The political impregnability of Rupert Murdoch and NewsCorp has always been one of those facts about the world that seemed regrettable but eternal. By contrast, the ability of the banks to emerge from their near-destruction of the world economy richer and more politically powerful than ever before certainly took me by surprise when it happened (partly motivating my change in title from “Dead Ideas” to “Zombie Economics”). John Emerson pointed out the other day that the head of risk management at Lehman Brothers, arguably the most egregious individual failure among the thousands of examples, was just appointed to a senior position at the World Bank.
But now it seems there is just a chance that the curtain might be swept away from even these wizards. The emerging theme in commentary is the corrupt culture of impunity represented by the press hacking scandal, MP expenses and the banks (here’s Ed Miliband pulling them all together).
If Labor could tie the Conservative-Liberal austerity package to the protection of the systemically corrupt banking system, they would have the chance to put Nu Labour behind them (I noticed Blair has already credited Brown with killing the brand). Instead of putting all the burden on the public at large, they could force those who benefited from the bubble to pay for the cleanup. The two main groups are the creditors who lent irresponsibly, counting on a bailout and should now take a long-overdue haircut and high-income earners who benefited, either directly or indirectly, from the huge inflation in financial sector income.
I know it seems hopelessly naive to think the banks could ever be brought to heel. But they were, for decades after the Depression. And as impregnable as they look today, Newscorp looked just as impregnable three weeks ago, as did the CPSU and the apartheid regime in South Africa thirty years ago.
Of course this spring moment won’t last long. But perhaps there is enough momentum that it won’t be exhausted by Murdoch alone.
An unrelated note on Murdoch. Looking at the Murdoch empire, it seems clear that, before this scandal, it was much more than the sum of its parts. The scandal sheets both made money and did the dirty work for the political agenda pursued through the more respectable parts of the empire, while the electronic media business profited from the political favors (not bribes, of course!) handed out in pursuit of Murdoch’s goodwill. Now the opposite is true. The link to the tabloids is toxic for papers of record like the Times and the WSJ, which will certainly find owners of some kind. And News International is now a liability for the US and Australian businesses, as well as for Sky. Then there are the complications of potentially massive litigation liabilities.
{ 62 comments }
drm 07.17.11 at 6:36 am
Minor quibble: it’s Ed Milliband, at least in this case
John Quiggin 07.17.11 at 7:17 am
D’oh! Fixed now
stostosto 07.17.11 at 11:23 am
Banking is a utility, like electricity or water and should be equally humdrum, unexciting and average in pay.
SamChevre 07.17.11 at 12:23 pm
I can’t speak for other countries, but in the US there is a third group who benefitted heavily from the inflation in house prices–people who sold their houses in bubble areas and either rented or moved to non-bubble areas. (The bubble gets talked about as a national phenomenon, when it was primarily a local one–housing prices outside CA, FL, AZ, and NY and suburbs have not fallen that much.)
Steve LaBonne 07.17.11 at 12:48 pm
The importance of Sam’s third group is trivial; they didn’t have anything within two orders of magnitude of the political power of the first two. They merely took advantage of a situation they had no part in bringing about. And as far as paying for the cleanup they’re also not where the real money is.
Steve LaBonne 07.17.11 at 12:50 pm
Sam, by the way, is typical of “look at that bright shiny object!” conservatives who want to make this a morality play but energetically obfuscate the identity of the real villains.
Andrew F. 07.17.11 at 1:24 pm
Instead of putting all the burden on the public at large, they could force those who benefited from the bubble to pay for the cleanup. The two main groups are the creditors who lent irresponsibly, counting on a bailout and should now take a long-overdue haircut and high-income earners who benefited, either directly or indirectly, from the huge inflation in financial sector income.
“Long-overdue haircut”? The banks – who owned the worst of the mess – took many billions of dollars in write-downs. As for the bailout, the largest banks have repaid money loaned to them by the government. In fact the loans the US Government made to banks will turn a profit, ultimately, of about $20 billion.
Nor, if one is opposed to austerity measures in Britain generally at this point, does it make sense to advocate concentrating the pain of austerity on one sector of the economy (the most mobile part of the economy, moreover) based on a desire to punish that sector. If you’re in a rowing race, and one man on the crew pulls a bad stroke (causing everyone else to have to work harder), the proper adjustment is not to break one of his arms. That’s unlikely to help your crew in the race.
empty inbox 07.17.11 at 1:26 pm
Not enough attention has been paid to Gordon Brown’s speech last week. He argued that in the UK Murdoch’s prime purpose, sole purpose probably, has been to make money, and he acquired and then used his political influence to control the legal and political climate in which his businesses operated (changes in policy on diversity of newspaper ownership, diminution of the size and power of the BBC, for instance). He has always tried to get alongside the party in, or about to achieve, power. For all the anti-EU rhetoric in his rags he’s never turned against his political pets on that, or any, policy ground. Only when they look like losing does he leave them.
In the US, though, he seems to have a political agenda distinct from, or at least parallel to, the enhancement of his turnover and profits.
NomadUK 07.17.11 at 1:39 pm
And now they’ve arrested Brookes. If they would just put the cuffs on Rupert, my year will have been made.
NomadUK 07.17.11 at 1:39 pm
Sorry, Brooks.
Freshly Squeezed Cynic 07.17.11 at 1:44 pm
If you’re in a rowing race, and one man on the crew pulls a bad stroke (causing everyone else to have to work harder), the proper adjustment is not to break one of his arms. That’s unlikely to help your crew in the race.
However, if one man on the crew insisted on putting a weakling on your crew, insisting that said weakling was actually a rowing champion, lying about his physical capabilities, and getting away with it because he was rather close to the coxswain, I think it’s more than necessary to make sure such a man never has such influence again on the make-up of the team, if allowed on at all, and is viewed with considerable suspicion.
Steve LaBonne 07.17.11 at 1:45 pm
At least in the US, Andrew, the solution is not to “go after” the banks as institutions. (They need to be far more tightly regulated, but as a pragmatic matter, not a punitive one). The solution, or part of ti anyway, is to end the woeful under-taxation of huge incomes, which are heavily concentrated in the financial sector and which continue to exist only courtesy of taxpayer- funded bailouts of the institutions that pay them (and to conclude that these have largely been paid back requires some highly creative accounting, by the way.)
bert 07.17.11 at 1:48 pm
bq. the head of risk management at Lehman Brothers, arguably the most egregious individual failure among the thousands of examples, was just appointed to a senior position at the World Bank
Apparently, she spoke up more than once, but was repeatedly overruled and outmanoeuvred by Fuld and others. So she’s Rice, not Rumsfeld. That said, only a nutcase would hire Condi Rice.
bert 07.17.11 at 1:52 pm
footnote: Rice’s involvement with Stanford predated her involvement with Bush, of course.
Hattip 07.17.11 at 2:03 pm
Oh really now, the so-called “sins” of News Corp is trivial compared to the absolutely treasonous conduct of the Left Establishment controlled MSM.
Here we have the NYT repeatedly and across generation publishing Secret DoD documents in the time of ware, TV channels perpetrating hoaxes against political candidates (e.g., the business f GWB’s national guard services), and or the harrowing of perfectly decent people like Palin or R. Reagan. They were instrumental in the loss of the Vietnam war and almost lost us the Cold War.
If you cared about “ethics” in media, you would take the MSM to task for this and weight their monstrous and abiding “sins’ against the relative peccadilloes of New Corp. But then you are not really interested in this in this at all, are you?. You are interested n assaulting an ideological enemy and imposing tyrannical laws to silence them, laws that you would literally shriek should they be applied to the Left Wing propaganda machine.
This is merely the usual self serving moral posturing and hysteria of the Left and little else.
Hattip 07.17.11 at 2:27 pm
Oh and Steve, the “banks” are extremely regulated. It is this “regulation” that caused this mess in the first place (hint: MBS’s and CD’s, and all the attendant derivatives use to cover the credit for the idiotic and larcenous project of the CRA and other Democrat redistributionist schemes). Nothing could more clearly show the corruption inherent and inevitable in government control of industries than this financial crisis. It is a failure of socialist/”corporatist” government that we are witnessing, not some sort of comeuppance to “Evil Bankers”, “Evil Capitalism” or free markets. Had the markets been freer this would not have happened.
You have a childish faith in government. This is due to the fact that you reflexively believe the Left’s agi-prop as delivered up by the Democrat Party. It is a wholly false narrative–do yourself a favor and grow out of it. Few things are more corrupt than government, particularly Democratic Party government, and one of the chef enablers of this corruption is “regulation”. Had government let the housing market alone none of this would have happened. Had we allowed those “To big too fail” banks to, yes, fail, we would be out of the woods now. Had we had a freer market where foolishness and immorality were punished, the crooks and idiot on Wall St, most of whom are Democrat insiders, BTW, would have had to face the consequences of their shenanigans decades ago. But did not happen. Instead, under the guise of “regulation”, they had their pals in government bail them out and in the process destroyed their competitors, and moved the America middle class that much further down the road to extinction.
As it stands now, the only hope we have of getting out of this mess is to chuck the Establishment Left and all their works, and undo the damage that they have done these last 50 years.
Steve, the Democrats may tell you that they are looking out for your interests, but I can assure you that they are not. Behind closed doors the roar with laughter at you obtuseness and gullibility.
StevenAttewell 07.17.11 at 2:29 pm
In the case of American banks, what we need to do is slap a tax/premium on reserves over a certain level, especially reserves held at the Fed (basically do what the Swedes are doing), because the problem is that everyone’s sitting on trillions of dollars of liquidity and refusing to lend. At most, they’re buying back their own stock.
However, as a long-term issue, we need to shift capital out of finance and into sectors that create more value-added, especially export industries.
In Europe, banks need to take a haircut, because their insistence on getting 100% on the euro of their bad debts that overly-orthodox European governments bailed out is what’s making the debt crisis impossible to deal with.
Myles 07.17.11 at 3:37 pm
If Labor could tie the Conservative-Liberal austerity package to the protection of the systemically corrupt banking system, they would have the chance to put Nu Labour behind them (I noticed Blair has already credited Brown with killing the brand).
Without which banking system the economy in the south of England would more or less collapse. The Home Counties middle classes are a lot of things, but dim and suicidal they aren’t. People aren’t presumably too enthusiastic about voting for a presumptive platform that sacrifices the biggest and most profitable economy activity in all of the UK.
The two main groups are the creditors who lent irresponsibly, counting on a bailout and should now take a long-overdue haircut and high-income earners who benefited, either directly or indirectly, from the huge inflation in financial sector income.
The following groups all benefited from the huge inflation in British financial sector income: a) the Treasury; b) financiers; c) just about anyone who holds a professional job in the south of England (consultant, PR, barrister, Harley Street doctor, whatever). I suspect the interest groups here are wider than one thinks. Taking that away from them isn’t going to win Labour elections.
hartal 07.17.11 at 3:51 pm
Curtains being pulled; illusions of impregnability vanishing….
“The contradictions inherent in the movement of capitalist society impress themselves upon the practical bourgeois most strikingly in the changes of the periodic cycle, through which modern industry runs, and whose crowning point is the universal crisis. That crisis is once again approaching, although as yet but in its preliminary stage; and by the universality of its theatre and the intensity of its action it will drum dialectics even into the heads of the mushroom-upstarts of the new, holy Prusso-German empire.
Karl Marx
London
January 24, 1873”
bert 07.17.11 at 4:04 pm
backward-looking bores …
“precisely in such periods of revolutionary crisis they anxiously conjure up the spirits of the past to their service and borrow from them names, battle cries and costumes in order to present the new scene of world history in this time-honoured disguise and this borrowed language”
hartal 07.17.11 at 4:10 pm
Touche.
Cian 07.17.11 at 4:20 pm
Without which banking system the economy in the south of England would more or less collapse.
In case anyone feels any vague desire to engage with the troll formerly known as Myles, this demonstrates his usual indifference to reality. I kind of imagine him skim reading very fast through the Economist while on a ritalin high, and then just spewing the first prejudice that escapes the rattling cavern inside his skull. You’d think embarrassment at always being wrong would kick in at some point, but apparently not.
Anyway, the SE of England does a few things other than banking. And banking is not the biggest activity in the UK and even in the SE casino banking is only a smallish part of the economy.
hartal 07.17.11 at 6:07 pm
But I was wondering whether this Ed Miliband is related to Ralph Miliband who was a Marxist. I mean the son of a well-known Marxist ascending to a high government position could not happen in the US. There is like a one-drop rule here for all progeny of Marxists that subjects to apartheid restrictions on high government office. All generations born to a Marxist here come under a Curse of Ham. The UK is so liberal.
SKapusniak 07.17.11 at 7:05 pm
But I was wondering whether this Ed Miliband is related to Ralph Miliband who was a Marxist.
Yes, both Ed and David Milliband are the sons of the Ralph Miliband I think you’re probably referring to.
Anders 07.17.11 at 7:31 pm
StevenAttewell ” the problem is that everyone’s sitting on trillions of dollars of liquidity and refusing to lend”
If you’re talking about banks’ reserves at the central bank, how are they supposed to ‘spend’ these en masse? The only way for the banking system as a whole to get rid of excess reserves is by buying something (ie securities) from the relevant central bank or Treasury.
I think that – with respect – this may be a confusion of broad and narrow money. Banks make loans first and sort out their reserves later (borrowing them if they need to).
Myles 07.17.11 at 7:39 pm
I mean the son of a well-known Marxist ascending to a high government position could not happen in the US. There is like a one-drop rule here for all progeny of Marxists that subjects to apartheid restrictions on high government office. All generations born to a Marxist here come under a Curse of Ham. The UK is so liberal.
The hard left in the UK is also quite different in nature and motivation from the hard left in the US. Chris Hitchens began out as a Trotskyist. Peter Mandelson went to the Soviet-backed youth festival in Havana, and was a member of the Young Communist League. Both aren’t hard leftists anymore.
I think it’s much more accurate to say that those several decades represented a particularly neurotic period in British public life, in which a lot of people were attracted to quite extreme ideologies. Once Britain revisited prosperity, that nonsense was gone like a puff of smoke, at least among most intelligent people.
Emma in Sydney 07.17.11 at 8:54 pm
Must. Not. Feed. Troll. [sits on hands]
ajay 07.17.11 at 9:13 pm
Without which banking system the economy in the south of England would more or less collapse. The Home Counties middle classes are a lot of things, but dim and suicidal they aren’t. People aren’t presumably too enthusiastic about voting for a presumptive platform that sacrifices the biggest and most profitable economy activity in all of the UK.
Well, without a banking system the entire economy of the UK would collapse; you kind of need banks in a modern economy.
But no one at all is suggesting abolishing every bank in the UK, so this is mere strawmannery.
Biggest economic activity? Depends on your definition. Most profitable? Not recently it wasn’t.
Myles 07.17.11 at 9:42 pm
Well, without a banking system the entire economy of the UK would collapse; you kind of need banks in a modern economy.
But no one at all is suggesting abolishing every bank in the UK, so this is mere strawmannery.
Well, I meant the City and associated sectors. The engine of prosperity in the south of England is of two parts: the City and associated industries (consulting, media, law, accountancy, etc.), and real estate. Pull one of the two planks, and any rational middle-class person in the Home Counties should be screaming for Ed Miliband’s head on a plate.
For southern England to try to reduce its financial sector would be more or less economic suicide.
ajay 07.17.11 at 9:51 pm
Myles, is it not true that you have never actually been to England?
Emma in Sydney 07.17.11 at 11:04 pm
ajay, it’s not discernable that Myles has actually been *anywhere*.
Watson Ladd 07.18.11 at 12:51 am
The City is more then banking. That venerable institution known as Lloyd’s of London comes to mind. But I think any sort of left turn in Labor is going to run up against the Winter of Discontent pretty quickly. At some level any political reconstitution of any kind of Left will run up against the way in which Nu Labor was a way out of political marginalization more profound then anything in the US.
StevenAttewell 07.18.11 at 12:53 am
Anders –
The banks could get rid of excess reserves by lending to businesses, investing in new industries, by allowing underwater mortgage payers to bargain down their principal, etc.. The whole problem right now is that businesses are sitting on their reserves because they’re in an attitude of irrational pessimism.
Western Dave 07.18.11 at 2:35 am
@cian 22 “I kind of imagine [Myles] skim reading very fast through the Economist while on a ritalin high, and then just spewing the first prejudice that escapes the rattling cavern inside his skull. You’d think embarrassment at always being wrong would kick in at some point, but apparently not.” You just described me when I don’t take my Ritalin. If you have ADD (or whatever they call it these days), the Ritalin helps you read more carefully and keeps you from saying stupid shit you think before it comes out your mouth. Since I got on the speed two years ago, my life has gotten much better. Please don’t compare us
Ritalin users to Myles.
PS to whoever was busting my chops about me arguing that 1939 was not the only correct start date for World War II, I just found my mom’s copy of the Time-Life History of World War II in Pictures (copyrights 1942, 1945!) First entry, “World War II began in Manchuria.” I knew I wasn’t making shit up.
Myles 07.18.11 at 3:19 am
Myles, is it not true that you have never actually been to England?
It’s not true.
Myles 07.18.11 at 3:22 am
The City is more then banking. That venerable institution known as Lloyd’s of London comes to mind.
It wasn’t my impression that London insurance brokers are the natural constituency of the Labour left.
Anders 07.18.11 at 8:15 am
StevenAttewell: no – banks don’t lend reserves. This “hoarding” idea is a canard!
Look at the accounting. Banks make loans by simply debiting loans (a receivable) and crediting deposits (a liability). Any further reserves needed are obtained subsequently in the interbank market. Funding, if required (ie if borrowers’ deposits are tending to flow more into other banks), is arranged at an aggregate level. This isn’t even controversial if you read anyone who discusses the mechanics of how bank lending works.
The limitation on new lending today is principally demand for loans by creditworthy borrowers. Given the economic backdrop, many creditworthy borrowers don’t want to borrow but are instead reducing their net debt. The guys who are desperate for new loans are generally considered by banks’ pricing models as a bad risk, and so are not offered loans at an economic rate. In aggregate, you may have noticed that in the US and the UK private debt/GDP is falling sharply towards its trend level: the overall theme at the moment is private sector deleveraging.
The limitation on lending is certainly not reserves. (I’m not sure that it ever could be…)
Cian 07.18.11 at 8:38 am
So Myles, if you have been in Britain what’s the excuse for the astonishing ignorance on display here? Were you drunk the whole time? Unconscious? 2 years old?
The reason several of us find your arguments risible, is that we live here (some of us in the SE). Unlike you, a few of us have worked in the banking industry. Okay, so this isn’t quite as bad as the time that you confidently lectured DSquared on Investment Banking culture, but its still pretty pathetic.
Cian 07.18.11 at 8:41 am
It wasn’t my impression that London insurance brokers are the natural constituency of the Labour left.
Which wasn’t your argument was it. Your argument was that London’s economy was either banking, or stuff that depended upon banking. Of course it didn’t help that you confused a particular form of banking, with all banking; but most of us are used to such school boy errors by this point.
Oh, and love the idea that the London media industry is dependant upon banking.
ajay 07.18.11 at 9:12 am
The limitation on lending is certainly not reserves. (I’m not sure that it ever could be…)
Well, it could be, because for regulatory reasons banks need to have a certain minimum capital adequacy ratio. (You take all their assets – all the loans they’ve made – and you weight them depending how risky they are, and then you divide your core capital, which is basically your reserves, by that number.) But that’s certainly not to say that it’s limiting lending right now.
Anders 07.18.11 at 9:24 am
ajay – ouch. Regulatory capital refers to the right-hand-side of a bank’s balance sheet (as adjusted), whilst reserves sit on the left-hand-side. Capital adequacy looks at risk-weighted assets (LHS) and determines how much equity-like stuff needs to support that, whilst reserve requirements (where they still exist!) look at deposits (RHS) and stipulate how much liquid assets (in the form of receivables from the central bank) need to be held against them. They are pretty fundamentally different.
Since central banks make available more reserves if required, I can’t imagine in practice any situation where a bank sees profitable loans it wants to make, but doesn’t because it lacks reserves.
Or do I misread you?
ajay 07.18.11 at 10:22 am
Ugh. Yes, you’re right, Anders. Sorry about that, don’t know where that confusion came from… monday morning probably. Confusing reserve requirements with CAR…
Anders 07.18.11 at 10:33 am
Say what you like about MMT (and I’m sure you do), at least it’s rooted in real-world accounting…
Myles 07.18.11 at 2:49 pm
Oh, and love the idea that the London media industry is dependant upon banking.
I didn’t say it was dependent, I said it was affiliated. To use a Canadian example, there are a whole bunch of industries in Toronto, but all of them would be structurally affected if the mining and banking industries collapsed. Certainly the leading Toronto corporate law firms would probably shrink beyond recognition, and Toronto PR firms and so on would probably have to seriously shrink as well.
I’m under the impression that the legal services industry in the London area is particularly developed. Well, that goes hand-in-hand with an equally outsized financial services industry, whatever the direction of causation. You can’t say “let’s have less bankers making ridiculous amount of money in London” without sayings “let’s have less jobs at Clifford Chance (or whatever) for lawyers,” or indeed “let’s have less jobs at E&Y for accountants.” It’s all right to bash bankers, especially bad bankers; but it’s not clear to me how well bashing people doing jobs in law and people doing jobs as CA’s would go down. Presumably not as well. And you would effectively be taking some of their jobs away.
In fact, the financial crisis has more or less frozen the investment banking recruiting market solid in the U.S., but it has had even greater effects on industries like law. The year before last’s Goldman Sachs summer analyst class had a conversion-to-full-time-offer rate of something like 30%, but some law firms are cancelling entire recruiting classes. If that’s the future in store for the financial and professional services sectors in London, I can’t see why anyone would vote for it.
Myles 07.18.11 at 3:00 pm
(And just on a personal point, I think it’s pretty insensitive to wield “we actually work in X industry” as a trump card to say that X industry should shrink when, you know, there are tons of people who are pretty seriously depending on being able to get a job in X industry.)
hellblazer 07.18.11 at 4:05 pm
I think it’s much more accurate to say that those several decades represented a particularly neurotic period in British public life, in which a lot of people were attracted to quite extreme ideologies. Once Britain revisited prosperity, that nonsense was gone like a puff of smoke, at least among most intelligent people.
You may think that, but people who either lived through that British public life, or know 1st-hand of its effects, may find this kind of pontificating rather guffsome.
I’m under the impression that the legal services industry in the London area is particularly developed. Well, that goes hand-in-hand with an equally outsized financial services industry, whatever the direction of causation.
Data? Evidence? They do teach analysis as well as assertion in universities these days, don’t they? Or are you yet again extrapolating from your own preconceptions?
Also, if you are going to pontificate on my hometown based on “impressions” you seem to have gleaned from 2nd-year textbooks and The Economist, could you at least not say “less” when you mean “fewer”? It’s the sort of thing that makes mention of your elevated environs on other threads that *little* bit sillier.
hellblazer 07.18.11 at 4:07 pm
I think it’s pretty insensitive to wield “we actually work in X industry†as a trump card to say that X industry should shrink
Funny, I thought it was being wielded as a trump card to say that you talking rubbish about X industry to people with experience in X industry is foolhardy.
hellblazer 07.18.11 at 4:19 pm
At 18: The following groups all benefited from the huge inflation in British financial sector income: a) the Treasury; b) financiers; c) just about anyone who holds a professional job in the south of England (consultant, PR, barrister, Harley Street doctor, whatever)
This list of professional jobs is telling, not least because of its omissions.
ScentOfViolets 07.18.11 at 8:01 pm
No, it’s just one of the standard trolling techniques to get a rise out of someone. See, by “wondering” or being “under the impression” (yeah, right) they’re trying to get you to offer up something to show that their “impressions” are wrong.
Once the unwary have taken the bait, the troll then says – usually with a fluff let’s-be-frank-about-this manner – that he’s “not convinced” and that you need to go digging for something else.
GOTCHA!
The point of this dishonesty, of course,being to isolate himself from all normative burden-of-proof requirements. Well, that’s just our Myles.
Well, that’s
ScentOfViolets 07.18.11 at 8:28 pm
You mean to say that you really don’t know that the big institutions are severely under-capitalized? That supposedly idiotic moves by government, like loaning these guys money at very low interest rates and then letting them buy treasuries at significantly higher rates is really done intentionally as part of a politically safe extend and pretend strategy to get them healthy again?
Japan’s already done this one, remember? I also remember all the finger-wagging disapproval at the time by our politicos, and who also advised their politicos to man up and do the right thing . . . even if they lost their jobs because of it ;-)
Alex 07.18.11 at 10:29 pm
Well, the whistleblower from NotW, Sean Hoare, has been found dead. Police say his death is “unexplained but no suspicious”. As you can imagine, many people do see it as suspicious, with comparisons to the death of Dr David Kelly. And as you an also imagine, the reflexive “anti-conspiracy theorists” are out in force. Here’s a sub-editor at the Independent:
Now, I am skeptical of the official explanation of Kelly’s death. Not because I believe he was murdered (not backing 100% theory X does not mean one must back theory Y instead), but simply because he died in suspicious circumstances, I am not a medical expert, and to be skeptical of those in authority is surely the sine qua non of science. We only have official reports to go on, and when the suspicion is widespread official wrongdoing, then “trust” in those reports is not a wise course.
But suddenly when another whistleblower dies in suspicious (to everyone but the police) circumstances, somehow people like the above tweeter can know that Hoare was not murdered. Just know. Without being there when he died, or looking at the evidence of the scene of his death, he knows that when the police say his death is “not suspicious”, that we can trust what the police say, despite the huge scandal involving corruption between the press, politicians and the police, which is what makes people see Hoare’s death as suspicious in the first place. And it’s those who have doubts who are the “nutters”!
Meanwhile, looks like Evan Harris has been schooling David Aaronovitch about conspiracy theories on Twitter, but he still doesn’t get it. That, and no doubt what he will say about Hoare will no doubt generate more
jobs for the boysposts at Aaronovitch Watch … ;)Alex 07.18.11 at 11:33 pm
Delicious:
reason 07.19.11 at 8:53 am
emma in Sydney @ 27 @31
O.T.
Is emma the new shiela? http://www.hamburg-triathlon.org/images/stories/elite/pdf/2011/elitewomen.pdf
Emma in Sydney 07.19.11 at 9:17 am
Reason, it’s an old and graceful name, with a fine literary pedigree, that I was lucky enough to receive a couple of decades before everyone else started calling their babies ‘Emma’. It was rare in Australia at the time.
Cian O'Connor 07.19.11 at 11:17 am
I didn’t say it was dependent, I said it was affiliated.
This is a distinction with little significance. The London media industry is not affiliated with the banking industry, anymore than the advertising industry is, or the insurance industry is, or the design industry is, or the marketing industry is. Much of the legal world is also not dependent upon the banking industry. Some, much is not. And of course, much of the banking world would not be touched by these kinds of regulations, because there is more to banking than simply making highly leveraged bets.
How do I know this Myles? Simple I’ve worked there, I know people who’ve worked in these industries and I’ve lived in England my whole life. Which is why I find your (typically) fact free pontificating so tedious. To anyone who lives here, its ludicrous. Your comments on the politics are particularly hilarious – its like an American telling me everybody in the SE speaks with a cockney accent. There’s no point even engaging with that kind of stupidity.
I’m under the impression that the legal services industry in the London area is particularly developed. Well, that goes hand-in-hand with an equally outsized financial services industry, whatever the direction of causation.
Not it goes hand in hand with an international city that does an awful lot of international legal work. Maybe its size is dependent upon the financial services industry, perhaps it isn’t. However that is a claim that requires evidence, given that much of the legal work has very little to do with banking.
If that’s the future in store for the financial and professional services sectors in London, I can’t see why anyone would vote for it.
Perhaps, because only a small minority work in those sectors, and most people have watched their salaries remain relatively stagnant while the cost of living has soared dramatically. I guess that wouldn’t have occurred to you though, because you know very little about this country.
Seriously, what is it with you? Are you really this stupid, or are you just too much of a wimp to actually engage with a real argument, because you’re trustifarian libertarianism might take a battering. Man up.
Andrew F. 07.19.11 at 1:18 pm
Alex @52: True, and just by way of comparison, to judge solely by the cost of 5y protection (the usual caveats apply), News Corp. is still less than half as risky as Italy: Markit
Cian @55: That’s a bit harsh. No one claimed that banks derive most of their income from “highly leveraged bets.” The issue was whether it made sense to levy higher taxes on the financial sector as a whole in lieu of British austerity measures. One possible consequence would be to drive much of the financial sector out of Britain. And – I’d be willing wager – a very large percentage of income earned in London is earned by those in the financial sector. Shift some of those earnings offshore and you may do significant damage to the economy.
As to supporting industries, you may be right that much of what lawyers do – in terms of total hours worked – is not directly tied to the financial sector. However, the income law firms derive from the financial sector is quite large – and in London, almost assuredly larger than that derived from any other sector.
There are other supporting industries – information technology and accounting, to name two – that would be damaged. And of course, there would be a large loss of discretionary income that would impact a range of service providers in London.
I entirely agree that it would be nice to have some numbers here, but this is an informal discussion in the comment section on a blog. There’s no reason to blast anyone for not having data handy. Myles’s speculations are reasonable. If your impressions are different, great; if you have numbers to dispute his speculations, even better; but your comment offers merely a different view and no supporting data. Nothing wrong with giving a different view, but including an attack on another commentator for also not including supporting data seems a touch hypocritical.
Cian 07.19.11 at 2:23 pm
Andrew, lets put it this way. Myles has a history. A long history of trolling and derrailing threads.
I would agree, a weaker version of his argument might have some merit (ignoring the ludicrous political comments from Myles. Which are typical of his “contributions”, incidentally). But his argument was not about taxes, at least the way I read it, but about clamping down on banking excesses; which basically means highly leveraged speculation. Most finance is not of this kind; so to argue that this would destroy the economy of London as he did, is already too strong, at least if made in isolation. He then compounds this error by stating that London’s economy is basically predicated upon banking. It is based upon an obviously false statement about London, and the SE’s economy. I mean Myles seems to be believe that the media industry is strong in London, because of the city. That’s not a reasonable speculation, that’s just idiocy; idiocy probably manufactured (like I said, he has a history) to try and justify his initial idiocies.
ajay 07.19.11 at 4:53 pm
The issue was whether it made sense to levy higher taxes on the financial sector as a whole in lieu of British austerity measures. One possible consequence would be to drive much of the financial sector out of Britain.
Possible, but very, very unlikely. Bankers are sticky. Why should we believe that a slight increase in corporation tax will drive them all out of London to (say) Paris, when a massive difference in operating costs has not been enough to drive them all out of London, one of the most expensive cities in the world, to (say) Lodz? Or even Sunderland?
hellblazer 07.19.11 at 4:54 pm
How do I know this Myles? Simple I’ve worked there, I know people who’ve worked in these industries and I’ve lived in England my whole life. Which is why I find your (typically) fact free pontificating so tedious. To anyone who lives here, its ludicrous. Your comments on the politics are particularly hilarious – its like an American telling me everybody in the SE speaks with a cockney accent. There’s no point even engaging with that kind of stupidity.
THIS. I am not so surprised that people have ill-formed ideas about places they clearly don’t know, but am surprised at such instances of people not stopping to think that they might be talking rubbish, and ignoring others who have something closer to 1st-hand experience.
(The underlying economic claims may or may not be correct, I’m not qualified or experienced enough to feel sure; but the “facts” brought along to support these assertions are just orthogonal to reality.)
Cian 07.19.11 at 7:39 pm
The issue was whether it made sense to levy higher taxes on the financial sector as a whole in lieu of British austerity measures. One possible consequence would be to drive much of the financial sector out of Britain.
As Ajay says, this is unlikely. Its not just stickiness; there’s also an existing infrastructure in the UK. Telecommunications, skilled workers (not just bankers, but IT workers, accountants, lawyers, PR people), support companies who understand banking (IT, accounting, recruitment, legal), education and training institutions, an existing legal and regulatory system, markets, relationships and a whole range of other things. Not to mention its geographical location, and the fact that London is a nice city to live in. You can’t just move all of those things offshore.
Andrew F. 07.21.11 at 11:35 am
ajay @58: Bankers are sticky. Why should we believe that a slight increase in corporation tax will drive them all out of London to (say) Paris, when a massive difference in operating costs has not been enough to drive them all out of London, one of the most expensive cities in the world, to (say) Lodz? Or even Sunderland?
Cian @60: Its not just stickiness; there’s also an existing infrastructure in the UK. Telecommunications, skilled workers (not just bankers, but IT workers, accountants, lawyers, PR people), support companies who understand banking (IT, accounting, recruitment, legal), education and training institutions, an existing legal and regulatory system, markets, relationships and a whole range of other things.
The word “slight” is carrying a lot of weight in your argument, Ajay.
Banks have moved massive amounts of their operations to lower-cost locations, and continue to do so. Indeed, the front-page article of the Wall St. Journal’s Money & Investing Section today is about banks cutting costs. One example is BNY Mellon’s plan to move some operations and employees out of its NY office to lower-cost cities.
Static friction is well and good, but once sufficient force is achieved to break it, objects can move quickly. The amount of pressure on banks at the moment to cut costs is enormous, and will only grow. Nearly everything Cian mentioned is portable.
The_Analyst 07.21.11 at 9:24 pm
While most of Hattip’s statements are utter garbage and partisan crap, he does have a point on Democratic connections to the financial industry. The dependence on financial industry contributions is the major reason the Democratic Party’s dabbling in financial reforms has been so very tepid (see, for instance, http://www.newdeal20.org/2010/11/12/money-and-the-midterms-are-the-parties-over-interview-with-thomas-ferguson-26869/ on the connection between investment banks and the centre-right Democrats).
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