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tomandlu

Spending Cuts: The Knives Are Out

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Nice article about the politics and economics of the forthcoming cuts by John Lanchester (author of the excellent Whoops!: Why everyone owes everyone and no one can pay)

Research is already showing that the people disproportionately targeted by the cuts will be the poor, especially poor women. As this fact becomes not an idea but a reality – as we move into Act Three – it seems highly likely that the basic unfairness of this is going to become more and more evident, and more and more rankling. For the bankers, business is more or less back to usual; in fact, for the remaining banks, business is as good as it has ever been. Since the public sees the bankers as being the people responsible for the credit crunch, and since the credit crunch caused the recession that in turn caused the cuts, there is a brutal contrast here: the guilty parties doing better than ever, the innocent taking all the pain. Again: did anyone vote for that? Does anyone think it is the kind of society we want to be?

Personally, I think the cuts are going to be a disaster - mainly because they are going to spill over into violence for the reasons Lanchester touches on in the above - the 'guilty' are determined that they won't pay for this mess. Could they have afforded to pay for it all? Of course not - but they seem basically determined not to pay for any of it, and I honestly don't think people will stand for that.

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Good article. I will pick up his book.

This bankers bonus season will be interesting. There's going to be an outcry as the numbers come out against the backdrop of doom and gloom.

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Good article. I will pick up his book.

This bankers bonus season will be interesting. There's going to be an outcry as the numbers come out against the backdrop of doom and gloom.

The book may be a bit basic for anyone who's hung out on this site for long, but it's well written and quite funny.

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I think ultimately the Tories will back down and not do any cuts. But if they push them, why should anyone accept getting cut back, when the rich and bankers are still making so much money?

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The cuts are coming; the banks are being rebuilt with your favourite QE money, aa3, so you will be happy about that (I am not, I would have been much preferred to see depositors protected to avoid systemic fail and most everyone else wiped out).

I want to see the cuts regardless of the deficit because the population is being weakened by becoming successively pressed onto the tit of the state and it's hopeless for our medium term survival. Just look at the state of our trading balance, it's gone beyond a joke into fantasy deficit every month.

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"I think ultimately the Tories will back down and not do any cuts....."

Absolutely wrong.

"But if they push them, why should anyone accept getting cut back, when the rich and bankers are still making so much money?"

Absolutely right.

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I think ultimately the Tories will back down and not do any cuts. But if they push them, why should anyone accept getting cut back, when the rich and bankers are still making so much money?

If you increase tax beyond 50% then we will lose even more people abroad. We've already lost one quarter of hedge fund managers. So raising top rate tax doesn't raise tax revenue and won't help the deficit.

If you cut benefits people will have to work more, and they will contribute rather take tax.

By the way, blaming bankers is a red herring. You should blame Central Bankers, and those that set central bank policy. Rates were held low for two long causing a huge housing bubble that collapsed taking the banks with it.

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If you increase tax beyond 50% then we will lose even more people abroad. We've already lost one quarter of hedge fund managers. So raising top rate tax doesn't raise tax revenue and won't help the deficit.

Hedge fund managers? Oh my, how will we survive without them...

If you cut benefits people will have to work more, and they will contribute rather take tax.

Benefits will be cut - that is not in dispute...

By the way, blaming bankers is a red herring. You should blame Central Bankers, and those that set central bank policy. Rates were held low for two long causing a huge housing bubble that collapsed taking the banks with it.

Why is it a red herring? Because how else where they expected to behave given the environment? Does that argument work for all crimes? Besides, I think you're missing the point. I'm not specifically advocating blaming or punishing bankers - the point is that banking should not accrue ridiculous rewards - those rewards are just theft from more productive enterprises.

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Hedge fund managers? Oh my, how will we survive without them...

we will be poorer without them : http://www.ft.com/cms/s/0/19d6e46c-cd97-11df-9c82-00144feab49a.html

Why is it a red herring? Because how else where they expected to behave given the environment? Does that argument work for all crimes? Besides, I think you're missing the point. I'm not specifically advocating blaming or punishing bankers - the point is that banking should not accrue ridiculous rewards - those rewards are just theft from more productive enterprises.

if you provide free booze at a party, you should expect people to get drunk and do foolish things. Free money (low interest rates) makes borrowers and lenders loses their senses. Central banks control the supply of credit. When there's a huge credit bubble, who do you blame?

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we will be poorer without them : http://www.ft.com/cms/s/0/19d6e46c-cd97-11df-9c82-00144feab49a.html

if you provide free booze at a party, you should expect people to get drunk and do foolish things. Free money (low interest rates) makes borrowers and lenders loses their senses. Central banks control the supply of credit. When there's a huge credit bubble, who do you blame?

Drunk driving is a criminal offence because it leads to innocent people being killed

This is essentially what has happened in the banking system.

Appsarently the current government is keen to reform benefits for the poor but is quite cool about bankers driving about out of their skulls

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I'll be poorer if I pay to read that article. Besides, from my rather limited knowledge, I'll give hedge funds a pass. They were not bailed out and they were not, afaik, responsible for lending. I'm not sure I'd even class them as banking.

if you provide free booze at a party, you should expect people to get drunk and do foolish things. Free money (low interest rates) makes borrowers and lenders loses their senses. Central banks control the supply of credit. When there's a huge credit bubble, who do you blame?

If the drunks go on the rampage, then, yes, I do blame them. It's not like the bankers just slept with slightly uglier people than they normally would have...

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Drunk driving is a criminal offence because it leads to innocent people being killed

Giving loans to people based on an optimistic valuation of their property is not a criminal offence. It's just stupid.
Appsarently the current government is keen to reform benefits for the poor but is quite cool about bankers driving about out of their skulls
Yes, in fact Vince wants them to drive even faster and lend even more irresponsible than before:
Banks could face a tax on their profits if they do not limit bonuses and lend more to companies who need credit, the Business Secretary has warned. sky news link

Basically - if you don't lend more we'll tax you until you do.

Edited by no accountant

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Why is it a red herring? Because how else where they expected to behave given the environment? Does that argument work for all crimes? Besides, I think you're missing the point. I'm not specifically advocating blaming or punishing bankers - the point is that banking should not accrue ridiculous rewards - those rewards are just theft from more productive enterprises.

Oh dear :(

What do you think might happen to the UK as a financial centre if it becomes uncompetitive in the global market.

You've been brainwashed by politicians and MSM.

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Giving loans to people based on an optimistic valuation of their property is not a criminal offence. It's just stupid.

Yes, in fact Vince wants them to drive even faster and lend even more irresponsible than before:

Basically - if you don't lend more we'll tax you until you do.

I think it's important not to confuse Liar loans with lending to viable business.

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Oh dear :(

What do you think might happen to the UK as a financial centre if it becomes uncompetitive in the global market.

You've been brainwashed by politicians and MSM.

I don't think it's me who's been brainwashed. For the record, I think we might have to find something more productive to do, as opposed to encouraging an industry whose job is to steal as much as possible of any wealth that comes near it, and then give some of it back as tax (the tax they can't avoid).

Banking should be a small part of any balanced economy, and should take a reasonable percentage for facilitating financial transactions. End of.

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Hedge fund managers? Oh my, how will we survive without them...

Benefits will be cut - that is not in dispute...

Why is it a red herring? Because how else where they expected to behave given the environment? Does that argument work for all crimes? Besides, I think you're missing the point. I'm not specifically advocating blaming or punishing bankers - the point is that banking should not accrue ridiculous rewards - those rewards are just theft from more productive enterprises.

Your absolutely correct about this being the key issue.

The government might be quite right about the benefits system not being fit for purpose and in need of radical reform but the same also applies to the banking system (ie certain classes of benefit claimants are not the only 'parasites' on the UK economy)

The problem is we are not going to see the latter so that means that the fundamental causes of this crisis are not going to be fixed. In fact the government seems to have been only too happy to change the nature of its rhetoric on this issue once in power.

This means that even if every benefit in the UK was eliminated we would still have a disfuncional economy with endless credit/asset booms and busts that leave truly productive enterprise starved of investment .

Ultimately such a set up is not sustainable so we are just setting ourselves up for an endless cycle of crisis, cuts, shrinking GDP etc just like Ireland. At the end of the day there is simply not enough earnings being generated by our economy to fed the greed of the financial sector. It is killing its host and when that dies it will eventually die too.

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For the record, I think we might have to find something more productive to do, as opposed to encouraging an industry whose job is to steal as much as possible of any wealth that comes near it, and then give some of it back as tax (the tax they can't avoid).

Banking should be a small part of any balanced economy, and should take a reasonable percentage for facilitating financial transactions. End of.

Agreed...but it is what we have been left with.

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I'll be poorer if I pay to read that article. Besides, from my rather limited knowledge, I'll give hedge funds a pass. They were not bailed out and they were not, afaik, responsible for lending. I'm not sure I'd even class them as banking.

quite right. If we can attract all the global hedge to operate from London it would be a good thing. The tax revenue they provide is significant.
If the drunks got on the rampage, then, yes, I do blame them. It's not like the bankers just slept with slightly uglier people than they normally would have...
true, but everyone go drunk, not just the money lenders. New Labour was drunk on the money too, spending and spending and winning more votes. Property speculators when mad and brought properties at insane prices. Location Location Location presenters went mad and recommended buying property at stupid prices. It was a hell of a party!

Essentially the whole economy went mad on free booze (cheap money). Yes, convict those party goers who commit criminal offences, but the common denominator, the root cause of it is the cheap booze.

It is the central bank policy that was cause of the credit bubble.

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Giving loans to people based on an optimistic valuation of their property is not a criminal offence. It's just stupid.

Pretending to give loans to people while not actualyl having any money IS a criminal offence though.

Cuts?

Forget about it. They will try, they will fail. All this malaraky is the tory boys reliving their public school negligence based childhoods onto the poor and weaker.

The problem is tax, regulation and rent seeking. It's not that some people incapable of operating in an economy with high rent, taxes and regulation levels. Basically the mugger has found his victims a bit short this week and is demanding they work harder. They won't be bothering until he stops mugging though!

If you look at other such episodes everywhere on earth, the talking tough and then caving in comes just before the finale.

Edited by Injin

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quite right. If we can attract all the global hedge to operate from London it would be a good thing. The tax revenue they provide is significant.

Hedge funds area tax in and of themselves. Taxing a thief just changes the benficary of theft, it doesn't solve the problem of stealing.

true, but everyone go drunk, not just the money lenders. New Labour was drunk on the money too, spending and spending and winning more votes. Property speculators when mad and brought properties at insane prices. Location Location Location presenters went mad and recommended buying property at stupid prices. It was a hell of a party!

Essentially the whole economy went mad on free booze (cheap money). Yes, convict those party goers who commit criminal offences, but the common denominator, the root cause of it is the cheap booze.

It is the central bank policy that was cause of the credit bubble.

All banking is fraud. If we are going to have prisons, the banking class should ALL be inside right now.

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The problem is we are not going to see the latter so that means that the fundamental causes of this crisis are not going to be fixed.

Correct, but the fundemental cause of credit bubbles is not bankers per se. It's central banks combined with the fractional reserve banking.

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Hedge funds area tax in and of themselves. Taxing a thief just changes the benficary of theft, it doesn't solve the problem of stealing.

How can buying and selling things for profit be illegal?
All banking is fraud. If we are going to have prisons, the banking class should ALL be inside right now.
Are you a communist?

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Correct, but the fundemental cause of credit bubbles is not bankers per se. It's central banks combined with the fractional reserve banking.

Which is adminstrated by bankers. if they were to refuse (for example on moral grounds, as one might with say slavery or child labour) then it wouldn't happen.

Whatever happened to personal responsibility. They can hardly be unaware that it's a load of tosh, a fraud, a scam. Yet they freely choose to be a prt of it. Fully culpable, therefore and ****** 'em.

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How can buying and selling things for profit be illegal?

When you don't own them and when they are bought using money you don't have but are merely promising to pay later. It's theft.

Ofc it's also legal but the law has nothing whatsoever to do with morality.

Are you a communist?

No, logical.

Bankers are the communists, universal credit and a central bank is the 4th plank of the manifesto.

Edited by Injin

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Victory of finance capital over everyone else.

Kleptocratic psychopathic rent seeking lords of our time.

Tax workers, tax savers, tax everything, but what you absolutely cannot do is

even suggest taxing finance. This will cause the end of the world as we know it.

Wonkers.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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