Fairness

Note to self: actually read these, and after the comprehensive spending review, check these places again.

*Update: a little more on the deficit. On 21st May Tim Harford broke down the national debt in the BBC Radio 4 programme More Or Less, as follows:

  • Official debt: £776bn (£30k per household) and rising
  • Under PFI the private sector pays for e.g. hospitals, and in return the government promises a stream of future revenue – another £5k per household
  • Public sector pensions cost another £770bn of unsecured debt, or a further £30k per household
  • Bank bailouts are not included and have an uncertain costs depending on future share prices of perhaps only a few hundred pounds per household. Any profits on the nationalised parts are of course not costs.

Here’s the bailout in a nutshell:

“Royal Bank of Scotland … and Lloyds … had to be part-nationalised as they ran up huge losses during the credit crisis, and others, such as Barclays … and HSBC, have benefited from cheap credit provided by the central bank.

UK banks have a January 2012 deadline to repay 185 billion pounds they borrowed from the Bank of England against 287 billion pounds of illiquid assets, mostly residential mortgage backed securities, under the BoE’s Special Liquidity Scheme.”

But our investment in the banking system amounts to £1.2 trillion, according to the Bank of England’s Mervin King (p8 of the aforementioned nef report):

“The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy. To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”

My unemployed boyfriend went to listen to Amar Bhidé at the RSA last Thursday developing the idea people summarise as separating Main Street from Wall Street.

I am still thinking hard about what ordinary people should expect of themselves when it comes to understanding this stuff. Conclusion so far: more than we currently do.

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3 thoughts on “Fairness

  1. Pingback: Roll Around The Blogs And News. « ModernityBlog

  2. I think it is gaping failure of New Labour that they didn’t manage to articulate any sense of “fairness” in all their talk of “equity”, and a tragedy that the Con/Dems have hijacked even that word… It’s a great value, underrated.

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