...a blog by Richard Flowers

Friday, October 30, 2009

Day 3221: Conservatories – if they had a PLAN they might be DANGEROUS


The Conservatories were made by Maggie
They revolted…
They evolved…
Now, they look human
There are many copies…
…but only one brain cell
And they have a plan.

Fortunately, any plan that involves putting Master Gideon in charge of the economy really ISN'T a very GOOD one, as he demonstrated again this week by successfully outraging the City AND everyone else at the same time with his silly ban-the-bonuses scheme. For starters, why target the HIGH STREET banks, when the really OBSCENE bonuses are paid out to the City wheeler-dealers in MERCHANT BANKS? Does Gideon even know the difference?

Nor do Master Gideon's figures appear to add up. When the Centre for Economics and Business research are suggesting that the total bonus pot will amount to (a still pretty whopping) six billion quid how does restricting the cash payment produce a much MORE whopping TWENTY billion extra for business?

Anyway, paying out SHARES – instantly convertible into cash for anyone who, oh I don't know, WORKS on the STOCK EXCHANGE – does NOT promote a LONG TERM interest in the bank's wellbeing. What you actually need to do is to reward people with share OPTIONS, that is to say a plan where they will get some shares in the FUTURE, maybe three or five or ten years time, so it is in their own interest to stick around and make sure that the bank makes a lot of PROFIT in those years and doesn't take any ludicrous RISKS or they won't get their money.

And, slightly more esoterically, paying out bonuses in shares rather than cash does NOT amount to "free money" – the value of those shares has to come from SOMEWHERE, they aren't just magicked out of the air, and in this case it comes from depleting the value of all the OTHER shareholders' shares. Or more specifically, since WE own those banks, OUR shares; Master Gideon wants bonuses to come – once again – out of the taxpayers' pockets.

But REALLY bonuses are only a SYMPTOM of the problem. People get very CROSS about them because they look so huge and unjustified – mainly because they ARE huge and unjustified – but the real problem is the culture in the City that is all about making a FAST BUCK, profiteering at the expense of investors and taxpayers off of the implicit Government guarantee that if their risks go belly up, the Treasury will foot the bill.

Or, as Mr Vince "the Power" Cable put it:
"These bonus proposals are short term, stop gap solutions designed to stem
public anger but which fail to get to the heart of the problem.
So, as long as Master Gideon, the Conservatory Shadow Minister for Adding Up, is – like the CYLONS – unable to count past twelve, you wouldn't want to put any LONG TERM investments on the Conservatories, would you?

But, look out! Here comes Mr Tim Montgomery, of Conservatory RestHome, hoping to paint the town blue for a generation.

How is this Thousand Year Reich to be achieved?

He has a three stage scheme:

First, to recruit a broader coalition of support, which he compares to the "Reagan Democrats", by appealing to the aspirational working classes and to the people he calls "values voters", i.e. the socially concerned middle classes or "Liberal Democrats" as they are often called. The key to this is "tax relief for the lower paid" which means poaching Lib Dem tax policy – as well as Lib Dem voters – because clearly Gideon isn't going to think up a winner on his own. He's not even ashamed to say it's to try and turn votes, rather than out of any sense of fairness or rebalancing the tax system.

The second stage is "creating conservatory institutions" by which he means Mr Michael Gove, the Curious Cove's, wheeze to create independent schools for indoctrinating I'm sorry educating hundreds of thousands of voters in the right way. Nice.

And stage three is "disabling hostile media institutions" which means breaking up the BBC and bankrupting the Grauniad.

The fundamental DOUBLE-THINK of two-faced Conservatoryism shines through. He almost admits as much himself:
"We made the point (sometimes too often) that there was nothing incompatible between a tough approach to immigration and a generous policy towards the poorest people of the world. Nothing incompatible between support for traditional marriage and a respect for gay couples. Nothing incompatible between investing in our own defence and worrying about the arms trade".
Or, as Mr Jeremy Hardy once put it, nothing incompatible between singing hymns to Mr God in church in the morning and dancing naked for a Black Sabbath to Mr Satan at midnight, and I see no contradiction in that.

But in spite of that, you can't REALLY fault the first one, since building a bigger coalition is something that all of us in SERIOUS political parties try to do. But two and three seem to me to be deeply scary and authoritarian things to be planning.

Obviously it was the JESUITS who said "give me the child and I will give you the second-, third- or fourth-term Government" and they were WELL KNOWN for their fluffy Liberal decentralization… or indeed NOT!

And while it's LONG been debated whether the is an intrinsic BIAS at Auntie Beeb – with the answer being whoever is in Government thinks the Corporation is biased against THEM – the idea that there is an institutional left-wing tilt to the PRINT media is well beyond PARANOID and off into MONOMANIA.

Is it REALLY the case though that the next election will be as he puts it a "REALIGNMENT ELECTION"?

It seems to me that there WAS a fundamental realignment in 1979 – look at ME with the ancient history! – when power moved from Big Unions to Big Finance. The state shifted her favours from large, heavily industrialized and nationalized sectors to City-based gambling. PEOPLE didn't really get a look in.

Queen Maggie expressed it as a "home owning democracy", and the emphasis was definitely on "owning". The "new coalition" promised oodles of wealth – an economic miracle – but it was a SILLY promise based on a FIB because it was all built on BOOM and BUST as we KEEP finding out to our ever-mounting COST.

That "ruling coalition" (between the City and the Civil Service) has been in charge ever since, even if the name on the brass plate at Number Ten keeps changing. Replacing Mr Frown with Mr Balloon won't make a JOT of a difference, and the bonuses will KEEP ON being paid.

That's why we need a REAL realignment, one that smashes up the cosy club, and cuts the city and the state OUT.

That's why we need the Liberal Democrats.


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