45 of 48 people found the following review helpful
Very useful and wide-ranging study of Britain's economy,
This review is from: Them and Us: Changing Britain - Why We Need a Fair Society (Hardcover)
Renowned commentator Will Hutton has written a brilliant book on Britain today. Wide-ranging, it covers the economic crisis, politics, society, education, and the ongoing technological revolution.
He denounces the destructive power of `the financial, media and bureaucratic elites' (a long-winded way of saying `ruling class'). He notes that the rich avoid £12.9 billion a year in tax and that a third of our top 700 companies pay no tax.
He points out that hedge funds buying credit default swaps [CDSs] in huge volumes triggered both the banking crisis and Europe's sovereign debt crisis. Their buying of CDSs on Greek government debt in April forced the huge IMF/EU bailout of Greece.
Debt and debt-related building and real estate services accounted for half Britain's growth between 1997 and 2007. Two-thirds of loans were house mortgages and a fifth was in commercial property, while manufacturing's share of output fell by two-fifths to 12 per cent, the world's fastest fall.
The crisis cost us 10 per cent of output, £1 trillion, smashing the myth of a golden age based on financial services, open markets and an endless credit and property boom. Then we gave the bankers £1.3 trillion, worldwide, £14 trillion.
Even the Bank of England says that another crunch is highly likely. £530 billion of corporate debt has to be refinanced by 2015 before any new money will be lent. Europe's private-equity firms have to repay £185 billion by 2016, yet in 2009 they paid back just £4 billion.
Hutton writes sensibly, "The rise of the BNP cannot be explained by saying that Britain is suddenly more racist than it used to be. It has happened because too many immigrants have access to free prescriptions, medical care, schooling and housing before they have made adequate contributions." The EU orders us to give new immigrants immediate access to benefits.
The USA invests 3 per cent of its GDP in universities; Europe's average is just 1.4 per cent. 73 per cent of the science papers cited in US industrial patents in 1993-94 came from public science sources. As Hutton notes, "the university remains the principal institution that creates the cumulative scientific and technological knowledge on which innovative ideas are built. ... It is a strong sector that should be guarded and nurtured; instead, it is being threatened by spending cuts."
Britain has 8 universities in the world's top 50, and 29 in the top 200. Our universities are great national resources, `fundamental sources of competitive strength'.
He points out that, for 200 years, countries with the highest social spending as a share of output have grown most. There is no link between high public debt and lower growth until debt reaches 90 per cent of GDP. Higher borrowing, if used to invest, can bring growth. Every extra one per cent of GNP borrowed cuts the recession by two and a half months (IMF figure); every extra one per cent of capital spending also boosts growth permanently by 0.3 per cent a year.
Hutton says we need `an economic development strategy', with a Knowledge Bank, a Life Sciences Bank and a National Infrastructure Bank. He asserts, "There has to be a willingness to spend, borrow, reshape finance and protect investment at all costs."
But now, as he laments, "the debt moralists are in control, denying the government essential flexibility and agility over borrowing. As a result, the next decade will be far more traumatic than it need be."
He warns us against accepting the government's spending cuts, which he says `threaten the very fabric of British society'. He says its programme is `the closest thing to an economic scorched-earth policy this country has ever seen'.
Yet in the same paragraph he writes of the government, "In the immediate short term this feels like a partial assertion of us over them, and welcome for it." In 1997 Hutton put his faith in Blair and in `stakeholder capitalism'; now he seems to believe in Cameron's `big society'.
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Showing 1-9 of 9 posts in this discussion
Initial post: 10 Nov 2010 12:14:13 GMT
J. C. Collier says:
Todays FT (Wed, Nov 10 2010):
BIG SOCIETY DOUBTS
Charitable giving by Britain's wealthiest families stalled last year, raising questions about funding David Cameron's "Big Society". page 4
At least they're not playing "Things can only get better".
In reply to an earlier post on 11 Nov 2010 12:04:53 GMT
Thanks! Apparently most charity money goes to religious bodies,
Posted on 12 Nov 2010 19:21:24 GMT
Sean Higgins says:
You seem knowledgeable....how do we stop CDS problems and regulate / control destructive practice....would we only have to regulate the insurance companies who insure the debts....after all the financial companies were just using them to offset possible losses...as long as the debts were insured why would the investment banks care about losses....the insurers said they would cover it (only they couldnt). Should they be the ones more closely monitored then they would say they were not willing to insure against the losses of a deliberately hidden debtor should we just legislate against CDS or similar future tools?
In reply to an earlier post on 18 Nov 2010 13:00:24 GMT
Surely, we can run the banks better than the finance capitalists can. Our class has a banking history. It's called the building society, where members can deposit money to save, whilst others can borrow money to build. No need to gamble on stocks and shares. Money lent never exceeded the deposits, consequently no chance of a crash.
In reply to an earlier post on 18 Nov 2010 15:18:10 GMT
Sean Higgins says:
Quite right i agree with you completely. Mind you the restrictions placed on the Canadian system would have suited us and i presume prevented this mess also. But we the greedy public were the ones who allowed demutualising because we got a quick reward for it.The problem is also that when labour were under the cosh they kept banging on about growth....which was false banking growth. If any government had told this selfish greedy nation that you cant have everything you want, then we'd vote them out. If labour'd told the truth that the growth couldnt continue and that we can only invest slowly then we wouldnt have been happy about it. How can you slow economic growth when interest rates are low and borrowing is cheap....banks start lending more to get better returns. What can be done to control unbridled spending during times of cheap borrowing.
In reply to an earlier post on 18 Nov 2010 16:35:40 GMT
You have apoint - but the government and the banks did all they could to blow up the bubbles - and then came the bust!
In reply to an earlier post on 25 Dec 2010 12:21:38 GMT
Last edited by the author on 25 Dec 2010 12:27:11 GMT
C. W. Bradbury says:
If Europe's increasing financial problems of the last 50/60 years are looked at, not as a series of unrelated incidents but as a recurring pattern; it becomes clear that since WWII all the European nations have been systematically asset-stripped. The methods used within the Soviet and American zones differed slightly, but the result was identical and all Europe's nations have been reduced to impotent penury by the same methods Hitler used during his occupation of Europe in the 1940's.
A corrupted form of 'democracy' was used to establish nominally independent 'quisling' governments representing not their electors but their Nazi overlords. These puppet regimes were tasked with extracting vast sums annually from their citizenry and whils't successfull, were permitted to enrich themselves personally; thus ensuring their loyalty.
Occupied Europe's 'contributions' to the Nazi war machine were raised through a subtle combination of exploitative taxes and fraudulent banking schemes orchestrated/administered by these same quisling governments/bankers; the huge sums extracted being transfered to the Nazi Reich by manipulation of the international currency control 'markets'.
If an impartial look is taken at post-WWII financial/political affairs, it becomes obvious that nothing really changed with the 'liberations' of 1945, save the ultimate destination of Europe's taxes/assets.
In reply to an earlier post on 2 Jan 2011 22:30:41 GMT
Last edited by the author on 2 Jan 2011 22:34:12 GMT
J. C. Collier says:
On the Nazis: Not forgetting to mention the forced siezure of valuable artworks and national treasures from public institutions and private collections - and more gruesome, and unthinkable means of extortion and extraction.
"If Europe's increasing financial problems of the last 50/60 years are looked at, not as a series of unrelated incidents but as a recurring pattern; it becomes clear that since WWII all the European nations have been systematically asset-stripped."
I've no familiarity with the subject, obviously the American elites were in a strong position and presumably negotiated a favourable rate of return. If I remember, the Bretton Woods conference of 1944 laid the foundations of the International Monetary Fund and the World Bank and also set the American Dollar as the world's reserve currency. That opens up vulnerable countries to potential economic blackmail from the creditor nation - I'm sure that America wouldn't have used, let's say food shipments, to African debtor nations as a method of coralling support for American foreign policy objectives.
We recollect that an ideological war was fought between two, equally ludicrous ideological camps who used the fear of the other to spur on the greatest misapplication of natural resources in the history of our species in a complex and interweaving narrative of murder, nuclear brinkmanship, terrorism, arms trading and drug trafficking.
"F**k your parliament and your constitution. America is an elephant. Cyprus is a flea. Greece is a flea. If these two fleas continue itching the elephant, they may just get whacked good ...We pay a lot of good American dollars to the Greeks, Mr. Ambassador. If your Prime Minister gives me talk about democracy, parliament and constitution, he, his parliament and his constitution may not last long..."
President Johnson to the Greek ambassador to Washington, Alexander Matsas, over the Cyprus issue in June 1964. Quoted in 'I Should Have Died' (1977) by Philip Deane, pp. 113-114
We also have the operating values compared to the operating costs of keeping Sadam Hussein 'contained' and safe in power in 1991.
"I think this is a very hard choice, but the price - we think the price is worth it."
Madeleine Albright. Spoken on 60 Minutes, CBS (1996-05-12) in reply to Lesley Stahl asking Albright, then the US Ambassador to the UN: "We have heard that half a million children have died. I mean, that's more children than died in Hiroshima. And, you know, is the price worth it?"
Generally speaking though America has been a force for good in this world. It is just a shame that the record of its various Administrations do not reflect the qualites and values of the American people at large. That's what the mainstream media is for, presumably.
In reply to an earlier post on 4 Jan 2011 09:59:21 GMT
Some extremely interesting points there, though the evidence you cite does not altogether support your conclusion that "America has been a force for good in this world."
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