Comments on: Don’t they know there’s a credit crisis?

By: mikestallard

mikestallard — Sat, 15 Mar 2008 20:37:33 +0000

In the days of Dad’s Army, Mr Mainwaring knew each of his customers by name. The Regional Manager knew Mr Mainwaring and the people in London knew the Regional Manager. So trust there had to be.
When Mr Mainwaring was removed, however, the system failed to work because nobody knew who the investors were and they did not care either.
Like many others, I was refused a loan of £2,000 when I got into difficulties in the 1990s, despite the fact that I had banked with NatWest (note the change of name) for some 20 years as a reliable investor. I was immediately given the loan when I went round the corner to Nationwide, where I still am.
In the 90s, people were paid, at the bottom levels, by results, targets etc etc. Hence the present crisis: who are we dealing with exactly? How do people know? They cannot know.
People often talk clever talk about being out of touch with the grass roots. This is an outstanding example of exactly that: it is VERY dangerous. As we are about to find out.

By: Matthew Reynolds

Matthew Reynolds — Sat, 15 Mar 2008 13:46:53 +0000

Green taxes should be revenue neutral as they should be high enough to change behaviour & thus not bring in too much extra cash which can then fund other tax cuts . Nick Clegg is quite right about that . I think that road fuel duties should rise to finance axing VED to make taxation far simpler and that landfill duty ought to rise along with anti-flytipping fines as the UK needs to recycle more as landfill space is fast running out and the countryside looks horrid when buried under plastic bags . Any money produced could fund trimming stamp duty on shares by 0.1% to 0.4% & lowering CGT to 15% . Climate change levy can go up so that along with the revenue that the Shadow Chancellor plans to raise from axing a number of business tax breaks there is enough money to fund cutting business tax rates to 23% & 17% respectively . A plastic bag charge along the lines suggested by the Chancellor is wise as it means fewer bags which cuts co2 emmissions & business costs while extra cash is raised for green charities - win -win for business & the environment . Green taxes can raise funds at the start to make pro-enterprise tax reforms ( like Lord Howe did when he raised VAT & cut income tax in 1979 ) - but as people get greener and green tax revenue falls the economy will be gaining from pro- business tax reform and so a bit extra money may come the Treasury’s way ( making up for lower green tax revenue ) . Aviation tax could rise to discourage pointless shorthaul flights to fund axing Labour’s mad non dom tax plans . Since 1990 emmissions are 15% lower & the economy is 50% bigger so green growth is sustainable & ethical prosperity . Cash affects behaviour and so speeding up this welcome trend via these sorts of tax changes would adress the present economic problems while helping to conserve the environment for future generations .

By: Neil Craig

Neil Craig — Sat, 15 Mar 2008 13:23:20 +0000

Alternately if a few banks went into administration others would buy up their mortgages, probably at a discount, the share holders would lose out, some jobs would be lost, the deposiors would be, at least 90% covered & business would resume once the chaff had been shaken out.

Bankruptcy is a necessary part of the business system. What would be much worse is that government policy should be determined for a couple of decades by a need to prop up insolvent banks. This would include actively preventing house price falls by continuing, or even accelerating, the regulatory controls that are the cause of housing shortages & high prices. This is pretty much what Japan did, going from 10% growth to 2 decades of literal stagnation.

By: Iain

Iain — Sat, 15 Mar 2008 12:26:26 +0000

I suppose you could be generous and say Darling couldn’t do much in the budget to tackle the credit crunch, but then as that’s the result of the economic mismanagement of the public finances by Gordon Brown you can see why Darling treated it as an issue that didn’t exist.

More difficult to explain is why the Conservatives aren’t making it and the budget a headline issue, instead gone to Gateshead to talk about families, something the Labour Government must very grateful to them for.

By: Brian Tomkinson

Brian Tomkinson — Sat, 15 Mar 2008 11:02:42 +0000

The financial crisis is indeed very worrying but seems publicly to be of little concern to Brown and Darling. When considering the Brown/Darling virtual denial of any consequences to the UK from the crisis in this week’s budget, we should not forget that they knew about the Northern Rock difficulties well ahead of the final crisis. In fact, they exacerbated the situation by their actions and words both before and after the public became aware of it. It is frightening to contemplate what they are aware of now and have chosen to remain silent about.