As I said elsewhere, “wrong kind of leaves on the line”

I think we might assume that the Sun header is indication, a little word between friends if you will, of what we might routinely see in the Murdoch rags on the subject of Dave and his posh chums if this phone hacking enquiry doesn’t get buried and soon. I doubt it has anything at all to do with Osborne’s alleged economic policies.

BB

[2] I’m sure that you’re on the money there, Bill.

I’d hope all three major Party leaders would co-sign a letter (to “The Times” 😆 ) saying they’ll do no such thing.

If that led “The Sun” in wounded beast mode to back UKIP we could find out how much power it really has. Or doesn’t have.

“The bankers meanwhile just paid themselves another £14bn in bonuses.”

Mission accomplished.

[4] Indeed. The simplest way to understand what’s going on, I feel, is to assume that the super-rich will increase their wealth year-on-year come what may. Whilst advanced economies grow, this need not involve impoverishing their citizens (although it will of course immiserate the rather larger number of people who live outside such economies). When growth stalls, as now, the super-rich turn on the rest of us. They have the power to take what they want.

Can the rest of us turn on them? That would require organisation, solidarity – even ideology. The historical record is that these assets have only ever been cashed in societies which are ethnically homogenous, such as the UK up to the 1960s. (The Soviet Union certainly never managed it, which was one of the two key reasons for its collapse – the other being the microchip.)

We have a dreary political choice between, on the one hand, kow-towing to the interminable concentration of wealth in ever fewer hands or, on the other, participating in some form of more-or-less racist opposition, stretching its dreary tentacles from Glasman to Breivik, and, as sure as night follows day, inducing ever more hysterically communalist responses from non-white Brits.

how much longer is the royal wedding going to be blamed by osborne for the poor growth figures?

I couldn’t believe my ears – the Royals! The Japanese Tsunami! Good weather in April! What a load of tosh.
The real reasons for the economic slump lie at the feet of the coalition government.
I outline them in the following article for http://www.allthatsleft

http://www.allthatsleft.co.uk/2011/07/osborne-stop-the-excuses-these-are-the-real-reasons-for-our-gdp-malaise/

Just a minor point but wasn’t it the ONS who stated these ‘special factors’ and not Osborne?

Growth is not as high as we might have hoped but with the slow down in our over spend ( rather than any cuts whatsoever thus far) it was always likely to be a jagged line at best.
The problem Osborne has is not too little demand in the Economy which is on the edge of a real inflation problem.The mistake was to raise taxes first and then go for spending cuts later it should have been the other way around and frankly we need to get the Public Sector monkey off our backs at some point both economically, and culturally in the long term. Until we do we will flat line
As a % of GDP it is up to 47% so when Will Hutton calls for an Asian approach he is being selective to the point of idiocy
I have no objection to protecting our industries the way the Germans do or to selective stimulus here and there what frustrates me is that cuts in waste or international AID are always opposed by the same people that claim they want prosperity for the country.
If you think that anyone is going to hand Ed boy Milliband and Browns left Ball a shot think again.Not ever and the more you bitch about every effort to get up the mountain of debt they created the less likely it is

Rather than carp and criticse, lets look forward to a time without weather, or events of any kind, where Osborne’s economic policies are free to succeed unmolested by reality.

Really Paul? There are cuts and slashes applenty, front loaded ones, going on. But if you’re right, then every reason to halt every single cut now, because the line of having to borrow more than Labour’s projections because of economic growth’s weakness is close.

Your prescription is the same regardless of the situation. Nuts.

[11] Leon, Paul is obviously an escapee from what Alan Bennett calls the Adam Smith Institute for the Criminally Insane 😆

Wrong Leon – Public spending was up 5.3% last year (more than inflation), and is forecast to rise 3.8% this year (more than forecast inflation). Public borrowing is as high as last year
What have you just invented there I wonder ? A line that is somehow drawn between taking money away from those engaged in productive activity and giving it to people who are not despite their higher rewards golden pensions and manifestly distorting affect on the Labour market. Good plan.
If there is one measure that would really help us it would be to raise the threshold for higher rate income tax We could painlessly pay for it by cutting the Forces getting out of wars, International AID contributions to the EU sink fund … easy peasy.
There is a reason for this beyond the obvious .The marginal rate for families losing child benefit between £40k and £50k is close to 100% .That vicious masochistic regime has an enormous effect on budgets , plans and consumption, especially across the South .We could finance it, or ameliorate it, and still be one of the top givers to needy global causes .. if we really must give money away .
The other thing that has to happen is a clear sign to the Public Sector Unions that they are no longer going to be able to hold the country to ransom.I think we are headed that way to be honest and the sooner the better .

Bring it on!!

“The bankers just paid themselves another £14bn in bonuses”
I don’t see the problem. They invested a few tens or hundreds of thousands in
Tory plc and are now getting their investment back. Isn’t that how business (and this government) works. This government is fast becoming more corrupt than John Majors bunch.

@ 4 & 5,

So instead of paying bonuses, banks should presumably pay this in tax instead?

Tricky one Banks , they contribute about £50billion to the exchequer each year and have cost the tax payer nothing ..NOTHING…we own banks that’s all
The true cost is the Premium for supplying an implicit guarantee but other than by continuing the business of banking its hard to see how we turn that into money.
Not a happy state of affairs true but the continual suggestion that we can stop paying bankers and that this will somehow enrich the squeezed middle belongs in the nursery.

Sorry but there it is.

@13 – And of course you’re delivering a biased picture.

There are some rises, yes, in areas which are priorities for the Tories, and to pay for things like their amazingly expensive NHS reorganisation. Oh, and to pay for redundancies.

This doesn’t mean that there have not been massive slashes made to the budgets of all the non-“priority” areas. Or that “cuts” have not simply pushed around where funding needs to be found to more expensive areas (something which is rising sharply, too).

The invention is your one-line-regardless-of-the-circumstances economic line. Oh, and let’s not forget “unions are bad” and “tax needs to be lowered”. All, again, ignoring circumstances and nuance.

The cuts have destroyed consumer confidence, consumer spending will fall further when households run out of savings or refuse to take on more debt, and the housing benefit changes mean that poorer households are soon to be bleeding jobs and moving away from their support structures.

[dripping sarcasm]
But banker bonuses are healthy, and that’s what matters, right?
[/dripping sarcasm]

@12 – Yes. Bearing in mind that what Adam Smith himself said was quite reasonable, and bears little relationship to what the “institute” comes up with.

Rather than carp and criticse, lets look forward to a time without weather, or events of any kind, where Osborne’s economic policies are free to succeed unmolested by reality.

Haha! Love it.

Max: Yes, they did; that part was cut out of this edited down piece. See my original.

“So instead of paying bonuses, banks should presumably pay this in tax instead?”

Or they could reduce the price of their services. Have you seen how much mortgage arrangement fees are these days?

@20

Why should they reduce the price of their services? People are prepared to pay that price.

We should remember here when the banks are praised for their contributions to the exchequer that they toil not, nor do they spin. They manufacture nothing, in that sense they contribute nothing. They money they’ve got they’ve scammed off the rest of us, they’re getting richer because the rest of us are getting poorer. They’re the fleas, we’re the dog but at the moment all energy’s going into catering for the welfare of the fleas, a policy which can only end in disaster for all of us.

BB

@22

What absloute drivel.

So the financial sector contributes nothing? You think the economy would be able to run efficiently without any financial services?

A huge portion of the economy manufactures nothing – should all of these people (teachers, nurses?) be scrapped?

Guess what – successful manufacturers are getting richer at the expense of the rest of us as well.

If you think the banks are scamming us, why do so many choose to use their services?

One can believe that Mr Osborne is not following optimal policies without also hoping that the economy crashes and burns to prove a point. The economy is not at a oh my god we are all going to die moment. The issue about special factors impacting the second quarter is not about excuses. One can’t get a more understood distortionary effect than an additional bank holiday. Special factors can sometimes come across from the ONS as excuses. However, they only draw attention to the one-off impacts because they know analysts are only interested in the underlying trend. What growth is this quarter compared to last year is not really important, it is the underlying trend that will determine employment and how likely Mr Osborne is to meet his targets.

In unseasonably mild weather we do use less gas and electricity. I think overall it is positive when we consume less energy. But there is no doubt that it impacts GDP.

Aggregating the last three quarters might be good for partisan point scoring but is not much use in working out our future prospects. The underlying trend is better than the MSM suggests in their reports. However, Mr Osborne is unlikely to meet his targets for deficit reduction before the next election unless the underlying growth rate increases. Monetary trends suggest that the the 3Q and 4Q this year will be better so the doom and gloom reports are overdone.

I think the argument that getting rid of the increase in VAT would cost us £12 billion is almost certainly nonsense. The rise is probably not raising anything like that amount of revenue, and the negative impact on the economy may actually be costing us more that the rise is raising in revenue. I agree with the OP that the government have allowed themselves no room for manoeuvre and are terrified how any deviation would be interpreted by financial markets. How can I put this simply, financial markets want them to grow the economy and are more likely to punish them for low growth than for any other reason.

One should not take the GDP growth rate as hard exact numbers. They are a guess and the ONS will still be adjusting their guesses in 2013. Employment, tax returns and PMI surveys suggest that the ONS figures are not an accurate snapshot of UK output. Moreover, this exaggeration has been going on for years..

There is plenty that the government could be doing to improve the long term supply-side of the economy, and at the same time stick to their deficit reduction plans. New schools will have to be built sometime in the future so cutting spending there is short-term thinking . It has never been cheaper for the government to build infrastructure. Our existing roads are in a terrible state and repairing them requires a massive increase in the budget. The UK has an energy deficit and as a consequence our economy has to import energy. We can build new capacity to reduce the energy deficit. However, even more important is to reduce our consumption of energy through an increase in energy efficiency. Remove our energy deficit and our trade with the rest of the world would be balanced.

Those things are achievable by the government without increasing our deficit and would be long-term beneficial for the economy.

“Why should they reduce the price of their services? People are prepared to pay that price.”

The mortgage lending figures suggest they’re not!

@25

Well clearly mortgage arrangement fees are not a big source of bank profits and therefore are not the reason for the £14bn bonuses.

Overall the banks are making profits which makes it possible for them to pay bonuses. They make these profits because people are prepared to pay for their services.

“Well clearly mortgage arrangement fees are not a big source of bank profits”

Why don’t they reduce them to zero, then?

Because they need to receive sufficient income to earn a profit, allowing for the risk of lending.

Why don’t you work for no income?

“Because they need to receive sufficient income to earn a profit, allowing for the risk of lending.”

And they do – plus a lot, lot more! At least 14bn more!

Look, if you want to believe everything is fine and rosy in the banking sector, that it’s working as a perfect market, then you’re welcome.

But if events of the last few weeks, months and years have shown us anything it’s to at least *ask* if everything is legit when we see some sector making a stack of money (especially when no-one else is).

There are plenty of people making stacks of money. In total £35bn of bonuses were paid in the UK last year, of which £14bn was in banking.

http://www.statistics.gov.uk/articles/nojournal/bonuses-2010.pdf

Most companies and individuals are making money.

From memory, I think the UK private sector excluding financial services paid out £19 billion in bonuses in the same period as the City paid £14 billion. Moreover, most of the City bonuses are paid from global activity. It is a complete distortion to imply that they are extracting these bonuses from the UK. A world financial centre makes its profits not surprisingly from the world.

Moreover, in the quarter to June, companies paid out to shareholders a total of £19.1 billion in dividends, a 27 per cent increase on the same period last year. Good news for shareholders and those contributing to a pension. Hardly sounds as if no one else is making any money.

@30 – Yes, let’s ignore the wage gap, growing unemployment and spiralling bonuses. Everything is fine.

Oh wait, flatline economy. Hmm!

@24 – Don’t worry, again, the poor will be turning off the lights this winter to get heating, that’ll help. Oh wait, many heating systems depend on electric controllers, even more savings!

Yes, I’m a little sarcastic about this. It’s clear the Government are just fine with the misery they’re dealing out, after all.

Fungus – that doc does very little to refute my point, I’m afraid.

I just got this “If you think the banks are scamming us, why do so many choose to use their services?”

What choice is there?

BB

@ 29 Neil

“But if events of the last few weeks, months and years have shown us anything it’s to at least *ask* if everything is legit when we see some sector making a stack of money (especially when no-one else is).”

Making a profit is a red flag to you? Seriously?

@32 – So…let’s open up who’s allowed to provide banking, yes? Oh, I can see restrictions on investment banking, but I’d be as happy to have my bank account with, oh, Amazon as I am with it’s current holders.

No, making a profit completely out of proportion with the profit in every other sector is what raises the red flag. Have a look at the graph on the doc linked earlier – it’s bloody crazy!

“Overall the banks are making profits which makes it possible for them to pay bonuses. They make these profits because people are prepared to pay for their services.”

Ahem… the banks make what they count as profits, among other things, because they have the monopoly on the money supply. You never heard of seignorage? It’s the difference you get between the costsof making money and the value of the money. The mint mints coins and its profit is the difference between what it costs to mint coins and what it can sell them into the economy for. The banks get the difference bween the costs of creating money through the use of their computers and again the costs of selling that money into the economy. It’s called seignorage, you can look it up. It’s tens of millions of pounds a year. It goes to the banks. That’s just one place they get their profits from that has nothing to do with industry or hard work. It’s handed to them on a plate. There’s no reason the Teasury couldn’t be creating this money into the economy interest-free. plus there’s the banks’ dodgy accounting. Money owed many years in the future can be brought forward and accounted for as if it were this year’s profit. Oh look, big bonuses for everyone. It’s phony accounting, that’s all!

BB

Neil,

No, making a profit completely out of proportion with the profit in every other sector is what raises the red flag. Have a look at the graph on the doc linked earlier – it’s bloody crazy!

You may not be wrong that some profits are obscene (whilst I have no problem with banks making profits (especially if my money is in them!) I worry that the last government effectively gave them a carte blanche to profit without consideration), but you cannot judge profitability on sector-by-sector comparisons, as sectors do not have the same events.

[38] Quite. Similar accounting devices can be found throughout the economy.

For example, my late father finished his career as MD of a British Steel accounting unit, a foundry which produced heavy kit for the rest of the industry. He was very proud of the fact that he ran it at a profit, and I’m not sure that our relationship ever recovered from my insisting on telling him that he only did so because British Steel itself decided how much he “sold” his product for.

Adam Smith’s “conspiracy against the public” is omnipresent, and whilst perfect competition would deal with it nicely, imperfect competition – which is all we can ever have in the real world – does no such thing.

19 Septicisle

Don’t you think you should have edited this version to make that clear? Your OP here gives the impression that Osborne and his ‘corny soundbites’ made all this stuff up

Oh wait…

Mike,

Adam Smith’s “conspiracy against the public” is omnipresent, and whilst perfect competition would deal with it nicely, imperfect competition – which is all we can ever have in the real world – does no such thing.

So what do we need to do the live in the unreal world – perfect competition is quite possible, you just have to overcome the problem of movement of information and the like. Which problems can you see never being overcome?

@40 – Or until we rebalance the economy on labour, not capital.

There’s a reason things like skills-trading websites are rapidly becoming more popular.

‘@ 38. Bill Kruse

That is utter drivel. It is the nationalised central bank, the BoE who earn seigniorage profits and pays them to the Treasury. Commercial banks do not create money, they create credit. In the UK, Seigniorage is not very large because currency is a tiny (4%) part of the UK money supply.

32. Leon Wolfson

” Don’t worry, again, the poor will be turning off the lights this winter to get heating, that’ll help. Oh wait, many heating systems depend on electric controllers, even more savings! ”

You seem to be misrepresenting what I actually said. Just because I said gas and electricity output falls in mild weather, does not in any way relate to don;t worry about the poor in winter. Hey, we should hope for a really cold winter as it will make us all better off from the boost in GDP, right.

@44. Richard W: “It is the nationalised central bank, the BoE who earn seigniorage profits and pays them to the Treasury.”

What about the non-English banks that issue sterling bank notes? I presume that they are agents of the BoE?

Max: I don’t think it’s misleading to the point where it needs extra clarification, which we’ve nonetheless done here in the comments. In any case, there are plenty of other people questioning the ONS coming up with what resemble excuses for the low growth, even if they’re rather more cautious in the wording of how it could have affected GDP than either politicians, journos, or indeed us bloggers.

Credit is money.

BB

@ 46. Charlieman

Since 1844 the BoE has had a monopoly in sterling note-issuing powers. Not all banknotes that are called sterling are actually sterling. The Isle of Man notes are sterling because they are in a formal monetary union with the UK. The Channel Isles issue notes that they call sterling and are exchanged at parity in those areas. However, they are not legal sterling currency. Same goes for Gibraltar, Falklands Islands and various crown overseas territories.

Four banks in Northern Ireland issue their own notes and three Scottish banks. However, they are promissory notes and not legal tender even in Scotland. Incidentally, neither are BoE notes legal tender in Scotland. Although, they have sterling written on them their legal status is that they can be exchanged at par for BoE sterling. Moreover, those banks who issue their own notes must deposit at the BoE an equal amount of BoE sterling. Therefore, it is really a currency swap. Due to some quirk or anomaly in the law, the Scottish banks discovered years ago that they can deposit the sterling at the BoE on a Friday evening and legally withdraw it on the Monday morning. It is probably around £5 billion. They then lend it in the money markets earning interest until depositing it again on the Friday. Probably worth around £100 million a year to the banks. As you can see it is only the BoE who are actually issuing sterling.

The BoE monopoly only gives them exclusive right to issue sterling and not money. Anyone in the UK can issue money and call it anything that they want apart from sterling. It is only illegal counterfeiting if you call it sterling. The difficulty for anyone issuing their own money would be getting others to accept it as money. However, the law in the UK does not prevent them.

@46 – Well, no. (but it doesn’t matter, really)

The various pounds are locally issues (and often only locally acceptable, for that matter), and are backed by their local banks, which must be backed by pounds sterling held (technically in notes, but I believe it’s all electronic these days).

In fact, in Scotland and Northern Ireland, the issuers are banks, not the government. So notes are directly backed by their respective issuers, and only indirectly the Bank of England (and Wales).

Yes, see the note on the first line

48. Bill Kruse

” Credit is money. ”

Credit is not money. Firms issue trade credit all the time, they are not creating money.

@49. Richard W: “Moreover, those banks who issue their own notes must deposit at the BoE an equal amount of BoE sterling.”

Ta. That means if an organisation fixes LETS currency to sterling (four WiddleTown LETS to the pound), they have to make a BoE deposit? So LETS always have to float?

@49 – Oops, I did forget the Manx situation there

And yes, there are Totnes, Lewes and Stroud Pounds these days…local currency. There’s also no question as to the legality of things like Bitcoin here, or of smaller internet currencies/barter tokens… (Of course, nobody’s forced to accept them!)

@52 – The various pounds are all fixed 1:1 with Pound Stirling. There’s no floatation involved. What private currencies do is up to them – I believe the local currencies are fixed, but things like Bitcoin float.

@ 52. Charlieman

No. There are a whole bunch of electronic currencies out on the internet. They are informal and not issued by the clearing banks so no need to make a deposit at the BoE. They could float or be fixed to some real currency. If they fix and the currency that they are fixed against depreciates, whatever goods or services that they are used to buy on the internet will suffer inflation.

Ta also to Leon.

http://www.economania.co.uk/where-money-comes-from.htm
Go and argue about it with the BoE, President Obama, former UK Chancellor Reginald McKenna, the Vickers Commission and others. They all seem to think the banks create money and they don’t mind saying so in public either. So go argue with them. I’m just going to copy the link to here in case it doesn’t work as a link above;

http://www.economania.co.uk/where-money-comes-from.htm

BB

@ 57. Bill Kruse

You started off by saying that the UK commercial banks earn seigniorage profits. Seigniorage profit is the difference between the face value of currency and the cost of producing it. That is earned by the central bank.

You then said that credit and money are the same. That is just nonsense, money originates in a fiat currency regime with the central bank injecting reserves into the banking system. For instance, a credit card is a pretty obvious example of credit. However, it is not money. If I buy something from a store using a credit card, then the credit card issuer pays the store with existing money. At a later date, I extinguish the debt by repaying the credit card issuer with existing money. No new money was created.

Say you write out a cheque to me for £1000. I deposit the cheque in my bank, and they ask your bank for £1000. The money already existed in your account and my bank now have an additional £11000 in reserves and yours has £1000 fewer. However, it can’t create new money with those reserves by lending them out. Imagine if it tried to create £10,000 in new loans with the £1000. People spend loans and the bank would fall below their minimum reserve requirement if the money was deposited in other banks.

If the bank is operating with a 10 percent reserve requirement it can only lend out £900. However, when it lends that £900, it is not creating money because the money already existed originally in your account. Therefore, a bank can’t lend more than its excess reserves.

Say the £900 is lent out and deposited at another bank, which will keep £90 and lend out £810, and so on. At face value, it may look as if the banking system as a whole is creating new money from that original £1000, as new loans are being extended. However, every bank’s gain in reserves is cancelled by another bank’s loss of reserves. Therefore, all that is happening is reserves are shuffling around the banking system and they are creating credit not new money. There can be no bank multiplier on net. Obviously, outside money, banks not at their reserve limit and banks having excess reserves can change the calculation. However, that is not important to our scenarios. What matters is the banking system simultaneously contracts by a multiplied amount of the original deposit/withdrawal.

Even if we are dealing with currency rather than cheques or electronic transfers it does not matter. Every deposit in the banking system is a prior withdrawal from the banking system. Moreover, when the currency is deposited in a bank it is only restoring the prior contraction in the money supply.

The only body in a fiat currency system that can inject new reserves into the banking system is the central bank. The injection of these new reserves create new money and are multiplied on net Through open-market operations the central bank adds new net reserves to the system, which enables the money-multiplier process with no offsetting loss in reserves elsewhere. Without the central bank doing OMO’s no new money can be created in the banking system.

New injections of currency can cause the money-multiplier process, but the central bank is the monopoly supplier of currency to commercial banks. The monetary base, consisting of bank reserves, total supply of currency and bank deposits at the central bank is totally under the control of the central bank. The commercial banks can’t create currency and they can’t create additions to the total amount of deposits at the central bank. Therefore, money creation originates with the central bank increasing the monetary base, the banks increase the supply of money by lending their excess reserves.

Did you actually look at the link? http://www.economania.co.uk/where-money-comes-from.htm

Credit cards, by the way, have nothing to do with credit. Banks can create money but they need our signature to do it. It’s a two-part process, one is the bank’s license to create money and the other essential is our signature, you need the two. Credit cards encourage us, unwittingly of course, to create more money into circulation on the understanding we have to give an equivalent amount to the bank. We’re conned into thinking it’s some kind of loan when it isn’t. We encourage chickens to create eggs so we can have more and the banks encourage us to create money into existence so they can have more, dressing it up as loans and credit so we won’t twig it. Another very nice scam.

BB

@40 Mike

“For example, my late father finished his career as MD of a British Steel accounting unit, a foundry which produced heavy kit for the rest of the industry. He was very proud of the fact that he ran it at a profit, and I’m not sure that our relationship ever recovered from my insisting on telling him that he only did so because British Steel itself decided how much he “sold” his product for. ”

This is irrelevant. It is internal management accounting for British steel. It has no impact on the overall accounts of British Steel which is what is important for this discussion.

[60] Well, it’s certainly irrelevant if you frame the terms of the discussion narrowly enough.

In the real world, however, almost all firms large enough operate what they call “profit centres” and whether these are mere accounting practices or bear some closer relation to the real world the concept and the numbers it produces often have a critical effect on people’s lives.

And my father never understood why, if he was making British Steel so much profit, they wouldn’t let him build a state-of-the-art foundry to make them even more!

@61

You quoted this as an example lof dodgy accounting practices. It is only used for internal reporting purposes to make management decisions. It has no impact on the public accounts or the overall profitablility of the company.

It will only have an impact on people within British steel.

[61] Do you realise how obnoxious you sound? Of course, with a nom de blog like yours, it’s highly unlikely that you care tuppence.

No I don’t care. Please explain the relevance of your example.

We really are at a crossroads in this country. The last election gave us such an uncertain result because we, the people, were collectively fed up with a range of people, but politicians and bankers topping the list.

The sheer scale of the economic woes makes us befuddled.

It is clear how impotent politicians are in this country, and indeed around the world against the financial markets. You only have to look at events in the US and the EU to see this.

The fight against inflation has been privileged to the point where democratic government are unable to rebalance in favour of society.

Social order is based on the idea of implicit promises. These are tacitly acknowledged by all.

A number of these promises have been broken by the politicians and by those in power, more generally.

There are general promises around honesty, integrity, observation of rules and acting in all our interests in the long term.

Now, I am not saying that these thuggish yob looters had that in mind when plundering Curry’s for a Plasma TV.

No such simple causal relationship exists.

It is about ‘inputs’ over decades, and though immensely painful, we should not be surprised at the consequences.

The behaviour of the looters actually reflects general attitudes prevalent within our society.

A stake in society, seems to simply be about a pricing structure. My speculation is just acceptable risk taking. Boldness even. Moral hazard is borne by the taxpayer. Your indebtedness, your negative equity, your joblessness is just poor management and bad luck.

It is wrong to steal a laptop from PC World, but my bonus is reward for bringing ‘shareholder value’ by dubious practices.

It is now evident that societal values are so warped that rampant consumerism, bling, celeb fame, ‘live fast die young’ philosophy are the drivers. The state withdraws from education, supporting socially beneficially jobs, wider social interests and so on. And many wring their hands when things go belly up.

It is now time to make more meaningful promises to each other. And act on these.