Thursday, Sep 03, 2009
More false dichotemy from Analtoe
Times: Shrink the City and you’ll pay a heavy price
With the OECD and others now showing Britain as the worst off of all G7 - Analtoe must love to read his musings of jsut two weeks ago
"This means that the recovery will be stronger than generally expected in America and possibly in Britain, while in continental Europe and possibly Japan the depth of the recession will produce longer-term structural problems that limit growth for several years ahead."
as written in http://business.timesonline.co.uk/tol/business/columnists/article6807255.ece
This "article" seeks to pose to the reader a choice: leave the banks alone or face pre-1980s Britain with a selection of emotive images designed to cloud the issues.
If Britain is really so innovative, then it ought to be easy to work out a system that ensures we don't end up here again.
18 Comments
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1. hpwatcher said...
Ah, the same Analtoe, who completely failed to predict the credit crunch and crisis in banking...in fact, the man who staunchly denied that anything serious was happening at all.....
I have absolutely no idea, why anyone would would listen to this ''journalist'' - journalist, because I don't consider him to be an economist.
2. The Baldman said...
Antole the idiot looking for a village. Everything he has written or predicted is totalo tosh.
3. mr g said...
Turner was spot on when he said that much of the City's activities were "socially useless" All it amounts to is an institutionalised casino populated by spivs and wide boys who make themselves rich whilst the average person in the street does not benefit in the slightest. The most galling thing is that it has got worse under this corrupt government
I am by no means an anti capitalist and certainly not a labour supporter but it's time that the emphasis on the financial services "industry" was buried once and for all and we started to make things and export again and get away from the concept of a service economy.
Don't ask me how we do this after the destruction of industry over the last 30 / 40 years and a lack of skilled people but if we don't, then I'm afraid this country will simply fall into further decline.
4. neo-serf said...
Some Kaletsky gems:
Feb 2008 "the credit crunch is likely to end within the next month."
Mar 2008 "decent growth is virtually guaranteed from the summer onwards."
May 2008 "the US economy will not experience even a minor recession as a result of the credit crunch last year"
Jun 2008 "If there were going to be a US recession in response to the credit crisis, it would have started by now. So let me stick my neck out and say without qualification - the US economy is out of the woods."
Sep 2008 "The worst of the housing slump appears to be over, consumer confidence is rising and a gradual economic recovery should soon be under way."
This guy is priceless but useless.
5. growler said...
Mr G: But fix it, we have to.
I'm no anti-capitalist, and I even support the City in a manner. Just as there are reasonable estate agents and second hand car salesmen - there are decent city folk. But we've got to remove the ease with which you can fudge the system so it becomes less attractive to do so.
For example: you could create a law to make it illegal to wind the clock back on a car - or - you redesign the clock so it can't be wound back.
This needs fundamental change. This is the great debate we need - and so far, only the Continent - want to start it in earnest.
6. bystander said...
The rhetoric is getting louder and more desperate from the mouthpieces of the parasites who reside and preside over the City of London. Most are 'socially useless' and predictably financially and economically dangerous as they are all, guided by one aim and that is to increase their own wealth by whatever means possible. We have had and possibly still do, the chance to make a worldwide difference to the way financial systems and institutions are run, but the Great Capitalist incubus, the USA/ Wall Street and its sidekicks the City, Hong Kong etc., will never let its host free, or free enough to make choices of their own. Maybe the 2012 Mayan change will be a freeing from this financial dependency for a more egalitarian way of life, it will hurt but it is what we need.
7. Tanniemola said...
This is a really stupid and sloppy piece of 'journalism' and really shows this guy cannot think logically.
It is the same as saying that giraffes should have arbitrarily long necks
because it is perfectly clear to anyone with half a brain cell that at some point the advantage of having a long neck (getting leaves from high trees) is outweighed by the penalty of being to slow to evade predators.
Or because the price of gold is high you should transfer all your assets to gold when the optimal (lowest risk) strategy is to have a balanced portfolio.
In other words for a system to be stable it should be balanced - at some point the advantage of having a too strong financial sector begins to harm other parts of the economy exactly because it drains talent and resources like the UK.
8. happy mondays said...
What bystander say's....out of destruction comes creation..
9. Al Young said...
The comparison with Germany's car production and France's wine out put is irrelevant. these products are tangible. not intangible, complex financial vehicles disguised as commodities and designed to conceal innate (to a point of criminality) worthlessness
10. japanese uncle said...
As I mentioned earlier, they look increasingly like an alien in the 80's film. If you shoot or stab me, my stinking and venomous blood will splash and melt everything it touches. So never do that.
11. icarus said...
If the vampire squid becomes the only source of blood then, yes, we need it.
12. cyril said...
The city provides an essential service to supply us with credit in the same way a drug dealer provides an essential service to a heroin addict.
Some bloke interviewed on Radio 4 this morning had it right - finacing is a zero sum game so the city is worse than useless because of its excessive costs. In fact, paradoxically, the 'success' of the city in terms of the lavish pay and bonuses is proof of its uselessness.
13. Mikelivingstone said...
Anatole, I have to disagree with you on this article. The City is now literally just a money-go-round that produces little or no real wealth. I have no difficulty with more traditional activities such as raising capital for investment in manufacturing and services or in share dealing. But a lot of the practices such as having multiple credit default swaps covering firms where there is no actual exposure, ie a bet on bankruptcy are frankly dubious and should be illegal. If you want insurance against failure, then buy insurance and then you will have to prove real loss. A lot of US banks would have gone under were it not for back Credit Default subsidies through AIG. This just illustrates how this practice has served to increase moral hazard and rip of the taxpayer.
Likewise for the bank's more direct bailouts. Say 3 gamblers each borrow £50k from the Government to play poker against each other. One loses and goes bankrupt, the other holds on to just £20k (he's an impaired loan) and the third walks away with £130k and gets described as a "unique and special talent." How is it reasonable that one industry get subsidised in this way?
The only reason the City gets away with this is that in reality it is a useful conduit to allow Bank of England Quantitative Easing to fund Government borrowing and spending. Due to our artificially low interest rates, the Bank of England buys back old Government Bonds at inflated prices from the banks, who then lend this money to Government at ultra low interest rates. The banks don't really make money off this, but they get to boost their balance sheets and make a relatively safe loan. This is Zimbabwe economics by the back door.
It is very clear that the financial services sector is far too big and really is just another branch of Government which is also far too big. Both could easily be slashed by 50% and few would notice except. It's time for some real capitalism and genuine enforcement of the law against corrupt financial practices.
14. Ab said...
The main problem is that the city has gone out of control with an industry based on greed and gluttony. The city does provide an essential service in that it facilitates the creation of and growth of businesses. These are wealth creation vehicles that contribute to the economy. In taking on that risk there should be a fair reward. The main problem is that the reward is far in excess of the risk.
15. clockslinger said...
Thanks to the posters here for proving that I wasn't having an Orwell "1984" moment when I "imagined" I'd read something by Analtoe (ha!) in about Sept 07 (Times) saying it would effectively all be over by Christmas. Moreover Growler clearly percieves the attempt in this nasty piece to limit debate about reform by positing a ludicrously simplistic choice.
However just to answer that crap AK rhetoric i) no, don't think anyone should be allowed to borrow 80% of pp of property cause it is too inflationary for property prices.
ii) Most poorer working class families now have far less chance of owning house than forty years ago when we made stuff and we didn't rely on a tiny bit of London for the fortunes of the state or to tell us how to live.
iii) Why does a child require a foreign holiday? (In fact it would be great to know I'd never have to sit near see any doting parents wailing vomiting brat on a flight ever again) In truth most people I know on modest incomes have never been able to afford to take a foreign holiday with their children and find it no hardship whatsoever. (Analtoes definition of "modest" is no doubt related to a city salary so will be a lot more)
iv)The deals offered to many pensioners from the "equity release" shysters for the luxury of surviving into old age are frequently appalling and what our less well off older population really deserve is the security of a guaranteed, RPI linked, state pension at a decent basic rate that would allow them a good holiday twice a year, even if not a foreign one! Yeah, you know AK, the pension thing they've spent their entire working lives paying towards that your mates in the city have spent on their lifestyles.
16. Van Hoogstraten said...
Well folks, with Murdoch looking to charge to view his "organs", and who in their right minds would pay to read the online Times, Kaletsky's audience for his nonsensical ramblings will shrink to pretty much zero.
And we can say also goodbye to David Smith, Ann Ashworth and the rest of the motley crew who have done so much damage to any reputation the Times may have had for producing any accurate analysis in its financial pages.
17. symo said...
Posting this from Brazil and p!ssed off with the idea that bankers arewoth anything ditto traders. They can only make money by people like me (engineers selling expensive kit abroad) making profits. They areworth jack shi!te. Let them go andput everyone in the country on work programmes if they want dole money. I have had enough.
18. Anarchyintheuk said...
The City is anti-capitalist, serves no purpose in terms of wealth creation and actually takes money out of the real economy and for that reason it must go. If September the 11th taught us anything it is that it makes bugger all difference to the economy to actually physically destroy large sections of thhe financial services industry. Bring it on.