More from the home of Trotskyist economics at Newsnight, this time on the Lehman debacle. It’s a place where irresponsible lending is ‘forcing debt down the throats’ of low income families; where the bank’s failure is really down to fat cat investment bank bosses trying to protect their future earnings; and where the real question when it comes to assessing the scale of the crisis is ‘so how does this compare to the miners’ strike?’
Trotsky’s guide to the credit crunch
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Apparently they got rid of Jeremy Vine because of his Maoist tendencies.
http://en.wikipedia.org/wiki/Paul_Mason_(journalist)
http://www.workerspower.com/
http://www.media.gn.apc.org/dispute/0201nq3.html
Venceremos!
He really hates his US colleagues eh? Look at his last 2 para’s; ‘Tomorrow we will just see a stunned American media in full denial/do-not-understand mode’
Of course HE understands it, but all from his Trot point of view – so he’s inevitably wrong.
Hugh | 15.09.08 – 7:35 pm:
Venceremos indeed!
It’s the sheer bloody “I’m happy to openly exhibit and express my embittered Leftist credentials” that leaves one struggling for words. This is the economics editor of the standard-bearing news programme of the world’s most famously impartial news broadcaster?
The Beeb these days doesn’t even pay lip service to the notion of impartiality.
despite all this focus on america – please bear in mind that 5,000 – yes FIVE THOUSAND – very highly paid jobs in London have dissapeared today.
the knock on effect in the London economy will be enormous.
its not just those Lehman Brothers bankers in Canary Wharf affected – its all the service industries that they spend their money on.
the curse of Jonah strikes again
http://www.order-order.com/2008/09/flashback-gordon-opening-lehmans-hq.html
“LONDON, April 5, 2004 • The Rt Hon Gordon Brown, MP, Chancellor of the Exchequer, today officially opened Lehman Brothers’ new European headquarters building at 25 Bank Street, Canary Wharf, London.”
The BBC, half a story and economics…
“…the bad lending on a massive scale that forced debt down the throats of low income people like foie down the throat of a gras.”
What he fails to mention is that it was government interference (i.e. socialism) in the lending markets that has led to this crunch. Ask a leftoid what the answer is and he will reply: more state interference!
You could not make it up.
http://www.forbes.com/opinions/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
“It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers’ expense) by multiple government bodies.”
The absence of state interference means that the market for the supply and demand of financial products will not be artificially distorted and will consequently allow for markets to correct themselves to sustainable profit levels much sooner.
Alas, it would appear Big Government is high on the agenda of both Obama and McCain, f**king the markets up for another 8 years at least.
GBS
considering the faux shock indignation at AGW “sceptics” and continual claims their theory has been debunked, the beeb doesnt seem to have any such concerns over the credibility of Marxist economics.
strange that
Interesting Jeremy Vine is a Wykamist,what are they teaching the boys at Winchester College nowadays?
He is stunningly unfitted by training and experience to be “Economics Editor” at Newsnight.
Wiki has him as Father of the Chapel among Newsnight journalists. That is another sign of the huge overmanning at the Beeb – Newsnight has its own Chapel.
Socialist? New Labour?
Please elaborate.
Magic Dave: Nu liebour = High taxes, billions pissed away on unreformed public services, billions given as handouts to lazy bone idle scum, no border controls and hammering the white middle class and an ever invasive Government sticking their noses into every aspect of our lives.
I’d call that Socialist.
A turd is a turd.
The ignorant prat doesn’t even know what “foie” and “gras” mean – not what he thinks.
Even Del-Boy had better french: “Mange-tout, Rodney”
Last week Mason marveled at a new ethanol plant and then said:
But once it’s operational, here’s the catch, the entire plant needs only four people to run it.
http://www.bbc.co.uk/blogs/newsnight/paulmason/2008/09/american_journey_into_the_etha.html#commentsanchor
Here’s the catch? Paul must lament the modern world. Folk could spend all day lugging around water buckets but instead we have piped water, what a destroyer of jobs, disgusting!
Technological progress freeing up labour for more skilled tasks is the key to our affluence, Paul Mason is an utter muppet.
Watching Paxman grilling the Libdem Clegg for daring to propose tax cuts an unworthy thought occured to me.
Opposing tax cuts is a standard BBC response. What if a courageous government gave nearly all of us a tax cut by abolishing the TV tax?
Is this why even our self apponited people’s tribune Paxman cannot stomach the thought.
After all he earns in a year more than most of us in a lifetime.
Our tax money gives him his luxurious lifestyle.
dave s
And the BBC licence tax i probably the most regressive tax we have. Well-off people can readily afford £135 a year. To someone on basic benefits it is approaching 4 or 5% of their annual income – one twentieth of their entire annual income. That is before they find themselves unable to pay the tax, and get hit by fines. And that is why some people end up in jail.
But why be forced to pay for a service that you don’t want to use?
You are not forced to pay car tax if you don’t own a car or only drive a car on private roads.
The idea of still funding the BBC based on a model that is over 60 years old is a total joke.
The cowardice of the politicians for not addressing the model of funding for the BBC is a disgrace.
The technology now exists to allow the BBC to do a combination of pay to view and advertising along with money it gets from commerical ventures.
What does the BBC fear?
I’m astounded at how little moron leftists like Mason know about economics. The sheer audacity of the left, to blame economic freedom for a situation that has undeniably been caused by economic regulation! But that is the nature of the left – everything must be inverted to its polar opposite: truth, values…everything.
The left has for decades been doing everything they can to sabotage capitalism, while simultaneously blaming capitalism for the results of their sabotage. It’s the ultimate chutzpah, akin to a murderer blaming his crime on the existence of his victim.
Some sense re: Lehmans and the credit crunch:
“Quit Doling Out That Bad-Economy Line”
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415_pf.html
My comment submitted to Mason’s blog pointed out very nicely that he was ignoring the contribution of the CRA and leftist community groups to the current credit crunch and housing crisis…and of course it was deemed to have “broken house rules” and was not published.
So we can deduce from this that one of the house rules is:
# Comments must not upset the BBC’s anticapitalist, left-leaning prism through which everything is viewed as a consequence of unchecked freedom and greed. Any empirical evidence provided to the contrary will be eliminated by the BBC’s house censors. How dare you.
‘….like foie down the throat of a gras.’
Eh?
Like liver down the throat of a fat? Doesn’t make much sense to me.
And as for ‘hitting a fragile system like a meteor and wiping it out needlessly’ – shouldn’t that be ‘meteorite’? I thought meteors were specks of dust that burnt up harmlessly in the atmosphere.
The monarchs of money have been exposed as arrogant fools. Now we are all paying the price for their hubris
The money men have made fools of us. In the years of their dominance, they insisted that the markets were the highest judges and must be left free to rule. Now that the markets signal their downfall, they are running sobbing to governments and taxpayers, begging for our money to save them from the poorhouse
http://www.dailymail.co.uk/news/article-1056376/The-monarchs-money-exposed-arrogant-fools-Now-paying-price-hubris.html
.
It is inevitable and right that regulation will be tightened on both sides of the Atlantic, to prevent a recurrence of the recklessness which has created this disaster.
If regulation goes too far, however, if the risk-takers are too tightly shackled, then the City of London will atrophy. It will find itself offering little to investors that other nations, rival financial centres, cannot provide for themselves.
It may sound paradoxical to bemoan the causes of the Anglo-American financial system’s failure, then to say that we must not change it too much.
But we should acknowledge that for at least two decades before it overreached itself, the City brought great prosperity to this country.
It is impossible to devise a model that generates successes without also allowing failures. Henceforward, we need to find means of moderating risk exposure, without destroying incentives and opportunities for entrepreneurs.
http://www.dailymail.co.uk/news/article-1056376/The-monarchs-money-exposed-arrogant-fools-Now-paying-price-hubris.html
And he forgot to mention the miners.
In any case, Hastings, despite having edited the Telegraph, is hardly the archetypal right-winger. He’s written about the same topic for the Guardian here:
http://www.guardian.co.uk/commentisfree/2008/sep/15/useconomicgrowth.useconomy
And he worked for the Beeb at one stage.
“to blame economic freedom for a situation that has undeniably been caused by economic regulation!”
that’s a truly ludicrous comment (and i write as an economically liberal city worker who still has a job this morning :-D). the underlying causes of Lehman and the wider credit cruch are clearly not excessive regulation – evidently nobody was regulating the mortgage market or the specialist derivatives market that it underpinned particularly well. clearly the risk management within the banks was hopelessly blasé.
that’s not to say that regulation is the answer now. i had a large smirk on my face when i was down in canary wharf yesterday as the lehmans mob carted their stuff out, because it was truly capitalism at work. f*** it up and you lose suckers. it’ll leave us in good shape once this blows over.
that’s not to excuse the government here though. if it had kept taxes under control and not blown ridiculous amounts of cash we’d be in a better place to ride it out.
Sometimes you almost have to admire the sheer chutzpah of the Beeboids. Surely only they could employ a Trotskyite as the Economics Editor of Newsnight?
Mind you, they are all ignorant about economics. I saw Paxo grilling a panel of economists, and when one woman tried to explain that the explosion of credit had been facilitated by the policy of Greenspan’s Fed keeping interest rates deliberately low, he just could not get it, but his Paxman sneer at a woman who was patently better informed and more intelligent than he was (for one thing she was Russian but spoke perfect English) just showed him up to be the pizzle he is.
Remind me how many English Literature graduates it takes to run a current affairs programme?
Newsnight is just run by a bunch of twats.
re Rob | 16.09.08 – 12:06 pm.
After Paxman had laughed dismissively at the points being put forward by the woman (from Lombard Street research) he then accepted the same points put forward more stealthily by Derek Scott (Blair’s alternative to Chancellor Brown).
Try this simple way of looking at things.
You either believe that the banking system is collectively criminally incompetent.
Or you believe they are controlled by people that are criminally evil.
AS WE SURLY ALL KNOW, do we not?
The BBC is controlled by the EU and the EU is controlled by the central banks.
Therefore The BBC is either criminally incompetent. Therefore it would already be disbanded or disciplined in some way. By the people that control it.
OR
The BBC is part of a very large conspiracy to partially/temporarily/or permanently ( who knows? )destroy the British European and American economies/societies. Which is why not even Cameron is thinking of closing down the BBC. Because far from doing a bad job for its establishment bosses, the BBC is in fact under its current circumstances doing its usual excellent job of talking much while saying nothing of any importance at all.
Please try not to give the evil shit that runs the world the benefit of the doubt or you will surly be the next on the menu.
Trust the BBC at your peril. It is without doubt the most dangerous device formulated solely for the propagation of establishment lies and dis information ever know to mankind.
SURLY the below is OBVIOUSLY apparent to a blind bat in a dark room in the middle of the night.
This country is being dismantled, piece by piece, so that it can NEVER be put back together again.
Our political parties are self destructing because they are being bribed to do so. The EU constitution has already effectively ruled out any further British elections, whether the BBC mentions the fact or not.
Sites such as this and GF are only available for the purpose of logging discontents, while speeding up the process of deliberately causing public despair in its party political leadership.
These people go by the name of The Common Purpose. They work in and at the expense of your local and national government, but do not EVER work for you.
They work for the imminent creation of a truly fascist/communist world controlling government.
No, I’m going to stick with collectively incompetent.
“You either believe that the banking system is collectively criminally incompetent.
Or you believe they are controlled by people that are criminally evil.”
Or you correctly belive that they’re run by some highly intelligent but human people who have made an excellent contribution to several years of economic stability and prosperity but have taken their eyes off the ball regarding the risk factoring of structured derivatives. And are not controlled by an alien stroking a white cat.
Cockney writes: “Or you correctly belive that they’re run by some highly intelligent but human people who have made an excellent contribution to several years of economic stability and prosperity but have taken their eyes off the ball regarding the risk factoring of structured derivatives”
Alternatvely, you listen to someone like Jeff Randall, who actually knows what he is talking about:
http://www.telegraph.co.uk/money/main.jhtml;jsessionid=YUVMM04PJ1IIBLARBSQSFFA?xml=/money/2008/09/16/ccjeff116.xml
Hugh:
It is inevitable and right that regulation will be tightened on both sides of the Atlantic, to prevent a recurrence of the recklessness which has created this disaster.
Hugh | 16.09.08 – 10:19 am | #
The only recklessness which created this disaster was the recklessness of the left in forcing lenders, through the CRA, to lower their underwriting standards in order to provide loans to low income families who otherwise were deemed to have insufficient income and were too much of a risk.
In a truly free market, those loans would NEVER have been given, but the left FORCED lenders to give them, with threat of vetoing bank mergers and expansions. In short, if the banks refused it would have cost them billions. They bowed to their bureaucratic masters and provided the loans. THIS caused the current crisis.
It’s boiling my blood to see so many ignorant and uninformed people (even on the right) now blaming the free market for a situation which a truly free market would NEVER have allowed to arise.
Some more info on why “unfettered capitalism” is NOT to blame for this situation:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html
Sorry, I should have been clear – it was an extract from the article both I and Anon linked to.
Sorry, I should have been clear – it was an extract from the article both I and Anon linked to.
Hugh | 16.09.08 – 2:50 pm | #
The link after the extract made it clear enough!
“Alternatvely, you listen to someone like Jeff Randall, who actually knows what he is talking about”
yep, seems to be pretty much of the same view as me so i dunno what the “alternatively” is all about. ho hum.
Cockney | 16.09.08 – 1:52 pm |
Or you correctly belive that they’re run by some highly intelligent but human people who have made an excellent contribution to several years of economic stability and prosperity but have taken their eyes off the ball regarding the risk factoring of structured derivatives. And are not controlled by an alien stroking a white cat.
And let’s not forget about those who get a quarterly burst based almost entirely on the overly aggressive signing up of new suckers for loans or mortgages or credit cards they can’t really afford (which is not entirely unfair, as one really does need at least one credit card to do certain things). There is also the problem of the whole thing being undermined by paper-pushing fee jockeys who make their money either way.
“highly intelligent but human”
Are you sure?
They have always looked a little like lizards to me, especially when they are eating caviar. I imagine that they are pretty confused now that the hive mind has just them off from their common purpose but a least the estate agents (who are really snakes) will have some spare mil plus accommodation to sell to the Eurocrats (who are really scorpions) who will be moving to London after Belgium breaks up and the UK joins the euro.
Don’t you see? It is obvious. The big oil companies (who are run by dragons) have been deliberately polluting the seas and helping to reduce fish stocks with the help of their scorpion friends in order to wipe out the dolphins (who are humankinds only real friends).
“Tick”
Forcing debts down the throats of low income families
“Tock”
Denying credit to marginalised and desperate families
“Tick”
Forcing debts down the throats of low income families
“Tock”
Denying credit to marginalised and desperate families
and so on and on…
The pendulum swings but the guilty party stays the same.
Paul masons response to a comment (asking how the BBC find such leftists to work for them!)left under his blog;
“If you are American you may not be used to this but the UK consensus is “liberal” and I am happy to be slap in the middle of it. On science, on the desirability of avoiding mass unemployment, on the world being older than 3,000 years”.
We are all shades of ‘liberal’ here in the uk it would appear! Nice.
Randall was indeed spot on in terms of correctly understanding capitalism; investors lose money with bad business ideas!
That is a *GOOD* thing!
As Randall says, N Rock should have been allowed to fold; Lehmann like.
It would have taught ordinary people a lesson too – do your research on the companies to whom you give *your* money. Use your brain and think for yourself rather than letting other people do your thinking for you. Wishful thinking is not the way to decide where to invest!
Yet, Randall misses *the* point on the positive correlation between government interference in the lendng market – via Freddie & Fannie – and their financial plight.
It was cause and effect in action – the only way to understand *anything* in life – yet Randall fails to hit the nail on the head of the causal agent – government interference.
Its not just the Lehman Brothers that has gone bust – its the end of capitalism – a Scot called Nick on Radio 5 said so.
I just renewed my mortgage with the same company I’ve been with since I bought my house.
I got another 2 year fixed rate deal at near as does it the same rate I already had on my previous 2 year rate.
Re: Libertarian @ 6:48
I think we have a new contender for the side-bar:
“the UK consensus is [American] “liberal” and I am happy to be slap in the middle of it.”
Paul Mason, Economics Editor, Newsnight
You could not get a clearer admission of bias. Of course only from a Trotskyist view would this appear to be “balanced”. Given current opinion polls his “UK consensus” must come from the BBC canteen.
Martin:
“Nu liebour = High taxes, billions pissed away on unreformed public services, billions given as handouts to lazy bone idle scum, no border controls and hammering the white middle class and an ever invasive Government sticking their noses into every aspect of our lives.”
What the hell are you talking about?
Nu Liebour? Is that supposed to be clever? Can we stick to some facts and not stating a load of uncited statements? I’m not trying to argue whether anyone’s policies are correct but I can assure you that Labour’s policies are closer to Thatcherism than Marxism.
The current taxes aren’t particularly high, certainly not as high as a socialist would want.
Lazy bone idle scum? Are you sure? Really? Please give examples apart from a few extremes and bad apples.
Ever invasive government? Yeah, nobody likes that. But that’s not socialism either.
And as a white middle class male, I’ve never felt particularly hammered. Maybe it’s just you they don’t like.