Free market excess and the credit crunch

[Ted Max]

I'm all for the parts about us being led into a credit-bubble, and would have liked to see some more analysis of why we got into that state, what left us so reliant on cheap money, mass consumerism and the service sector.

I'm against him lumping in loads of Daily Wail-friendly broken Britain stuff that we'd reject as shallow and inaccurate if it came from one of our own.

[Brendan]

Oh well. I?m just trying to rile people up.

[Ted Max]

You as well? Is nobody on here posting for real? Then let Rome fall.

shakes fist at sky

[karter]

Thanks for the 2 cappuccinos earlier Lozzyloz and the catch up. Glad to see that the credit crunch hasn't affected your professional photography services and the banks are still calling you up. Nice one.

[SteveT]

Dulwichdoll I sympathise and noted two of the difficulties I may help you with.

The extinguishes might be sprayed with a red car paint spray to save a few quid.

The next time a toilet gets blocked, get the oldest mop in the place, push it up and down in the toilet pan then flush it, if it fills the pan do more up and down movements with the mop as if you are trying to get it to go round the bend, it should empty the pan and get rid of the blockage. Dump the mop or rinse it thoroughly.

Employees are to the most part an expensive liability. My uncle, who ran a pub all his adult life said "if they were any good they were robbing the till, and if they were no good they were costing you money".

I have lost out at three tribunals one for twelve grand who had worked for me slightly less than a year, she then quit and walked out, and then she lied to the tribunal about quitting, and said I had sacked her.

The last one cost me eight grand, she worked for 3 mornings per week and had run up ?2600 in personal telephone charges which some might think was excessive. I had someone to correlate the calls which cost another grand, and the tribunal speaker said the evidence supplied was not admissable in his court. When I asked how much is an employee allowed to steal before you can sack them, he merely talked over me and gave her the judgement.

I no longer pay anyone unless they are self employed. PAYE ruins peoples attitude to work as far as I'm concerned, and I believe everyone would be better off as self employed, they then want work.

I have employed all kinds of people many nationalities and the best I have ever employed are Australians, who all believed they were expected to work for their pay, and they got on with the job, under any conditions, without whingeing, there only fault was, they went walkabout after 12 or 18 months to do the rest of europe.

Then you had the problem of trying to find a replacement.

The worst thing I have ever had to do was to sack 2 good guys. There was a change in business, in that there wasn't any, a deep recession took half of the turnover away, and we had to close down a workshop. I never felt good about that, even though there was nothing else to be done, I still feel sick thinking about it. I saw one of them some years later and we chatted for a few minutes and then went our seperate ways, they were both brothers who I had sacked but both were in employment then and happy enough to catch up with what myself and ex-business partner was now doing.

Dulwich doll I sympathise with your position and am about to get 2 first aid boxes, and 2 fire extinguishes, for 'health'n'safety' a right load of bollocks in my opinion. Best of luck.

[Marmora Man]

To answer Sean McG:

Most of my staff have been with me for quite a considerable length of time and under normal circumstances everything would be "hunky-dory"; however, these are extraordinary circumstances in which most small businesses find themselves, mine included. Over the last few years we have been inundated with red tape, Mr. Brown's "stealth" taxes and Mr. Darling's obvious hatred of the licensed trade and the ongoing taxes inflicted by him; changes in the law; changes in all aspects of the taxation structure; increases in employers' National Insurance contributions and corporation tax; increases in rent, business rates, council tax, gas, electricity, water rates, telephone charges, credit card commission, refuse collection, waste oil collection, laundry for chefs' whites; disposal of light bulbs, fluorescent strip lights and batteries and anything considered toxic! (When I say increases, I mean, for example, my electricity has gone up by over 25%...!). Legal requirements to change all existing fire extinguishers to RED ONES (nothing wrong with the others, just the colour needed to be changed!), install grease-traps, and gas safety interlocking devices, (the latter over ?2,000), the alternative fines would put us out of business - Health & Safety has truly gone mad - I can be sued for virtually anything. Insurance policies (compulsory ones) gone bananas. I spend one day a week, every week, going round the entire building with a clip-board ticking boxes! Brown's & Darling's next trick after the smoking ban? To make it compulsory for pubs to lower the measures of spirits and wine, which means that I've now got to fork out for new optics at ?6 a go and new, extra, wine glasses at about ?1 a hit............plusssssss V.A.T. not forgetting that the duty on alcohol will go up ...... again .....by 4% in the not too distant future and all of this, under this government has got f*** all to do with banking...!!

We've had this online debate before but all the above looks like excessive, government inspired, red tape and bureaucracy. How much of any of the above has benefited Dulwich Doll, his customers or the wider community? Are red fire extinguishers more efficient at putting out fires?

But to take your point about where on the planet is the low tax, small government model - answer I don't know. However, I have no problem with being a first mover - why should we follow others? The Gallic model that I see has been praised on this thread - try living in it when on the wrong end of strikes or with employees restricted to a 35 hour week. French businessmen I know loathe the even greater and excessive costs impose by their gov't.

I hold the following to be a self evident truth: An individual can, for 90% of all purchases, spend a ? more efficiently that the government can. When the government spends our money it has transaction costs of:

a. Collecting it

b. Administering it

c. Agreeing what to buy

d. Negotiating detailed contracts

It has been estimated that a government ? has up to 35p in additional costs. This is a drag on efficiency.

There are certain absolutes that only government can provide - but I believe that these are far fewer than we currently accept and that, in any case, we should automatically challenge all government expansion and spending.

Taking a couple of today's stories - NHS IT system - original budget ?2.7 billion with a timeline to be implemented by 2008. Current estimate ?12 billion (and counting) - timeline 2015 (perhaps). This a project that was conceived over a coffee on T Blair's sofa in 30 minutes. Or the Children's database, another government inspired IT Project that will give 400,000 "professionals" (plus hackers) access to key details of every child in UK under the age of 18 (the only saving grace is that it probably won't work, or be accurate enough). Less costly tho' I believe this is around ?2.5 billion (not sure about overruns - but there'll be some)

Or the VAT cut - reducing the cost of VAT goods by 2.1p in the pound - a % rapidly overtaken by the price slashes in pre CHristmas sales but which imposed huge on companies having to reprice and account for the stupid and ineffective headline grabbing soundbite change.

I'll allow that my "strong defence" slogan is part of my psyche and what I should really learn to say is "defence forces appropriate to the task in hand".

[brum]

SteveT Wrote:

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> > The extinguishes might be sprayed with a red car

> paint spray to save a few quid.

>

You should know that the only extinguisher that should be completely red is a water one. The other types - e.g., CO2, foam and dry powder, must include a minimum 5% (I think) of the extinguisher surface area in the correct 'colour' assigned to it - with the rest of it being red. ie, CO2 is black, foam is cream and dry powder is blue. These are regulations brought in by the EU to 'standardise' all countries so we're all the same. Personally I think it's a typical example of EU bureaucracy triumphing over common sense, but there you go. The important thing is to make sure you know the correct type to use for the fire you're fighting, and also to understand how it works before you use one for real! Another tip for small businesses - don't get fobbed off by slick extinguisher salesmen - they'll sell you more than you probably need. If in doubt give the local fire safety officer a call (check the London Fire Brigade website for contact details) for free advice. One thing he will advise is not to even consider painting extinguishers in the first place.

[Peckhamgatecrasher]

MM - only the other day it was reported that individuals were given a budget to manage their medicines. I believe using the money for a holiday was the favourite response!

[Marmora Man]

MM - only the other day it was reported that individuals were given a budget to manage their medicines. I believe using the money for a holiday was the favourite response!

And your problem is?

If an individual chooses to spend their money on a holiday rather than medicine - let them. BUT - it must be their money and not money given back to them by the state. So don't tax them for medicines in the first place.

[Brendan]

Well I suppose now that we have nationalised the banks we may as well privatise the health service.

[macroban]

The nation state has three core responsibilities:

(1) Protection from foreign enemies

(2) Ensuring a sound currency

(3) Maintaining law and order.

The rest is politics.

[Marmora Man]

Well I suppose now that we have nationalised the banks we may as well privatise the health service.

It could be done - but there is a half way house.

Pay for healthcare thru' taxation but provide it by private providers, let state (NHS) hospitals, physios, nurses, doctors, GPs etc etc free of government bureaucracy. If you think Dulwich Doll's red tape was excessive you should try the NHS version.

So the state becomes another health insurer - like BUPA, Norwich Union and many others, and if an individual chooses BUPA they wouldn't need to pay the "health" element of government taxes - in this way the government is encouraged to become more efficient in its administration of the funds and fully private insurers would have an incentive to drive their premiums down toward government levels (or vice versa).

[Marmora Man]

macroban Wrote:

-------------------------------------------------------

> The nation state has three core responsibilities:

>

> (1) Protection from foreign enemies

>

> (2) Ensuring a sound currency

>

> (3) Maintaining law and order.

>

> The rest is politics.

Far more succinct, and telling, than my ramble.

[Brendan]

I?m not adverse to private healthcare especially in developed first world nations where people are empowered to take advantage of the increased choice. I was really just being facetious.

Although when it comes to these 3 points:

(1)Protection from foreign enemies

(2) Ensuring a sound currency

(3) Maintaining law and order.

1 and 3 are pretty straight forward. 2 is however multifaceted and just on the surface involves the provision of infrastructure and satisfactory social conditions.

[Jeremy]

Perhaps I'm old fashioned in believeing that hospitals should be public services, rather than profit-making private companies?

MM, you talk about bureaucracy, but the kind of system you describe would surely be vastly more paperwork-heavy. Have you ever needed medical attention in America?

I used to think the privatisation was a good thing, and that competition would inevitably lead to better value and service, but there are just too many counter-examples for me th believe that any more.

[SeanMacGabhann]

"employees restricted to a 35 hour week"

I wish I was restricted to a 35 hour week

Tis true that employers have a greater burden in the Gallic model. But if the net result is a happier country and populace why shouldn't that be the cost? I do not susbcribe for one moment to the Daily Mail agenda of a "broken Britain" - but in the 20+ years I have lived here it has always surprised me how mercantile, and money focused the average person is compared to many other countries . And that might be absolutely fine if it made people happy but it doesn't appear to. I probably listen to too much talk radio and work with the wrong sort - but the proverbial pie chart of those people is dominated by people constantly moaning about everything, obsessed about "others" depriving them of something or other. Guaranteed that if they had that something or other they would still be miserable

I realise I am generalising wildly - and focusing on a negative to make a point. But I do wish people everywhere would worry less about efficiency and more about true value.

[Brendan]

SeanMacGabhann Wrote:

-------------------------------------------------------

> Daily Mail agenda of a "broken Britain" - but in

> the 20+ years I have lived here it has always

> surprised me how mercantile, and money focused the

> average person is compared to many other

> countries . And that might be absolutely fine if

> it made people happy but it doesn't appear to.

This is very true (although difficult to say without sounding critical rather than just observant) I see it as the source of so much unhappiness in so many people I know. It brings out the worst in people.

It isn?t intrinsically in people?s nature but rather a by-product of a ?greed is good? culture imposed by those with power because it justifies their exploitation of people and resources.

[Ted Max]

it has always surprised me how mercantile, and money focused the average person is compared

Or, to adopt an earlier trenchant criticism from across the channel, we're a nation of shopkeepers.

[SeanMacGabhann]

Cheers Brendan - I meant to add something along those lines. I did fear a sort of "well if you don't like it here..." response, which may yet happen. But I do like it here. A lot. I've lived longer here than the country of my birth now (ouch) Which is why any "broken Britain" stories get my back up.

Speaking of the country of my birth, they seem to have set off on a similar road about 20 years ago and they are palpably more miserable than they were when they were a near-third-world economy

[Brendan]

Well that?s very magnanimous of you. Personally I was just slipping comfortably into my own national stereotype and being justifiably arrogant.

[Peckhamgatecrasher]

Bugger off, both of you.

[SeanMacGabhann]

That's the spirit!

[Brendan]

Listen lady, if I didn?t have a genuine affection for the English I wouldn?t waste my time annoying them by generalising about their idiosyncrasies

[david_carnell]

MamoraMan - I do not agree that your example of the NHS IT system is evidence of the inefficiencies of a nationalised health care system. If anything it is yet another example of the complete inability of the private sector (who have been contracted to install and run the system) to complete such projects on time and on budget. Fujitsu and Accenture have been responsible for cost over-runs and time delays and yet these are the same private companies that you would happily hand over our health service to.

And I'm also in agreement with SeanMcG (unsurprisingly) in his astute assessment of the benefits of a maximum working week. Whilst sacrificing some productivity the resultant social benefits are equally cost saving. Without sounding mawkish, families able to sit together of an evening an be "a family" because Mum and Dad haven't passed out from working a 60 hour week; parents with time and energy to cook fresh meals for their children rather than merely order take-aways; and the health benefits this ensures - these are just two examples of the many benefits. Travailler moins, produire plus.

[Huguenot]

"The nation state has 3 core responsibilities..."

Good heavens, I hope I never live in a state of your devising; a state where the poor, the unemployed and the unintelligent are stuck in a hideous spiral without education and basic healthcare.

It wouldn't need protection from foreign enemies, there would be enough within the borders - disenfranchised and starving, divorced from recognised social structures and with a limited life-expectancy the poor would be burning and looting our cities whilst the rich cowered inside gated bunkers.

Aside from that it's a silly doctrine - who's going to build the road outside your front door? Does each home-owner do it and then charge a toll?

Social altruism is essentially enlightened self-interest. We support our society because we know it creates a better environment for us to pursue our own interests. Petty reductionism to uninspired cliches like these '3 core responsibilities' is merely a revelation that we haven't thought through the possible consequences of our actions.

Dulwichdoll's complaint conspires to conflate two diametrically opposed issues as if they were the same.

The loss of customers in the credit-crunch is a reflection of too little regulation for what Will Hutton beautifully describes as private companies that "have delinquent propensities for speculation and short-termism that profoundly damage the real economy".

The fire extinguisher issue is possibly over-regulation, but one you may be grateful for it if a foreign language speaker puts out your chip-pan fire because they recognise the tools to do it.

So what are you accusing this government of, too little or too much regulation?

Likewise it's ridiculous to blame the government for the petty thefts of your staff. Arguably this is attributed to Thatcherite strategies: if there is 'no such thing as society' and greed is good, then why the funk would anyone want to ignore the opportunity for filling their pockets? That's not this government's fault, but the Tories.

Those looking to privatise healthcare and education will increase the likelihood of this crime taking place, as the proletariat realise that no-one gives a sh*t about then, so why should they give a sh*t about anyone else?

MM's views on letting weak banks fail is patently daft. These banks were going down like flies (good and bad together), and it wasn't even the consumers forcing their hands, it was corporate crooks betting on a collapse and feeding a disaster frenzy.

What MM just doesn't get is that this isn't some intellectual game, it's real-life, and for some people the banks going down meant not being able to feed their kids. People get desperate and all of a sudden you've got complete social breakdown. Does MM think he's living in some sort of ivory tower? We'd have all gone down with them.