Tuesday, August 17, 2010
Paying for a scam
We are getting poorer
As it is we are paying for the financial industry: the scammers who engineered the current financial crisis. This is a communism for the rich.
Posted by ant @ 10:38 PM (2011 views)
16 thoughts on “Paying for a scam”
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Jace says:
So its nothing to do with paying too many people too much benefits, overpaying public sector workers etc etc…. thats left no money in the pot to take us out of this situation or at least lessen it….
Crunchy says:
I remember some time back STR1 and myself mentioning the words engineered boom and bust. This was pre bail out bonanza.
It was widely challenged with vehement disdain. Mums the word!
Let’s hope the number of grown ups (still priced out of the ‘free’ market) on here have increased over the unfolding of time.
mark wadsworth says:
Home-Onwer-Ism or Blue Socialism is what I call it. But ‘communism for the rich’ is also correct.
estrader says:
Mark,
Fascism is more correct.
ant says:
It is ridiculous. The tax increases are a chicken-feed and in fact a smokescreen compared to what we pay through high inflation, low interest rates and low wage increases. As long as the percentage difference is there the losses in real term (in pounds) are compounding exponentially.
mark wadsworth says:
“high inflation, low interest rates and low wage increases.”
Yup. These are forms of disguised taxation and a way in which the Home-Owner-Ists benefit at everybody else’s expense. Rather perversely, most homeowners have a Home-Owner-Ist Hat (under which they welcome high inflation etc) and a Productive Worker hat (under which they bemoan the self same things).
To summarise, most Home-Owner-Ists are being bribed with their own money. The net transfer from Productive Workers (in which I include large swathes of the public sector) to Home-Owner-Ists (by definition, nearly all these gains are privatised, in particular by the banking sector and people who are cash-poor property-rich) is quite small.
So why do we put up with this?
Because of the propaganda that “UK house prices and financial sector are the drivers of our economy”, which is true in a way – they are driving us into the abyss.
ant says:
@mark: But think about those who saved money (for very many years) for their retirement. These guys are really shafted.
mark wadsworth says:
Ant, indeed, but with the next breath they wail about “New housing putting pressure on local services/threatening our food security/ruining the long established character of the area/it’s all this immigration that’s to blame etc”, so they too are robbing others and being robbed themselves -> they are being robbed to subsidise people who are overpaying for houses whose prices are (partly) driven up by their NIMBYism in the first place>
khards says:
The Monopoly game will continue until we are all bankrupt!
the number cruncher says:
The fascist movement of Mussolini, Hitler and Franco destroyed workers rights, lowered salaries of middle and working class, boosted income and asset values of large landowners and powerful capitalists. They professed to be ‘socialist’ in nature but acted in the interests of the most wealthy and powerful.
Although our political system has avoided totalitarian nationalism, the economic affects of the ‘Chicago school crony capitalism’, given prominence by Reagan and Thatcher, has been the same as fascism in the creation of large protected private corporate monopolies.
icarus says:
number cruncher @8 – “large, protected private corporate monoplies”. I think it’s possible to see the the whole of society, including large parts of its intellectual and “scientific” production in those terms. Many scientific paradigms are protected by sham “peer review” processes (academic versions of self-preserving trades unions) – the skewing and warping of medical research by big pharma, lots of academic economic nonsense and questionable paradigms and models in climate science (and others I won’t mention for for fear of straying too much off-topic).
Tochinoki says:
@Icarus
Good point about Pharma. In the US alone recalled 1,742 drugs last year alone because they were later found to be harmful.
letthemfall says:
I’d go along with that icarus. Science in this country, and worldwide, has degenerated into a “business-led” “entreprise” – or in other words, it is all about money and much less about knowledge. And what is about money is about economic power – more glass than ivory towers now.
I’ve watched the alumni magazine from my alma mater decline into a boasting business rag, full of vacuous management jargon and cliches.
nomad says:
This is a thoughtful comment from quietguy to a previous post.
“I’m beginning to wonder if we’re underestimating Mervyn. What would happen to our banking system if there was a house price crash and how could Mervyn avoid this scenario?
One way to try to avoid the crash would be to gently inflate away debts. Instead of saying ‘sorry savers it’s for the wider good’, Merv just writes another letter and watched the percentage points counter on the debt eroder tot up. Yes, this is risky but every action by the MPC is risky at this stage.
The reason I ask about this is another question: would our banking system stand up to a house price crash? I cannot see any severe HPC scenario without risking a banking meltdown. I don’t like this any more than you lot but I’m just wondering if this is the reality.”
We are a nation of aquiescent and soporific people, witness how we have accommodated the clampers and the bankers – similar professions if you think about it.
In trying to think about what may change this attitude, top of my list would be if repossessions became so prevalent that friends and family of all of us, with their children, were being removed from their homes.
Maybe Merv and the coalition realise this.
tom101 says:
The concept of people losing their homes because they are overstretched financially is palatable. You take on a mortgage you take on the risk. However, if people lose whatever savings they have in their accounts, because of failed banks, I think we would find a bit of turmoil coming our way, which i think is what they’re scared of.
Just imagine right now if your bank account(s) were frozen and branches were closed.
mark wadsworth says:
Nomad, Tom 101, the idea that a house price crash would lead somehow to “a meltdown of the financial system” and savers losing their bank balances, accounts frozen, branches closed etc is complete hokum put about by the Home-Owner-Ist coalition. Admittedly, the Icelandic banks did it, but that was another massive scam by our cod-munching chums up north.
I invite you to look at some published UK bank balance sheets and you will see that whatever losses you pencil in on the mortgages banks have made, these can be borne about three times over by the bond holders – customer deposits are a small fraction of total bank liabilties (about a tenth or a fifth usually) and so no need for taxpayer to step in and honour the £50,000 guarantee.
It’s called a debt-for-equity swap and our fave bank, Northern Rock, went through this (with the extra step that the bank was split into two, which is not entirely necessary). The losses on the bad bank will by and large be borne by the bondholders in the old bank.
See also CIT Group in the USA.