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"Allister,
Thank you very much for getting back to me. An unexpected pleasure.
My view of the current mess is along the following lines:
too-free markets coupled with too much power concentrated in certain hands, e.g. banks.
I back this up with my view of the excessive payments for failure. Why have we seen failure rewarded with such amounts? I would like to answer this myself, in the mean time I speculate that concentrated, unaccountable power is to blame. Shareholdings is a perfect example as the majority of shares are owned by rich powerful blocks, not numerous poorer people.
I agree that aiming vitriol just at bankers is simplistic and therefore silly. I believe that the blame rests at the feet of bankers, governments, electorates, shareholders, and consumers. But primarily with the bankers because of the prevalence of debt and the excessive leverage against property which has underpinned the consumer boom we have seen. I would include the addiction to debt more widely as another example of this. This is why I blame all the parties involved, and whilst you blame monetary decision makers, I would partly agree but look at the bankers who have exploited this situation for their own ends.
Banks going to the wall has very important implications for staff and savers, who I believe should be protected. There are places like north England, south Wales and Cornwall still recovering from the recessions of the 1980s. All I mean by that is the importance of considering the social consequences of letting large businesses going to the wall.
Bankers are getting hated because they are getting huge bonuses, on top of huge salaries, at a time when people are loosing their homes and jobs. Credit is still squeezed, especially for SMEs. The latter being an important part of my work.
I am certainly sympathetic towards this view, even on a purely emotional level."
Showing posts with label City AM. Show all posts
Showing posts with label City AM. Show all posts
Tuesday, 4 August 2009
City AM
Reply to my ranting email:
"
I doubt we’ll ever agree. But my point – as I have often argued — is that following in the line of many economists over the years, I believe that the main drivers of booms, bubbles and busts is inadequate monetary policy i.e bad decision from central banks. I don’t think commercial banks are generally anything other than the conduits for these errors. When excess liquidity floods the markets, private agents and investors become drunk and take stupid decisions. It has happened time and again — in this case, what mainly went wrong was a massive global bet on the property market. There was also a secondary reason for the crisis: an intellectual error which meant that most valuation models were wrong. These points fed off each other, in my view.
You are obviously entitled to disagree, to think this is all nonsense and that I reflect the view of vested interests (I don’t: I hate bailouts and would rather that AIG, for example, not be bailed out). But you should then present an alternative theory of the way the world works and refute my explanation. I’d also be keen to understand exactly how Goldman Sachs (for example) helped cause the recession. I don’t think they did in any meaningful way.
Best wishes
Allister"
"
I doubt we’ll ever agree. But my point – as I have often argued — is that following in the line of many economists over the years, I believe that the main drivers of booms, bubbles and busts is inadequate monetary policy i.e bad decision from central banks. I don’t think commercial banks are generally anything other than the conduits for these errors. When excess liquidity floods the markets, private agents and investors become drunk and take stupid decisions. It has happened time and again — in this case, what mainly went wrong was a massive global bet on the property market. There was also a secondary reason for the crisis: an intellectual error which meant that most valuation models were wrong. These points fed off each other, in my view.
You are obviously entitled to disagree, to think this is all nonsense and that I reflect the view of vested interests (I don’t: I hate bailouts and would rather that AIG, for example, not be bailed out). But you should then present an alternative theory of the way the world works and refute my explanation. I’d also be keen to understand exactly how Goldman Sachs (for example) helped cause the recession. I don’t think they did in any meaningful way.
Best wishes
Allister"
City AM
I hate the bloke who writes editorials in City AM.
He pissed me off this morning by going on about how great it was that banks were paying bonuses and how bad it was that people would dare criticise banks.
So I wrote this to him. Reply, if any, will follow:
Dear Mr Heath,
Once again I had the misfortune of reading one of your editorial pieces in City AM this morning. Whilst I understand that it is your job to stand up for certain sections of the business community, I find your continued disregard of glaringly obvious facts starts to grate after a time. To attempt to absolve all well-paid businessmen from blame for this recession would border on the unbelievable if it were not your stock in trade. To say that “Goldman Sachs did not cause or exacerbate the recession; neither did JP Morgan” is stretching the truth to the limit.
While there are the occasional attempt at sorrow in your pieces, it goes against the vast bulk of your articles, where your line that ‘it’s someone else’s fault’ is roughly on a par with Labour’s conviction that they will win the next election, or that David Cameron has stuck to his guns.
It is unusual that I am motivated to write in in this way, usually I would put the paper down and walk away, but your pieces have almost caused me to throw the paper out of the window on more than one occasion. As a result I would ask you for at least some balance in your ‘reporting’ so that my attempts to catch up with some very important business news are not interrupted by my anger at the dross presented on the inside page.
He pissed me off this morning by going on about how great it was that banks were paying bonuses and how bad it was that people would dare criticise banks.
So I wrote this to him. Reply, if any, will follow:
Dear Mr Heath,
Once again I had the misfortune of reading one of your editorial pieces in City AM this morning. Whilst I understand that it is your job to stand up for certain sections of the business community, I find your continued disregard of glaringly obvious facts starts to grate after a time. To attempt to absolve all well-paid businessmen from blame for this recession would border on the unbelievable if it were not your stock in trade. To say that “Goldman Sachs did not cause or exacerbate the recession; neither did JP Morgan” is stretching the truth to the limit.
While there are the occasional attempt at sorrow in your pieces, it goes against the vast bulk of your articles, where your line that ‘it’s someone else’s fault’ is roughly on a par with Labour’s conviction that they will win the next election, or that David Cameron has stuck to his guns.
It is unusual that I am motivated to write in in this way, usually I would put the paper down and walk away, but your pieces have almost caused me to throw the paper out of the window on more than one occasion. As a result I would ask you for at least some balance in your ‘reporting’ so that my attempts to catch up with some very important business news are not interrupted by my anger at the dross presented on the inside page.
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