Be Excellent To Each Other

The scene, the shareholders AGM of Beex Inc.

Hey guys, we made a profit of £3bn. Thats down a bit on last year. Such are the swings and roundabouts of life. But we're paying a dividend of £300m too.

Now, whats really going to cheer you up is that we've been unneccesarily employing 10,000 people at an average cost per employee of £50,000. That's half a billion wasted this year and every year. That half a billion additional profit could have been paid out as a dividend, because we've already retained the amount that we need to keep in the company. But we're not going to sack them despite having no work for them because we're nice people.

Now, onto the elections for the new board representatives retiring by rotation. Oh, not us? But why? We're nice!

[vote:ApplePieofDestiny]

Hmmm... why is nobody buying anything from Beex Inc. anymore?

So what if nobody has a job, that's not our fault right? I mean our employees weren't necessary, but that's specific to me, those other guys should have kept their employees and kept the economy strong.

It's not a charity. Just because your company clearly employs people it doesn't need doesn't mean they all should.

[edit]removed the name of the company you work for - sorry!

It's hardly surprising that international pilfering is more profitable when carried out by a handful of vile people than 10,000 ordinary ones.

Sure, it's not a charity, but these people they hire must be doing something right, as they made £5.2bn...

All i'm saying is that to have a good economy in a country, you need people to be in work. The long term benefits of a stable economy would massively outweigh the short term benefit of binning people to squeeze out that extra buck this second.
If everyone chases the money to the exclusion of anything else, then the economy will be fucked... oh wait, it is

You need to have an economy that's based on something a little more sustainable than just shuffling other people's money around.

Part of the culling will be Ing direct mind, that's transferring to Barclays brand at the moment.

I think there should be some kind of klaxon sound every time someone says that (which is often). Try telling the newly-formed Chinese and Indian middle classes (each larger than the entire population of the UK, as formed recently and from a starting base of virtually nothing), including millionaires created by the dozen each month, that "trickle down economics doesn't work". Sheesh, I mean honestly - if you want to talk about stuff that *really* doesn't work, try Socialism (ask the French how their 75% taxation of upper earners etc. is going).

As an aside, no-one should be surprised at the sight of bankers doing stuff wot bankers do - screwing everyone, including their own hapless employees, not just the country at large and taxpayer. It's hardly unexpected or unprecedented.

I understand Barclays are planning on closing shedloads of their branches in favour of a desk in your local Asda? Bless 'em.

Sorry, that's ludicrous.
So, I can't call myself a Socialist if I send my kids to private school? Oh wait...

Talking about new millionaires makes my point for me. You can wibble on about about India and China when the massive majority aren't living in poverty.

You claimed trickle down economics doesn't work. I've shown it does. The creation of massive middle classes from zero, easily within a single generation, has nothing whatsoever to do with "the majority not living in poverty"; this is entirely besides the point and a straw man argument. (Besides which, the median standard of living in China is also vastly improved anyway)

The general claim of trickle-down economics is that it trickles down all the way, improving the quality of live across the board - not that it trickles down to the lucky few then stops.

Barclays soaked a lot of Woolwich staff into themselves after that acquisition and TUPE protections will have expired, so there's a few. A lot of job cuts can come from things like we had at my old bank a decade ago - jobs which used to happen in branch such as daily reviews of overdue accounts and a bit of helpful administration for our customers because sending a letter and charging most of them, with staff now in regional large offices. Then they just programmed a computer to fine everyone for going overdrawn and send an automated letter, and made everyone redundant.

The difficulty with hoping for voluntary redundancies is that you don't know which department people are going to want to leave from. The advantage of hoping for voluntary redundancies is that once people have gone and others have been shuffled about to places they don't want to be, they'll be more likely to opt for voluntary redundancies with next year's job cuts.

But we're in a global economy, so those are just middler classes created at the expense of other ones. Like Europe's. Also, what Craster said.

How does the creation of millionaires show that trickle down economics work, again? Surely, that money didn't trickle down from billionaires? Or what?

China's middle class was apparently 300 million souls in 2012 (probably much bigger now). I'd hardly call that "the lucky few" mate.

http://money.cnn.com/2012/04/25/news/ec ... dle-class/

Yes, I completely agree with you; the globe's resources are obviously finite. What has this got to do with it though?

Considering the definition used in that article:



That includes people earning £7000 a year. That would be well below the poverty line in the UK, so not sure how that fits a definition of middle-class.

Weeell yes, you've picked the lowest figure; I could equally cite £45k per year (the $60k upper limit). But the point you seem to be missing is this: because of much lower living costs, even £10k per year goes a damn sight further in China than it does here. Being "middle class" is all about being able to afford a nice car and house; having your kids go to a good school; being educated yourself. If you can do it for £10k pa - and the Chinese can - they're middle class. Sure beats working/starving in the fields for a pittance like their parents/grandparents were as little as 10-20 years ago, again a key point you seem to have missed?

That then it isn't actually trickle down economics at all?

Well, except it doesn't - that same article you cited states:

It means you're talking about 'swirl around' economics, not 'trickle down' economics.

Because cost of living in China is low?

If we all took our money out of these banks and put it into local building societies and credit unions, they'd soon stop being an issue in the domestic market. Retail banking's not very profitable, relatively speaking, or at least it wasn't a few years ago. Especially not for Barclays.

*waves*

Pulling all the money out of the investment banks would mean massive unemployment and fuck us all for another generation though.
The finance industry is good for the country as a whole, I just wish they didn't act like such cunts all the time.

Trickle down economics is a nonsense. It works by the uber rich getting richer, and letting some others have their scraps. In developing economies it can be one force at work amongst others in improving the lot of the lucky ones, but always still at the expense of a majority. In developed economies, it always takes money from the poorest and adds it to the top, as every study of income inequality shows.

Gngh. Seriously man, the fact that (in 2012) many of the poorest rural Chinese had yet to feel much effect from China's economic miracle has nothing to do with whether or not trickle down economics works! Note: I did not say trickle down economics was *perfect*, nor did I claim everyone benefited equally - I merely disputed Markg's claim that it "doesn't work", in the face of all the empirical proof to the contrary.

This whole "think of the poor peasants" straw man is such BS anyway; the people you speak of were hardly any better off under Communism; they were starving half the time. 300 million people lifted out of poverty, and into a pretty good lifestyle in 10-20 years, sure seems like progress to me. Let's see where China is in another 20 years time; the situation is hugely dynamic anyway and the upwards momentum is very much still with them.

They would just go and work for the building societies and credit unions. Where they would get better terms and conditions and share of profits and that workforce would be employed according to ability, not how long they've been at a bank where they've been entrenched for 30 years already, getting promoted to mitigate every incompetence.

Investment banks would need to invest carefully for a change.

Better none than a select 600,000,000, though.

There aren't anywhere close to enough jobs in retail banking to employ everyone who would be made redundant from the finance industry collapsing. It would double the current unemployment rate virtually overnight.
Not to mention the amount of secondary industries that rely on the business created from the finance industry.

Lulz. Those elitist "lucky few" 600 million people - posh Capitalist twats eh.

I don't think anyone is upset that 600 million people have better living conditions.

It just isn't trickle down economics, and has absolutely no bearing on how we could apply it to the UK.

I'm not for a minute saying what's happening in China is bad, or that life isn't improving - I'm saying that the specific economic concept of 'trickle-down economics' doesn't achieve what it should. Trickle down is supposed to work like this:

Big company makes money
-
Big company grows
-
Tax take grows
-
Increased spending on education, social welfare, health etc
-
Unemployment falls
-
Salaries rise in-line with or above inflation across the board

Of those, in the majority of developed and developing nations, the first two happen and the others....happen a lot less. Proper trickle-down economics would dictate that the others happen automatically as a matter of course.

Oh man, I think I'm going to give up now. It wouldn't matter how many times I explained it, demonstrated it, produced however many testaments from very eminent experts/University Deans and all the rest who *actually live there* and were the architects of the whole thing in some instances - people here would still say "yeah but it doesn't work". Guys, no offence, I've been here before and it's bloody frustrating; to me it seems very much like an irrational pseudo-religion? I'm sticking to cars, bikes, women and booze.

So, to clarify, you are saying this entire thing was caused purely by the reduction of top level tax bands? That's all that happened in China? Nothing else altered, but the lower level of tax for the highest earners alone completely transformed the economy?

Because that's all trickle-down economics is; the hope that by giving the rich tax breaks, the wealth flows down to the poorest.

China's situation is a fuckload more complex than that, and I suggest those economists would agree with me.

The thing is that wealth seems to be trickling up, rather than down. There's a very few people who are incredibly wealthy and that pattern is becoming ever more pronounced. It certainly doesn't seem like a healthy trajectory.

The notion that from unbridled capitalism there will magically emerge some set of natural laws that work to create an ideal society is fucking mental, yet that seems to be the experiment being carried out. The bankers that people rail against are nothing more than an inevitable product of that system. You can't have one without the other.

That's my feelings on it anyway. Although it's interesting to read more about China.

I'm only talking about high street banking though, not corporate nor investment. The government want the pair separated anyway, so why not just take the fatcats out of the equation completely. The whole industry is not predicated on the current accounts of ordinary folk.

I think the idea that an ideal society can ever be found is pretty fucking mental whatever, sadly.

<Sigh>

I'd love to know where I said trickle down economics yields an "ideal society", or anything like it. Now that is indeed 'fucking mental'; not so much putting words into my mouth, but an entire fucking novel.

Anyway, enough, this road leads to madness. Sadly I've enough to worry about now, without frustrating and futile distractions.

You seem to understand economics, and, yes indeed.

Sure, you have to at least try though. For long term survival if nothing else.

As incredible as you might find it my post wasn't meant solely for you. It was more a comment on the road we seem to be on with less and less government.

Sorry, I thought we were having a discussion; your previous post to this one was very much directed at me, sorry I'm sure! Besides which, I'd love to know who these 'other' people are who think trickle down economics yields an ideal society; I've never even heard the most hardened, unreformed Thatcherite (or indeed Thatcher herself) make such a ludicrous claim.

As for less and less 'government', well, you'll note Kishore Mahbubani's view, (Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore), in that piece I posted earlier:

'...The reason for Asia's success is through implementation of important reforms - free-market economics, meritocracy, rule of law and others - and these reforms do much to raise the living standards in Asia, Mahbubani wrote. "In China, for example, since initiating market reforms, more than 600 million people have been rescued from absolute poverty," ...'

Note 'free market' and 'meritocracy' - the very antithesis of 'government' in the context you're referring to - and the direct, measurable, empirically demonstrable 'seismic shift' creation of 600,000,000 new middle class in just a few short years (with super-low levels of regulation, welfare, taxation, health & safety, employment rights, environmental controls, employment and wage controls, unionisation etc all unthinkable in the UK), set to rise to a "lucky few" of 1,750,000,000 in the next 5 years? Still, what does the likes of him know.

Well, personally speaking, I have to say I tend to give the likes of his opinions in these matters rather more weight than frothings on the internet that were demonstrably outmoded at the close of the 1970s, although if I say so myself, I've been saying this same basic stuff for the last 20 years, including the last 10 on this very forum and WoS preceding it.

This is not to say, of course, that I wouldn't want to see a beautiful, utopian, perfect society as much as the next man - but I know, as a grownup, that given basic, immutable human nature, it ain't gonna happen. So then, rather than rail uselessly and impotently against these traits (e.g. Socialism), causing great harm through unintended consequences in the process, I recognise the need for politics/policy that not only acknowledge this reality, but actually tries to harness it, and turn it to the advantage of as many people as possible - precisely via the 'trickle down effect' and a whole host of other stuff besides, most notably increased economic activity, efficiency and productivity. (Most especially those who are prepared to work hard, even if for the *entirely selfish* reasons of wanting to improve relative to their peers, yearning for the best for them and their families, to have as much of their own money that they have earned in their hand as possible and/or the latest car or other consumer goods).

I've just remembered that I have a mate that works in IT for Barclays.

I should text him.

Cavey - I largely agree with you. My disagreement is that it has little to do with trickle down economics; it's about implementing free market economics to a market with previously massive state barriers to enterprise.

Curio, please note that there is a world of difference between simply stating that trickle down economics are seen to be working with the creation of an unimaginably huge middle class off the backs of the prior creation of insanely rich individuals (sweat shop manufacturing et al), and "China's success is all down to trickle down economics". I did NOT claim this mate; I merely disputed Markg's very specific, blanket dismissal of trickle down economics?

Of course, I am absolutely the first among us here to acknowledge the prime, overriding importance of free market economics and removal of State barriers, as I'm sure you'll acknowledge. But this does not in any way undermine my argument, far from it - the existence of, and demonstrable efficacy of trickle down economics is very much a part of this (and my) overall politics and worldview.

Think about how China (and others like India, Taiwan, Korea) started the ball rolling - dirt cheap, sweat shop manufacturing for others and the attendant creation of a few super-rich individuals (business owners, together with recipients of previous State assets etc), with pretty much no regard for workers' rights, conditions, the environment, you name it. However, even this generated knowledge; the likes of Apple cannot get Chinese workers to "unlearn" how to make iPhones or the tech that they comprise. It's only a (short) question of time before the question is asked: we can do this for ourselves. Also, a proportion of that money coming into the pockets of the super-rich gets spent and finds its way to the people at large. This snowballing, which includes elements of classical trickle down from the top, leads to increased wealth, affluence, aspiration, knowledge.

Look at the so-called MINT countries; these too are currently characterised by a super-rich elite even now, but I'm betting in 5 years they too will more closely resemble 'mini Chinas' with much greater wealth somewhat more evenly distrubuted? To me it seems inevitable, just as our own demise in Europe looms, and we'll be forced by the global market to do pretty much what China and the other emergent economies do (not least due to the loss of our previous technological USP/advantages, not helped by our hopeless education systems).