Our food, fuel and power bills shoot up while our incomes stagnate. I’m shocked. Who’d have thought that low interest rates would hurt self-funded retirees and other savers? That flooding the system with cheap money would push up the price of things money can buy, like food and other commodities? That these rising prices would feed into the price of other goods, undermining workers incomes. Not to mention the effects of ever increasing government debt. Debts governments will never pay back with coin of equal value. This undermines the currency, increasing import prices and further impoverishing workers, retirees and other savers.
The government intervention is not a win-win. Its a lose, lose and lose again for the people. But at least some are doing well. No, I’m not referring to the politicians, who at least in Australia feel our pain. Or perhaps not: “Politicians get a Christmas cracker of a pay rise“. This pay rise will greatly increase the pensions of those longer standing MP’s likely to lose their seats in the next election. Would that the rest of us were so lucky. But of course that would bankrupt the nation, as the Greeks and other Europeans are finding out.
I’m referring to fat cat bureaucrats rather than politicians. There’s a whole new class of them and they sure can earn. At least that’s my take on this:
Dunchead of amazingstuff.co.uksez, “RBS boss Stephen Hester has accepted his bonus of £963,000 on top of his annual salary of £1.2 million. RBS is 80% owned by the UK taxpayer. This image represents his annual income as 2.2 million pixels, comparing it in ‘income parade’ style with other taxpayer-employed workers.”
RBS boss Stephen Hester’s annual salary and bonus represented in pixels (Thanks, Dunchead!)
Source: Boing Boing
The graphic highlights just how wrong the Western world has been in its response to the Global Financial Crisis. Incompetent managers turned into highly paid public servants. That will work out well. It’s bad enough that the shareholders saw their money destroyed. This is rubbing shareholders faces in it by taking their money as taxes and giving it to those responsible for their losses. The old shareholders can’t even punish the likes of Hester by sacking him and his board. The government now owns most of the shares. I mean seriously, how wrong is this?
The government could not even regulate the banks to prevent their generating bubbles. I’ve heard of people not seeing something right in front of their faces. But not when it was also being vocalized by their very own lips?
These minutes show us the extent of their misunderstanding of the health of the economy. They show us how badly they misunderstood the way that the economy was working, how badly they misunderestimated the impact of the housing crash.
And it shows, you know, a group of very intelligent, very thoughtful people, you know, talking about the economic situation in the country in a considered way, evaluating what might happen, and having a discussion that, it turns out in retrospect, was far removed from the reality of the actual situation.
The report is gob smacking. It also mentions other familiar figures:
The old chairman, Alan Greenspan, presides over the first meeting of the year. Now Secretary Tim Geithner, then the head of the Federal Reserve Bank of New York, says into the record: “I would like the record to show that I think you’re pretty terrific, too. And thinking in terms of probability, I think the risk that we decide in the future that you have been even better than we think is higher than the alternative.”
Geithner has always stuck me as the sort of sniveling little toad who would have sucked up to a Flashman at school. I may be quite wrong with that assessment, but he sure seems to have a brown nose in the above quote. No wonder the powerful like and promote him. After all, what’s competence got to do with success in today’s post-capitalist America? And given the salary of the the British state employed bankers, in the UK as well? Actually, given the competence of Australia’s current crop of politicians and their recent pay rise….. oh well you get point. But if we reward and empower the incompetent we will all be the poorer for it.
Of course one should not pick on Geithner alone. The report goes on to state:
Kevin Warsh, a Federal Reserve governor, says in September 2006: “I would say that the capital markets are probably more profitable and more robust at this moment than they have perhaps ever been.”
Great call Kevin. Seriously, this goes to show how important your fundamental understanding of reality is. We all view the world through the prism of our consciousness. We understand things through our conceptual framework. It matters little how intelligent, well educated and informed you are. If the prism through which you view the world is fundamentally flawed, you will be wrong. Repeatedly wrong, often spectacularly so. Only through luck, co-incidence and a lack of clarity will you be right. Not that anyone necessarily has a true grasp of reality. But it is realitive understanding that counts. Your understanding of reality, or at least of key aspects of it, has to better approximate reality than that of others. In the land of the blind, the one eyed man is king. Although sycophancy, corruption and sociopathic tendencies may enable some to go far. Make no mistake, people can be successful with fundamentally flawed perspectives, it’s the rest of us that suffer.
Sadly the left wing takeover of education means that far too many of what should be our best and brightest have a very flawed understanding of reality. This flaw is the reason why the British, Australian and US governments appear to be so incompetent. They really do not have a clue how the world works. Their lack of understanding extends to their own self-awareness. They are fundamentally incapable of knowing how little they know. Naturally they lean to centralist State directed “growth”, rather accepting the limits to their knowledge and capacity and letting people make decisions for themselves. They are doomed to be forever surprised by unforeseen negative consequences.
On unexpected consequences, what does the following chart on donation by the finance, insurance and real estate sectors (FIRE) suggest? Particularly given the reliance of the finance sector on public bailouts:
“An analysis of campaign contribution records by the Sunlight Foundation reveals that the number of donors in the FIRE sector giving at least $10,000 (in 2010 dollars) per election cycle to political candidates, parties and independent expenditure groups increased from 1,091 in 1990 to 5,510 in 2010 (a 405% increase). Combined contributions of these elite donors increased even more dramatically, growing by $162.8 million (a 700% increase, controlling for inflation). This project builds on the Political 1% of the 1% that was featured on Boing Boing in December.”
Source: Boing Boing
Got to love the finance sector. They might have bought the establishment politicians. But they can’t buy the people, at least not for long. Either our current crop of leaders restore integrity to our systems or they will be replaced. In replacing either our leaders or our system we must not throw the baby out with the bathwater.
There have and always will be greedy psychotic individuals. Our recent variant of capitalism channeled peoples baser motives to further the public good. They did this by enshrining voluntary exchange in a relatively free market as the the primary mechanism for accruing riches. This was achieved within a Judeo Christian cultural framework. Our culture, morality and laws were central to the workings of our economy. The “progressive” left undermined these foundations. In doing so they have helped unleash economic tyranny across the free world. Their flawed conceptual frameworks makes them incapable of seeing what they have done. Their solutions will create more problems. Their solutions to the problems created by their previous solutions will unleash yet more problems. This will continue until the whole system collapses.
A collapse of the system will not and cannot be pleasant. The current crop of Western empowered vested interests will be every bit as determined to hold onto power as those in China. People are people. Power hungry narcissists are power hungry narcissists the word over. There will always be some of them in positions of power. This should to be part of our understanding of reality. We can not change it. But we can minimize the extent to which it manifests itself in ways that harm us. We can channel it for good rather than ill. We owe it to our descendents to do so. If that means restoring some of the freedoms handed down to us by our forebears, then so be it. Freedom of expression is fairly central, even is it upsets someones feelings. What vested interests are trying to do in the name of copyright and sensitivity is outrageous. But this is a subject for another post.