04/26/2010: "Election - Bank failure versus protection"

make no mistake, political parties of all colours want, on the whole, the exact same things for the UK.

- the economy to grow continuously
- interest rates for mortgage holders to stay low
- inflation to stay low
- all children to get a good education
- less crime, if not no crime
- good relations with other countries
- the best pensions for all the people
- cures for all diseases and fast treatments for illness and injuries
- everyone that can work, in work
- no debt for the country

there are of course other "ideal scenarios" that are spouted by all politicians of all parties, which they believe, their policies will bring about.
the only difference between the parties, is HOW they would bring about these ideal scenarios

on the subject of the banks...
would you have bailed the banks out?
my answer would depend on the type of bail out given.

i cannot understand why, given that the levels of personal debt in britain are obscene, in part, promoted and added to by banking practices, in part added to by irresponsible lending, and in part by irresponsible borrowing by people (which should have been prevented by regulation - which is a government's job) the british people have been given almost nothing in their hands, for a pay out in taxation of a size not seen before!

all roads of money lead back to the banks

just think of the good that could have been done, if instead of giving the banks Ł24,000 per voter in bailouts, the banks were bailed out by the government giving this money directly to every household in britain!
* levels of personal debt would have vastly reduced
* levels of savings would have increased
* competition between banks and businesses would have increased
* tax revenues via VAT would have increased as people had more money to spend
* pension funds would have increased (again bringing in more revenue for the government via their 5% tax on pension fund profits - could this have kept the retirement age lower?)

the UK economy would have had more jobs, more competition on the high street, more competition between banks as they fight for customers which would have also increased savings rates for people.

if the government had gone the other way, and refused to bailout the banks, i would have supported them.

in life, wise people learn from the mistakes of others, mostly, people learn from their personal experiences.

- not forgetting for one minute, that the prime minister of the day removed bank of england powers that would have prevented the banks being allowed to overstretch on their borrowings (the money they were borrowing cheaply and lending to the public at a higher rate of interest, increasing their profits) giving them instead to the FSA
- not forgetting that the former head of the FSA has stated that the prime minister of the day, used political pressure upon him not to step in and use these powers when the FSA spotted the banks were increasing their risks because of over borrowing and would have been unable to finance themselves in the event of a crash

the deterant that would have been there for all to see, had the government let northern rock fall, would have made sure that all the other banks would have brought their houses in order.
before i get accused of leaving the british people with northern rock accounts in lumber and worse off, ask yourself this...
all banks already had to provide an upto Ł30,000 guarantee to its customers - how many of northern rock's customers had more than Ł30,000 sat in their current accounts?
it would also have improved the standing of the pound and the view of the UK by countries around the world, in its ability to deal with debts.

as it stands though, with the bailout going directly to banks - the people of britain will have to fork out huge swathes of extra taxes and cuts in services from any party that forms the next government, and subsequant governments, to pay for all the borrowing, for decades to come!

bizarre as it sounds, those that use quotes of "fairness" and "equality" have seen the reverse happen!
why should banks have been bailed out and not other retail companies that have gone to the wall?
ask woolworths or ethel austin workers if they think they have been treated equally or fairly!
ask all the people that worked in the car industry, was it fair that the banks who funded their companies when they went bust, were saved from the same fate?

ironically, as we will find out in the future no doubt, speculators will be keen to step in and unravel the UK in the money markets, as they now know that the current labour government, should they win on may 6th, will bailout failures in the banks in the future... a dangerous position to be in!