Free market excess and the credit crunch

[macroban]

Must be the noon-day sun, Hugenot.

Read my post again.

[dulwichdoll]

This was sent to me in reply. Thought I would share it with y'all on this cold morning. And thanks for all the replies and posts. DD

Sorry, still a lot of old cobblers I'm afraid. Nobody moans like the self-employed when things get tough and they seem to think we should all get down on their knees and worship them for going into business on our behalf. In fact if, like me, you've lived in other countries like Italy most notably, you'll be aware that you'd have been subject to far more taxation and levels of bureaucracy than you are in the UK. Similarly, the levels of employee protection and related legislation that employers have to contend with in France and Germany dwarf anything we have in the UK. Here, ever since the dreaded Thatcher set about completely gutting the values we once had and replacing them with a one-dimensional charge towards a loads-a-money society based on greed and self-interest, that direction has remained entirely unchecked. The existing government, a labour government in name only, has championed policies which are unashamedly very right-wing whether they be economic or relating to Foreign Policy, (the latter most infamously). If we were a member of the EU, (no doubt representing the ultimate horror to all you plastic patriots out there), then you 'd have far more checks and balances to contend with. Here in the UK, our record of membership to that community has been one of repetitive opt-outs. As I say, you're freer from legislative restrictions here than any other country in Europe.

As for having to pay Corporation Tax as well as Income Tax, well that's a benefit for owners of a private limited company, since Corporation Tax is charged at a lower rate than income tax. I know this, since I am self-employed myself and, therefore, pay very little income tax, but the bulk of my taxation in Corporation Tax, leaving me significantly better off as a consequence. Despite my having to contend with all of the massive trials and tribulations that the author of the original email in this thread spewed out, and again, speaking as someone who is self-employed myself, I find I'm doing OK thanks and benefit in many ways that an employee never can. For example, you might try being a recent graduate here in the UK and see what life's like then. Both my son and a close friend of his have left Uni 1-2 years ago having very successfully completed their studies, in one case with an academic record of 9 GCSEs at grade A, 3 A-Levels at Grade A, unpaid voluntary work in the Uni vacation time as a measure to enhancing his employability and a 1st class honours degree at the end of it all. That's quite a lot of very hard graft and no mean commitment believe me, (of course not as tear-jerking as the heroic struggle of the small-business entrepeneur, bravely going it alone for England and the Queen, but still, not bad for a young man trying to get a start in life post-education). Alas, neither of them have been able to find a graduate entry position up to now, with each job advertised receiving several hundred applications. No doubt you think they, unlike your noble selves are not trying hard enough and should get on their bikes. In fact, it's this latest generation of entrants into the job market who have the enviable opportunity to pay the bill for the almighty binge that their predecessors have enjoyed over the last decade or so, ramping up debt upon debt and culminating in the mother of all crises that we're beset with now, As I said before, this has been caused entirely by unchecked and unregulated, rampant g reed and not by government interference

Finally, because I'm getting really bored now, the original author, the restauranteur, I think made the observation that the small business owner is the backbone of the country. Sorry again, but that's another LOOB. The overwhelmingly largest contributor to the UK GDP is the financial services industry and those who have been allowed to run that, free of government interference in the way that you'd no doubt champion, have fucked it for all of us big-time. That's why the situation looks so bleak from here. We don't make anything anymore, (again because of the consequences of the competition from "freed-up global capitalism" and not through government restrictions, and the only industry we have of real note is shot to pieces). This idea that Britain is still a nation of honest shopkeepers, pluckily providing the main bulwark of our economy for the benefit of the rest of us is just not on. Put your head out of the window and observe, the world's changed you see, and not because of a "Political Hurricane" besetting the country, (what the fuck did he mean by that please? The idea of this government being capable of launching a political hurricane is bizarre to say the least. Not unlike Denis Healey's remark that being attacked by Sir Geoffrey Howe was "like being savaged by a dead sheep").

Any difficulties faced by the small-business owner today have been building inexorably for a long time now. They have been caused by the continual move towards to multi-national conglomerates snaffling up everything and elbowing the small operator completely out of the equation. Take a look at your own high street. It doesn't matter which one, since they all look the same. The logical endpoint of "free-enterprise" capitalism is not a healthy competition for honest business from a collection of noble small operators. Rather it's the gobbling up of all of them by the big boys. Utilising their enormous economies of scale with which the small operator simply cannot compete, the corporations end up owning everything. Even in my own sordid ex-business, management consultancy, the lessons are plain to see. When I started with Ernst & Young in that business around 20 years ago, people spoke of a big 10, (it had previously been a big 12). It soon became a big 8, then 6 and currently we're down to 4 as successive mergers and aquisitions have taken their toll. We nearly got to a big 3 a few years back when EY flirted boldly with KMPG but that fell through. I think they had trouble getting all of the letters into a new snappy acronym, although many of my colleagues tried to get MONKEY out of it but failed gallantly in the attempt. Take a look at any other industry you like, the story is the same. If you do the research and look to see exactly who owns things beneath the bewildering layers of holding companies and offshore registrations, then you'll be surprised by how few people own things. One day we'll all wake up and find that we now all work for just 1 enterprise. No doubt then, there will be street parties, or even comparable events in the Grapes held by Barbara and those who agree with her views, celebrating the fact we defeated the spectre of socialism and red tape!

Blaming the difficulties of life for the small business operator on restrictive government red tape in the UK today is a complete blind alley. You've not had it better in my lifetime. This government is just not a left-wing government in any way. I only wish it was!! It's unreservedly kissed the arse of free market capitalism since day 1. The real cause of your difficulties is the unrelenting march of globalised capitalism itself. Free from interference in exactly the way you say you want.

Well, you know what they say, be careful you don't end up with what you wished for!

Peter

[Huguenot]

Sorry Macroban, I recognise your amendment on the NHS, but a private health model would be misappropriated. Companies like Bupa predicate their business model on only providing for customers who don't get ill (healthy wealthy business types) and on a competitor NHS.

Without an NHS private premiums would soar, and the old and infirm would be unable to find cover for their ailments. A monopoly coupled with compulsory enrolment would see charges to the government soar well beyond current NHS fees.

This Peter chap seems like the voice of reason! ;-)

[Marmora Man]

david_carnell Wrote:

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> 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.

I'd agree the projects are to be delivered by private sector but they are managed / run by the public sector and the resulting cost and time overruns are the result of:

a. Poor specification in the first place by the public sector

b. Overarching ambition in wanting to have everyone in UK on the database

c. Many subsequent changes of course / direction and specification

> 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.

Nobody in the country is legally obliged to work longer than 37.5 hours a week. PLenty choose to do just that. Equally many others choose to work longer hours for overtime, higher base salaries, ambition to be promoted or simply because they enjoy the work. Restricting everyone, regardless, to a 35 hour week is just ridiculous.

How many hours do you work a week and why? How many hours does Sean McG work and why?

I personally work between 50 - 60 hours for a salary with no overtime. I enjoy the work, believe I am making a positive contribution to the company that employs me. The rewards allow me to live in a pleasant house, take good holidays and ea well. My family see me every day - and I usually manage to cook 3 evening meals for them a week. If I was unable to work for longer than 35 hours I would feel deprived.

[Marmora Man]

A private health model would be misappropriated. Companies like Bupa predicate their business model on only providing for customers who don't get ill (healthy wealthy business types) and on a competitor NHS. Without an NHS private premiums would soar, and the old and infirm would be unable to find cover for their ailments. A monopoly coupled with compulsory enrolment would see charges to the government soar well beyond current NHS fees.

True at present - but with a state health insurance it is possible to have relatively low premiums. Current BUPA comprehensive health insurance costs approx ?1500 per person. Coincidentally NHS is spending approximately ?1500 per head of UK population. (Circa ?90 Billion versus population of 60 million. Plus there should be efficiency gains - private health typically spends a significantly lower % on administration than the NHS

This Peter chap seems like the voice of reason! Not to me!

[Huguenot]

;-)

[SeanMacGabhann]

Sorry to be the one to take a stand against you again MM, but

Not strictly true - Britain's opt-out meant that many many employess had to sign a waiver form. I know I did. ostensibly it was a choice but those people that didn't were soon got rid of.

Call me an old square from the past, but these are hardly lofty ideals which should only be available to people working nearly double the French equivalent. Look at it another way, countries which enfore a 35 hour maximum week appear to be able to achieve the same thing. Now I don't want to stop you from working as long as you want.. but that's different

I work about 40-50 hours a week without overtime , but with constant pressure to do more. By more, some people do double that. Out of fear mostly.

for the very reason Huguenot mentions - it's easier to spend less on admin when you don't have to deal with the awkward customers. And when you were doing your "eating within a poverty budget" excercise, how much of that budget went on your ?1500 premiums?

Fortunately, once again we are able to scan the world and look at where this admin-light, easy-peasy healthcare system works to prove your point... umm....

[Ted Max]

I work about 40-50 hours a week without overtime

Are you paid by the post, then?

[hintza]

Hmmm - this sounds as if it's all a bit too TPF to me (Tooting Popular Front) though in reverse. Come the revolution!

Apologies for going slightly off topic here but...

From my own experience of our current financial crisis I am somewhat despondant as to the fate of civilisation - only yesterday I heard about a case of someone in my firm moaning that their outgoings were $40,000 a month yet there income was only $10,000 and it was "our" (the companys) fault/responsibility to ensure they were "put right".

And then only today I heard of someone complaining to HR that "they had met their targets and objectives for the year so why on earth should they not get the same bonus as last year" despite the fact that my firm has lost more cash than our entire defence budget for the last 2 years....

Admittedly both instances were in the US but I don't doubt some of my fellow colleagues in the UK feel the same.

Bring back compulsory National Service!

[louisiana]

hintza Wrote:

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

> Hmmm - this sounds as if it's all a bit too TPF to

> me (Tooting Popular Front) though in reverse. Come

> the revolution!

> Apologies for going slightly off topic here

> but...

>

> From my own experience of our current financial

> crisis I am somewhat despondant as to the fate of

> civilisation - only yesterday I heard about a case

> of someone in my firm moaning that their outgoings

> were $40,000 a month yet there income was only

> $10,000 and it was "our" (the companys)

> fault/responsibility to ensure they were "put

> right".

>

> And then only today I heard of someone complaining

> to HR that "they had met their targets and

> objectives for the year so why on earth should

> they not get the same bonus as last year" despite

> the fact that my firm has lost more cash than our

> entire defence budget for the last 2 years....

>

> Admittedly both instances were in the US but I

> don't doubt some of my fellow colleagues in the UK

> feel the same.

And at the same time there are hundreds of thousands of small people like you and me across the US suddenly finding themselves existing on food stamps for the first time in their lives. And many states now expanding their (federally funded) food stamp programmes.

I don't believe that governments putting more and more money into the black hole that is the financial services balance(!) sheet is the way forward. It's a bottomless pit and these guys still think they can have company jets, ridiculous bonuses, parties in Davos, office carpets that cost more than a house, and all the rest. They are a sad parody of the Bonfire of the Vanities. Governments really should be doing other things with *our money* (and our childrens' childrens' money). Bailing these people out just gives them permission to do the same all over again. And they will. Save the savers but dump the bankers.

[SeanMacGabhann]

I'm with Jon Stewart on this one

The banks are frightened and won't lend money

The populace are frightened and won't spend money

Why don't the governments, instead of giving the banks all the money, give the money to the populace who use the money to pay off all the mortgage - they become debt free. Meanwhile the banks still end up with all the cash and have no dodgy mortgages on the books

[Marmora Man]

There is / was an American economist who suggested during the last recession that the best way forward was to scatter $100 bills from a helicopter to the general public rather than have government try to pick where best to target the publics money.

Sounds as rational as many of the current schemes - or perhaps more so.

[Huguenot]

Well in the UK total mortgage debt is GBP 1.4112 trn, which is a bit larger than the bailout.

More importantly, although people would be debt free, they'd have no jobs to go to, and no way of trading (unless they borrowed against their property of course...).

Wasn't the hundred dollar gambit pursued by Bush with zero impact?

[Jeremy]

The bank bailout wasn't charity, they didn't just give the money away.

[SeanMacGabhann]

I wasn't totally serious about the Jon Stewart thing peeps

And I know conditions were attached to the bailouts - but they appear to be ineffective conditions so far -

"have some money but lend more"

"err.. ok!"

....

....

....

[snorky]

See that big fat telly in the corner of your room ? see that 4WD lying dormant outside the house for 8 months of the year? see that handbag that your Mrs paid ?500 for ?

Thats why we are in this situation

[????]

I KNEW it was my fault....still I've just taken my 4WD for a fantastic spin round Peckham Rye park

[david_carnell]

snorky Wrote:

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> See that big fat telly in the corner of your room? Thats why we are in this situation

Have you actually been to SeanMacs house Snorky?! Spooky.

Now I know who to blame. Why can't you make do with a portable B&W tv you inherited from your Gran, eh Sean? That's what I want to know you capitalist pig-dog!

[SeanMacGabhann]

that telly was the cheapest I have ever bought I'll have you know...

And the thinnest as well come to think of it

None of my grandparents ever had a telly. True fact. And if they did, would I really want to carry it across on a B&I ferries the 80s eh??

Nor do I have a car of any sort much less a 4WD

And my missus is no fan of expensive bags

I reckon me and snorks would get on fine AND agree about the financial crisis

[????]

....does Snorks work in a similar institution to your good self then Sean? ;-)

[SeanMacGabhann]

IF I were to go to corporate HQ and look behind the curtain, I think I know who I would see...

[huncamunca]

I think Snorky may have more than a passing knowledge of Volatilty and Deltas

[Marmora Man]

Marmora Man Wrote:

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

> 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.

See following link - personal budgets for social care are working according to research. Personal Care Budgets

[Mick Mac]

There seemed to be some positive vibes this week - the US chap Bennekke (no idea on spelling) sees pick up in 2010, high profile people investing in commercial property, minor improvement in consumer confidence, M&G starting corporate lending fund to take up the slack from the now cautious banks, perhaps things are slowly beginning to turn.