While waiting for the Main Event to kick off...

...a few bits and pieces.

The current Private Eye (No 1259, 2-15 April 2010, p.5) has its usual  'Number Crunching' piece:

2% increase in number of qualified nurses working for NHS in England last year

6% increase in number of consultant doctors working for NHS in England last year

12% increase in numbers of managers working for NHS in England last year

This echoes figures I saw earlier in the week concerning recruitment trends in Higher Education:

...figures obtained from the Higher Education Statistics Agency...show that in the UK higher education sector in 2003-04, there were 10,740 managers, while in 2008-09, this had grown to 14,250, an increase of 33%.During that time the number of academics increased by 10% from 106,900 to 116,495 while the total number of students rose by 9% from 2,200,180 to 2,396,055.

I hope all those extra managers has made us all healthier and more educated in recent years.

For those, such as me, who like a bit of intelligent bank bashing, you may enjoy the thoughts of Simon Jenkins and Larry Elliott. Mr. Elliott also takes issue with the idea that we are living through a 'Spring of Discontent' of industrial action equivalent to the 'Winter of Discontent' of 1978-9 which proceeded the Conservatives' 1979 General Election victory. To put it crudely, it is like comparing a hurricane to a fart. He also says that we have already had a recent 'Winter of Discontent', which saw (that hackneyed media cliche) 'bully-boy rule':

...we had the winter of discontent for finance, in which the bankers downed tools and withdrew their capital. Nothing moved in the credit markets. Governments were held to ransom by the strikers and eventually capitulated. In the autumn of 2008, when it seemed no western bank was safe, there was a huge injection of public money to recapitalise those who had proved to be self-seeking and incompetent.
...the banks were rewarded for their failures with loan guarantees, unlimited borrowing at 0% interest and an opportunity to offload their toxic assets. The upshot has been a rapid return to profitability in the financial sector, which has given the banks the opportunity to pay lavish (and undeserved) bonuses. Whingeing in the City about Alistair Darling's one-off bonus tax adds insult to injury.

Let's hope rational, intelligent discussion on the growth of public sector managers and the baleful influence of the City of London will take place duruing the forthcoming General Election campaign. Then again...

I hope to knock out one post on the Net and related stuff in the next couple of days. Then it should be Show Time ad nauseum...

Socialists For Small Government?

From Chris Dillow's Stumbling and Mumbling blog:

Shrink the state: a leftist aim, April 17th 2009

David Semple thinks the left should join American tea parties, which protest against high taxes. I think I agree. The desire to shrink the state should be a leftist aim. I say so for four reasons.

1. Big government cannot be redistributive government. If the state is raising 40% of GDP in taxes, it must tax the worst off, simply because the rich, even in the UK and US, aren’t that rich or plentiful.

This pdf gives us the numbers. Table 2 shows that the tax system - leaving aside benefits - actually adds to inequality. This is because direct taxes cut the Gini coefficient by 4 percentage points, but indirect taxes add 5 points to it. And table 21 shows that the poorest fifth of households with children pay a higher proportion of their income in taxes than the richest 10%: 37.2% against 33%.

2. A big state hurts the worst off. Right-wing nut jobs might pose as victims of “ZaNuLabour.” But whether we look at Purnell’s welfare plans, repressive anti-immigration laws or the policing of protests, it is ordinary people who are the real victims of an overly powerful state: newspaper sellers, poor foreigners, the unemployed and ill. The left should be on their side.

3. When the state has lots of power, there’ll be a big fight to control it. And it’s the rich and powerful that win such fights. Why do you think banks get big bail-outs whilst ordinary workers are flung onto the dole with little compensation?

4. Belief in big government rests upon the notion that there’s an elite of leaders which has the wisdom and know-how to manage our affairs from the top-down; this is why New Labour found common cause with corporate bosses - both share the same ideology. But it is an utterly anti-egalitarian notion. It is also utterly wrong.

Free Market Anti-Capitalist Notes

Ayn Rand For Beginners:



For your perusal,this one from Chris Dillow:

Public vs private: what's the difference?, July 17th, 2008

For years, we’ve been told by left and right alike that the state is a vehicle for socialism whilst the private sector embodies free enterprise and self-reliance. It looks like this is pure bull.

Exhibit one. Cath Elliott describes the class conflict in the public sector:

It's pretty hard to remain objective when you see your work colleagues being shafted, year-in and year-out, by politicians and chief executives who haven't got the faintest idea of what it's like trying to survive on close to minimum wage incomes.

Exhibit two. Vanni Treves, chairman of Equitable Life, tells us that the fund management industry was nationalized years ago. The Equitable’s management, he says, was only “in part” responsible for the company’s collapse.

It was the job of the regulator to supervise what the [Equitable] management was doing…the government must pay the bills for its own failings.


In other words, fund managers were really just civil servants working under government supervision. And like civil servants, they expect the tax-payer to pick up the bill for their own failings. At least Fannie and Freddie had the honesty to admit they were government-sponsored firms.

So, the state is capitalistic in the sense that bosses and their hangers-on rip off workers, whilst what we all thought was the market sector was really a branch of government.

Confused? You will be if you think left=state=socialism and right=market=self-reliance.

But as I said, the real divide isn’t between “left” and “right” but between those who believe in spontaneous, undirected order and those who believe in top-down management, be it in government or business.

And what these two instances show us is that management (as distinct from administration), in the state or “private” sector, is much the same - an inherently corrupt activity aimed at ripping off workers, customers or tax-payers.

Also this about State Subsidies For the Pointlessly Rich from Our Future:

Wall Street Socialism, By Robert Borosage
July 16th, 2008


This weekend, Treasury Secretary Henry Paulson, former head of the Goldman Sachs investment house, provided us with a perfect demonstration of Wall Street socialism.

He announced that the Bush administration would seek congressional approval to bail out Fannie Mae and Freddie Mac, the government created but privately owned, profit-making housing finance companies that hold or guarantee nearly half of the U.S. mortgage market—some $5 trillion in debt. Paulson seeks and will get an unlimited line of credit to guarantee their debt, as well as authority to purchase their shares to supplement their capital base. The Federal Reserve announced it was ready to provide lending while waiting for Congress to act. Paulson said the new subsidies were designed to sustain the two institutions in "their current form."

Perfect. The two institutions have always been more fowl than fish. Created by the government in the 1930s to help lubricate the U.S. mortgage market by buying mortgages from the banks so they would have the cash to make more mortgages, Fannie and Freddie were able to borrow money at a discount because of a widely shared assumption that the government would stand behind their debts if push came to shove. Their operations were regulated, limited by laws detailing what mortgages they could assume. (They were essentially prohibited from diving directly into the subprime muck.)

But as they grew and profited, their executives pocketed lavish salaries and bonuses—giving them an incentive to grow even more (and as we discovered earlier this decade, to cook the books). Last year, for example, the Chair of Freddie Mac took home a cool $18,289,575. Fannie Mae CEO Daniel Mudd reaped a 7 percent rise in pay to $13.4 million in 2007 while the company lost $2.1 billion and its shares fell 33 percent. Nice work if you can get it.

Now with the bursting of the housing bubble, push surely has come to shove. Foreclosures are soaring, the two institutions have sustained billions in losses, their shares have plummeted, and, according to former St. Louis Federal Reserve President William Poole, one and possibly both would be bankrupt if their assets were marked down to their current market value.

So now the Bush administration proposes to make the federal guarantee explicit and even to offer taxpayer money to help recapitalize the two banks if needed. Everything has been nationalized—except the profits and the pay scales of the bank's executives.

That's right. If the guarantees work, private speculators, having driven the stock down, will clean up on the upside. And the bank's CEOs will continue to pocket the multimillion dollar salaries that are de rigueur on Wall Street. Call it Wall Street socialism. Their losses are socialized; their profits are pocketed. You and I will pay for their failures. And if conservatives have their way, their families will pocket their successes, without even having to pay a tax for the transfer of the estates we've helped to create.

These enterprises are operating on our tab now—completely. Why not just nationalize them, as even that font of economic convention, Sabastian Mallaby suggested yesterday in The Washington Post? Sure, we'd have to add the $5 trillion in debt to the federal balance sheet, but we could add the assets also. And after Paulson's announcement, global investors are already toting up their debts onto the federal balance sheet.

Why pay dividends to shareholders when they are essentially playing with our money? Why pay managers of public enterprises the bloated pay packages of Wall Street speculators? Why allow them to finance lobbyists to shield them from accountability? The fiction of their separate existence has been exploded; let's save the dough and run them efficiently.

The bailout of Fannie Mae and Freddie Mac is only the most recent and extreme version of Wall Street socialism. The Bush administration has done essentially the same for private providers of college loans. The Federal Reserve has made taxpayers the guarantor not simply of the banks that it regulates, but the shadow banking system of hedge funds and investment houses that it doesn't regulate. After the bailout of Bear Sterns, they basically are gambling with our money. The Federal Reserve has now traded more than $500 billion in federal bonds for the toxic paper of private banks and investment houses, some $200 billion of it in mortgage-backed securities, worth dimes on the dollar. This massive subsidy—justified as necessary to keep the banking system afloat—is not accompanied by limits on what gambles the speculators can make, how much debt they can take on, what rewards they can pocket. They are playing with house money—not exactly an incentive for prudence.

Republicans seem ideologically committed to these kinds of arrangements. In Medicare for example, conservatives have demanded that the government subsidize private insurance companies to compete with public Medicare, even though Medicare provides health care much less expensively. When Bush and the Tom DeLay Congress drove through the prescription drug bill, they included a provision that prohibits Medicare from negotiating cheaper prices for drugs, effectively turning the bill from a benefit to seniors to a multibillion-dollar subsidy to private drug companies (not surprisingly, after Wall Street, the drug companies finance one of the most lavish and powerful lobbies in Washington).

Now it makes sense to me for the government to subsidize housing mortgages and college loans. Encouraging home ownership and higher education are central to sustaining the broad middle class that is America's triumph. But I can't imagine why we need to let bankers and investors pocket the upside, when they are playing with our money and we're covering their losses. Public enterprise may be staid and bureaucratic, but it's a lot cheaper and more efficient than the perils of Wall Street socialism.