Bonkers banker claims “fat lazy people” caused the financial crisis

30 06 2010

Wayne and Waynetta Slob - derivatives traders with Bear Stearns. Apparently.

If you’re a radio talk show host, there’s only one thing better than a blowhard – and that’s a blowhard who used to be a banker.

Step forward Venetia Thompson.

Venetia, a banker (or inter-dealer broker, to give her full non-job title) who was fired after writing a tell-all column about excess in the City (well I never!), was a natural provocative choice for Jeremy Vine last week as he asked the question on his radio show – which social class was hit hardest by the Budget?

Venetia was perhaps the only person on the entire BBC contact list who was willing to publicly defend bankers and argue that George Osborne had hit the rich hardest by cutting corporation tax and going soft on capital gains.

Up against her was Daily Telegraph Whitehall editor Christopher Hope batting for the ‘middle classes’ (presumably as defined by the Barclay brothers), while the Socialist Party’s Hannah Sell argued that the poor were feeling the squeeze.

So how could Venetia argue that the rich had been hit hardest by a Budget that went soft on capital gains tax and cut corporation tax?

Simple – by going absolutely stark raving bonkers.

“I don’t think it actually was the bankers who got us into this mess,” spluttered Venetia. “It was originally a problem with fat lazy people sitting around not working hard enough. Fat lazy people who don’t want to go out and get jobs and who were living off benefits and the state.”

Presumably thin lazy people are wholly innocent – it was the overweight idle who were doling out high-risk subprime mortgages and took enormous gambles on toxic derivatives. Who’d have thought that collateralised debt obligations were invented by Wayne and Waynetta Slob?

Anne Widdecombe better get hold of an accountant.

Venetia’s suggestion? “We should start taxing fat people.”

Well that’s Anne Widdecombe done for.

It got better. “I don’t think in this day and age they are that rich on £151,000. I think the amount that it costs to survive in London is actually a heck of a lot more than that.”

Awww, those poor bankers, struggling to get by on £151k a year. Apparently it costs far more to “survive” in London – perhaps Unison should bear that in mind for their next London Weighting campaign.

Although then again – a year’s worth of cocaine and Brunello does stack up pretty quickly.

But don’t these bankers deserve to get clobbered? “They have paid a huge penalty inasmuch as no-one’s getting bonuses anymore, we’ve tried to clobber them harder and harder, the culture has changed… some of them are getting bonuses, the vast majority aren’t.”

Oh, I see, Venetia – they aren’t getting bonuses for, um, doing their jobs. What is this world coming to?

Just to round off, Jeremy Vine asked Venetia – who  had just insisted that high pay was a vital incentive to keep the rich from fleeing our shores – whether poverty was an incentive for the poor.

“I think poverty is an incentive…” was about as far as she got before Hannah Sell went ballistic.

You can listen to the whole thing (for the time being at least) here – http://bit.ly/dqM9pf – the fun starts at 0:09:20.

What is immediately striking is that anyone – even a socialist – could probably do a more credible job defending the rich than Venetia. The arrogance and ignorance was so naked as to draw fire even from Telegraph hack Christopher Hope (who otherwise barely got a word in edgeways). It was a PR disaster from start to finish.

Apparently Venetia now works as a journalist. Ah, The Spectator. That explains it.

But even if the likes of the British Bankers Association might have the smarts to show some remote public contrition over the credit crunch, it was Freudian Venetia who let the cat out of the bag as to how the City and the rich really feel. £151,000? How can we possibly survive? Tax fat people instead!

Hannah Sell battled her every step of the way, and pretty heroically at that – and I’m not just saying that because I used to be a party member. It’s more that she actually managed to remain coherent in the face of some quite stupendously absurd arguments. I would have been left utterly speechless. Which wouldn’t make for good radio.

Enough from bonkers bankers. Last word to Hannah Sell:

“The system’s broken. Capitalism is broken, that’s the problem in this country. It’s a capitalist crisis that got us into this mess. It wasn’t the public sector, it was big business and it was the banking system.”

There. Much better.





The story everyone in Britain needs to read

30 06 2010

Courtesy of the Guardian:

Budget will cost 1.3m jobs – Treasury

Read it, weep, and forward it to everyone you know – especially anyone who supports George Osborne’s emergency Budget.

And if anyone starts harping about the 2.5m jobs the Treasury “is assuming” will be created in the private sector over the next five years, the Guardian helpfully quotes John Philpott, chief economist at the politically independent Chartered Institute for Personnel and Development:

“This is not so much wishful thinking as a complete refusal to engage with reality. Much more likely are dole queues comparable to the 1980s, a new deep north-south divide and widespread poverty as the budget’s benefit cuts start to bite. Many will find that a frightening prospect.

“There is not a hope in hell’s chance of this happening [the creation of 2.5m new jobs]. There would have to be extraordinarily strong private sector employment growth in a … much less conducive economic environment than it was during the boom.”

Any chance of the government publishing its evidence for the 2.5m jobs assumption…?





The people of Burnley are all in this together

30 06 2010

While we all come to terms with the massive spending cuts and benefits freeze announced in the emergency Budget, it’s easy to forget the first round of spending cuts – worth £6.2bn – revealed by the government back in May.

But these initial cuts are slowly starting to bite. Reductions in local government funding amounting to £1.166bn will hit poor areas hardest – and among the councils facing the maximum two percent budget cut is Burnley, which has relatively high unemployment.

Reductions in area based grants – specifically targeted grants such as the Working Neighbourhoods Fund – are forcing Burnley to make cutbacks, and last night a report was presented to the council executive setting out where the axe will fall.

Burnley Borough Council must cut just over half a million pounds from its Working Neighbourhoods Fund, Prevent and Cohesion spending. In addition to £303,000 in cuts to its area based grants, the government has also pulled £200,000 of expected funding that the council had already committed to key regeneration schemes – meaning the savings have to be found elsewhere.

Funding for neighbourhood policing support – essentially, police community support officers – will fall by 20 percent, while community safety funding – which includes work to tackle domestic violence – is being cut by 10 percent. Two initiatives to tackle anti-social behaviour – NEAT and Clean Team – are taking a 7.6 per cent hit.

Burnley's Youth Bus - popular and effective, but facing a 10 percent budget cut

Among the specific projects taking a hit is the Youth Bus. The project was developed after a big rise in youth criminal damage and anti-social behaviour in parts of Burnley; consultation with local young people revealed a glaring absence of youth facilities and widespread boredom and disaffection.

The Youth Bus was the response. Under this scheme, a double-decker bus was converted into a social space and mini-internet café for local teenagers, touring different parts of the town.

The results were immediate – the first six months of operation saw a fall of more than 700 damage and anti-social behaviour incidents, including a 20.5 percent reduction in criminal damage.

During the course of these six months, the bus operated in one area, Burnleywood, for a 10-week period – during which damage fell by 39 percent and anti-social behaviour by 18 percent.

The project has proved popular, but the central government funding cut has driven the council to cut its funding by 10 percent.

Employment schemes are also falling victim to the cuts. Burnley Council’s jobs match programme, Licence to Skill, is operated in partnership with private firm Vedas Services.

Vedas’ website claims the scheme has so far helped 500 jobseekers into work. Confirmed figures from September 2008 show that midway through the project’s first year of operation it had managed to secure sustained (at least 13 weeks) employment for 68 previously unemployed people, at a total cost of just under £165,000 – under £2,500 for each unemployed person who had secured a sustained job via the scheme at that early stage.

But due to the central government funding cuts, the Licence to Skill jobs match programme is facing a 20 percent budget cut.

It is not possible from a distance to analyse the value of every pound of expenditure – we’ll leave it to others to shed tears over the 10 percent funding cut for ‘Branding Burnley’ – nor predict what the final impact of the cutbacks will be.

Prevent and Cohesion funding, which are also being cut back, are themselves open to criticism on numerous grounds.

But worse is yet to come for Burnley. Likely cuts of £2m to the Housing Markets Renewal Programme and other announcements affecting economic projects mean that council managers expect total budget cuts of well over £3m this year. And a separate report presented to the council executive last night warned that future budget cuts are likely to have a “very substantial” overall effect.

The people of Burnley will no doubt be interested to hear our Millionaires’ Row cabinet insist that “we’re all in this together”.





Marking out the battlefield – the dangers of focusing on the double dip

26 06 2010

The government’s emergency Budget brought plenty of opposition from trade unions, charities and anyone with at least an O-Level in Economics, but the public reaction was broadly positive.

This is no great surprise, as the coalition is in a honeymoon period and the outgoing Labour government is (justifiably) associated with the economic crisis.

Opponents of the broader cuts agenda are warning that it will push Britain back into recession, and whilst you can find an economist to say pretty much whatever you want to hear, there’s no mistaking the uncertainty over whether the government can magic an export-led economic recovery as it says it will. If it fails, Britain’s economy is headed for trouble.

Perhaps emboldened by the government’s close-your-eyes-and-think-of-Thatcher economic policy, the broad political Left is pushing its line very hard – the cuts will lead to a double dip recession. The economy will stop growing, however anaemically, and start shrinking again.

Maybe this will happen. It is perfectly possible that cutting public spending, squeezing benefits and raising taxes while Britain’s main trading partners in Europe undergo a sovereign debt crisis, will suck whatever life there is from Britain’s economy.

But maybe, just maybe, it won’t happen. Maybe the molly-coddled financial sector will expand enough to carry Britain’s official economic growth. Maybe companies will experience a ‘jobless recovery’ that leaves no dent on unemployment figures but keeps Britain’s growth figures just about in the black. Maybe Britain’s economy will tread water – anaemic growth, but no double dip.

Will the government be able to hail this as a success? Come 2015, assuming the coalition holds together, will George Osborne be able to hail a Tory Economic Miracle – massive public spending cuts that didn’t drag Britain back into recession?

The answer is yes – if we let them.

A big problem with reporting on the economy has been the tendency to focus obsessively on headline growth figures, inflation, and the stock market. Never mind the gap between rich and poor, or unemployment, or poverty levels – as long as AstraZeneca is up 1.04%, the economy must be doing fine.

If the anti-cuts movement bases its economic argument solely around the ‘double dip’ – and much of the rhetoric so far has been focused in this direction – it makes itself a hostage to fortune.

For example, if the government’s cuts programme leads to a large rise in unemployment, regional recessions in the North, and a rise in poverty, Osborne will still be able to claim victory – just as long as London’s rejuvenated financial sector can generate pre-crunch profit margins to drag the headline growth rate above zero.

This is the danger of focusing on the double dip. If it is allowed to become the sole measure of the government’s economic policy, then growth – no matter how anaemic, no matter how concentrated in the hands of the wealthy – will be enough to ‘vindicate’ the cuts agenda in the eyes of the media, and by extension sections of the public.

Instead, the anti-cuts movement must frame its opposition to the cuts agenda around five measures:

  • national economic growth – the ‘double dip’
  • regional economic growth – the danger of regional recessions
  • poverty levels
  • wage levels
  • unemployment

Amid the uncoordinated response to the Budget and the cuts announced already, all of these have been mentioned at some point or other – though higher wages, surely the most obvious ‘incentive’ for the unemployed to work, are barely mentioned at all.

But most of the focus has been on national growth and the ‘double dip’. While important and packed with enough alliteration to set journalists’ hearts aflutter, this is perhaps the furthest removed of all the tests I have listed from the living conditions of the poorest in society – it is the one that can be most easily secured by a revival of the superrich.

So let’s ensure we insist the government is held to account on all five of these tests, not just headline growth figures. It will be difficult to stop the early cuts, but the evidence from these may help prevent further cuts if we get the terms of the debate right at the outset.

And if the government does manage to pull off its entire cuts agenda with no negative impact on national or regional growth, poverty levels, wage levels or unemployment, I promise I will go and stand in the corner and think about what I’ve done. But I don’t see it happening.

The government shows little concern for poverty and unemployment. We must ensure the war is fought on our terms, not theirs.





Daily Cuts Briefing – Friday 25th June

25 06 2010

Researchers have published a report suggesting that welfare spending cuts could cost lives.

As the coalition government looks to implement unprecedented cuts in Britain’s welfare state, the research published in the British Medical Journal links a £70 cut in welfare spending per person to a 2.8% rise in alcohol-related deaths and a 1.2% rise in deaths from heart disease.

The UK research team looked at data from 15 countries, including Britain, from 1980 to 1995.

Meanwhile, there has been considerable discussion over the government’s announcement that it wants public sector workers to let it know where it should make cuts in public services.

The TUC has come out against the plans, claiming that it is merely a stunt to provide political cover for huge public spending cuts, rather than a proper consultation exercise.

However, other commentators say the TUC’s line is too dogmatic and that trade unions should engage with the process.





Daily Cuts Briefing – Thursday 24th June

24 06 2010

While the banks won’t suffer for causing the financial crisis, working people across the country will have to delay retirement by a year under proposals outlined by the government.

The state pension age could be raised to 66 as soon as 2016, with ministers floating the possibility that it could rise in future to 70. Trade unions are warning that the measures could lead to a ‘work until you drop’ culture. Labour had planned to increase the state retirement age to 66 in 2024 and then gradually to 68 by 2046.

Meanwhile, the government’s attempts to cast its emergency Budget as “progressive” lasted all of two days before the Institute for Fiscal Studies put the boot in.

Yesterday the IFS – worshipped by financial journalists as possessed with papal infallibility – described the progressive label as “debatable”, given that it can only apply if Labour government measures are taken into account.

Meanwhile, the government has confirmed that all regional development agencies will be axed within two years. Some RDAs are likely to be replaced by local enterprise partnerships (LEPs).





Daily Cuts Briefing – Wednesday 23rd June

23 06 2010

You probably know most of what was in the ‘axe and tax’ emergency Budget, so rather than a rehash of the details, here are the best links to understand the implications of yesterday’s announcements:

And if you want to read the entire Budget yourself, it’s here. Probably more fun than watching England try to play football…








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