Comments on: Uncontrolled capitalism and uncontrolled government

By: not an economist

not an economist — Mon, 20 Oct 2008 07:25:20 +0000

Has anyone in this govt actually said that the nationalisation of the banks is planned to be temporary?

It just that it occurs to me that for some in the labour party this provides an ideal opportunity for the permanent state ownership of what is an essential part of capitalism. Any talk of re-privatising them could always potentially be countered by a long monologue about recent events and how they (in their eyes) demonstrate that the capitalist model has failed.

By: not an economist

not an economist — Sun, 19 Oct 2008 12:29:00 +0000

“If the free market system feels that bonuses are a good way of enhancing productivity and/or profitability then such systems should be allowed by the regulator.”

Where the free market is allowed operate then this is fine. But if public money is being used to bail out an entity then the rules of the market have been effectively suspended. As Cameron pointed out in an interview the other day on Radio 4, we have to be sensitive to the sense of public outrage that may very well arise if a govt bails out an ailing bank and then we witness the spectacle of huge bonuses being paid effectively out of public money.

By: Bazman

Bazman — Sat, 18 Oct 2008 20:38:45 +0000

“special treatment highly paid bank workers” Like it John. Many of these ‘smart people’ on millions a year did their best to hold down the salaries of tens of thousands of bank workers who claimed benefits from the state. No bonuses for them boy! No I do not want to ‘upgrade’ my account! Subsides no less, not politics. Facts! Disgusting and outrageous mikestallard. By the way they paid me £2.50 interest on my current account this month. Long day if I have to pay!

By: Bazman

Bazman — Sat, 18 Oct 2008 17:18:08 +0000

How about the red tape and regulations involved in building, running and decommissioning nuclear power stations? The market could solve all our energy problems! Every town and city could have their own power supply. Built and run by private individuals and companies. Each built by cheap foreign labour and run by a middle aged smart Alec. Grants will be of course be available for everything. Any elf and safety can be ‘managed’ and if the worst comes to the worst all the right people will have private jets on standby the mess will be bailed out by the taxpayer.
It’s like any crime scene. Look for motive and opportunity.

By: oldtimer

oldtimer — Sat, 18 Oct 2008 17:06:22 +0000

I agree totally with your view. The Elliott/Wighton article in today`s Times is revealing in two important respects (other than the authorship of the “rescue”). First it says that it needed a sharp drop in the share price to persuade them of the need for action, an aspect of which (ie Mr Peston`s role) has already been questioned by Mr Howard. The second is the way that Matthew Greenberg of Merril Lynch (representing Lloyds-TSB) was forced into a corner to the agreement presented to the media. This was no way to determine the terms of a merger.

I hope that you and the Conservative party will pursue these issues vigorously in the House of Commons.

By: mikestallard

mikestallard — Sat, 18 Oct 2008 16:54:29 +0000

It seems, from this article, that you think the government as well as the banks can – and indeed should – reduce their spending.
The myth we are being sold is, however, that the banks cannot do this and the only hope is to nationalise them. Secondly, there seems to be no discussion at all about reducing government wastage/expenditure/inefficiency.
I do not hear a lot from the Conservatives – present company always excepted – about this.
Meanwhile, I take the dog for a walk and get an earful about Mr Brown from a nice stranger with a labrador who works in a local factory driving a fork lift. His dream is to emigrate to Canada because has had it up to here….
We need leadership.
Please.

By: Lola

Lola — Sat, 18 Oct 2008 14:47:29 +0000

Mr Redwood, that's a bit naive. When banks run out of their money the last thing they do is cut the divi or keep a control on staff pay and bonuses – they just increase their prices. It has always been thus and will become ever more thus after Browns bail out. Retail banking is an unprofitable cartel. The only way I can see to solve this is to break up the banks and get them to segregate retail – and preferably very well capitalised banking -from investment – and hence very risky – investment banking. But the cartel must go.

By: gordon-bennett

gordon-bennett — Sat, 18 Oct 2008 14:30:06 +0000

If the free market system feels that bonuses are a good way of enhancing productivity and/or profitability then such systems should be allowed by the regulator.

However, bonuses should only be payable in the form of shares or share options and this will ensure that bonus systems are tied to the long term success of the business.

Much as I hate to interfere with free markets, it should not be allowed for an employee to be rewarded for a deal until the passage of time shows that the deal was sound.

Also, when are they going to repeal or amend the Community Reinvestment Act in the USA? Until this is done this financial crisis will repeatedly recur.

By: Tony Makara

Tony Makara — Sat, 18 Oct 2008 13:41:24 +0000

We only get accountable government if we get effective opposition. The Conservative and Liberal parties must ensure that the recession does not lead to wasteful spending by the government. Mr Brown et al may well see the recession as a golden opportunity to bind all aspects of national life to state spending, and in so doing shift the political landscape of the country. I hope all opposition politicians will be vocal if the government moves from providing economic stimulus to ideological self-aggrandizement.

By: Kit

Kit — Sat, 18 Oct 2008 11:55:03 +0000

This may be a silly question but do we have a credit crisis? Yes I know that some banks are buggered but my letter box is still filled with loan offers at reasonable rates, I've just taken out a large (for me) commercial loan again with a good rate, and speaking to business friends none seem to be finding it difficult to find credit. I know this is anecdotal but before we bankrupt future generations do we really have a problem?