Cable says tuition fees rise is 'on the right lines'‏

Once again, when the tough decisions are needed the Lib Dems have rolled over to have their tummies tickled in the face of power. The speed with which they have abandoned just about everything they stood for at the election is really staggering. They give two-faced turn coats a bad name.

and when Cable announced it, "No-one in his party stood up to protest".

I personally think fees should be scrapped and replaced by funding through the direct tax system, the only way to make it fair.
I think the introduction of competition is the worst thing when coupled with fees as those who are poorer or looking to get less-highly paid jobs may see the better option as going somewhere cheaper and accepting a cut-price education rather than fulfilling their potential, while those who can afford a better education will get one, squeezing out more able but less wealthy competitors, for that is what students are to become to each other.
Perhaps not surprising that selective education based on wealth is the favoured route given the backgrounds of Clegg, Cameron, Osborne etc.

when is a marxist a marxist?

With the talk recently flying around about "Red Ed" Miliband and Marxist Vince Cable, the Economist brings some sense to the debate.
"One of the issues Mr Cable is referring to is the "agency problem" - that managers do not act in the best interest of shareholders. From the figures quoted in the Deutsche Bank long-term asset return study, that is a valid criticism. Earnings per share growth have lagged GDP growth over the long term. Companies have reduced the payout ratio without growing earnings sufficiently to compensate. Since the overall remuneration of executives has grown dramatically faster than GDP over the last forty years, it is not difficult to see where the money has gone.

Or as that well-known Marxist Warren Buffett remarked

"Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay.""

yeah, i'd go with that. free markets rarely work out, and the economist would go along with that to a lesser extent than me, but we broadly agree on the need for regulation:
As for markets being occasionally irrational, we have surely had adequate evidence of that over the last 10 years. Even the renowned free market advocate Alan Greenspan confessed in 2008 that

This modern risk-management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year.

The Economist is in favour of free markets, but both words are important. If banks are too big to fail, then their cost of capital is implicitly subsidised. This creates barriers to entry and encourages risk-taking at the taxpayers' expense; the market is thus not truly free. In an ideal world, we ought to be able to let banks fail in the same way that we let widget manufacturers fail. But since bank failures have a devastating economic impact, we need to have some approach to regulating them. Markets also have externalities, a concept long established in academia; a chemical company cannot be free to pollute a river, for example.

To say that any further regulation is socialism, or that any consideration of inequality is misguided, seems wilfully blind. If banks earn huge profits, and their traders huge bonuses, only because of an implicit state subsidy, that seems a legitimate matter of public concern."


and that's the thing - moral hazard. if banks are unwritten by the tax payer then the taxpayer must have a say in how the money is used. if there's a better way to do that than government involvement, maybe a civil servant or two sitting on the board, i'd certainly be open to it. but for the moment, that will have to do

Alistair Darling turns hard man but Vince Cable gets all the laughs | Larry Elliott | Comment is free | The Guardian‏

Key:
"Osborne went for the populist approach. Voters knew from their own experience that the "sooner you deal with a debt problem, the better", the shadow chancellor said. "We need to cut wasteful government spending instead of increasing national insurance taxes on hardworking people," he added. That may go down well on the doorsteps in the coming weeks, but it is economic nonsense. If the government cuts spending when households are tightening their belts, it simply leads to lower demand and a longer, deeper recession, as Darling, in one of his better interventions, pointed out."

"If the government cuts spending when households are tightening their belts, it simply leads to lower demand and a longer, deeper recession, as Darling, in one of his better interventions, pointed out.""
Exactly. It's so important and we can't get away from that

BBC - Nick Robinson's Newslog: Intriguing political role reversal?‏

"stand by for Alistair Darling to claim that it is he who is being careful, cautious and candid whilst his opponent is making "reckless" promises.

In reply, Osborne is likely to argue that he and the Tories can be trusted to get more for less from government after years of Labour tax, waste and spending."

It seems we never get out of these basic archetypes. Politicians on both sides use the same tried and tired lines over and again.

The Tories are being a good opposition, not sure they're a government in waiting. The difference being that Cameron and Ozzy are claiming to be able to do everything: cut the deficit, cut taxes, not cut services, cut services, shrink the state.
I've highlighted before that Cameron keeps saying he won't cut X, Y, or Z service, but needs to be up front and honest about what they are going to cut. But both sides think people will be scared and go silly if they are open and honest, and they might just be right

BBC News - Vince Cable: 'Chancellor said very little'‏

Vinny is right in that neither party has been honest about the cuts that are coming.
Cameron is trying to make a virtue of honesty but got scared of that strategy and is now only going on about how he won't cut this, and won't cut that.
Ozzy actually did the decent thing for the first time in his life when he made that bleak speech at the conference about how we're all fucked and all that, but I guess that didn't go down too well in the focus groups and so they retreated from that at a rate of knots.
Not that the Libs are doing anything more than muddling along, with that idiot Clegg trying to be all things to all people, saying taxes will be cut and services won't but that services won't get cut but taxes will and that there's plenty of money for this and they're being totally honest and up front guvnor.
Sad that the great profession of politics is reduced to this, but a country gets the politicians it deserves

Voters recognise they need Vince to moderate George

I didn't hear about the latest Ozzy economics idea, but it's taken apart quite brilliantly by Toynbee here. The one thing that gives me hope is that the staff in the treasury, as the SMF director told me, stop the chancellor doing anything stupid. Some may argue they were sleeping on the job when Gordy was there, but that's overly harsh.
The end bit about this election being winnable is also true. If someone more popular than Gordy was in Labour would probably win by a distance, but no-one else who opposes him has the networks or bollocks to remove him, as repeatedly shown. So we (Labour) have the leader we deserve, and soon the country will have the Prime Minister it both deserves and wants. If that's Cameron, I despair. But at least he's better than the further right in his party. Ozzy is a bit of a shocker and could probably do with being demoted before getting a proper top job. The like of a Ken Clarke or David Davies probably needs to be chancellor if it MUST be a Tory (bastard).
Having said all that, if the Tories get in this time and make a pig's arse out of it, we might be back in the next time for (hopefully) another long spell of government, with just odd short spells of the Tories coming in to make a mess of things before we go back and clean up. Let's hope.

Liberal Democrats not anti-banker party, says Cable‏

Some good proposals in there. I hope he hasn't been branded as anti-bank or anti-banker as that would be a stupid oversimplification. Means there will probably be quite a few blogs claiming that, the internet seems to overflow with idiots. What do you mean like me?! bastards

Cable sets out economic vision, but tax policy could be more "radical"

I personally think that removing the poorly paid from any income tax is a great idea. I think anyone on minimum wage should pay no direct tax, and then every pound above this is then taxed accordingly.
I'd pay for this in a fiscally neutral measure whereby the tax rates above this level were adjusted in order to compensate for the lost revenue from the change.
I'd also stick some higher rate charges in there. I've done enough on here on capital flight to show that I'm at least aware of the arguments about it.
I'm not a fan of bureacracy, so the less of it the better as far as I'm concerned. Rather than buggering around with tax credits, I'd just not take it in the first place.

George Osborne on bank bonuses

"High Street banks should be banned from paying bonuses above about £2,000 in cash, the Conservatives have said."

So Georgie Boy jumps on the bandwagon, i assume part of the Tories' 'party of the poor' comedy routine.
But he seems to have learnt something from Gordy: the devil in the detail.
"stop retail banks - in other words the banks that lend directly to businesses and families - paying out profits in significant cash bonuses"
Interestingly, the retail banks aren't the ones paying the huge bonuses, nor, really, the ones who brought about the problems in the first place.
"It would only apply to High Street retail banks, which means investment banks would be exempt."


I'm glad he's finally coming round to the idea of getting money out there: ""We need to take emergency steps to support bank lending and move the economy forward this winter. The banks have to understand that we are all in this together.""
but he seems to think that all banks' money goes to the same place (he may be right) and therefore it's that easy to move money around the banking system and get lending out there. Though that is not necessarily the best way to go and can lead to long-term unsustainable debt (sounds familiar)
So that's me confused. Tough choices, wish it was me making them


Vince Cable shows it's easier to be critical than correct and agrees with me:
""They have not given full backing to [Bank of England governor] Mervyn King's proposals on splitting up the banks and these bonus proposals are short-term, stop-gap solutions designed to stem public anger but which fail to get to the heart of the problem." "