Wednesday, 18 July 2012

Mervyn King - a clarification

Devoted readers - and I gather that includes the Vice-Chancellor - will remember that I was slightly scathing about the behind-closed-doors nature of the Governor of the Bank of England's visit to the university recently. The 'Wolverhampton Debates' are meant to examine ways in which this ailing town can be revived, and my point was that we're in an era of Open Source, whether we're talking about software, politics or economics.

My other point was that mainstream economists are discredited. They designed a fiscal model which rewarded the speculative circulation of money and abandoned what's called the 'real' economy: making things. Of course the problem with this is that of the 60m or so people in the UK, very few of them are needed to trade derivatives or CDSs. Labour's solution was to institute a low-wage service economy (we all serve each other cups of coffee) and the financial sector's taxes would provide benefits to top up these scandalously low wages. Cheap credit would also help workers bridge the gap between their wages and housing/living costs.

Bingo: big profits for outsourcers and agencies. Massive profits for financial services. Dependency and debt for workers and in the end, a crashed economy - because the financial services model was a) rotten to the core with corruption and b) structurally unsound: it was always going to overwhelm the real economy, and its operators were never going to keep providing the taxes. As a small example of the institutionalised corruption which masqueraded as policy, visit your local Inland Revenue (i.e. tax) office. It may look very governmental - poor architecture, cheap furniture, general air of being down at heel. But it's not a government building. The Inland Revenue sold all its building to a company called Mapeley Steps, and rents them back (apparently this makes sense in their universe, though I'd be asking where the profit is generated from). Mapeley Steps doesn't pay its taxes: it's an offshore company. So we pay our taxes in buildings sold by the tax office to a tax evader. Like I said - rotten to the core.

What we actually need is a high-pay, high-tax economy. Like the Scandinavian paradises. Clear out bankers earning millions for destructive speculative activity - it's very unclear that the people at the top of the tree actually add much to a company's value anyway - and pay ordinary workers a lot more. They spend it rather than hide it offshore, and they pay their taxes rather than evade them. Then we can provide decent state services - and not have to sink a huge amount of cash into subsidising low-paid jobs with tax credits etc. We can spend it on cold fusion, mag-lev trains and resources for humble English lecturers. Ahem.

Anyway, where was I? Oh yes, Mervyn King. The VC just had a chat with me about my objections to these closed door debates. He said that the problem was Mervyn King's office: they demanded a guest list in advance, photo ID, and questions vetted - some were rejected. Security was pretty obsessive from the sound of it, which seems paranoid. Certainly he's an important man, but I doubt that he's any more of a target than David Miliband, whose security seemed pretty relaxed when he visited, despite his collusion in the rendition and torture of various Eastern individuals. To his great credit, King ignored the questions and opened up to the floor, so it appears that it's the entourage that's pompous rather than the individual.

So, who's the next celebrity guest? I can't reveal that before the university does, but I promise you this: if you like them rightwing (at least by my standards), buffed and unelected, you'll love him. I asked for a ticket and the VC laughed… and another page gets added to my Personnel file!

1 comment:

Russ said...

And he loves his tennis.