Harry,
At 17:36 14/10/2011, you wrote:
Most likely direction, I suspect, is inflation,
for this will relieve some of the pressure (at
the expense of most people's pensions and small nest eggs).
Yes*. Since the Quantitative Easing of 2008,
recent retirees in this country with
employer-contributed pensions (whose funds
usually invest quite heavily in government bonds)
already receive something like 10% less in real
income, and basic state pensioners (whose
pensions are inflation-indexed once a year in
arrears) have lost about 4% of income each year.
The latter's pensions are made up once a year so
they only lose bite sizes -- just like
index-linked public service pensioners. In their
case, the inflation doesn't compound in the same
way as private pensions. In 10-15 years' time
most of private pensioners will receive less than
the basic state pension. And that's only assuming
that the present inflation rate (about 5%) hasn't
increased, which is most unlikely. As our present
Chancellor is about to unleash yet another bout
of QE then it's highly likely that inflation will
compound further and, in about 5 years' time,
about three-quarters of all pensioners in England
will be receiving something similar to a basic
state pension which, today, barely pays for food,
rent and heating. The remainder (public service
pensioners), keeping up in real terms with their
original pensions once a year, will be
comparatively well off. Clever civil services in
all advanced countries! They made sure that they
would be well looked after retirement, whatever
stupidities the politicians and central bankers
got up to by way of money-printing.
Revolutionary potential? I'd say! In a few
years' time the present Wall Street riots will be
seen as tea parties in comparison.
(*Something approaching 2 million people in this
country have bought Premium Bonds, the monthly
government lottery, which pays about 1.5% p.a. in
winnings (£1 million is the top prize -- Treasury
officials know how to attract punters!). Two
people I know, otherwise intelligent, have bought
£30,000 worth of PBs, the maximum allowed. On
average they receive winnings of £25 a month with
a £50 win every year or two. But every time they
have a win of £25 they are also losing about £50
from the real value of their 'investment' (that
is, £600 a year!). I've tried to explain this to them but they won't have it!)
Keith
Also, as they cause it they can take a stance
against it, claiming to fight inflation on our behalf.
Guess I'm getting cynical as I get older.
Harry
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On Fri, Oct 14, 2011 at 8:27 AM, Keith Hudson
<<mailto:[email protected]>[email protected]> wrote:
At 13:27 14/10/2011, Ed wrote:
Great ideas, but what are the chances of any of
them being implemented? Not very good, I'd say.
I agree. Besides, a lot of this is just
retribution. A few dollops of retribution is no
bad thing and I wouldn't mind seeing more than a
few bankers and city traders in the stocks or
breaking rocks but Matt Taibbi's suggestions
don't really answer to the really serious
underlying trends. One is that most advanced
(money-printing) governments and their
(excessive credit-making) sidekicks, the banks,
are now deeply in debt and there's little
prospect of any recovery from this unless
there's superabundant economic growth (based on
what?), or taxation over many years or high
inflation. Another is that we're now moving into
a far more specialized world than ever before
with a consequent yawning skills gap between the
value-adders and the rest. Also, because of
automation we're moving into an economy which
simply doesn't need so many adult workers. Yet
another is that we're all becoming largely
locked into a dense urban way of life with a
standard repertoire of consumer goods. In short,
the last 300 years of the industrial revolution
has now come to an end and an altogether new
type of society and government has to emerge.
Keith
My Advice to the Occupy Wall Street Protesters
Hit bankers where it hurts
by: Matt Taibbi
Protesters with the 'Occupy Wall Street' movement demonstrate in New York.
Spencer Platt/Getty Images
I've been down to "Occupy Wall Street" twice
now, and I love it. The protests building at
Liberty Square and spreading over Lower
Manhattan are a great thing, the logical answer
to the Tea Party and a long-overdue middle
finger to the financial elite. The protesters
picked the right target and, through their
refusal to disband after just one day, the
right tactic, showing the public at large that
the movement against Wall Street has stamina,
resolve and growing popular appeal.
But... there's a but. And for me this is a
deeply personal thing, because this issue of
how to combat Wall Street corruption has
consumed my life for years now, and it's hard
for me not to see where Occupy Wall Street
could be better and more dangerous. I'm
guessing, for instance, that the banks were
secretly thrilled in the early going of the
protests, sure they'd won round one of the messaging war.
Why? Because after a decade of unparalleled
thievery and corruption, with tens of millions
entering the ranks of the hungry thanks to
artificially inflated commodity prices, and
millions more displaced from their homes by
corruption in the mortgage markets, the
headline from the first week of protests
against the financial-services sector was an
old cop macing a quartet of college girls.
That, to me, speaks volumes about the primary
challenge of opposing the 50-headed hydra of
Wall Street corruption, which is that it's
extremely difficult to explain the crimes of
the modern financial elite in a simple visual.
The essence of this particular sort of
oligarchic power is its complexity and
day-to-day invisibility: Its worst crimes, from
bribery and insider trading and market
manipulation, to backroom dominance of
government and the usurping of the regulatory
structure from within, simply can't be seen by
the public or put on TV. There just isn't going
to be an iconic "Running Girl" photo with
Goldman Sachs, Citigroup or Bank of America
just 62 million Americans with zero or negative
net worth, scratching their heads and wondering
where the hell all their money went and why
their votes seem to count less and less each and every year.
No matter what, I'll be supporting Occupy Wall
Street. And I think the movement's basic
strategy to build numbers and stay in the
fight, rather than tying itself to any
particular set of principles makes a lot of
sense early on. But the time is rapidly
approaching when the movement is going to have
to offer concrete solutions to the problems
posed by Wall Street. To do that, it will need
a short but powerful list of demands. There are
thousands one could make, but I'd suggest focusing on five:
1. Break up the monopolies. The so-called "Too
Big to Fail" financial companies now
sometimes called by the more accurate term
"Systemically Dangerous Institutions" are a
direct threat to national security. They are
above the law and above market consequence,
making them more dangerous and unaccountable
than a thousand mafias combined. There are
about 20 such firms in America, and they need
to be dismantled; a good start would be to
repeal the Gramm-Leach-Bliley Act and mandate
the separation of insurance companies, investment banks and commercial banks.
2. Pay for your own bailouts. A tax of 0.1
percent on all trades of stocks and bonds and a
0.01 percent tax on all trades of derivatives
would generate enough revenue to pay us back
for the bailouts, and still have plenty left
over to fight the deficits the banks claim to
be so worried about. It would also deter the
endless chase for instant profits through
computerized insider-trading schemes like High
Frequency Trading, and force Wall Street to go
back to the job it's supposed to be doing,
i.e., making sober investments in job-creating
businesses and watching them grow.
3. No public money for private lobbying. A
company that receives a public bailout should
not be allowed to use the taxpayer's own money
to lobby against him. You can either suck on
the public teat or influence the next
presidential race, but you can't do both. Butt
out for once and let the people choose the next president and Congress.
4. Tax hedge-fund gamblers. For starters, we
need an immediate repeal of the preposterous
and indefensible carried-interest tax break,
which allows hedge-fund titans like Stevie
Cohen and John Paulson to pay taxes of only 15
percent on their billions in gambling income,
while ordinary Americans pay twice that for
teaching kids and putting out fires. I defy any
politician to stand up and defend that loophole during an election year.
5. Change the way bankers get paid. We need new
laws preventing Wall Street executives from
getting bonuses upfront for deals that might
blow up in all of our faces later. It should
be: You make a deal today, you get company
stock you can redeem two or three years from
now. That forces everyone to be invested in his
own company's long-term health no more Joe
Cassanos pocketing multimillion-dollar bonuses
for destroying the AIGs of the world.
To quote the immortal political philosopher
Matt Damon from Rounders, "The key to No Limit
poker is to put a man to a decision for all his
chips." The only reason the Lloyd Blankfeins
and Jamie Dimons of the world survive is that
they're never forced, by the media or anyone
else, to put all their cards on the table. If
Occupy Wall Street can do that if it can
speak to the millions of people the banks have
driven into foreclosure and joblessness it
has a chance to build a massive grassroots
movement. All it has to do is light a match in
the right place, and the overwhelming public
support for real reform not later, but right
now will be there in an instant.
This story is from the October 27, 2011 issue of Rolling Stone.
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Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2011/10/>http://allisstatus.wordpress.com/2011/10/
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Henry George School
of Social Science
of Los Angeles
Tujunga CA 90243
(818) 352-4141
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/10/
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