The idea that Vince Cable is a statist thug is hardly controversial in these parts. Moreover he affects some of the same nauseating fatherly manner as the late Tony Benn, and frankly they have more than a little in common. Well, not the dead bit yet. Sadly this approach is something folks in Britain are total suckers for, and indeed my utter hatred for these people is often greeted with genuine bafflement.
“Yes, I grant you he may not always be right,” they say, giving me a bemused smile, “and he a bit of a leftie, but he is such a nice chap!”
Generally the sound of my grinding teeth goes unnoticed as I try to resist the urge to shout “it’s a tactic you guileless English moron!”
Cable is someone who is strongly of the view his notions of what other people can earn should have the violence backed power of the state enforcing them. In short, he agrees with the approach of Castro’s Cuba, he is just willing to set the maximum wage rather higher. But in principle… yeah.
If he does not ‘understand’ why someone else earns the amount they earn, it must not be allowed.
What I have never ‘understood’ is how anyone could regard the LibDems as a party of civil liberties when you tot up all the pluses and minuses. Indeed if the Tories are the Stupid Party, Labour is the Evil Party… then the LibDems are perhaps the Incoherent Party.
That reminds me of a quote I heard years ago. I was watching something about con men and a detective who dealt with fraud said the victims always said afterwards “Oh but he was so charming”.
His perspective was that he wished people would realise that charm “was an verb, not a noun”. It is not an attribute that is intrinsic to you, but rather it is something you actively do in order to achieve a particular goal.
That a person is charming you tells you nothing about that person’s motives in so doing.
Ah! PdeH-
Why is it that the electorate of England still requires “Parties?”
In the U S, they have been reduced to a statutory (ballot formation) function, but they (Parties) no longer provide individual direction (or inclinations) even for such “candidates” as have some of either.
Cable is someone who is strongly of the view his notions of what other people can earn should have the violence backed power of the state enforcing them.
Actually, the State seems to be the entity paying out the earnings (or rather, the bonuses) in this case.
If I understand correctly (I’m no great financial whiz), the RBS is currently ‘owned’ (if ‘owned’ is the word I want) by the British taxpayers:
82 percent of RBS’ shares are now owned by the UK government, which bought RBS stock for £42 billion, representing 50 pence per share.
The BBC article linked to says:
Mr Cable said last month he thought the public would find it hard to understand how Royal Bank of Scotland could pay bonuses of £576m for staff when it had made an £8.2bn pre-tax loss for 2013.
I can’t speak for anyone else, but I can tell you that this particular member of the public does indeed find it difficult to understand how people (mis)managing a money-losing enterprise can be 8 billion quid in the red, yet still somehow manage to find a half-billion quid with which to pay themselves bonuses.
Frankly, that’s just silly…as well as being a slap in the face to the people who have worked hard, kept their powder dry, and would never dream of asking to be bailed out if they screw the pooch.
The unwritten premise of capitalism is this: when people make money (provided neither force nor fraud are used, of course), then they should be allowed to enjoy it.
If, on the other hand, they lose money, then they should go to the wall. Why? Because Going to the Wall is what motivates people to pay attention to what they are doing and not screw up: when you screw up, you have your capital taken away from you by your creditors and given to someone who presumably knows what he (or she) is doing.
Somehow, RBS has managed to subvert what capitalism is supposed to be about by employing inept people who lose money and who are then rewarded for doing so. D’you see the problem here?
So: I fully agree that no one has the right to tell anyone else how much money they ‘ought to’ make. However, the question Mr. Cable actually seems to be posing here (even if it’s clumsily phrased) is, “Why are the taxpayers asked to prop up banks that have lost positively staggering amounts of money, go on to continue to lose money, yet still consider it acceptable to pay out bonuses to their ludicrously inept staff?”
If you’re a genuine capitalist, trust me: this is a worthwhile question that demands an answer, even if the person posing the question is a complete twat.
It is true that most bankers (NOT all of them) would earn a lot less if governments (via Central Banks) did not subsidise banking and thus allow bankers to create credit bubbles (via complex interactions between banks and other such) without going bankrupt in the long run (banks can get away with this for awhile – but in the end the demand that the government, and its courts, step in to “suspend cash payments” and so on, comes). In short to expand lending beyond REAL SAVINGS.
[By the way, should anyone deny that the banking system does expand lending beyond real savings, what “money supply” contracted in the United States between 1929 and 1933? Did evil “deflation elves” go around burning Dollar Bills and melting down coins in bank vaults? No it was bank CREDIT, a credit BUBBLE that “contracted”].
If a banker was just a money-lender lending out REAL SAVINGS of cash-money (either their own – or real savings other have entrusted to them to-be-lent, no more nonsense language about “deposits” or nonsense concepts such as savers and borrowers have the same money AT THE SAME TIME) then most (again NOT all) would be paid less.
So is the above the position of “Uncle Vince” Cable?
No it is not his position – Vincent Cable just hates rich people.
“Surely it can not be that simple and evil Paul?”
Yes it is that simple – and that evil.
People who support the Liberal Democrats are supported envy and class hatred – and that is it.
“People who support the Liberal Democrats are supported envy and class hatred – and that is it.”
funny thing is that all the lib dems I have ever met tend to be very posh, very well educated, very well paid and often owning inherited assets
So what? The point he was making is, to repeat:
…from this (and frankly many earlier remarks he has made) it is obvious he thinks this is a wider principle (i.e. the Castro principle of maximum incomes). Do you really think he regards one million quid being paid to a (say) Credit Suisse banker in London ok and it is only the same to some RBS geezer that is not ok?
Indeed george, typical members of the bourgeois left.
To be fair though, they tend to be very selective in the sorts of taxes on the rich they support. Usually they will target bankers or the hyper-rich. They are very careful not to do anything to upset the comfortably well off Cotswolds set, like hiking stamp duty on houses.
In the glorious peoples republic the Lib Dems, like all socialists who possess either wealth or power, anticipate themselves as being in the upper tiers of the party. They will be driven around in ZIL Limousines to party functions. Not for them toiling in on the bus at 5am every morning to work in the glorious factories of the people’s republic. No siree.
The working classes who vote Labour and Lib Dem are, as has always been the case, the useful idiots of the revolution. If it ever comes, they’re the ones who are getting the shit end of the stick.
Surely the Lib Dems are the party for those who think that the Labour Party is too ‘common’? Without statism, a vast swathe of the middle classes in the UK would be relatively impoverished by the labour market’s pricing of their skills and attitudes.
Ed, I think they differ on how big the politburo frankchise should be, and who should be included – but they agree on the basic principle that such a system of forcible government for the people’ own good is desireable.
Do you really think he regards one million quid being paid to a (say) Credit Suisse banker in London ok and it is only the same to some RBS geezer that is not ok?
That depends. Which one of them has made campaign contributions (directly or indirectly) to either Mr. Cable or his party? If the former has, but the latter has not, colour me surprised if some sort of loophole isn’t created for him.
I confess to not following politics all that closely and at times like this it probably shows quite badly. However, at the risk of sounding bitterly cynical (or hopelessly naïve, you choose), Mr. Cable’s remarks smack of a shakedown operation to me. My experience is that socialists, for all their high-flown rhetoric, can be bought off the same as everyone else; you just can’t be as obvious about it with them as you would be with anyone else, that’s all.
(After all, they have an image to maintain.)
Believe me, I understand your concern regarding a politician who goes around believing he knows how much money other people ‘ought to’ be making. That said, I have to wonder: how much of Mr. Cable’s musing out loud is really what he thinks and how much of it is being done for public consumption?
He is, after all, a politician. As near as I can make out, politicians have two reasons for saying and doing things: the obvious (or stated) reason (‘rich people make too much money and it’s not fair to the poor!’) and the actual reason (‘rich people make too much money and don’t give me and/or my party enough in the way of kickbacks’).
“Suckers . . . nice chap . . . thug . . . violence . . .”
Yup. Not a new problem.
“Beware of false prophets, which come to you in sheep’s clothing, but inwardly they are ravening wolves.”
Matthew 7:15
In Cable’s case, I suppose that could be ‘false profits’ . . .
Someone thinks Vince Cable is nice? Huh? He doesn’t come across as nice in the slightest, and he doesn’t appear to make any effort to do so. He’s an angry, scowling, disapproving and self-righteous. Why would anyone thinks he’s nice?
I think it’s just because he’s a bit different to the standard politician that attracts some people to him. They think he’s a real person, and not just a machine-created smoothie. But he’s not nice, and his contempt for almost everyone is not in least bit disguised.
…to you.
Or to me.
But you and I are in a minority, I assure you. I am often told what a nice chap the vile scrote is.
But you and I are in a minority, I assure you. I am often told what a nice chap the vile scrote is.
The thing I like most about people is that they are completely predictable in that they can be relied upon to invariably do the wrong thing. In this particular case, they’ve been taken in by someone who thinks they know what’s best for other people (surely a recipe for Hell on Earth if he’s ever given half a chance to actually start making such decisions for others).
But I have to wonder if perhaps the only real question in such cases as this is: are you going to let it get to you? I mean, if you grind your teeth every time you encounter such an ‘average’ (i.e. gullible) person, surely they’ll be reduced to powder in no time flat?
“Yes, I grant you he may not always be right,” they say, giving me a bemused smile, “and he a bit of a leftie, but he is such a nice chap!”
Speaking for myself, I try to meet such bemused smiles with an amused smile of my own at the inevitability of most people being taken in by a suntan, a grin, and a laurel and hearty handshake.
For me, it’s a straight choice of either doing that or catching the next train to Beachy Head (which, granted, doesn’t seem like such a bad idea, some days.)
Yes, of course I let it ‘get to me’. The ignorant credulousness of people who think affecting ‘fatherliness’ somehow mitigates the fact a person is a power obsessed thug is what makes a person like Cable a clear and present danger.
@Paul Marks
I’m as libertarian as they come, but I see nothing wrong with the basic concept of fractional reserve banking, except for the little detail of the government insuring the whole thing and that whole bailing out thing.
If I agree to deposit my money in the bank, and agree to allow the bank to lend it out several times up to an agreed upon limit, and understand the liquidity risk, and risk of loss associated with that, and I do it in exchange for a higher rate or return on my money (either in terms of interest payments or payment in kind by way of banking services) then everybody is in a perfectly voluntary transaction.
I might even want to put my money in a bank that was insured, and consequently had its activities regulated by a private insurance company.
There are all sorts of optics issues, and the fact that it is government issued currency confuses it, but if you strip away all the regulatory bullshit, and apply a little sunshine, fractional reserve banking seems a perfectly good way to grow an economy. After all, it allows an awful lot of people to own their own homes or start their own business. It’d be fine, even with a commodity based money (which, FWIW, I am not in favor of.)
In regards to the RBS, the problem, as pointed out above, is that they should have been allowed to fold, and their assets scavenged by more capable people. Arguing over their bonuses is like arguing who should get the largest share of research money for CAGW — which is to say arguing over the technical implementation of something that shouldn’t even exist in the first place. It is the apotheosis of “missing the point.”
You know I was thinking some more about this RBS thing. Part of the argument for paying these people bonuses is that they need to pay good people to stay in the organization to fix up its problems. IT strikes me how backward that is. What it in fact is is locking the few capable people into a cancerous organization where, were they not bonused, they’d quit and go work somewhere their undoubted skill could actually be put to useful effect.
I can’t speak for anyone else, but I can tell you that this particular member of the public does indeed find it difficult to understand how people (mis)managing a money-losing enterprise can be 8 billion quid in the red, yet still somehow manage to find a half-billion quid with which to pay themselves bonuses.
Even money-losing businesses have expenses they can’t cut without losing more money. I’m not familiar enough with the business to know what other options these guys have, but there’s no reason to zero out bonuses if it means people you need leave and the bank loses ten million instead of eight the following year.
George – many Class War supporters are very rich. They still blame everything on “the rich” and “Big Business”.
Fraser Orr – as I think you know it is NOT really “fractional reserve banking” (as a normal person understands the word “fraction”).
Total bank lending is not a “fraction” of real savings of cash money (say nine tenths – 90% with 10% kept as “fractional reserve”), total lending is vastly LARGER than real savings of cash-money (a “fraction” of a hundred tenths or a thousand tenths).
If you sincerely do not see the problem with total lending being larger (vastly larger) than total REAL savings, then I can not explain it to you.
It is rather like trying to explain “why” 1+1=2 (rather than hundred or a thousand). Reality (the laws of reason as well as the laws of the physical reality) exits – if bankers find that reality gets in the way of their desires to (for example) have “depositors” and borrowers (multiple different borrowers) have the same money at THE SAME TIME, then they should declare war on God (or on the universe – if they do not believe in God). Or, rather, they should accept that reality (the laws of logic included)place a limit on their (non rational) desires. If they do not accept this there is no need to punish them – reality will punish them (via bankruptcy) unless the government comes to their rescue with “suspension of cash payments” and other court tricks.
By the way (and this is the bit of my comments that does not normally appear on “Free Banking” sites – no matter how many times I type it out), if anyone denies that the banking system (via complex interactions) increases credit (“broad money”) beyond real savings of cash-money then what “money supply” collapsed in the United States between 1929 and 1933?
Did evil “deflation elves” sneak into bank vaults and burn Dollar notes and melt down coins? Of they did not (there are no such thing as “deflation elves” – evil or otherwise) what collapsed was CREDIT, a credit BUBBLE.
That is why Milton Friedman (and others – both “monetarist” and “Keynesian”) are wrong, utterly wrong, to complain that the Federal Reserve “let the money supply collapse” or “made the money supply collapse”.
Where the Federal Reserve can be attacked (but where Milton Friedman’s hero Irving Fisher did NOT attack it) was for its policy in the late 1920s (Benjamin Strong – Milton Friedman’s other hero) – where it backed the expansion of the (credit) money supply in order to maintain a “stable price level” (Irving Fisher index definition of “inflation”).
However, banks can expand credit beyond real savings (and often have) even if a Central Bank does not exist (for example in the various boom-busts in the United States before 1913 when the Federal Reserve was created).
Milton Friedman is just terrible on banking – he even blames the collapse of the (commercial) “Bank of the United States” on anti-Semitism (of course! anyone who thinks that assets that consist of magic pixie dust stored in an invisible castle in the air, are unsound, must be an anti-Semite…..). In reality the antics of the irrational people in charge of this bank even shocked Benjamin Anderson (the main economic spokesman for fractional reserve banking for many years).
It is like dealing with Tim (“Northern Rock is a sound bank”) Congdon – all the details are got right (they, the monetarists, know VASTLY more about the details than I do – what colour notepaper X bank uses, what the correct form of words is for a specific scam, and so on), but the basic principles (of reason) are forgotten.
It is like dealing with people who have perfect understanding of the Elven languages that Tolkien invented (which I do not know at all), but are under the unfortunate delusion that elves actually exist.
Do not laugh – as the financial (and political) system is controlled by such people.
Short version – if you want to lend out 100 Pounds then you (or someone else) must REFRAIN FROM CONSUMPTION of a 100 Pounds of income (you, or someone else, must make a SACRIFICE of consumption).
If you try to “have your cake and eat it as well” you are not an honest money lender, you are bubble maker.
By the way – a mortgage is NOT money (any more than an insurance plan is money), the money used to PAY OFF a mortgage is money (just as the money used to PAY an insurance claim is money), a credit card is not money either (the credit card company must have money to pay the bill).
Adding lots of technical words (and magical mathematical notation) does not make non-money into money.
Any more than different parties can have the same money at the same time. When a saver lends out money they (the saver) does not have the money anymore – not till when (and IF) it is repaid. Then (when it is repaid) the borrower does not have the money anymore.
There is nothing (economically) wrong with usury (lending money at interest). It is only when the money lender gets bored with being a “Shylock” and tries to be something special (beyond the “petty” laws of logic that contain mere mortals) that the economic harm is caused.