I know a lot of people were getting a bit jittery about George Osborne's Swiss Tax deal, designed to puncture a hole in the super-rich's tax haven shield in Switzerland. In his own words, "We will be as tough on the richest who evade tax as on those who cheat on benefits. The days when it was easy to stash the profits of tax evasion in Switzerland are over." Wow, well that IS tough, seeing how much abuse they've given (and are going to give) benefit cheats - who, let's be honest, by taking £1 billion out of the budget each year compared with the £15.2 billion lost through tax-dodging, are definitely in the same ball park - I'd say there's a lot of rich people shaking in their £200 boots. Has George finally started listening to UK Uncut and taken a decidedly leftist attack?
Hmm...nope.
The Financial Times has highlighted a few problems:
“First, evaders will still pay less than if they had gone by the law. The withholding tax on investment returns is below the top rate in the UK - by a quantitatively marginal but symbolically significant difference. The one-off levy, too, is unnecessarily forgiving for principal that was not taxed when it was first earned."
So, the rich are still paying less than the rest of us. I suppose this is "better than nothing"...
“Second, this is an anti-evasion measure that seems all too easy to evade. The one-off tax will only be levied on accounts still open after May 2013. That is plenty of time for evaders and their Swiss bankers to discuss where it might make most sense to place the money next. Lichtenstein, which has a less taxing agreement with the UK, is being mentioned, but there is an abundance of other tax havens."
Ah, good. So unless any of the big tax-dodging companies have heard of any other country than Switzerland, this is a water-tight clampdown...also, assuming that they're all lazy bastards who won't get around to doing anything with their balance sheets until 2013...
“Third, though the deal is not presented as an amnesty, it is hard to spot the difference. To let account holders who can keep not declaring their accounts settle their tax liabilities by paying less than regular UK residents smacks of permitting some people to pay their way out of obeying the law.”
Well, this is of course the crux of the matter - this is one law for the rich and one for the, uh, less rich.
Basically, this is just a bone thrown to the rabid dogs (i.e. sane people) who want to see some action taken against the tax-dodgers, but without any real substance to back it up.
It all goes back to the great neo-liberal ethos which has bascially become a superstition - if you do anything overly nasty to the rich, they will bugger off. And that is, in some way, a bad thing and will be, in some way, bad for the country and economy.
But it's more than that - it's an almost childish admiration that the likes of Cameron and Osborne have for the super-rich. Its almsot like a desire to be able to say "Look! My country's got more billionaires than your country! Suck my Prince Albert!" Or something. To be honest, I don't really understand it and I know a lot of people, both on the left and right, don't. The FTSE 100 paid a total of £5 billion in corporation tax in 2010, which is less than the amount of tax taken from Tobacoo duties. Looks like they might want to back-track on all those anti-smoking ads. Afterall, big business is much worse for your health. Anyone remember that notorios statistic about Barclays paying only £113 million in corporation tax in 2009? Yet, of course, if we push these people too much and try and make them, y'know, obey the same law as the rest of us, they'll all leave and it'll be the end of the world. So every other part of the economy - even those groups that generate more tax revenue (and let's not forget not gambling away all our money resulting in us bailing them out and leaving the actual taxpayers £131 billion in debt) - are going to suffer instead. The rest of us are expendable.
Osborne's decision to scrap the 50p top rate of income tax is just typical of this - either he's a complete moron, or he's totally in thrall of the big boys. Or both. Apparently, the 50p rate of tax is only producing marginal returns...according to the Independent, the difference between a 45p tax and 50p tax might be only £750 million a year.
Ah right.
Wait, what?
£750 million?! Danny Alexander described cutting the 50p tax as "living in cloud-cuckoo land" and it's not hard to see why. For example, Osborne is planning to cut £670 million from the budget for the Department for Education. He is also planning to cut £535 million from the Department for Work and Pensions. So while these cuts are desparate and necessary, a sum of money greater than either of the budget deficit in either department is "marginal"? Like I said, either Osborne's a moron, or he's completely in the pocket of the super-rich. There's simply no other way to justify this. Even by neo-liberal standards, this is a totally irrational move, as many have been quick to point out. It's not even an ideological move - it's really just pure corruption. It's one step removed from the kind of Mafia-like oligarchy that's been ruining Russia since the collapse of the USSR.
To be honest, the reaction in the government has been so strongly negative - both from Conservatives and Lib-Dems - that I can't see it actually being pushed through. But the fact that Osborne actually saw this as a good idea is what makes it so scary. If I was in the cabinet, I'd be pushing for a vote of no-confidence. It's not like there aren't enough talented economists in the cabinet as it is - Vince Cable's proposals, such as a land tax (which would close one tax loophole - you can't exactly move a plot of land to the Caimen Islands, can you?) have been much more sensible, at the very least.
But this is missing the point really - Cameron and Osborne have not, and have never, had any intention of penalising the bankers or the super-rich for the financial crises or for engaging in even the slightest amount of Robin Hood taxation. That's just not their ethos - they are a group of fundamenalists who are going to cling to their "we need the rich" idiom and drag everyone else down with them just so they don't have to admit that it's not actually true.
It all goes back to Mervyn King's now-legendary summation of the financial crisis: "Now is the period when the cost is being paid. I'm surprised the real anger hasn't been greater than it has."
When you have a government which is protecting the people who caused the financial crisis in the first place and making the rest of suffer for it, you have to ask - is the government insane and corrupt...or are we insane and corrupt for voting them in?
Tuesday 30 August 2011
Tuesday 9 August 2011
Responses to the Riots reveal the Prejudices of the Liberal Left
This morning the FTSE100 fell in early trade to 4,866.48, meaning the onset of a new stock market crash and no doubt international economic misery from us all...
But who cares about that?! People were smashing stuff up in London, Liverpool and Birmingham last night!
No, more than usual!
There is a tendency here to try and politicise the riots that began in Tottenham and tore through Hackney, Brixton, Croydon and on to Liverpool, Birmingham and Bristol.
Riots don't happen out of the blue I'll give you that. But if ever there was a case of oppurtunism, the Tottenham riots were just that. On the back of a perfectly legitimate, peaceful demonstration outside Tottenham police station, a series of gangsters and thugs have taken the oppurtunity to go on a rampage around the country, looting and pillaging. Naturally a lot of people are "having opinions" on why this is happening.
The view being taken by a lot the various left-liberal and horribly middle-class commentators (not to mention Ken Livingstone) takes these riots from a high structuralist perch. These riots are not a response to specific policies or, really, even a specific incident (the shooting of Mark Duggan can't possibly still be relevant) so we're basically having to take it as read that this is general response to the socio-economic circumstances that they find themselves in. Well, duh. That's why they're expressing their anger in the form of looting local shops and smashing uo the houses of people often in exactly the same situation as they are? Yeah, wow, power to the people!
The stance being taken by a lot of political commentators is simply patronising. Who is Dan Hodges to say "Our streets are aflame. Now black Britain will be allowed its say"?
Sorry, because black people are such a bunch of ignorant savages that they can't express themselves except through violence?
It's also this idea of mass movement someone signifying political legitimacy. There are robberies and shootings all the time in these same areas of London, but I rarely see these same people being hailed as an political commentators. But when they all gang together to do exactly the same thing on a larger scale, it's a folk movement!
The only thing I'd say this really proves is that the poorer areas of London have given rise to gang culture. That's clearly the case. And that needs to be addressed - but the people who are trying to defend the actions of violent thugs due to their circumstances and the policies of the government are on a par with defending Anders Behring Breivik's shootings as the inevitable cause of Islamic immigration.
If I see some graffitti, or banners or any example proving a politicsed intent from the rioters then I concede a political intent. But to try and categorise a group of thinking, reasoning people as being a mindless reactive mass who can only express themselves on the most base level to circumstances beyond their control is actually the most insulting macro-sociological attitude to take and completely ignores the input of individuals, completely ignores the plight of the victims and is an enourmously patronising high-on-a-pedastal attitude from a bunch of pseudo-liberal commentators who of course would never stoop to that level themselves...
In a way, I'd prefer it if they did just want to nick a widescreen TV. At least that proves some kind of individual motivation.
But who cares about that?! People were smashing stuff up in London, Liverpool and Birmingham last night!
No, more than usual!
There is a tendency here to try and politicise the riots that began in Tottenham and tore through Hackney, Brixton, Croydon and on to Liverpool, Birmingham and Bristol.
Riots don't happen out of the blue I'll give you that. But if ever there was a case of oppurtunism, the Tottenham riots were just that. On the back of a perfectly legitimate, peaceful demonstration outside Tottenham police station, a series of gangsters and thugs have taken the oppurtunity to go on a rampage around the country, looting and pillaging. Naturally a lot of people are "having opinions" on why this is happening.
The view being taken by a lot the various left-liberal and horribly middle-class commentators (not to mention Ken Livingstone) takes these riots from a high structuralist perch. These riots are not a response to specific policies or, really, even a specific incident (the shooting of Mark Duggan can't possibly still be relevant) so we're basically having to take it as read that this is general response to the socio-economic circumstances that they find themselves in. Well, duh. That's why they're expressing their anger in the form of looting local shops and smashing uo the houses of people often in exactly the same situation as they are? Yeah, wow, power to the people!
The stance being taken by a lot of political commentators is simply patronising. Who is Dan Hodges to say "Our streets are aflame. Now black Britain will be allowed its say"?
Sorry, because black people are such a bunch of ignorant savages that they can't express themselves except through violence?
It's also this idea of mass movement someone signifying political legitimacy. There are robberies and shootings all the time in these same areas of London, but I rarely see these same people being hailed as an political commentators. But when they all gang together to do exactly the same thing on a larger scale, it's a folk movement!
The only thing I'd say this really proves is that the poorer areas of London have given rise to gang culture. That's clearly the case. And that needs to be addressed - but the people who are trying to defend the actions of violent thugs due to their circumstances and the policies of the government are on a par with defending Anders Behring Breivik's shootings as the inevitable cause of Islamic immigration.
If I see some graffitti, or banners or any example proving a politicsed intent from the rioters then I concede a political intent. But to try and categorise a group of thinking, reasoning people as being a mindless reactive mass who can only express themselves on the most base level to circumstances beyond their control is actually the most insulting macro-sociological attitude to take and completely ignores the input of individuals, completely ignores the plight of the victims and is an enourmously patronising high-on-a-pedastal attitude from a bunch of pseudo-liberal commentators who of course would never stoop to that level themselves...
In a way, I'd prefer it if they did just want to nick a widescreen TV. At least that proves some kind of individual motivation.
Monday 1 August 2011
Good old-fashioned intrinsic values...
One of my favourite ways to spend a nice day of living on the dole in Central London is to head down to Denmark Street and casually peruse the guitar shops. Now, I have never owned a guitar costing more than £200 and so it's a real novelty for me to go in there and play the endless amounts of exquisitely produced guitars that play like elixer of the Gods (in guitar form). There is an upward correlation between price and quality of course - a guitar costing £500 plays better than one costing £100. Like, duh. However, if you're really itching for it you can find that price steadily increase to £800, £2000, even pushing £10,000 and of course you can buy guitar costing considerably more from specialist dealers. The problem is that the cost/quality correlation flatlines around about the £1000 mark. I'm not basing that on any particular survey or even experience of playing. It's just that it's simply impossible for it not to - because they're just guitars. And, excusing a few daft gimmicks such as those self-tuning guitars that are all the rage with tone-deaf imbeciles, there is only so much you do to improve the playing and sound quality of guitar before it's just basically becomes perfect.
Guitars that cost the price of porsche then become purely assets with no intrinsic value - but abstract factors such as brand name still add flexibility in price; often, even this isn't an issue. There are a number of factors...one is that enough people simply believe in the price/quality correlation to assume that, somehow, a guitar costing £10,000 must be better than one cost £1000 grand. One might call this gullibility, but it's also not an unreasonable expectation. Another factor is status of wealth - this is a trend which is, thankfully, dying down a bit with the onset of austerity, but that nasty hangover from the 80's which says that those with the money to afford it should actually buy the more expensive option simply because it is more expensive, is still prevelant. Some idiots might see this along the same lines as investing in the housing market - but, of course, it's not because, with a few very rare exceptions, guitars generally lose value once purchased and rarely gain.
What I'm trying to really get at here is that the 21st century is a society where money has become meaningless - intrinsic value, materials which are actually inherintly valuable to their owners, has become a distant memory. A painting sold at auction can go for millions of pounds, but it's not actually worth that, is it? It's only worth that according to the social-historical reasoning of a few experts who have deemed it worth that particular sum. If I was to go and draw a smiley face on it, it's still a painting, but it would suddenly crash in price. Which is nonsense in economic terms (not that I'm promoting the defacing of art, which should have social value beyond financial value).
The lack of physicality in the economy has really hit home since the banking crisis where banks' balance sheets were loaded with non-existent toxic assets based on the income from debtors who simply didn't have the physical means to pay them back. In this age where paper and metallic forms of money are giving way to the age of PayPal, this problem will only accelerate. Money is just a series of shapes on a screen.
The death of intrinsic value has really accelerated since the war, when Keynes was hailing the rejection of the gold standard as providing new horizons of economic freedom. Money has since become more and more detached from reality. Since Nixon took America out of the gold standard (the "Nixon Shock" of 1971) mainly for the purposes of being able to pay to kill endless amount of people in Southeast Asia (see, some good came out of it!) US debt has been able to climb steadily into more abstract heights. As of June 29, 2011, the Total Public Debt Outstanding of the United States was $14.46 trillion - if the USA were still using the gold standard, and using the current rate of US$1500/oz this would amount to approximately 272,231 metric tons of gold - seeing as how, of 2009, the total amount of gold ever mined by human kind equals only 165,000 tonnes, this shows how far gone these kinds of figures are. Gold was a useful stop-plug for this kind of insane financial skyscraping, but, then, most of the world would probably be bankrupt if we had stuck with it.
Now, the notion of the instrinsic value of gold is one which kind of boggles my mind as well. The official line all the smart-arses use for the gold's instrinsic value is that it's so unreactice. This essentially meant, when it was probably first used in around 4,000 BC, that it was a case of "ooh, shiny metal stay shinier than other metals for longer!" This has somehow developed over millenia to put gold as the base level for international trade - but of course, it's not really that useful for anything. It's used in electronics due to high conductivity and, well, jewelry. That's pretty much it. Not useless, but hardly the greatest substance under the sun - essentially it's just a form of unaligned currency that happens to be valued highly pretty much everywhere. But eventually, people are going to snap out of the gold hazed miasma to realise that what they've been hording for all of history is, essentially, big shiny worthless lumps of metal.
The abstracting of money to the point where it loses touch with reality has historically resulted in massive public backlash leading to extremist tendencies - Hitler's rise to power was partially fomented by the collapse of the Germany economy in nonsensical levels of hyperinflation and national debt; in his own words, "The basic feature of our economic theory is that we have no theory at all." When the populace feel lost in an economic whirlwind of meaningless figures, people who claim to cut through all the crap, like Hitler, start to seem much more attractive and sensible.
The decline of physical wealth and physical currency is not as progressive an idea as it might appear - it's that great postmodern horror story in which some bored, amoral clerk somewhere decides to stick a few zeros on the end of a transfer and suddenly a million quid has appeared out of nowhere. Inflation goes to hell, but a computer doesn't account for inflation. It just knows there's more of something than there was before. It's this kind of spectral financial manipulation which lead to the crash and which tore a hole in the global economy. It's this kind of thing which is driving Greece, Italy and Portugal to bankrupcy - and the reason are getting so pissed off is that none of the money that being thrown around is real. All it would take be someone to hit the "delete" key and suddenly all those bonds and loans would just disappear. It would completely screw up the international economic system, but a lot of people would argue that it's screwed up anyway.
So let's not all get hooked to our credit cards and internet banking and remember that there is real security in owning physical assets and currency. It's not perfect, but it's more reliable than ethereal number crunching. Adding more zeros to something, whether it's a guitar, or a painting, a car, a plane, or a solid gold skull, doesn't mean it's really worth anything. It's just another fickle asset to be passed around among consumers, until another meaningless set of numbers somewhere makes it suddenly worthless. Items of intrinsic value are becoming a very rare commodity and, sadly, perhaps the only thing in this world which has genuine intrinsic value anymore is mostly owned by a small group of royal nutters in Saudi Arabia...
Guitars that cost the price of porsche then become purely assets with no intrinsic value - but abstract factors such as brand name still add flexibility in price; often, even this isn't an issue. There are a number of factors...one is that enough people simply believe in the price/quality correlation to assume that, somehow, a guitar costing £10,000 must be better than one cost £1000 grand. One might call this gullibility, but it's also not an unreasonable expectation. Another factor is status of wealth - this is a trend which is, thankfully, dying down a bit with the onset of austerity, but that nasty hangover from the 80's which says that those with the money to afford it should actually buy the more expensive option simply because it is more expensive, is still prevelant. Some idiots might see this along the same lines as investing in the housing market - but, of course, it's not because, with a few very rare exceptions, guitars generally lose value once purchased and rarely gain.
What I'm trying to really get at here is that the 21st century is a society where money has become meaningless - intrinsic value, materials which are actually inherintly valuable to their owners, has become a distant memory. A painting sold at auction can go for millions of pounds, but it's not actually worth that, is it? It's only worth that according to the social-historical reasoning of a few experts who have deemed it worth that particular sum. If I was to go and draw a smiley face on it, it's still a painting, but it would suddenly crash in price. Which is nonsense in economic terms (not that I'm promoting the defacing of art, which should have social value beyond financial value).
The lack of physicality in the economy has really hit home since the banking crisis where banks' balance sheets were loaded with non-existent toxic assets based on the income from debtors who simply didn't have the physical means to pay them back. In this age where paper and metallic forms of money are giving way to the age of PayPal, this problem will only accelerate. Money is just a series of shapes on a screen.
The death of intrinsic value has really accelerated since the war, when Keynes was hailing the rejection of the gold standard as providing new horizons of economic freedom. Money has since become more and more detached from reality. Since Nixon took America out of the gold standard (the "Nixon Shock" of 1971) mainly for the purposes of being able to pay to kill endless amount of people in Southeast Asia (see, some good came out of it!) US debt has been able to climb steadily into more abstract heights. As of June 29, 2011, the Total Public Debt Outstanding of the United States was $14.46 trillion - if the USA were still using the gold standard, and using the current rate of US$1500/oz this would amount to approximately 272,231 metric tons of gold - seeing as how, of 2009, the total amount of gold ever mined by human kind equals only 165,000 tonnes, this shows how far gone these kinds of figures are. Gold was a useful stop-plug for this kind of insane financial skyscraping, but, then, most of the world would probably be bankrupt if we had stuck with it.
Now, the notion of the instrinsic value of gold is one which kind of boggles my mind as well. The official line all the smart-arses use for the gold's instrinsic value is that it's so unreactice. This essentially meant, when it was probably first used in around 4,000 BC, that it was a case of "ooh, shiny metal stay shinier than other metals for longer!" This has somehow developed over millenia to put gold as the base level for international trade - but of course, it's not really that useful for anything. It's used in electronics due to high conductivity and, well, jewelry. That's pretty much it. Not useless, but hardly the greatest substance under the sun - essentially it's just a form of unaligned currency that happens to be valued highly pretty much everywhere. But eventually, people are going to snap out of the gold hazed miasma to realise that what they've been hording for all of history is, essentially, big shiny worthless lumps of metal.
The abstracting of money to the point where it loses touch with reality has historically resulted in massive public backlash leading to extremist tendencies - Hitler's rise to power was partially fomented by the collapse of the Germany economy in nonsensical levels of hyperinflation and national debt; in his own words, "The basic feature of our economic theory is that we have no theory at all." When the populace feel lost in an economic whirlwind of meaningless figures, people who claim to cut through all the crap, like Hitler, start to seem much more attractive and sensible.
The decline of physical wealth and physical currency is not as progressive an idea as it might appear - it's that great postmodern horror story in which some bored, amoral clerk somewhere decides to stick a few zeros on the end of a transfer and suddenly a million quid has appeared out of nowhere. Inflation goes to hell, but a computer doesn't account for inflation. It just knows there's more of something than there was before. It's this kind of spectral financial manipulation which lead to the crash and which tore a hole in the global economy. It's this kind of thing which is driving Greece, Italy and Portugal to bankrupcy - and the reason are getting so pissed off is that none of the money that being thrown around is real. All it would take be someone to hit the "delete" key and suddenly all those bonds and loans would just disappear. It would completely screw up the international economic system, but a lot of people would argue that it's screwed up anyway.
So let's not all get hooked to our credit cards and internet banking and remember that there is real security in owning physical assets and currency. It's not perfect, but it's more reliable than ethereal number crunching. Adding more zeros to something, whether it's a guitar, or a painting, a car, a plane, or a solid gold skull, doesn't mean it's really worth anything. It's just another fickle asset to be passed around among consumers, until another meaningless set of numbers somewhere makes it suddenly worthless. Items of intrinsic value are becoming a very rare commodity and, sadly, perhaps the only thing in this world which has genuine intrinsic value anymore is mostly owned by a small group of royal nutters in Saudi Arabia...
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