I wonder do we ever realise when we are living through a period of relative calm, or do we just take it for granted? Because it seems as if everything from the personal and private to the wider world is going through a period of great upheaval and uncertainty at the moment, and it's unnerving. BM is a creature who craves security and there's not a lot of that about right now.
One thing that I find fascinating, is the emerging theme that capitalism or our version of it, hasn't worked and we need to develop something else if we are to continue living in a civilised way. John Lanchester, writing in the LRB has been developing this theme over the past 3 years. His book 'Whoops' about the collapse of the banks in 2008 manages to be simultaneously a delight (for the writing) as well as stomach-churningly worrying because of the reality and scale of the problems he describes.
So far so predictable. The 'Left' for want of a better word, had for some time pre-dating the crash of 2008 engaged in analysis of the problems associated with unregulated and unfettered capitalism.
More surprising and I believe encouraging, have been Charles Moore's recent pieces in the Telegraph and Spectator expanding on the theme and to some extent, attempting to reclaim a more conservative (small c), decent brand of capitalism. Then listening to Any Questions (lunchtime repeat) today, I heard Norman Lamont - hardly a revolutionary figure - commenting that the changes to regulation of the banks, which Vince Cable has been seeking for some time, should happen without further delay!
And just when I was feeling a little optimistic about the near future, browsing the business section of the Guardian, I see that James Murdoch has declined his £4m bonus this year...but will still earn $12m in salary. Clearly I'm not an economist but how can that sort of executive pay be explained? 'Because I'm worth it' seems to be the preferred explanation when this level of remuneration is questioned.
It's clearly not sustainable but these people live in a different sphere and can governments really intervene and press the re-set button? I think most ordinary people want them to. But if we are to be mobilised to have our voices heard and our votes counted we need to see a compelling alternative to replace what's been broken.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Saturday, 3 September 2011
Saturday, 22 January 2011
The myth of a low-tax economy
Daniel Hannan MEP believes that Joe Higgins MEP, is the most honest man in Ireland...but then that narrative suits him now that the miracle that was the Irish econony of the 1990s & noughties has been exposed a cheap con trick. I think Barrosso tells it straight here; but that interpretation of Ireland's current woes does not fit Hannan's economic instincts of low tax, free market enterprise. The truth as BM sees it is that Ireland benefitted from the easy money available to it through being a member of the Euro, enabling it to have infrastructure built funded by (mostly) other European countries whilst at the same time because of the fiscal freedoms the Euro offered, allowing it to entice all sorts of tax evaders (oops, avoiders) to work in the country paying only 12% corporation tax. I knew very few people who returned to enjoy the 'boom' years who were actually employed - au contraire, they were self-employed. Why join the PAYE and pay 35% upwards on a sliding scale when you could incorporate and pay only 12? The cult of the cute hoor is embedded in the Irish psyche and this time, the government was actively encouraging it.
Over the past 10 years or so, the government began to share some of its largesse from tax receipts with the people and true to its conservative instincts, gave the people the money to spend as they pleased. Benefits went up,spending on schools and hospitals decreased but that was okay, right ? People now had the money and could decide where to spend it themselves - the market would take care of the rest. Until it all came tumbling down...
Maybe in a roundabout way, Hannan's argument is right. The real lie of a common Eurpean currency was that it was possible to succeed sharing monetary policy only. The Eurosceptics have always feared a larger plan ie shared fiscal policy and perhaps what we are seeing in the fracture of those weak spendthrift economies is the exposure of the reality that European and Monetary Union can only succeed if there is a common fiscal policy as well. But I'm not an economist... or a politican...or even a politician's wife anymore so what do I know? Anyway the clip is short and interesting if only because it reveals a level of exasperation from Barrosso that he usually manages to keep under control.
Over the past 10 years or so, the government began to share some of its largesse from tax receipts with the people and true to its conservative instincts, gave the people the money to spend as they pleased. Benefits went up,spending on schools and hospitals decreased but that was okay, right ? People now had the money and could decide where to spend it themselves - the market would take care of the rest. Until it all came tumbling down...
Maybe in a roundabout way, Hannan's argument is right. The real lie of a common Eurpean currency was that it was possible to succeed sharing monetary policy only. The Eurosceptics have always feared a larger plan ie shared fiscal policy and perhaps what we are seeing in the fracture of those weak spendthrift economies is the exposure of the reality that European and Monetary Union can only succeed if there is a common fiscal policy as well. But I'm not an economist... or a politican...or even a politician's wife anymore so what do I know? Anyway the clip is short and interesting if only because it reveals a level of exasperation from Barrosso that he usually manages to keep under control.
Friday, 19 November 2010
Romantic Ireland's dead and gone...
Robert Peston may not be a poet so much as the herald of bad news but he invariably gets it right. Not just in the blog post yesterday but also earlier on the Today programme when he explained that Ireland's government bailout of the banks 2 years ago, meant a whopping £110bn loan from the ECB, an amount greater than the total value of the Irish economy. Since then, the economic slowdown, reduced government tax receipts and increased welfare payments has led to the current crisis.
Trouble is, for ex-pats like me it has long been a mystery how Ireland could sustain in the best of times, not to mention the past 2 years, a welfare benefit system which saw Jobseekers Allowance paid at a rate of £196 Euros per week, + £130 with a dependent spouse + £29 per each dependent child - by UK standards these amounts are astonishing. In the good times, those rates as well as those for Child Benefit and Pensions were admirable, signs of a society willing to share success with those less fortunate. Except that the 'success' was an illusion or more accurately, a mass delusion which saw ordinary homes in relatively rural areas valued at London prices and middle income families, investing in second homes to rent (to whom, I often wondered). Top that with the low tax rates which everyone enjoyed particularly those who decided it was more prudent to be self-employed on an incorporated basis and pay only 12% corporation tax and it becomes clear how badly things can go wrong when the easy money dried up.
Well, someone a couple of years back shouted out that the Emperor had no clothes and suddenly everyone woke up. Ireland like many post-industrial countries does not produce enough and unlike say, Britain is relatively low in the natural resources which matter, like oil and gas.
Some will say it was good while it lasted; others blame the politicians (always a safe bet, although isn't the electorate responsible for the politicians they elect? ) but the truth is that most people over 30 when this 'boom' started over 10 years ago, were wary and couldn't quite figure out where the wealth had come from and what was sustaining it.
In many ways, BM suspects that the situation in the UK is worse; the tax threshold is already high, the level of welfare benefits paid relatively modest so there is little room for manoeuvre...at least Ireland has scope to cut further and raise taxes if necessary. On the other hand Ireland did not enjoy anything like the investment in health and education that the UK has seen over the past 10 years or so.
Personally, I never liked the brash 'loadsamoney' Ireland but that's not to say that I enjoy seeing it humbled in this way either. And as the Irish Times (not previously known for its republican stance) put it today, to think that Ireland's struggle for independence over 200 years has led to this day. All's changed.
Trouble is, for ex-pats like me it has long been a mystery how Ireland could sustain in the best of times, not to mention the past 2 years, a welfare benefit system which saw Jobseekers Allowance paid at a rate of £196 Euros per week, + £130 with a dependent spouse + £29 per each dependent child - by UK standards these amounts are astonishing. In the good times, those rates as well as those for Child Benefit and Pensions were admirable, signs of a society willing to share success with those less fortunate. Except that the 'success' was an illusion or more accurately, a mass delusion which saw ordinary homes in relatively rural areas valued at London prices and middle income families, investing in second homes to rent (to whom, I often wondered). Top that with the low tax rates which everyone enjoyed particularly those who decided it was more prudent to be self-employed on an incorporated basis and pay only 12% corporation tax and it becomes clear how badly things can go wrong when the easy money dried up.
Well, someone a couple of years back shouted out that the Emperor had no clothes and suddenly everyone woke up. Ireland like many post-industrial countries does not produce enough and unlike say, Britain is relatively low in the natural resources which matter, like oil and gas.
Some will say it was good while it lasted; others blame the politicians (always a safe bet, although isn't the electorate responsible for the politicians they elect? ) but the truth is that most people over 30 when this 'boom' started over 10 years ago, were wary and couldn't quite figure out where the wealth had come from and what was sustaining it.
In many ways, BM suspects that the situation in the UK is worse; the tax threshold is already high, the level of welfare benefits paid relatively modest so there is little room for manoeuvre...at least Ireland has scope to cut further and raise taxes if necessary. On the other hand Ireland did not enjoy anything like the investment in health and education that the UK has seen over the past 10 years or so.
Personally, I never liked the brash 'loadsamoney' Ireland but that's not to say that I enjoy seeing it humbled in this way either. And as the Irish Times (not previously known for its republican stance) put it today, to think that Ireland's struggle for independence over 200 years has led to this day. All's changed.
Monday, 26 April 2010
Have a go at this
The FT has come up with an interactive game of 'Sort out the deficit', where you can either choose one of the 3 main parties policies or have a go yourself. BM tried it and was still £4bn short.... tough times ahead eh ?
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