Thursday, 25 August 2011

Issues of fairness

Writing in the Financial Times on 20th August 2011 Christopher Caldwell, who is against raising taxes for the rich, notes that Warren Buffet [who is mega rich & believes he should pay more tax], paid just under $7m in US Federal Taxes last year or about 17% of his taxable income. His 'back office' employees pay about 36%.

The top 400 US 'earners' [some of us question the validity of the word 'earned' in this debate]:
In 1992 made $19.9bn and paid 29.2% in taxes
In 2010 made $90.9bn and paid 21.5% in taxes

Elsewhere the same paper publishes two graphs. They show that in 1970 the top half percent of UK earners paid 40% - everyone poorer than this paid less and that was true also in about 2005.
But in 1970 the top tenth of a percent of earners paid 90% tax whereas by 2005 they still only paid 40% Moreover in 2005 the lower earners hit the 30% rate earlier.

These two sets of data are used to support the thesis that low taxes create wealth, or conversely that higher taxes inhibit wealth creation & in any case so few 'earners' are affected the amount of money raised is trivial. But surely this misses the point. The former 'Minister for Murdoch' and still Secretary of State for Culture, Jeremy Hunt, in the same FT said "This is about people who have completely lost their moral compass and exploited technology to create massive public disorder".

He was talking about rioters but his words can surely apply equally to those whose business ethics brought about the financial crisis? They have largely escaped retribution. Some have even been rewarded. It's hard to get an exact figure but by contrast it seems as though over 50000 ordinary mortals jobs have been lost in the UK Banking sector since 2008.

In the USA, since Obama came to power, 393000 illegal immigrants have been rounded up & zero bankers. [Observer 14 Aug 2011]. And it gets worse. The State of Alabama's law on illegal immigration and the punishment for employment of illegals has a clause which exempts domestic servants. The filthy rich who use and exploit illegals as maids etc are not defined as 'employers' so they're all right then. Remember the storm in Britain when the LibDems proposed an amnesty for illegals who'd been here a long time, obeyed the law, integrated & paid taxes? Of course if you have the money to buy a football club or a £140m mansion or whatever we'll not enquire too closely into your background.

The Prime Minister, Chancellor & Mayor of London at least have an insight into the mind of a hooligan. As former members of the Bullingdon Club they surely understand the excitement of trashing places even if they didn't actually take part. Naturally the damage was paid for & nothing more was said. The great majority of those MPs who made flawed expenses claims & paid the money back have escaped further retribution. These commonsense responses are not, of course, extended to, mostly young, people with unblemished records who were involved in vandalism & looting & who confessed in shame & returned their stolen goods. Now this is not to condone rioting or other bad behaviour it just points out an inconsistency.

Nor is all this stuff the politics of envy - as some will no doubt try & portray it. Throughout history the Law has been written by the rich & powerful for the preservation of the vested interests of the rich & powerful, natural justice is not usually relevant in that process, and by and large the rest of us accept it & get on with our lives. But the chasm between the tiny percent of 'definitely haves' and the rest of us is huge & getting bigger. When it takes the right wing of the Tory Party to point this out [Observer21st August] the LibDems & Labour are in deep trouble.

Sunday, 21 August 2011

Red Arrows must fly again

It is right that the RAF has grounded all its Hawk aircraft until the cause of the tragic accident to a Red Arrow is established. However this must not be used as an excuse for the cost cutters and safety obsessives to disband the Red Arrows altogether. One Australia day c. 1995 my wife & I had the privilege of watching the Red Arrows perform over Sydney Harbour. Hundreds of thousands (well over half a million flank Sydney Harbour on that day & it's vast enough not to feel crowded!!) of God knows how many Nationalities were cheering & clapping them. We had tears rolling down our faces. Just for once one was so proud to be British and looking at sheer excellence for its own sake. We saw them again only recently over Blackpool & felt just the same.

Tuesday, 16 August 2011

When is thief not a thief?

Last week during 'Newsnight' former editor of 'The Sun' Kelvin Mackenzie [ so we know what his views are don't we !!] rounded on a fellow panellist with the words " There is nothing to understand about this. They are thieves by any name and you can get thieves in any part of society". Well he got the last bit of that comment right. The trouble is that it is primarily only the thieves at the bottom that get caught & punished. Those at the top get rewarded. The Financial Times [not renowned for being left wing] had a fabulous cartoon on Saturday 13th showing an individual clutching big box of money called MPs expenses, followed by another with an even bigger box of money called bankers bonus, followed by a hoodie carrying an Adidas box, all emerging from a broken window painted as the Union Flag. The caption was Broken Britain. Back in April I published a post pointing out that Goldman Sachs had been fined what,in terms of most people's income,was 5p.

Thursday, 11 August 2011

Who the hell are Standard & Poors?

Anyone with a pension, any kind of property or savings will be hit by the sharply increased turmoil in the 'markets' this week. Sensible folk find it hard to get their heads round this. The business that has suddenly seen its share price dive is exactly the same business that last week was seeing a steady share price rise. It seems that this increased turmoil is largely caused by the opinions of a private company called Standard & Poors. As Nobel Prize winning economist and New York Times columnist Paul Krugman notes "It's hard to think of anyone less qualified to pass judgment than the agencies [S&P & others] who [highly] rated sub-prime securities". If anyone knows & can explain in simple lay terms why markets pay any attention to them please do so.

Don't link riots to sentencing reform

One of the more fatuous comments on the recent riots came in Parliament today from Jack Straw who invited the Government to move even further away from Ken Clarke's proposals than they have already. Put rioting to one side for the moment & realise that the re-offending rate for 18 to 25yrolds of over 70% within two years of release versus the cost of imprisonment represents failure on a heroic scale. There has to be a better way. When one also realises that a huge number of prisoners have mental health & other problems it is clear that other ways exist. When it comes to punishing young people, if my numerous teenage grandchildren & their friends are any guide, what would REALLY punish them is to deprive them, for a period, of access to mobile phones, iPods, MP3 and all the other electronic gizmos without which their lives are apparently unsustainable. One should also look to the success of Kids Company & other initiatives where the success is measurable & substantial.

All this is long(ish) term and should not be blown off course by the immediate need to give the rioters & looters a seriously swift & sharp lesson. Moreover such little evidence as there is suggests that there will always be 10% or so who will simply spit efforts to help them back in your face. That's more than enough to produce a rioting mob. We should recognise the existence of this minority & indeed treat them severely and stop devoting disproportionate resources in a one size fits all determination to redeem everybody.

We wish.

Doncaster born Jeremy Clarkson waxed eloquent in his Sunday Times column about the awfulness of Greater Manchester &, in particular, the BBCs move to Salford. He said " If the BBC said I had to move back up North I'd resign in a heartbeat". Don't be a tease Jeremy. For some of us that would be wonderful news but I'm not holding my breath.

Monday, 1 August 2011

Congratulations to sporting India

Just had to post my massive congratulations to the India Cricket Captain & team over the Bell run out incident. It is so rare for true sportsmanship to triumph over the compulsion to win at all costs & the pressure brought on that compulsion by too much money sloshing around. India shine like a beacon & restore ones faith in sport.