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Author Topic: Austerity?  (Read 5851 times)
Slobodan Blagojevic
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« Reply #40 on: June 13, 2012, 03:11:03 PM »
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... why else do all those would-be immigrants hang around the Channel borders of France awaiting a hidden ferry ride across to Britain when they are already in the European Union just by being in France?...

Why would anyone want to leave France for Britain is indeed baffling to me Wink
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hjulenissen
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« Reply #41 on: June 13, 2012, 03:22:51 PM »
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I am guessing that a fundamental issue is that European/US wages cannot be many times that of Asian wages unless this is reflected in a proportionally larger productivity (assuming that products and services flow freely globally).

_If_ what you are doing can be done equally well by someone elsewhere in the world far cheaper, is it "fair" or "rational" that you get paid so much more?

Now, a wedding photographer is pretty much geographically protected. As long as those in your country can afford to pay you whatever you need to make a living, they probably will. But what if you are photographing products?

Many have become wealthy by going from hunters, to farmers, to industry-workers, to white-collar working our way up Maslow, exploiting sophisticated education systems and knowledge of the culture in the most wealthy societies in order to get a "competitive advantage". While the jobs that we have left behind have been mechanised or moved to low-cost countries. But as they are catching up, will this "ladder" go on for ever? Will we find new low-cost countries?


Regarding the 2008 crisis: I see two approaches that could make some sense:
1) Banks are too important to go bankrupt. Therefore the state had no option but to nationalize banks (purchase bankrupt banks at a cost of zero), run them until the system was stable, and sell them as soon as possible thereafter. (left/inverventionalist)
2) The state should not do business. Letting the banks go bust would surely hurt, but the market would take care of it, and after a while growth would return. (right/liberalist)

What happened in many countries seems to be a nasty bastard of those two: owners of banks did a nasty gamble, it did not work out, national states secured their investement. It is like the state refunding your wallet after you spent it all in Las Vegas. Not only is it "unfair", it also sets a precedence where gambling actually become more rational for banks (owners).

-h
« Last Edit: June 13, 2012, 03:39:06 PM by hjulenissen » Logged
jeremypayne
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« Reply #42 on: June 13, 2012, 04:07:15 PM »
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'h' ... Spot on ...

In essence, it was heads they win, tails we lose.

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kencameron
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« Reply #43 on: June 13, 2012, 04:50:56 PM »
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; secondly, those that do make the crossing instanty join the ranks of the unemployed
Rob C
Do you have evidence for that? It sounds to me quite unlikely. My belief - only modestly supported by evidence, I grant you - is that most immigrants to most countries are keen to work, often in  poorly paid jobs which the natives wont't take.
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Rob C
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« Reply #44 on: June 13, 2012, 05:14:46 PM »
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Do you have evidence for that? It sounds to me quite unlikely. My belief - only modestly supported by evidence, I grant you - is that most immigrants to most countries are keen to work, often in  poorly paid jobs which the natives wont't take.



Many such people haven't a word of English. They drift up from North Africa via the Med, some stop off in Spain or Italy where they cruise the bars selling illegal products (no work permits; counterfeit music cds etc.- you will see at least one a day in almost any bar here) and then if they can pay off the boat ride from Africa they will move northwards to richer countries.

What honest job do you imagine somebody without the language can do in the UK? There isn't enough work for the natives, for heaven's sake! Being illegals they can't apply for even those lowest ranking jobs (that we, supposedly, won't do) that people like to use as illustrations of why they  come. All there is is crime, at some level or another. And then, eventually, they get into the system and perpetuate the politics that provide the means for their survival. And if anyone believes that it's all about taking jobs from the indigenous folks, think again: when even the legally found jobs end, as with the motorway construction here, they are without work, have nothing to send back home, and they find themselves in the same boat as the eastern Europeans who do have the legal right to be here but find crime more profitable than the work that doesn't exist even for the Spanish. Somewhere, the money has to be found to wire back to wherever; if you can't get it by working...

It's all a friggin' mess born out of the imagined advantages of free movement of people across Europe.

Rob C
« Last Edit: June 13, 2012, 05:18:43 PM by Rob C » Logged

Rob C
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« Reply #45 on: June 13, 2012, 05:34:04 PM »
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'h' ... Spot on ...

In essence, it was heads they win, tails we lose.




I'm probably misunderstanding you, and maybe everybody else, but it isn't a matter of they winning and we losing. We would indeed lose if the banks were allowed to go down - the folks with their accounts in those banks, that is. They are the ones being rescued, not the managements, many of whom have been axed. It's only because of governments stepping in with some public money to save the public's deposits that the system can continue and, with luck, fix itself. Don't forget, banks have been around providing great service for centuries; it's just the recent bout of bad lending that has brough this disaster about, not the concept of banking.

Yes, some people have been driven by greed and hubris, but by no means the entire industry. It's so easy to knock a whole sector for the sins of part.

Personally, I believe that a lot of what hjulenissen suggests is true: there can't forever be a series of lesser paid workers/producers in the world. The evidence stares you in the face when you think of Japan: was a time it could produce most anything as well as if not better than the rest of the world and more cheaply; now, it has to subcontract out to stay competitive!

China still has millions of very low paid workers, but for how long? Who's going to be the next world-workshop - North Korea? That would make some here happy bunnies!

Rob C
« Last Edit: June 13, 2012, 05:37:41 PM by Rob C » Logged

Slobodan Blagojevic
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« Reply #46 on: June 13, 2012, 05:34:10 PM »
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... Being illegals they can't apply for even those lowest ranking jobs...

Not being able to legally apply, correct. But that does not mean they do not find jobs. As a matter of fact, being able to find such jobs is the biggest motivator of illegal immigration, at least here, in the States. In addition to, of course, employing illegals is highly profitable for employers, as they can not only pay them less, but strip them of all other benefits and rights as well. Had it not been beneficial for both parties, it would not have existed for so long. Blaming crime as the main motivator helps explain only a minor percentage of illegal immigration. I have always been perplexed by the right-wing hypocrisy of the illegal immigration politics: against it publicly, yet benefiting the most from it (as employers). Fine Walmarts of the world with $1 million for every case of employing illegals, and problem solved. The crime component will be there no matter what, though.
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Rob C
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« Reply #47 on: June 13, 2012, 05:45:29 PM »
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Not being able to legally apply, correct. But that does not mean they do not find jobs. As a matter of fact, being able to find such jobs is the biggest motivator of illegal immigration, at least here, in the States. In addition to, of course, employing illegals is highly profitable for employers, as they can not only pay them less, but strip them of all other benefits and rights as well. Had it not been beneficial for both parties, it would not have existed for so long. Blaming crime as the main motivator helps explain only a minor percentage of illegal immigration. I have always been perplexed by the right-wing hypocrisy of the illegal immigration politics: against it publicly, yet benefiting the most from it (as employers). Fine Walmarts of the world with $1 million for every case of employing illegals, and problem solved. The crime component will be there no matter what, though.


I guess that the U.S. is a different game: the Mexican people move upwards into the southern States and they find a helluva lot of people there can speak the same language: Spanish; it's their passport. However, the Algerian illegal in London isn't going to find his version of Arabic that common with the Brits, and believe me, in the UK even his French will prove to be just as useless!

Rob C
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jeremypayne
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« Reply #48 on: June 13, 2012, 06:22:58 PM »
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I'm probably misunderstanding you, and maybe everybody else, but it isn't a matter of they winning and we losing. We would indeed lose if the banks were allowed to go down - the folks with their accounts in those banks, that is. They are the ones being rescued, not the managements, many of whom have been axed. It's only because of governments stepping in with some public money to save the public's deposits that the system can continue and, with luck, fix itself. Don't forget, banks have been around providing great service for centuries; it's just the recent bout of bad lending that has brough this disaster about, not the concept of banking.

Yes, some people have been driven by greed and hubris, but by no means the entire industry. It's so easy to knock a whole sector for the sins of part.


With all due respect, you don't really know what you are talking about ... In the US.

Ground zero of this crisis was not the depositary institutions.  AIG didn't take any desposits.  Goldman Sachs didn't take any deposits.  Morgan Stanley didn't take any deposits.  Bear Stearns didn't take any deposits.  Lehman Brothers didn't take any deposits.  Merrill Lynch didn't take any deposits.  JP Morgan in London didn't take any deposits.

Banking in the modern world is not what you remember.

Waaaaaaaay too many of the people who caused this crisis not only kept their jobs ... They continue to make 7-8 figures in total annual comp.  Believe me, I'm surrounded by them.

It really was "heads they win, tails we lose."

These ayyyyholes made huge bets with shareholder money.  When the bets paid off, they kept a huge chunk of the gain ... They weren't even good at sharing with the shareholders whose money they wagered!

Then ... When the bets soured, we - joe public - had to pay the tab ... Because we allowed them to become too important too fail ... And as effed up as it seems, it was in our interests to keep the doors open.

But that shouldn't have been allowed to happen ... And we haven't done enough to punish the wrong doers nor enough to ensure a different outcome next time.
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RSL
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« Reply #49 on: June 13, 2012, 08:22:07 PM »
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We don't often agree, Jeremy, but we do on this point. It's called "crony capitalism," and our government is just as guilty as the ayyyyyholes who draw the big salaries and donate heavily to the campaigns of the politicians who make it all possible. Unfortunately it's pretty nonpartisan.
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Slobodan Blagojevic
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« Reply #50 on: June 13, 2012, 08:45:56 PM »
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"Privatizing profits and socializing losses", as it is succinctly known.
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Slobodan

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hjulenissen
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« Reply #51 on: June 14, 2012, 02:29:05 AM »
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I'm probably misunderstanding you, and maybe everybody else, but it isn't a matter of they winning and we losing. We would indeed lose if the banks were allowed to go down - the folks with their accounts in those banks, that is. They are the ones being rescued, not the managements, many of whom have been axed. It's only because of governments stepping in with some public money to save the public's deposits that the system can continue and, with luck, fix itself. Don't forget, banks have been around providing great service for centuries; it's just the recent bout of bad lending that has brough this disaster about, not the concept of banking.
It is my understanding that the owners (that were responsible for their own business) in many cases were allowed to stay in ownership, while the organization was bankrupt. This would not normally be possible, but taxpayers money made it possible.

I would suggest that a better solution would be to nationalize bankrupt banks. That way, investors that made a poor gamble would loose all of their investment. I think that the latter makes sense for people both left and right, although the means to accomplish it may differ.

The end-result is that there are few changes in regulation of how banks and big corporations are allowed to work. The investors have observed that if they gamble with important organizations, there is no down-side: their investment will be secured by the people. The national states have exhausted their resources trying to fix the economy. I.e. more power to big corporations, less power to the democratic institutions.

-h
« Last Edit: June 14, 2012, 02:32:31 AM by hjulenissen » Logged
Rob C
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« Reply #52 on: June 14, 2012, 02:32:02 AM »
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Jeremy

With all due respect, you don't really know what you are talking about ... In the US.





I don't argue about the States - I don't have any money (that I know about) sitting there.

But I do know about Northern Rock and I do know about Bank of Scotland, Royal Bank of Scotland and LLoyds. It was indeed the folks with cash on deposit that were certain to lose it had these structures been allowed to fail.

Unfortunately, as my wife was losing her battle with cancer at the end of '08 we were, at the same time, trying to get money out of one bank and into another perceived as more secure. I remember walking through the local town square with our kids, just a day or so after the funeral, when the cellphone rang and a bank confirmed that they had opened a fresh account for us. It was touch and go that the credit card could pay for the funeral because the old account that fed it had been closed and I had to await the opening of the new in order to get even the money I needed to refurbish the local Spanish one and feed us all.

So don't tell me it is only the stock players and bank shareholders that were and still are at risk; without the deposits there would be nothing for anyone. And as I do know something about bank shareholding, don't kid anyone that they were, and remained, always great buys. It also sits badly for people currently to blanket call the brokers assholes; nobody thought of calling them that when times were good and interest poured in! Truth is, we like the gambling game when we win, but blame somebody else when we lose. At least the lottery has no hypocrisy to it... on the other hand, so far, it only buys me the odd (very) cup of coffee.

Yes, I agree that policing of these services is required - but it always was a need, the rules were there, but who enforced them?

Rob C

P.S. Yes, I do know about the governmental 'guarantees' for deposits; for many people the sums 'guaranteed' still signal wipeout.

« Last Edit: June 14, 2012, 02:37:52 AM by Rob C » Logged

hjulenissen
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« Reply #53 on: June 14, 2012, 02:40:02 AM »
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Yes, I agree that policing of these services is required - but it always was a need, the rules were there, but who enforced them?
It seems that human individuals and society are incapable of comprehending the idea that economy will have ups and downs. From Dutch flower crisis to 2008. I am no economist, but it is unclear to me what the alternative is. I.e. are the oscillations around the central tendency always a bad thing? Or is this inherent unstable behaviour actually needed in order to have the nice long-term growth that can be observed over decades?

When bank and car-manufacturers appeared on the tv telling us that their organization was too important to go bust, and that they wanted tax-payers to help them out, I think that they implicitly said that "our organization is too important for society for us to have full freedom". If a bank is so important that the state have to subsidize losses, we _must_ also be allowed a share of the profits, or at least allow ourselves to regulate the company so as to avoid future losses.

-h
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Rob C
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« Reply #54 on: June 14, 2012, 02:42:44 AM »
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We don't often agree, Jeremy, but we do on this point. It's called "crony capitalism," and our government is just as guilty as the ayyyyyholes who draw the big salaries and donate heavily to the campaigns of the politicians who make it all possible. Unfortunately it's pretty nonpartisan.



Nonsense, Russ; that's the bright side of the situation!

You can vote freely in the knowledge that they will all screw you with equal pleasure.

I'm definitely a glass-half-full kind of chap!

;-)

Rob C
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« Reply #55 on: June 14, 2012, 03:16:33 AM »
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One of Gordon Brown's first acts as chancellor was to initiate a £3bn per year tax raid on private pension funds, so he'd have money to spend on buying votes. That's why private pension funds are not viable and have largely ceased to exist; and it's why, in some parts of the country, well over half those who are actually employed work for the government. The logic, insofar as there was any, seemed to be that public employees, knowing on which side their bread was buttered, would vote Labour.

The wanton destruction of one of the best systems in the world for pension provision was malicious vandalism. History will not be kind to the clunking fist.

Jeremy

Jeremy, that only tells half of the story - though it undoubtably contributed towards the problem.  I worked in the pensions industry in the 1980's and at that time annuity rates were around 10% and the stock market was doing very well, as was the housing market here in the UK.  In the last 20 years annuity rates have halved because of the realisation that people are living longer and also the yields from the bonds that underwrite the pension payments have also reduced.  Pension funds no longer benefit from the steady increase in the stock market. Final salary pension schemes it was realised are just not affordable as they once were.  I worked in a company where the normal retirement age was 60, and if you had done 40 years you would get a full two-thirds pension at that time.  It is just not affordable for a business to pay such a high pension for perhaps 30 plus years, based on a 40 year working life.  A pension fund of around £500K would be needed to pay a typical pension - and how much would that cost per year to invest in?

But I also agree that the government (of all colours) has done very little to sort out this huge problem.

Jim
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« Reply #56 on: June 14, 2012, 03:44:09 AM »
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Jimmy Reid, Scottish politician 1932 -2010 stated in a speech in 1972.

A rat race is for rats. We’re not rats. We’re human beings.

Amen.
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Slobodan Blagojevic
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« Reply #57 on: June 14, 2012, 07:18:21 AM »
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... A rat race is for rats. We’re not rats. We’re human beings...

Yes, we are. Not sure it is a compliment though. Not for humans. For rats, maybe. Other than generally viewed with disgust, I am unaware that rats are capable of such unspeakable cruelty, monstrousity and atrocities we, the proud humans, are.

So, what's your point in economic or political terms? You know of a more "humane" way of running things? I am all ears! But peddling failed systems of the past and debunked theories ain't gonna cut it.
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Slobodan

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jeremypayne
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« Reply #58 on: June 14, 2012, 08:14:43 AM »
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So, what's your point in economic or political terms? You know of a more "humane" way of running things? I am all ears! But peddling failed systems of the past and debunked theories ain't gonna cut it.

Put me in charge.  I'd be a very enlightened dictator and it would solve my own retirement puzzle.
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popnfresh
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« Reply #59 on: June 14, 2012, 08:56:08 AM »
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Getting back to the photograph for a moment...

It's an OK street shot of a protest, but it's all in the background. I think you were too far away from the action and needed to get in closer, as opposed to just using a longer lens. As it is they're just a wall of people down the street. There's no sense of immediacy or passion. Look at photos that win photojournalism awards. The photographer puts the viewer in the middle of it. In this one you're on the sidelines, watching from a safe distance.
« Last Edit: June 14, 2012, 09:07:51 AM by popnfresh » Logged
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