The real cause of our woes

1:55pm Thursday 11th October 2012 in Letters

WE SHOULD remember the recession was actually caused by the greed of corporations who racked up huge profits by keeping workers’ wages low and by moving lots of production overseas, eg China. The problem of how workers can then purchase goods and services so that profits can be obtained was solved by making easy credit available. Governments also fostered housing bubbles so homeowners could borrow against the value of their homes.

When the US housing bubble burst, banks went bust and the whole rotten capitalist system went into freefall!

Greedy bosses/shareholders and bankers were the culprits as they did not realise the true cost of not distributing the wealth created. Given the above, as bailed-out banks and many profitable corporations are financially sound, why the need for austerity? If we add the billions lost through tax avoidance by the rich to the equation we must conclude that this imposed austerity is being used callously to roll back public services and the welfare state. The latest victims of the Con/Dem government’s class war to be scapegoated are mums on welfare who are to be financially punished for daring to give birth whilst on the dole! Make no mistake, Nye Bevan was absolutely right about the Tories! Terry Banfield, Cardigan Crescent, Cwmbran

Comments(22)

Gareth says...
2:13pm Thu 11 Oct 12

Classic finger pointing. Everything wrong in our lives HAS to be someone else's fault.

Do you think we should take no responsibility for purchasing cheaper Asian white goods instead of more expensive UK-produced goods?

Do you think we should take no responsibility for taking out those morgages, loans and credit agreements knowing fully well how much they would cost us in the long run?

Of course not. It's not my fault. I have no personal responsibility in this. It's his fault. It's her fault. It's their fault - those people in suits.

It's everyone else's fault but my own...

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A. R. Hill says...
2:17pm Thu 11 Oct 12

I think you forgot the deficit Labour left Mr Banfield, so don't try to bang on about class warfare, it's Labour's fault as well

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Llanmartinangel says...
2:42pm Thu 11 Oct 12

And lets not also forget Blair's huge growth in the public sector and welfare budget which meant that the country borrowed beyond it's means so that some people could live at someone else's expense for life.

Isn't it odd that if a corporation lives beyond it's means it's reckless mismanagement. If several million people do it, it's someone else's greed.

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Riley2012 says...
8:17pm Thu 11 Oct 12

Labour Lib/Con's, once what ever party come into power they do the opposite, get all that's good for the old boy's club and let the voter's that put them in power suffer, they are all crook's in pin stripes, if you could collect all the hot air they puff out it could heat up most of the homes in the UK, you cannot trust any of them.

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james jackson says...
11:20am Fri 12 Oct 12

Terry Banfield makes very valid points. It's nothing to do with "class" warfare and everything to do with greed by bankers, corporations and war profiteering. It's easy for people to complain about the average British citizen overspending and living beyond his or her means, but not so long ago it was fashionable, even encouraged for people to spend, spend, spend and max out on credit cards. They were exhorted to do so. It was the done thing.
But before the average man or woman is condemned further, ask yourselves why such things as cheap airlines; cheap loans; easy credit; easy mortgages; second homes to rent and rip other people off, came about in the first place. It sure wasn't to benefit the general population. It was to benefit those agencies that saw a way to maximise profits and virtually enslave people with debt.
Add to that privatisation of public assets and people are shackled further.when they have to find the money to pay massively increasing fuel bills etc. (See British Gas shocking price rise announced today.)
People are not feckless just because they find the goal posts moved when it comes to making ends meet.
Don't be so ready to **** Mr Banfield. Do the research!

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Gareth says...
11:55am Fri 12 Oct 12

An interesting post James - nicely written argument. That said I can't agree with the basic premise that we were forced - exhorted, as you put it - into anything.

We see hundreds of adverts every day telling us how much the purchase of their brand will improve our lives. It is up to us whether we buy into that.

I dare say that Bannantyne's will see a return on investment for their (annoying) advert on this website... but i'm not signing up ...and i suggest many others won't either. Why not? Because we've seen the advert and decided it wasn't for us... for whatever reason.

See, we can take personal responsibility for making the decision not tojoin the gym because the result of that decision isn't a bad one (well, apart from the widening waist line...!) and we do it all the time when the result is good (well cooked dinner, great goal scored at Sunday footy, a lovely reverse into a tight parking bay...). However, the moment a decision we made has bad results, then it's someone else's fault.

We are great at abdicating responsibility for our lives because it feels better to blame someone else.

As we've both seen on this site over the years, no unemployed person has ever put their hands up and said: "You know what, I wasted years of free education and now I am less employable than most everyone else."

No chance.

It's the teachers' fault. It's the system's fault. It's the immigrant who stole my rightful job. It's everyone else's fault but my own.

Did the bankers do wrong? Absolutely. Should there be a lot more suits in prison right now? Totally. Are there money-grabbing people out there who tempt us to buy their goods and services? Every minute of the day. Would I close down every one of those "got no food? We'll give you a few quid for your gran's wedding ring" leeching companies? Oh yes.

But the fact that they offer something is no excuse to taking it. To abdicate ourselves of all blame over decisions we made that didn't work out... that's just plain wrong, James.

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james jackson says...
3:41pm Fri 12 Oct 12

Gareth, You put forward a good argument We can't and shouldn't generalise, but that applies to those who work and are industrious, as much as to those who don't - or can't.
I generally ignore adverts that pop up in front of me because I don't like having my reading matter (whatever it is!) spoiled by these annoying intrusions. Having said that, I don't watch adverts on TV and ignore them in newspapers and magazines. If I want something I'll buy it and work out if I can afford it before I do.
But you must admit that throughout the late 1980s and early 90s in the "loadsa" money era, people did respond to these things and probably spent beyond their means.
It's a fact that in America, there are millions of people accessing food banks and have lost their homes. Homes that they shouldn't have ever been given mortgages on in the first place. It was boom time for the bankers. So when people are unhappy and are blaming others, it's not just society's "wastrels"; it's decent people from across the country.
It's not their fault that they've bailed out the banks to the tune of £40,000 per household. Those are eye-watering figures. It's not their fault that they've lost their jobs and their standard of living is falling. These are real grievances and the present government (all governments to be accurate) has no answers.
Now the other people you mention - those that didn't learn at school; those who don't want to work, well they are in actual fact a minority. I don't like this scape-goating of poor or uneducated people. It's not right. If you have time, research how "classes" have risen and fallen since university expansion in the 1960s.
If one is the child of an unskilled labourer, chances are one's children haven't moved out of that socio-economic group.
Whether we like it or not, there are parents who are educated and parents who are not. When children are hungry, cold or inadequately clothed, no amount of teaching about Henry V, or exciting science experiments or the most beautiful music will do it for these youngsters.
They have every right to feel excluded from the good things society has to offer. And it's easier to blame others, simply because they have no power to effect change themselves - even if they wanted it.

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Gareth says...
4:25pm Fri 12 Oct 12

I really cannot argue with any part of that James. Debating any of those facts would be nothng but an exercise in futility.

Granted, there are a whole section of people who are in trouble for no real fault of there own. You lose a job, and good, manageable debt becomes a nightmare overnight. My issue is not with people who are having a tough time for no fault of their own. Crikey, we are in a tough place at the moment and most of us are feeling it.

But I would suggest that those people are not the ones wasting their time blaming other people; they are putting it to better use looking for a new job - taking responsibility and finding a way to solve the problem they find themselves in.

I really am not advocating that we have total control/responsibili
ty for everything that makes up our lot in life. Not at all. My issue is with the people who we cannot take responsibility for ANYTHING that makes up their lot in life.

And I'm not actually scape-goating the under-educated at all. My whole point is against such a blame culture; pointing fingers at a single group and saying "they are the reason my life hasn't turned out well."

When I talk about taking personal responsibility, I do not discount that bad things happen to throw you off track in life for no fault of your own (bad education, losing a job etc). What I'm trying to argue (and badly it seems!) is that you take ownership of the position you find yourself in and work to solve it.

...instead of blaming other people for everything.

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Llanmartinangel says...
6:33pm Fri 12 Oct 12

It is interesting that when I was recruiting people recently I was contacted by Eastern Europeans prepared to do anything. The people sent to me from job centres either didn't turn up or gave me 101 reasons why the hours weren't ideal or how they had 'child care issues'. Clearly a life on benefit was easier/preferable. More than a million from E Europe managed to find work here which gives a lie to the 'there aren't any jobs' mantra. We spend £117 Billion on 'working age' benefits. That's treasury figures. Who are the mugs?

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chris227 says...
1:14pm Sun 14 Oct 12

I don't think life on Job Seekers £70 a week you are going to be living a rock stars life style thats for sure but those claiming to be sick and working as well can when combined with the housing benefit do very nicely. I know 2 people on incapacity one works for cash on a building site and one drives a taxi.

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On the inside says...
6:18pm Sun 14 Oct 12

I once asked a beneifts fraud manager 'If your dept was cut to the bone who would you target to maximise the chances of catching benefits scroungers, the unemployed, the sick, single parents, immigrants, the disabled, single parents?'

His answer?

Pensioners!

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adrian simmonds says...
7:58am Tue 16 Oct 12

I sugest Mr. Banfield emigrates to North Korea, the one fully communist state left standing. He can then join the queues for food and essentials as millions of people have to do each day. But he can be happy because he will have escaped all those thieving capitalists.

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james jackson says...
10:56am Tue 16 Oct 12

That's a rather silly argument Adrian, as Terry Banfield advocates no Korean-style communist dictatorship.
He argues for fairness and justice, as I do I and other people concerned with social justice.
I'd rather have people speaking up for the disadvantaged, than people like the odious chancellor and his prime minister, - and indeed Blair and Mandelson in their day - who are interested only in the rich and how they can keep their precious lifestyles.
One point worth remembering. Benefit fraud = £1 bn (bad enough of course) but tax fraud = £20 billion. That could help a lot of people and there'd be little need for swingeing welfare cuts.

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adrian simmonds says...
11:55am Tue 16 Oct 12

James, my reference to North Korea was obviously tongue in cheek but faced with the extremism of Terry Banfield I felt it only right to redress the balance. I also believe in fairness but you can argue all day about what would be fair taxation and benefits policies. The figures you quote for benefit fraud and tax " evasion" may or may not be correct but they're probably guesswork. I suspect that £1 billion for benefits fraud is well short whilst 20 billion for taxation may well cover illegal tax evasion by individuals and fully legal tax avoidance by individuals and companies. In that context, I see today that Starbucks has spent 10 years in the UK and never paid any tax. They are presumably avoiding tax by their American parent charging them excessive "royalties". This is an abuse which HMRC should jump on as where's the logic in running a firm for 10 years with continuous losses?
But I wouldn't go along with the ant-business attitude of the Lib Dems. Stamp out abuses, yes, but don't throw out the baby with the bathwater.
As somebody said a long time ago

"You won't enrich the poor by impoverishing the rich" bcompaniescthow mubeliteryo

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james jackson says...
2:03pm Tue 16 Oct 12

I know it was tongue-in-cheek!
You raise good points too Adrian, especially about companies such as Starbucks.
HMRC's own figures state that benefit fraud is £1.2 billion while tax fraud is £14 billion.
However, tax evasion is running at £4 billion and the hidden economy also £4 billion.
There are mind-boggling amounts of fraud going on that the rest of us honest people cannot imagine. For example: Insurance fraud £2.1 billion; telephone banking fraud £16.7 million (small in comparison) and mortgage fraud, £1 billion. Then there are criminal attacks on the tax system (false IDs etc) that amount to another £6 billion.
Those girls and boys at the tax offices have their work cut out.

And finally, nobody is saying that the rich should be impoverished so the poor can be enriched.
We're talking about fairness - a level playing field, where billionaires pay their share.
Or maybe we all subscribe to another old maxim: "The rich man in his castle; the poor man at his gate. God made them high and lowly and ordered their estate."
Or: All men are born equal, but some are born more equal than others!

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Llanmartinangel says...
5:11pm Tue 16 Oct 12

There is merit in both of the last two posts. The Starbucks example particularly although I wonder how may of our companies behave similarly with their foreign subsidiaries from which UK pension funds benefit. The global financial system is so complex that plugging leaks in tax systems like ours is, as you point out, virtually impossible. I wonder how many people knew about the tax avoidance scheme (I.e. legal) allegedly deployed by Jimmy Carr and Gary Barlow? I certainly didn't. Where tax policy is concerned, I'm reminded of the old maxim, 'show me a ten foot security fence and I'll show you an eleven foot ladder'. What I do know is that France's Msr Hollande looks destined to fail by trying to take 75% of everything over £1M euros per annum. French billionaires are just buying flats in Belgium. And then instead of getting half of what they earn he gets nothing.

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adrian simmonds says...
6:19pm Tue 16 Oct 12

Llanmartinangel hits the nail on the head. But how can you stop ALL tax avoidance schemes? It's arguable that buying an ISA every year is tax-avoidance. Up until 2000 I worked for an international group where the most important man was the tax expert and offices in Dubai and Zug, Switzerland were more than useful for saving tax. But I was told some years ago that HMRC were looking "behind the transactions" so if a business deal was made in London, having the invoicing and hence the profit channelled off via a low taxation country wouldn't work but the case of Starbucks suggests that HMRC are not doing their job properly. And how many other companies are doing the same?
I believe in capitalism but companies should not be allowed to avoid tax like that.

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Mudwolf says...
11:40am Fri 19 Oct 12

How high taxation works:
Tory scenario: Person makes a million quid so pays two hundred thousand tax.
Labour scenario: Person makes a million quid so pays half a million quid tax.
Real result, Tory millionaire lives in Sussex, Labour millionaire lives in Dubai.
Sussex millionaire contributes 200,000 labour millionaire contributes nothing.
The higher rate of tax in the USA is 30% for those earning in excess of 100,000 per annum and forget exchange rates, what costs a pound over here costs a dollar (or less) over there.

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Mudwolf says...
11:44am Fri 19 Oct 12

How high taxation works:
Tory scenario: Person makes a million quid so pays two hundred thousand tax.
Labour scenario: Person makes a million quid so pays half a million quid tax.
Real result, Tory millionaire lives in Sussex, Labour millionaire lives in Dubai.
Sussex millionaire contributes 200,000 labour millionaire contributes nothing.
The higher rate of tax in the USA is 30% for those earning in excess of 100,000 per annum and forget exchange rates, what costs a pound over here costs a dollar (or less) over there.

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Mudwolf says...
4:15pm Fri 19 Oct 12

adrian simmonds wrote:
I sugest Mr. Banfield emigrates to North Korea, the one fully communist state left standing. He can then join the queues for food and essentials as millions of people have to do each day. But he can be happy because he will have escaped all those thieving capitalists.
Or France!

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Mudwolf says...
4:27pm Fri 19 Oct 12

adrian simmonds wrote:
Llanmartinangel hits the nail on the head. But how can you stop ALL tax avoidance schemes? It's arguable that buying an ISA every year is tax-avoidance. Up until 2000 I worked for an international group where the most important man was the tax expert and offices in Dubai and Zug, Switzerland were more than useful for saving tax. But I was told some years ago that HMRC were looking "behind the transactions" so if a business deal was made in London, having the invoicing and hence the profit channelled off via a low taxation country wouldn't work but the case of Starbucks suggests that HMRC are not doing their job properly. And how many other companies are doing the same? I believe in capitalism but companies should not be allowed to avoid tax like that.
As long as loopholes exist, tax avoidance will continue un-abated and why not. Saving yourself tax money legally is no different to seeing a book you want in W H Smith then buying it on Amazon for half as much. The crucial point is if you operate within the law to minimise the governments take of your earnings you are doing nothing wrong or for that matter immoral. If the public want Wayne Rooney or all those BBC presenters to pay 45% of their income in tax then they need to lobby their elected member to get the law changed.

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Gareth says...
4:34pm Fri 19 Oct 12

any employee will say the same, as they've no say so over their tax. But once you become self-employed or company boss, you're going to listen to your accountant and look after number one. It's just natural. Morality doesn't come into it.

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