Super-banker Mark Carney

November 28, 2012

Super-banker Mark Carney negotiated a whopping 30% increase in remuneration, in the form of a pension contributions, providing him with a total of £624,000 per annum for the Bank of England job. This was not agreed by the remuneration committee but was negotiated by the Treasury (George Osborne) and agreed by the bank’s non-executive directors.

If I had a time machine, I’d go back to 1938 in Cleveland, Ohio, and be in the room when Joe Shuster created comic book hero Superman. I don’t have a time machine, but I was in London in November 2012 when super-banker Mark Carney was invented.
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Should Labour adopt the 4% inflation policy?

November 28, 2012

A 1998 proposal by Paul Krugman that the western world should target inflation at 4% rather than 2%, has got the backing of the IMF. The intention would be to erode government debt, and to give policy makers a more flexible tool in the future, rather than resorting to QE.
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A Gift from Alistair to George

November 13, 2012

The funniest line of George Osborne’s letter to Mervyn King begins with the words, “As you are aware, my predecessor agreed…”

The predecessor is Alistair Darling and the letter concerns the £35billion of interest payments, or coupons, that would have been paid on the gilts bought up by the Bank of England, under the policy of Quantitative Easing.

The agreement struck by the Labour Chancellor, is that the Treasury would not make coupon payments on the gilts, since it would be pointless for the Treasury to pay interest to the Bank of England (the state to pay the state).

The reason the letter is amusing is that Osborne won an election on the promise to reduce the deficit at spectacular speed, but has spectacularly failed to do so. However, he has done a good job of blaming his predecessor for his own failure. In this letter he has been forced to admit that his predecessor has delivered a £35billion gift to the public purse.

All this means that George Osborne must be tremendously happy. You can picture him getting out the bunting in Number 11 Downing Street. He’s probably kissing a photo of Alistair Darling at this very moment. There must be a proper spring in his step.
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Obama, Miliband, Tax and State

November 3, 2012

I’ve completely changed my mind, thanks to Peter Watt. I used to agree with Peter’s position, that taxation is a necessary evil, not a automatic right of the state. Then I read his piece, “It’s not our money stupid, it’s theirs”, and I’ve since reversed my position completely.

This is part of a wider debate about whether the state creates private business, that began with a gaff from Obama. “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

It was a gaff, but the rest of the quote made sense of what he meant. “There was a great teacher somewhere in your life. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that”.

The debate re-emerged in this country during the party conference season. Miliband had described a Tory tax-cut with the visual image of David Cameron writing out £40k cheques to his mates. At the Tory conference Cameron responded, “When people earn money, it’s their money. Not the government’s money: their money. Then, the government takes some of it away in tax”.

Previously I was very much in agreement with David Cameron on this one, but reading Peter’s article got me thinking. If it were the case that the state acts as a hindrance to wealth creation, then why do millions of enterprising and ambitious young people, from the developing world, risk their lives to enter the western world every year? Surely if our top heavy state was standing in the way of business, why don’t they stay in their own country and make their fortune there? Read the rest of this entry »