Recession backlash has yet to find the target

The backlash could get really ugly. Or else the inquisition will move on so fast that most will escape its lash. There are so many imponderables, like the length and depth of the recession itself. One person’s quest for social justice is another’s politics of envy. The old question arises – quis custodiet ipsos custodes? – who supervises the elites but other bankers, other politicians, other civil servants? Set a thief to catch a thief. Bonuses for bankers are a juicy target but can we do without the trade itself? The Spectator carries a vivid insider’s piece on the City’s “New Puritanism”. Can’t afford the coke any more, so they have to survive on great coffee. The spotlight is falling again on the public sector where the payola is far lower but the rules seem just as loaded in favour of the privileged… Home Secretary Jacqui Smith is the latest target, for claiming 22k a year within the rules for lodging with her sister. The peers accused of cash for amendments won’t be arrested but may be thrown out one day, some day …And now it’s the turn again of the civil servants:

Sir Brian Bender is a top Whitehall mandarin. So what was he doing at Wimbledon, the Derby and the Chelsea Flower Show?

HBOS invited the Treasury’s director for international finance, Stephen Pickford, to a reception in October and then bought him dinner the following month. A Cabinet Office spokesman said: “The decision to publish this list reflects the government’s continued commitment to openness and transparency. All hospitality received is in line with guidelines set out in the Civil Service Code and Civil Service Management Code.”

Another wonderfully bland Treasury reply, unabashed at revealing the stubborn survival of the nexus of bankers and officials. Harmless little courtesy, or rank corruption? For a lot of this information, we have the Freedom of Information Act to thank. FOI is a two edged -sword. Designed to raise public confidence through greater accountability, its impact has been generally to depress it. Amazingly, the politicians who passed the Act have been among the most determined opponents of FOI in action. Guido Fawkes the anarcho-Tory blog describes the moves that led to a sharp U-turn over of exempting MPs from declaring full expenses, sparing neither side. You may think this odd for a group who are supposed to be keyed into public opinion. Or else it may dawn on you that many of them don’t care a fig for the public but want to stick their snouts in the trough as often as they can, before they lose their seats. This is what is meant by fin de regime.

  • niall

    Whatever the backlash I actually fear the bill arriving ultimately on my doorstep with higher taxes and short time/a wage reduction.

    An interesting thing on the media backlash in NI though is how poor the economics analysis of all our prominent media outlets was in the boom. Personal debt and of course the housing “boom”.

    Our papers may be all angry now but what did they offer us as way of criticism earlier?

    I fluctuate between anger on the housing thing to be actually feeling sick even thinking about it. So many people absolutely in the shit, in farness through our own decisions but the boom certainly had some sort of state sponsorship.

    oh for the days when slugger would have half a million comments on flags, passports and who could play games with whom while an economy related blog would get a dozen comments.

    Lets hope the impotence of the talking shop in the face of the crisis unites the people in a shake of the head “those lot are all pointless at present” (as i assume they will largely continue to be) and an evolution in our politics dealing with issues on non – sectarian lines.

    I fear a result of “well them ones are getting a better deal than us ‘ans”

  • aquifer`

    So the fat bankers borrowed extra money to pay themselves even fatter bonuses, borrowed some more to pay the shareholders a bigger cut, and slipped the auditors something to whitewash the books. The government took their cut too, as corporation tax, pretending to regulate bankers who knew that the government would guarantee depositors’ funds whatever silly gambles they made.

    So who lost and who won. Older people won, because house prices remain inflated relative to what they paid for them. Older civil servants won, as they shared in the growth in average earnings that excess borrowing made possible, sliding up the payscales and picking up pensions based on final salaries boosted by late promotions by their mates. Their isolation from market dynamics is paying them bigtime now.

    People with property and savings won, as they still have most of them while taxpayers must now pay back the cost of the whole debacle.

    PAYE taxpayers will lose, paying relatively more, as the rich can often write off losses before paying tax.

    Self-employed people have lost much of the value of the private pensions government encouraged them to use.

    Young workers will lose. No more well paid permanent jobs. Public expenditure cuts will close the door on recruitment there.

    Maybe some more of the blameless must suffer before a backlash builds. Or is blame too well distributed? While house prices rose who cared to talk about the real economy or managing scarce resources?

    Now what is the real value of all that farmland, funded on a rising tide of expectation?

    Will HMG have to buy that too?

  • Driftwood

    ‘Sir Brian Bender’

    Splendid name straight out of:

    But the upcoming generation are facing the very real prospect of a drop in standard of living. It may not come to that as its anyones guess where we go from here long term, My guess is stagnation and complacency.

  • aquifer

    ‘stagnation and complacency’

    If the young are kept out of jobs and money, and the public sector is not shrunk more than the private sector, that is what we will have.

    You might think that the best destination for a stimulus package could be for individual innovators who will promptly spend it on start-up expenses, or for big public programmes to provide public goods like clean energy.

    No. Let’s give it to big reliable institutions like banks who understand business. Ho Ho.

  • Scaramoosh

    The City’s “New Puritanism” stems from the fact that the City is finished.

    Most banks are closing down their “prop” desks; hedge funds are simply no longer a viable proposition, and you have the Boston Consultancy Group forecasting that more than half of all companies owned by private equity groups are set to default on their debt, with loses of as much as 300bn washing through the financial system.