capitalism leads to and yet most people just want to stick a plaster on it and carry on as before.

wha... I must've missed it then. cause what I saw was what govt getting in bed with big businesses leads to. That has got nothing to do with free market capitalism. At least the free market capitalism I've read about. The government made possible what the banks were doing, with the subsidies of low interest rates and of course the moral hazard of the bailouts.

In a capitalist system, you are driven by a profit motive, but your actions are balanced by fear of losses. Thats what keeps you from making irrational decisions and keeps the system working. But what the government did was take away the risk of losses. A free market system cannot work that way. If you opened a casino and told everyone that they could gamble, and if they won, the money's theirs, and if they lost, you had their back, you would have an endless line of gamblers everyday.

Don't get me wrong, I too am pissed off about the current state of affaris, but I think it is more to do with government policies and subsidies to their big business buddies, rather than the failure of capitalism.

Pocketing your profits and sticking the tax payer with the bill for losses is NOT capitalism. The latter is enabled by the government policies.

 

[peterstorey]

wha... I must've missed it then. cause what I saw was what govt getting in bed with big businesses with leads to. That has got nothing to do with free market capitalism. At least the free market capitalism I've read about. The government made possible what the banks were doing, with the subsidies of low interest rates and of course the moral hazard of the bailouts.

In a capitalist system, you are driven by a profit motive, but your actions are balanced by fear of losses. Thats what keeps you from making irrational decisions and keeps the system working. But what the government did was take away the risk of losses. A free market system cannot work that way. If you opened a casino and told everyone that they could gamble, and if they won, the money's theirs, and if they lost, you had their back, you would have an endless line of gamblers everyday.

Don't get me wrong, I too am pissed off about the current state of affaris, but I think it is more to do with government policies and subsidies to their big business buddies, rather than the failure of capitalism.

Pocketing your profits and sticking the tax payer with the bill for losses is NOT capitalism. The latter is enabled by the government policies.

Well you obviously didn't miss it. You saw the unregulated financial industry feck everything up and you saw (as Lenin said nearly 100 years ago) the government get the workers (taxpayers) to bail 'em out. My question was why are we just letting them put the same old shit back together?

 

[RapidRed]

Well you obviously didn't miss it. You saw the unregulated financial industry feck everything up and you saw (as Lenin said nearly 100 years ago) the government get the workers (taxpayers) to bail 'em out. My question was why are we just letting them put the same old shit back together?

I completely agree that the banks fecked up big time and the taxpayer is getting shafted in return. And I also completely agree that they are trying to put up the same old shit back again. And nothing pisses me off more!

My only contention is that all this has nothing to do with actual free market capitalism.

 

[peterstorey]

My only contention is that all this has nothing to do with actual free market capitalism.

Well Lenin would disagree, basically free market capitalism is inherently boom/bust. In the boom the fat cats hoover up all the bonuses and blither on about wealth creation. When it fecks up then the government has to step in and save their arses with taxpayers' money. You're correct that if it was truly laissez faire then it should be allowed to melt down but we're looking at 30s-style depression then.

 

[RapidRed]

Well Lenin would disagree, basically free market capitalism is inherently boom/bust. In the boom the fat cats hoover up all the bonuses and blither on about wealth creation. When it fecks up then the government has to step in and save their arses with taxpayers' money. You're correct that if it was truly laissez faire then it should be allowed to melt down but we're looking at 30s-style depression then.

The booms or bubbles are caused by loose monetary policy, reckless credit expansion and other government subsidies. This causes an unsustainable boom leading to reckless malinvestments like the dot com bubble or the housing bubble. These cheap-money-easy-credit financed booms or bubbles are in fact the problem where the mistakes are made. For instance, in the dot com bubble, a lot of companies came into existance which never should have, in the housing bubble a lot of people bought houses they never could afford and so on. A recession or a bust is needed in order to rebalance the economy and correct all these mistakes. A lot of the malinvestments made have to be liquidated, a lot of businesses that were riding the wave of the unsustainable boom have to go bankrupt, so that more sustainable businesses can take their place.

Governemts only exacerbate the situation when they prevent the correction from happening. Unfortunately, big businesses and special interests get bailed out in the process and the taxpayer gets royally shafted.

 

[Suedesi]

Well you obviously didn't miss it. You saw the unregulated financial industry feck everything up and you saw (as Lenin said nearly 100 years ago) the government get the workers (taxpayers) to bail 'em out. My question was why are we just letting them put the same old shit back together?

In every competitive industry you have failures of individual companies, or cycles where the whole industry goes through pain aka airlines, autos etc.

Secondly, I don't know how it works in the UK, but the taxpayer in the US is certainly not the worker.

The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes.

Filthy rich are a good proxy for the US taxpayers.

Someone needs to tell that to the plebs acting all pissed off with righteous indignation.

 

[peterstorey]

Filthy rich are a good proxy for the US taxpayers.

Someone needs to tell that to the plebs acting all pissed off with righteous indignation.

The US is heading towards a plutocracy as those numbers (which look overstated and don't include sales taxes) indicate. The rich make such excessive money they can afford to pay those taxes and still wallow in wealth, middle and lower America take the hit in real terms that impact their day-to-day income. I'd watch out if I were you those plebs will wake up one day and want more of the cake.

 

[Plechazunga]

The problem with letting them all fail is political more than economic. When the banking system melts down and there's no credit, businesses fail and mass unemployment ensues, people are then prone to allowing nutjobs into power on the back of scapegoating campaigns and promises of new world orders.

Bailing out the banks allowed a few idiots to keep making undeserved fortunes, but it softened the landing for everyone else. It was bad morals and, in the long term, bad economics... but it was better than the potential alternatives.

 

[Gambit]

The problem with letting them all fail is political more than economic. When the banking system melts down and there's no credit, businesses fail and mass unemployment ensues, people are then prone to allowing nutjobs into power on the back of scapegoating campaigns and promises of new world orders.

Bailing out the banks allowed a few idiots to keep making undeserved fortunes, but it softened the landing for everyone else. It was bad morals and, in the long term, bad economics... but it was better than the potential alternatives.

How about the bailout actually being the nationalisation of those banks under the bank of England (or whatever country) allowing the assets to still be adminstered, which can then be sold to the future companies that take their place. We paid for the feckers but got nothing in return.

 

[peterstorey]

The problem with letting them all fail is political more than economic. When the banking system melts down and there's no credit, businesses fail and mass unemployment ensues, people are then prone to allowing nutjobs into power on the back of scapegoating campaigns and promises of new world orders.

Bailing out the banks allowed a few idiots to keep making undeserved fortunes, but it softened the landing for everyone else. It was bad morals and, in the long term, bad economics... but it was better than the potential alternatives.

I'm far from convinced about that in the long run but I don't want the personal grief either - so damage limitation it is.

 

[Plechazunga]

How about the bailout actually being the nationalisation of those banks under the bank of England (or whatever country) allowing the assets to still be adminstered, which can then be sold to the future companies that take their place. We paid for the feckers but got nothing in return.

Yeah I don't understand why they didn't do that either. Maybe the influence of the banks on government, or worries that the City would go mental because they didn't trust the government to run anything, or that the bond markets would lose faith in the City to continue contributing to economic growth, or all of the above...

I'm far from convinced about that in the long run but I don't want the personal grief either - so damage limitation it is.

Well it happened before didn't it. Not worth the risk. Even with recessions kept to current levels of severity, paid for by future generations, most of Europe's moved to the right.

 

[peterstorey]

Well it happened before didn't it. Not worth the risk. Even with recessions kept to current levels of severity, paid for by future generations, most of Europe's moved to the right.

Well we could take the pain for our children. Er, well perhaps not.

 

[Wibble]

The problem with letting them all fail is political more than economic. When the banking system melts down and there's no credit, businesses fail and mass unemployment ensues, people are then prone to allowing nutjobs into power on the back of scapegoating campaigns and promises of new world orders.

Bailing out the banks allowed a few idiots to keep making undeserved fortunes, but it softened the landing for everyone else. It was bad morals and, in the long term, bad economics... but it was better than the potential alternatives.

I agree except in the sense that it sounds like just as big an economic feck up as an political one if the banks fail.

 

[Suedesi]

The US is heading towards a plutocracy as those numbers (which look overstated and don't include sales taxes) indicate. The rich make such excessive money they can afford to pay those taxes and still wallow in wealth, middle and lower America take the hit in real terms that impact their day-to-day income. I'd watch out if I were you those plebs will wake up one day and want more of the cake.

Well ironically, most measures proposed by the left such as higher taxes, caps on compensation, socialized economy (bailouts, medicine) etc, would ultimately restrict upward mobility and consolidate power for the filthy rich.

 

[Suedesi]

The problem with letting them all fail is political more than economic. When the banking system melts down and there's no credit, businesses fail and mass unemployment ensues, people are then prone to allowing nutjobs into power on the back of scapegoating campaigns and promises of new world orders.

Bailing out the banks allowed a few idiots to keep making undeserved fortunes, but it softened the landing for everyone else. It was bad morals and, in the long term, bad economics... but it was better than the potential alternatives.

Agreed.

 

[hungrywing]

History will look back on capitalism as we now look back on slavery and say: 'How could people accept a system that's morally bankrupt?'.

This has been happening since the dawn of man. If we don't find an energy solution, and movement of goods and services becomes increasingly cost-prohibitive, race-based nationalism ("you people never belonged here in the first place") can always make a comeback, along with slave labor depending on who ends up with the short end of the stick.

Granted, this is looking at least 60 years into the future, past at least two generations who will want to hold onto the ideals that their grandparents (Us) held dear, but the door is always open for an emergence of any and all social "norm"s, slavery, theocracy, etc., etc.

How about the bailout actually being the nationalisation of those banks under the bank of England (or whatever country) allowing the assets to still be adminstered, which can then be sold to the future companies that take their place. We paid for the feckers but got nothing in return.

Fear of loss of competitiveness was probably one of the main arguments pushed by the lobbyists. AKA, if we shackle ourselves with a ball and chain, but other nations' banking systems don't, then they have a leg up on us for however long we stay under regulation. Money will flow to those unregulated markets, a lot of which are based in nations/areas with different ideologies, and that means you risk losing entire generations' worth of customer bases as they acclimate to those systems. Like Plechazunga mentioned, it's a pretty persuasive argument against any truly drastic action. If all nations involved draw up a regulatory system and sign off on it, maybe you get some kind of parity upon which to build the new system, but that was never going to happen considering the overwhelming majority of blame placed on so few shoulders.

Also, maybe to allow all of that would have been tantamount to an admission of guilt by all parties involved, namely the government itself, who turned a blind eye to everything that had been going on, leaving them very exposed on any future legal action? I'm no lawyer, but it seems a scenario that could have developed down the line.

I hate to sound like some slick lobbyist, putting oneself in their shoes is like a mineral bath in axel grease, but this is probably pretty close to what they said to rationalize/justify themselves.

 

[Gambit]

This has been happening since the dawn of man. If we don't find an energy solution, and movement of goods and services becomes increasingly cost-prohibitive, race-based nationalism ("you people never belonged here in the first place") can always make a comeback, along with slave labor depending on who ends up with the short end of the stick.

Granted, this is looking at least 60 years into the future, past at least two generations who will want to hold onto the ideals that their grandparents (Us) held dear, but the door is always open for an emergence of any and all social "norm"s, slavery, theocracy, etc., etc.



Fear of loss of competitiveness was probably one of the main arguments pushed by the lobbyists. AKA, if we shackle ourselves with a ball and chain, but other nations' banking systems don't, then they have a leg up on us for however long we stay under regulation. Money will flow to those unregulated markets, a lot of which are based in nations/areas with different ideologies, and that means you risk losing entire generations' worth of customer bases as they acclimate to those systems. Like Plechazunga mentioned, it's a pretty persuasive argument against any truly drastic action. If all nations involved draw up a regulatory system and sign off on it, maybe you get some kind of parity upon which to build the new system, but that was never going to happen considering the overwhelming majority of blame placed on so few shoulders.

Also, maybe to allow all of that would have been tantamount to an admission of guilt by all parties involved, namely the government itself, who turned a blind eye to everything that had been going on, leaving them very exposed on any future legal action? I'm no lawyer, but it seems a scenario that could have developed down the line.

I hate to sound like some slick lobbyist, putting oneself in their shoes is like a mineral bath in axel grease, but this is probably pretty close to what they said to rationalize/justify themselves.

Fully agree with everything you've said there. The only problem with that stance (the bankers supposed one) though is, it may be fine for the US where they did put some regulations on the banks that accepted the money so much so that they are now going t pay it back, because lets face it te US government can afford it. We in the UK can't afford to give billions away and get nothing in return. We only finished paying the states of for the second world war in the last 15 years. They're now saying this bonus tax scheme even though it's for this year only will damage the UK finance industry forever with head of bankers complaining that they haveto answer to their share holders. I truly couldn't give a shit about that. If answering to your shareholders was the first and foremost issue then you sholdn't have morally obligated yourselves by accepting the handout and instead tried to ride the stor.

 

[hungrywing]

We only finished paying the states of for the second world war in the last 15 years.

Yeah, we um, used that money to pour a decade's worth of resources into ridiculously over-adorned houses that no one outside the US will ever want to um...import. Wheels on the houses? I'm afraid we didn't think that far ahead. Hold on, I've got Europe and Asia on conference call. So you guys are positive you don't want some mass-produced, uninspiring, hilariously bastardized Victorian architecture that costs a fortune to heat and cool? Oh yeah, you guys in Europe have the real thing. China how about you guys? Oh, yeah, you're modernizing. Right. Just figured we'd check. Wrecking balls? Sure! Where do you want them? Oh. For us you mean. Um...Can I put you on hold for just a sec?