I wonder if Ken Macdonald has plans to set up in ‘proper’ politics after his public kicking of the regulatory measures which allowed the bank excesses of the past decade? Perhaps he might go back to his old job as Director of Public Prosecutions at the CPS? (It would be something like The Return of the Witch Finder General 🙂 only probably less forgiving.
(It’s ok, there’s a song at the end).
HM government decided back in September of 2008 that whatever economic action was necessary to fight the prospect of a recession would have to be conducted through the established banks operating in the UK. This was an understandable decision because banks have long been the way society has regulated the flow of credit and debt necessary for business and public enterprises.
The Prime Minister was repeating this method only yesterday.
However, the downside of this traditional solution are becoming clearer. There is still no sign that banks are any more inclined to lend to businesses despite the money they secured from government. Instead they have used the money to provide a nest egg against further unspecified losses from their bad investments. The scale of these losses, made by institutions such as RBS and HBoS, are still not completely clear.
Meanwhile, the ‘stalemate’ in traditional lending practices is having catastrophic effects on non-financial sector businesses which cannot access traditional supplies of credit. The government has been making plans to help, however, its activity is cumbersome and it is, clearly, struggling to keep up with the scale and speed of the crash. The result is that businesses of all sorts are slashing costs to survive – and that means jobs.
In general, unemployed people do not, or cannot pay tax, and soon have to claim support from the state. The recent figures about collapsing tax revenues for the government were extremely bad news for us all because the bill for the unemployed and soon-to-be poor is about to get much bigger. Hamish McRae spells out what it means here for the next few years.
As he writes, the bill for the profligacy and bad practice of the banks and the government’s enormous efforts to save them will be paid in huge UK unemployment, long term national debts and, perhaps, also in social upheaval.
Still, at least Coventry’s finest are out and about.
Updated 29th July 2014:
In re-reading this article from 2009 for a repost made on social media, I think I would only change the use of unemployment for underemployment as much os the ‘slack’ in the national economic effort has been absorbed by the adoption of zero-hours contracts for workers and underemployment in self-employment for many others.
There has been a cartoon controversy in the United States where an artist called Sean Delonas has drawn an incautious picture of a dead chimpanzee (relating to a local news story near New York) and mixed it with the reaction to the new President’s economic plans. In a country with a long history of racial strife this has provoked a predictable media firestorm. Many people have pitched in, including fellow cartoonist Tony Auth. Clarity of expression is an extremely powerful thing.
Who needs enemies?
The government has announced plans to boost the supply of money in the economy. When this starts it will effectively devalue the existing currency in circulation among the public, so, the pound in your pocket will be worth less. As a result, products and services you buy will become more expensive as producers use price inflation to try to maintain their livelihoods. Both manufacturing and service businesses will find raw materials more expensive to purchase, particularly so, if they buy imported goods.
We may also find the value of the national currency falls again as other countries and organisations take a look and a make a bet on our immediate national economic prospects.
Published at Channel 4 News.
This week’s one-hour’s notice dismissal of 850 workers at BMW’s Cowley plant in Oxford is a graphic example of what can happen to agency workers who are without many basic employment rights. Tim Worstall spots this for what it is, a creative business exploitation of the gap in relative economic power between staff workers and contractors. There is a lively debate going on underneath Tim’s subsequent proposal, which more or less outlines the arguments about the terms people choose, or are forced, to work on.
Tessa Jowell, UK Minister for the 2012 Olympics, is likely to find her financial affairs under close scrutiny again after her former husband (and current common law partner), lawyer David Mills was found guilty of accepting bribes by a court in Italy. Mills was found guilty of accepting £400,00 from Italian Prime Minister Silvio Berlusconi in return for two pieces of false evidence given in corruption cases which involved the politician. Jowell claimed the money she had subsequently been given by Mills and which paid off the balance of a joint mortgage was legitimately earned. BBC, Guardian, Telegraph.
The Blackberry/Crackberry can have unfortunate personal side-effects.
In between the collapsing financial institutions some other industries continue to decline. In my world, this means the mass-market print industry which is wresting with far-reaching technological change and the collapse of the advertising business model which has previously supported it. Collapsing industries always mean rising job losses. The following link is to a chart about changing patterns of employment in the US ‘content’ industries – and as we know, what starts in America tends to come here later. Hat tip.
In the UK, blogger Roy Greenslade has touched on the practical, human-sized implications of this in the newspaper industry in a piece calling the effective end of sub-editing. For those not-in-the-know, sub-editors are production journalists who turn and edit the original words from reporters and columnists, like Roy, into the finely honed prose you used to read in your newspapers.
Greenslade argues technological and economic change has made this work increasingly redundant and frankly, he has a point. No cash-conscious media owner is going to pay for something they can get cheaper or, for free because of technology or outsourced production processes. I know of what I speak, I used to work at Express newspapers. To adapt the words of someone not-so-long-ago you can’t buck the market , you can only delay it.
Martin Belam at Currybetdotnet makes this point more elegantly at his site.
I would very much like a sub-editor to correct my prose and to help me make what I make. If you would like to like to apply, please do, here. Of course, I can’t afford to pay you but I can offer personal brand advertising and repeated exposure to the public…
UPDATED: Sunday 15th Feb 20.00GMT. Adam Tinworth points in the direction of a slightly less apocalyptic vision for the future of production journalists at the blog of Karl Schneider
