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Anglo Disease fever

by Jerome a Paris Tue Aug 28th, 2007 at 05:29:58 AM EST

City bonuses have increased by 30% to a record £14bn this year. The rise is twice as big as in 2006 and likely to exacerbate the widening gap between executive and shop-floor pay. The bonuses come against a background of record debt, rising bankruptcies and home repossessions.

(...)

The majority of the £14.1bn will have been earned by a few at the top of the City tree pulling in hundreds of thousands or even millions in spring bonuses at the end of a year which saw growth in the City account for more than half of all growth in the economy.

Time to crank up our mentions of the Anglo Disease (see an intro here). I expect the concept could resonate in the near future...


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Party over, time to cash in before the money evaporate? Sounds like that's what happens when people smell the end of a bubble. A bit of welfare for the well-off, soon to be no longer well paid? A courtesy extended only to those high enough up the food chain, to be sure. Which for the tech/internet bubble included some fortunate engineers. I remember some of my slightly older and start-up employed friends loosing their jobs when the end approached, only to be hired back as 'consultants' at $300 to $400 an hour. And the final day at the office, with the 'take what you want of the equipment' party.  I only have anecdotal evidence here, sorry... I guess for the City crowd they have slightly more sophisticated bonuses to hand out to this end.

Bonuses have been runaway for a while, though. So maybe it's a different phenomenon. But something about wads of cash handed out at what seems to be bad and worsening times seems so familiar.

by someone (s0me1smail(a)gmail(d)com) on Tue Aug 28th, 2007 at 05:46:51 AM EST
is that the numbers discussed in the article are those for bonuses relating to 2006 performance, and paid in early 2007. That money is now finding its way into those markets that cater to it - real estate, fancy cars and luxury holidays.

Bonuses relative to year 2007 (to be paid in early 2008) are a huge question mark, right now. It seems that in some parts of the financial  industry, there will be none, but it's not clear yet what the overall effect is going to be. In all likelihood, devastating. But we'll see.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 05:52:39 AM EST
[ Parent ]
So...this is happening in France? (I wasn't clear...) But the media and all the rich cronies are all happy with Sarko in, yes?

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Tue Aug 28th, 2007 at 05:52:11 AM EST
Not sure I understand your question, but here's an answer anyway...


Don't count on conservative triumph in France

In Mr. Sarkozy's book "Testimony," he notes that 30 years ago Britain had a GDP 25 percent lower than that of France. Now Britain's is 10 percent higher. What happened? Margaret Thatcher did. But although Mr. Sarkozy vows a "rupture" with the past, he is not bold enough to affirm an affinity with her and to seriously challenge the consensus at the root of France's social sclerosis: Both left and right reject economic liberalism, the left because of its regnant socialism, the right because it regards statism as a prerequisite for national greatness.

France's unemployment rate has not been below 8 percent in 25 years -- not since 1982, when Francois Mitterrand inadvertently did what Mrs. Thatcher intentionally did -- killed socialism. Elected president in 1981 promising a "rupture with capitalism," he kept that promise pitilessly. He had the most sweeping program of nationalizations ever proposed for a free economy; he increased pensions, family allowances, housing allowances and the minimum wage. The franc was devalued three times and soon he was forced to adopt "socialist rigor" (austerity).

French leftism is perfectly reactionary. Wielding a word with semi-sacred connotations in France, socialists say they are "the resistance." They are not for anything; they are against surrendering any of their entitlements. They stand against three menaces: "neoliberalism" -- markets supplanting the state as the primary allocator of wealth and opportunity, Americanization of culture by imports of American entertainments and globalization.

In May, in an election with the highest turnout (85 percent) since 1981, Mr. Sarkozy's socialist opponent, Segolene Royal, a princess of vagueness, won 47 percent of the vote for, essentially, "resistance." Remarkably, she defeated Mr. Sarkozy among voters ages 18 to 59 -- the working population. It does not bode well for reform that he won by winning huge majorities among those most dependent on the welfare state -- 61 percent among those 60 to 69 and 68 percent among those over 70.

One in four French workers is employed in the public sector, which devours 54 percent of GDP. (The U.S. percentage is about 34.) The fact that for 15 years France's GDP and output per hour worked have been declining relative to those of Britain and the United States surely is related to the fact that 60 percent of the French respond positively to the word "bureaucrat." American conservatives should seek happy harbingers elsewhere.

This is from George Will, so that with the appropriate grain of salt, etc...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 05:55:49 AM EST
[ Parent ]
We have no rich here Bob. It's only "petit bourgeoisie" or "bourgeoisie." You trying to start class warfare in France, or something?

Hey, Grandma Moses started late!
by LEP on Tue Aug 28th, 2007 at 07:38:38 AM EST
[ Parent ]
The majority of the £14.1bn will have been earned

Earned?  Earned????!!!!

Got.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Aug 28th, 2007 at 06:40:48 AM EST
"captured"

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 07:22:17 AM EST
[ Parent ]
Not looted?

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Tue Aug 28th, 2007 at 09:06:07 AM EST
[ Parent ]
I suggest two further: "deadweight loss".

They receive compensation in a situation in which the economy as a whole is circling round the drain.

Deadweight loss.

This is the reason that they give for which the wages of workers must not rise above the subsistence level.  Because although it would benefit those workers, it would create a loss to society as a whole.

Deadweight loss.

Deprive their ideas of value.  And when they shit on the floor and expect society to clean it up for them, stick their damn noses in it and make them breath it in.

Deadweight loss.

You City hacks are a drain on society, parasites that impede the ability of men and women who do create wealth and far better well being for society as a whole to live with dignity.

Deadweight loss.

Societies in which wealth is redistribute from those who created it to ethically challenged financial sectors are worse of as a whole.  It's nothing personal that their wages must be slashed, and that they must be placed on the streets en masse.  It's neccesary for the well being of soceity.

Deadweight loss.


And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Aug 28th, 2007 at 09:33:10 AM EST
[ Parent ]
I entirely agree.

"I said, 'Wait a minute, Chester, You know I'm a peaceful man...'" Robbie Robertson
by NearlyNormal on Tue Aug 28th, 2007 at 12:03:00 PM EST
[ Parent ]
from the same article


The waiting list for a new Rolls-Royce is now five years and there is a shortage of crew members for superyachts. Worldwide, 688 yachts measuring more than 80ft were launched and there will be 250 more this year.

I'm getting lost in the mix of metaphors and reality there: is this trickle down, or the rising tide that lifts all boats?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 07:21:51 AM EST
Rolls-Royces are damn ugly, too!

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Tue Aug 28th, 2007 at 07:36:29 AM EST
[ Parent ]
And they're very bad on mileage too.

Hey, Grandma Moses started late!
by LEP on Tue Aug 28th, 2007 at 07:40:02 AM EST
[ Parent ]
The only point of status things is the status.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Tue Aug 28th, 2007 at 08:33:46 AM EST
[ Parent ]
Well, I was thinking of buying one but I decided the cost of operation was too high.

Hey, Grandma Moses started late!
by LEP on Tue Aug 28th, 2007 at 08:55:27 AM EST
[ Parent ]
A friend of mine decided not to buy one after a test drive cos he said they were old fashioned and the suspensions were rubbish.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Aug 28th, 2007 at 09:23:21 AM EST
[ Parent ]
They lie.  

While they SAY a "rising tide lifts all boats" (an economic principle that actually works BTW) what they actually practice is an impossible concept "a rising yacht lifts all tides" that, of course, has never worked because it violates all known laws of physics."

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Tue Aug 28th, 2007 at 07:39:49 PM EST
[ Parent ]
hmmm.

I suppose though that in a small enough harbor, a sinking yacht could raise all boats.

Eureka?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Aug 28th, 2007 at 11:28:00 PM EST
[ Parent ]
This reminded me of this article in the FT, discussed in Opus 4 on the Anglo Disease:


France falters as investor target

France has lost market share of inward investment into Europe, according to figures published Wednesday, allowing the UK to consolidate its position as the continent's favoured destination for FDI projects.

(...)

The UK and France remained the top two destinations, with other European countries falling well behind.

(...)

The UK's performance was driven by London and the south-east, which attracted more projects than any other country in Europe, with the exception of France. While London and the south-east secured more than 50 per cent of projects into the UK, Paris received 19 per cent of those into France

Again, that 'magical' half.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 07:25:49 AM EST
Goerge monbiot has a good essay in the Guardian on this subject.

worth reading in full

Neoliberalism claims that we are best served by maximum market freedom and minimum intervention by the state. The role of government should be confined to creating and defending markets, protecting private property and defending the realm. All other functions are better discharged by private enterprise, which will be prompted by the profit motive to supply essential services. By this means, enterprise is liberated, rational decisions are made and citizens are freed from the dehumanising hand of the state.

This, at any rate, is the theory. But as David Harvey proposes in his book A Brief History of Neoliberalism, wherever the neoliberal programme has been implemented, it has caused a massive shift of wealth not just to the top 1%, but to the top tenth of the top 1%. In the US, for instance, the upper 0.1% has already regained the position it held at the beginning of the 1920s. The conditions that neoliberalism demands in order to free human beings from the slavery of the state - minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions - just happen to be the conditions required to make the elite even richer, while leaving everyone else to sink or swim. In practice the philosophy developed at Mont Pelerin is little but an elaborate disguise for a wealth grab.

And a warning for John Edwards is implied at the end

But the most powerful promoter of this programme was the media. Most of it is owned by multimillionaires who use it to project the ideas that support their interests. Those ideas which threaten their interests are either ignored or ridiculed. It is through the newspapers and TV channels that the socially destructive notions of a small group of extremists have come to look like common sense. The corporations' tame thinkers sell the project by reframing our political language................

Neoliberalism, if unchecked, will catalyse crisis after crisis, all of which can be solved only by greater intervention on the part of the state. In confronting it, we must recognise that we will never be able to mobilise the resources its exponents have been given. But as the disasters they have caused unfold, the public will need ever less persuading that it has been misled.



keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Aug 28th, 2007 at 08:43:21 AM EST

But as the disasters they have caused unfold, the public will need ever less persuading that it has been misled.

So we should just wait as the oligarchs discredit themselves and hand over power to the other side?? That sounds unduly optimistic.

I rather expect the "we never really liberalised / we never really slashed government, let's do it now to solve the crisis" arguments to dominate, for some reason.

And to be pushed by that same media.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 28th, 2007 at 09:07:30 AM EST
[ Parent ]
No, no, I don't read it like that at all. What I believe he's saying is that, while we can never expect the same level of megaphone coverage as the neo-liberals recieve, the evidence of their own eyes will increasingly encourage the general public to become favourably inclined to our alternative message of criticism.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Aug 28th, 2007 at 09:20:46 AM EST
[ Parent ]
This deserves a diary.

I think we're maybe a couple of years away from a potential shift which could discredit neoliberalism and market nonsense for generations, if not permanently.

But there have to be plans in place to capitalise on that shift and make sure the message sticks.

Part of the answer is getting traction and flipping the media pyramid so that information comes from the bottom up instead of being distributed top down.

That's becoming easier to do than it's ever been before, and it's going to get easier still over the next few years.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Aug 28th, 2007 at 11:07:11 AM EST
[ Parent ]
Make it a diary.

I actually suspect the process is already fermenting to a certain degree within the Netherlands - the left is winning. But it is also losing. The evidence of a failing neoliberal policy is also beginning to show the other side of the coin: rampant nationalism and xenophobia. In other words: blame the funny looking ones.

As has been noticed various times: the centre is dying in Europe and the masses split in half. In Netherlands this is no exception: one part moves to the left (the rise of the Socialist Party in the Netherlands is the example) and one part to the right.

Socialist Party definitely moves the overton window back to the left. But then there is the other side: Geert Wilders and its lot who, by replacing the now practically abolished Pim Fortuyn party, actually moved further to the right. Their message is populist and thrives on xenophobia and, like the Socialist Party, targets the common man. However, the program actually exacerbates the neoliberal frame - but that's okay as long as we get rid of those pesky foreigners. As the press is now openly printing Wilder's frothing ravings, Jerome's point also comes into play.

by Nomad on Tue Aug 28th, 2007 at 11:48:53 AM EST
[ Parent ]
Well, when I complain that the formal left only has  stale and discredited marxism to offer people get huffy and get all sixth-form politico dialectic theory on me.

I want to propose a new left concensus around co-operatives and the creation of specifically non-authoritarian democratic institutions, but I simply don't have the socio-political or philosophical background to do it. I can put up bullet points and ideas, but creating a newly minted ideology is beyond me I'm afraid.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue Aug 28th, 2007 at 12:01:03 PM EST
[ Parent ]
Well, your blanket dismissal of Marx  is a bit  - though I'm with you on the whole dialectics thing.

A new ideology? Do we need one past simply rebalancing things? The problem, really, is that we've let the system get out of balance in several ways. We need to fix that.

by Colman (colman at eurotrib.com) on Tue Aug 28th, 2007 at 12:11:28 PM EST
[ Parent ]
Marxism is simply command capitalism, state dictatorship. There is no liberal freedom. Sorry, but if anyone can point to a single marxist based society that didn't descend into authoritarianism within a few weeks of establishment I must have missed it.

I'm not the sort of person who can survive a conformist society, if there's no space at the edges I don't want your future in my backyard. And the argument last night about gay people in cuba was ridiculous, of course ALL communist societies regard gays as degenerate. Any society that idealises the people whilst treating the individuals like shit cannot bear to have its iconography mocked. It's only societies that allege to be free that have to face their hypocrisy.


keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue Aug 28th, 2007 at 12:33:18 PM EST
[ Parent ]
Which is all only part of Marx's work: his solutions are just as silly as any of the other people who think that they can come up with a "solution" to the problems of the work. His identification of the problem was pretty interesting though.
by Colman (colman at eurotrib.com) on Tue Aug 28th, 2007 at 12:38:20 PM EST
[ Parent ]
The concepts I found most interesting - apart form "Surplus Value" - were his early conclusions in relation to "alienation" and the "Abolition of Labour" and the "Abolition of Property".

But his theoretical solutions were IMHO never based upon correct assumptions in relation to Reality, and via the wonders of Dialectics, he flew, like the Oozlum Bird, in ever decreasing circles until he disappeared where the Sun does not shine.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Aug 28th, 2007 at 12:54:44 PM EST
[ Parent ]
I can't beat dialectics into a shape that will fit into mind: it keeps rejecting it with a "you can't be serious" error.
by Colman (colman at eurotrib.com) on Tue Aug 28th, 2007 at 12:57:16 PM EST
[ Parent ]
Double movement. Polanyi.

The thing about this is that if the politcal system can achieve this end, you can have evolution rather than revolution.

All people want meaning in their life.  You either find that in building yourself up, or tearing others down. If you can't find a sense of self worth through work and raising your family up in relative equality, maybe you turn to race and religion, and a clash of cultures.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Aug 28th, 2007 at 02:50:03 PM EST
[ Parent ]


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