A fair society ...

[Huguenot]

So what are you suggesting SMG, upping the minimum wage? Legislating a maximum wage?

It strikes me that a maximum wage is unenforceable, and regardless it should be up to shareholders to 'correctly' incentivise senior management to maximise return on their investment.

What about shareholders anyway? Lots of lawyers are partners in their firm, and their substantial salaries are derived on a profit share.

[HAL9000]

Those were the days ... we were pumping liquid prosperity from under the feet of ignorant natives in return for shiny trinkets and paper money and all was well with the world.

Those days are over - a new dawn has broken. Adapt or die, says my evil twin.

[SeanMacGabhann]

I get why you are pushing Brendan or me for ?an answer? Huge, but I don?t have one. I don?t think anyone does

But I would like to see more ?it can be done, let?s figure out how? discussions instead of the more ?it is what it is? bent

A blank maximum wage for example wouldn?t work but as a ratio against the lowest paid in that company? That seems like a starting point for a discussion

Shareholders ensuring correcty incentivisation? That doesn?t seem too succesful to me ? at best it can work in the short term for the company in question but as we have seen?. What?s good for the company ain?t good for the system

[Huguenot]

I can't help but get the feeling that the basic angle here is that 'equality' is to be achieved by making successful people poorer.

This proposal seems to be mixed in with a general mistrust of 'business', and a feeling that we need some revenge for a credit crunch brought about by our own greed and self-indulgence.

I don't think this is even remotely reasonable, and alienating some of our most successful wealth generators doesn't strike me as a wise move for UK Plc.

There could be a case for legislating that all employees should be shareholders, but this is a disincentive (but not necessarily terminal) for investors, for whom their dividend payment is a just return for the investment they made in the first place, alongside the risk. Disincentivise investors and you've got a big problem with your company.

The challenge with equality in the UK needs to be addressed through education and opportunity, not through manacling our waelth generators.

Much of the problem is cultural, not governmental. We rubbish and mistrust success and we undermine the education system by removing incentives to work hard. This desire to cut salaries is a reflection of this attitude - and very much part of the problem.

[Twirly]

[pre]

HAL9000 Wrote:

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> We have made great social progress over the

> centuries but there is a danger that going further

> (in the here and now) may disincentivise the

> workers - tax-payers have long complained about

> those who'd rather parasitise the benefits system

> than oil the wheels of capitalism. There is a

> limit beyond which the system breaks down - and

> the recent crisis has redrawn the boundaries.

>

> My evil twin is playing Devil's Advocate, of

> course.

[/pre]

Is this discussion about those on benefits, or those on low wages? There seems to be a danger of lumping them both into the same group.

The low pay issue is connected to how we value certain work in our society. Whilst some roles take a long time to train for well as their degree of social usefulness being higher and there can therefore be some logic in them being paid more (e.g. doctors, lawyers), for others (e.g. advertising execs, some of those in finance) it is harder to see what justifies the high salaries (I am not even sure how "market forces" can be used to justify it, personally). And yet we pay others who have extensive skills that are useful to society (teachers and nurses being the obvious examples) a pitifully low wage by comparison despite the fact that we all depend on them. And yet they'd all be royally f*cked if the poorly paid cleaner withdrew their labour!

Those who "chose" to live their lives on benefits are in a different situation, and a different solution is needed. For example, I heard on the news this morning that the Conservatives were saying that people should take responsibility for the number of children they have and whilst they could have as many as they want, they should not expect the tax payer to pay for them. Now in principle, I have sympathy with that. But in practice, there is no way I would want to see a child go hungry through the irresponsibility of the parents and cutbacks in benefits. Or anyone else go hungry, thirsty, cold or unhoused. However, I have no idea what the solution is.

[Huguenot]

Twirly, I'm not sure that you can lump together people that 'we' pay from the public purse like nurses and teachers, and those that generate wealth independently like 'advertising execs and some of those in finance'.

Salaries for teachers and nurses is simply a case of political will - both in total taxation and the proportion spent on education or health. The fact is that we vote for politicians who cut taxes and underpay public servants. We can't talk about how unfair the government is, it's our decision.

Advertising execs and financiers are paid as a reward for delivering goods or services, invariably that's linked to the effectiveness of their contribution. They are not paid by us.

Ad execs are paid by clients to sell their product. Better execs sell more product and attract higher rewards. This is not an issue in which the tax payer should be interfering. Quite simply it has nothing to do with them.

If a child is going hungry because of irresponsible parents that isn't going to be solved by throwing more public money at the parents, that's just an incentive to be more irresponsible.

[HAL9000]

Twirly Wrote:

-------------------------------------------------------

> Is this discussion about those on benefits, or

> those on low wages? There seems to be a danger of

> lumping them both into the same group.

Just pointing out that the two groups overlap in so far as low paid workers are more likely to become benefit claimants if they end up better off on benefits rather than working. The devil is in where to draw the line.

[Emerson Crane]

financiers are paid as a reward for delivering goods or services, invariably that's linked to the effectiveness of their contribution.

Are these the self same people that lose millions or billions and are still paid obscene bonuses? Very effective indeed, at achieving a bonus for themselves if nothing else. Are these the same people that you class as "wealth generators"? In my view eveyrbody in paid employment is a "wealth generator", and all bring something to the economic table. The nurse will help to put people back on their feet and back earning a living, a teacher will help produce future "wealth generators", an administrator will help to put together paperwork for a "welath generator" to go out and generate wealth for the company. All of us in our own way put something into the pot. I abhor this idea that people in banking, finance, etc are the only ones that bring something to the table and that the poor dears are being picked on.

[HAL9000]

Twirly Wrote:

-------------------------------------------------------

> I have no idea what the solution is.

No one knows - we are on the cusp of a new paradigm. No one alive has ever experienced what is about to unfold. All we know from history is that past civilisations have collapsed so suddenly that no one survived to tell the tale - only centuries of silence marked their passing.

But that can't happen to us, surely - they say?

[DJKillaQueen]

I don't think this is even remotely reasonable, and alienating some of our most successful wealth generators doesn't strike me as a wise move for UK Plc.

Err you mean like the banks who yesterday were reported to be paying out bonuses at almost the level before the global crisis they caused.....

Give us a break....something has to be done to curb the wreckless greed that has put us in this mess...a mess that the poorest will pay for most.

[Huguenot]

Nurses and teachers are paid by you. You set their salary when you go to the ballot box.

If financiers are getting bonuses for losing money, then that's an issue for the shareholders, not you. You can only vote with your feet by not buying their product.

If the shareholders are taxpayers - for example because of a bailout - then it's right and proper that we should be setting bonus levels. The consideration of the Exchequer, rightly or wrongly, was that the bailout would be repaid faster if they were to resume business as usual.

However, most people are more interested in the money than the ethics of the supplier, or they'd all be with the Co-op.

[DJKillaQueen]

Nurses and teachers are paid by you. You set their salary when you go to the ballot box.

No we don't...public sector pay was not part of any manifesto this time round and I do believe no party won the election with a majority. And you know as well as I do that the parties on offer are limited and it would be near impossible for any new party to form and effectively win a general election. We are locked into a fixed system that protects itself.

It is an issue for us when taxpayers money bailed out the banks. We have every right to be angry at those corporations and how they do business, especially when most of them are multi-nationals who destroy competition by fixing or offering products only marginally different from each other whilst protecting their profitability and control over the market.

[HAL9000]

Just to put things into perspective: the western economic system hasn't generated any real wealth (or 'growth') for something like twenty years now. The illusion of wealth was merely the product of various asset bubbles and Ponzi schemes, most of which haven't even started to deflate yet - thanks to mind-boggling multi-government intervention in our once exalted free-markets.

The bottom line is - the system is broken: I'm not sure anyone really knows how to fix it without causing a lot of pain and suffering or - worse case - killing the patient.

[Huguenot]

DJKQ - that's a perfect example of what I was referring to earlier. It's like we're out to 'get' bankers.

Bankers didn't cause the crisis, everyday people did. It was precipitated by the excessive numbers of people that were borrowing money they couldn't afford to repay. This isn't the banks fault, this is greedy people.

The thing we (not the banks) should have done is legislate so that banks couldn't become too big to fail, and increased the minimum levels of cash reserves. We probably should have stopped share trading in the financial sector

People are entitled to pay themselves whatever they want so long as they're making the profits to cover it.

[mockney piers]

well yes and no Huguenot.

Many of the banks that are only still there because of taxpayers money, and some specifically have the government as either large or majority shareholders, a government supposedly acting in our interest with our money, so I do think we have a say whether excessive bonuses are paid to those who are making huge profits thanks to UK plc underwriting their toxic debt and injecting huge amounts of liquidity into their organisation for them to gamble again.

And yes it was those who borrowed more than they can afford to pay back who were at the root of this, though in many cases they were knowingly missold and indeed misinformed about what was happening and what the risks were. Those that did it were only interested in their commissions and were happy that greedy bankers were buying up this rubbish debt because greed and arrogance made them think that their clever quants had finally learned how to turn base metal into gold.

This couldn't have been done without the deregulation they'd leaned on governments to do and the rubbish regulatory systems said governments had acquiesced under pressure (and err greed) to install.

Most of those 'greedy' people on the bottom rung just wanted a modest roof over their head; to place full culpability on their shoulders is twisting things too far in my opinion.

[HAL9000]

Huguenot Wrote:

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> This isn't the banks fault, this is greedy people.

I think most of the fault lies with the governments who removed the tried and tested checks and balances essential for the proper regulation of the financial and banking sectors. And the spotlight must fall on the US authorities in particular.

One can't blame hapless homebuyers who merely wanted to share in the capitalist dream and were enticed into undeclared risk by easy-to-obtain loans.

[HAL9000]

Snap!

[mockney piers]

uncanny, is this the start of something beautiful?

[louisiana]

Huguenot Wrote:

-------------------------------------------------------

> So what are you suggesting SMG, upping the

> minimum wage? Legislating a maximum wage?

>

> It strikes me that a maximum wage is

> unenforceable, and regardless it should be up to

> shareholders to 'correctly' incentivise senior

> management to maximise return on their

> investment.

Shareholders do little. Even major institutional investors (some of whom are rebelling against excesses) have problems achieving anything. Small shareholders find it almost impossible to organise. Mostly shareholders just rubber-stamp what senior management want. The model is broken.

[Huguenot]

If public sector pay increases weren't in anyone's manifesto that's because it loses votes.

People at the top threshold are already paying 51% of their income into the public purse. That's a huge amount.

To increase public sector salaries you either have to increase tax, or shift spending from other areas. Both of those are vote losers.

There isn't a conspiracy because one simply isn't needed. It's odd to 'accuse' banks of self-interest, but only because it's a given. We all practise self-interest: banks, nurses, teachers, Tube unions.

I can understand that it's infuriating seeing these chaps make megabucks, but that's the price of freedom.

I've taken a huge risk on selling my house and launching my own business, and I'm entitled to reap those profits. If I've been so successful my profits are astronomical then I'm entitled to a Ferrari. For people to suggest I shouldn't be allowed access to the profits of my own hard work is outrageous.

If it applies to me, then it also applies to bankers.

[louisiana]

HAL9000 Wrote:

-------------------------------------------------------

> Twirly Wrote:

> --------------------------------------------------

> -----

> > I have no idea what the solution is.

>

> No one knows - we are on the cusp of a new

> paradigm. No one alive has ever experienced what

> is about to unfold. All we know from history is

> that past civilisations have collapsed so suddenly

> that no one survived to tell the tale - only

> centuries of silence marked their passing.

>

> But that can't happen to us, surely - they say?

I think it would be a good idea if a whole lot more people read Joseph Tainter's book The Collapse of Complex Societies. It's a great book, and has lessons for where we might be going wrong.

[Huguenot]

Piersy I agree that those banks that are supported by taxpayer money should be responsible to the tax payer.

It was and remains a tragedy that the government couldn't leverage these shareholdings to legislate particular bonus issues.

What I'm protesting is that bankers are being singled out for what everybody does - act in their own interests.

We have lax regulations because our government made the calculated gamble that the potential benefit outweighed the potential risk. A gamble that in hindsight proved to be incorrect.

Either way, the conversation is about a 'fair' society - but what it appears is that we're not after a fair society, so much as punishing the wealthy. I think it's a poor strategy, and in the end we'll only be punishing ourselves.

[mockney piers]

"It was and remains a tragedy that the government couldn't leverage..."

I'd alter the c to a w, I happen to know that her maj's gov't has made a tidy 6 billion out of the Lloyds Banking Group shares it holds, that's 6 years worth of child benefit thinking about it.

[DJKillaQueen]

I'm with MP on this.

H - be thankful you earned enough to buy a house in the first place ...or maybe you are of an age where you were lucky enough to buy at a time that houses were still cheap. If the latter is true then you have benefitted from the artificial housing market created and facilitated by the deregulation that MP is referring to. It's not hard work that got you there but a system that rewarded those who got in at the right time with ridiculous levels of growth compared to other capital purchases or investments to follow.

Many people work 14 plus hours a day...have always worked and have nothing to show for it. So can we please get away from this idea that hard work and education equate to wealth...they damn well don't as anyone with an ounce of intelligence knows.

You need money to make money.....and most never get wealthy working for someone else.

[reggie]

Child benefit has for our family been a very nice addition, in fact we have been putting it away for the last 10 years to help give the kids something at 18...how smug is that?

Is it fair that child benefit is cut for higher earners...of course.

The issue of fairness is coming up with public sector pensions, I can hear the squeals coming over the rooftops already.