Sunday, November 08, 2009

Gordon and Darling: insane bastards

The BBC—even the BBC—is reporting that the latest stupid idea from Brown and Darling has received a "lukewarm reaction".
Prime Minister Gordon Brown's idea of a financial transactions tax has received a lukewarm response from G20 countries.

The proposal, which took delegates by surprise at the meeting in St Andrew's overshadowed other items on the agenda.

Naturally. Gordon's idea of being "statemanlike" is just throwing in ideas that are not on the agenda. This one-eyed Scots idiot seems to equate lobbing in stuff that no one has prepared for to being "radical". It's this silly fucker's standard tactic.
The US said it would "not support" a transaction tax and Canada added it was "not an idea we would look at".

The Conservatives said that Downing Street had previously "poured cold water on this proposal" and that the Treasury had called it "unworkable".

But what is the standard protocol for by-passing silly little local governments...?
Chancellor Alistair Darling said the leaders had agreed the International Monetary Fund should now consider the possibility of introducing an international transactions tax, which would be used to create a fund for bank bailouts.

That's right: you submit it to a supranational body who will attempt to enforce it on everyone anyway (remember Blair trying to get the EU to force ID Cards on us?).
He said governments should consider whether it would be possible to develop a tax that would be universal, comprehensive in scope and compatible with financial stability, as well as fair and which would not "distort things".

Taxes always distort things, you stupid fuck.
He described the idea as "clearly work in progress, it will take time to develop but it is, I believe, an important piece of work".

Yes, yes it is an important piece of work—if, by "important", you actually mean "completely fucking insane".

Look, the government now owns most of our banks; it has a duty to ensure that they can make a decent profit so that we taxpayers—those of us who pay for our government's profligacy—can get some of the money back. This Tobin tax would, quite obviously, make that long climb back to profitability considerably longer and harder.

Now, I am no economist, quite obviously, but some people do have the relevant training. So, first up, Timmy discusses the reasons why Tobin suggested such a tax—to "throw “sand in the wheels” of turbo-charged capitalism" in a world of fixed exchange rates (which ours is not. Until the world currency anyway)—and how it would have unintended consequences (surprise sur-fucking-prise) in penalising those who are not eeeeevil bankers.
We now have the Austrian Government making the decision about whether my trades on the currency markets are necessary or not? As just a very minor example, my income is variously in $, £ and €. My expenditures are similarly, variously in $, £ and €. Incomes in one corrency rarely match with outgoings in that same currency so there’s a certain amount of shufling things around month by month. But according to the Austrian Government I should be taxed because, umm, well, apparently I’m some bastard international bank who deserves to be screwed.

You can levy a tax wherever you like. But just because you levy it somewhere doesn’t mean that that’s where it stays: there is this thing called tax incidence.

And as the report says, we do have a transaction tax on financial transactions in the UK: Stamp Duty on share transactions. And who actually bears the economic burden of that tax? The wheelers and dealers? Actually, no: a report back in 2002 pointed out that it was individual’s pension funds that bore part of the brunt, the other major effect being a rise in the cost of equity capital to UK based firms. And as we know, a rise in the cost of capital shows up in the workers’ paycheques as a reduction in them.

So far from a Tobin Tax screwing the bankers, it, once again, screws the workers.

And Chris Dillow expands on all of this, helpfully pointing out that the bastard tax wouldn't bloody work anyway—and, just to ram home how fucking nuts this is, outines why it wouldn't even have stopped the current problems.
  1. It would have done nothing to have stopped this financial crisis, and might even have made things worse. The two markets upon which a tax would impinge most - FX and stock markets - played little role in this crisis; they were, as near as dammit, innocent bystanders. The tax would not have stopped RBS overpaying for ABN-Amro, would not have stopped HBOS making bad loans, and probably wouldn’t have stopped Northern Rock funding its mortgage lending by borrowing in wholesale markets.
    What the tax might have done, though, is reduce the liquidity of mortgage derivatives. But this was, for many banks, precisely the problem. As Alistair Milne describes in The Fall of the House of Credit, the problem with many “toxic assets” is not so much that they were devalued by defaults, but rather that they became illiquid, untradeable. A transactions tax might have exacerbated this problem.

  2. ...

  3. A transactions tax does not necessarily stabilize markets. It might do the opposite. As Andrea Terzi points out (pdf), such a tax doesn’t so much reduce short-term trades as trades with low expected gains. However, these trades are often stabilizing trades - those done by arbitrageurs hovering up pennies.
    If the tax bears more heavily upon these than it does upon noise traders, then it might make bubbles more likely, not less.

Which all goes to show that Gordon Brown—a Labour historian*, by the way, not a fucking economist—and Alistair Darling (a total fucking ignoramous Trotskyite cunt of a lawyer) know less than fuck all about economics, and that the pair of them are barkingly insane.

Unless, of course, all that they are interested in is taking control of the entire money supply and thus ensuring complete control over the British nation—in which case, they might just be evil genuises.

UPDATE: Capitalists@Work have dubbed this The Worst Policy of New Labour, Ever.
What really staggers me though is that Badger and Brownstuff could promote this idea in the very week in which they confirm the UK taxpayer is to own the largest international bank in the world by assets and 43% of another top 20 bank.

So the UK government now owns banks and is advocating a policy which will cripple their recovery. This is beyond stupidity, it really is.

In years to come the political world will have a new lexicon for all this Government;

'as stupid as a Brown plan'—for a truly appalling policy announcement

'even Brown would not have done that'—for a real turkey of an idea

ad infinitum.

Doesn't everyone already use these phrases...?

*The title of his PhD thesis—which took him ten years to complete—was The Labour Party and Political Change in Scotland 1918–29. The man is a fucking twat who knows bollocks-all about most history that isn't couched in Labour Party terms.


Peter Carter-Fuck said...

This is one of the most deranged things that the Gurning Gulper has come up with yet, and it is hardly surprising that the Yanks have poured a big bucket of warm shot over his head. Anyone could have told him they would do this, I expect one of his advisers might have tried, only to end up stapled to the desk.

Seriously, the Gaping Gargoyle is now in full Untergang mode. I don't know if he's got a dog, but if he has, I'd advise it to leave the bunker sharpish.

Beware of Geeks bearing GIFs said...

Brown is the sort of dysfunctional idiot that would remove direct debits, credit cards and debit cards forcing punters towards opening their defunct chequebooks.

Then impose a checkbook tax.


captainff said...

The first news report I read about this story had a longer quite from the Canadian finance Minister. It reported he said

"We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at."

Brian, follower of Deornoth said...

"The Labour Party and Political Change in Scotland 1918–29"

You can get a PhD for that?

Mitch said...

10 yrs of his life working on that!! hahahahahahaha what a fukin waste, bet no one read it they just gave him a pass cos they felt sorry for him.
May as well studied Klingon.

RyanB said...

Thanks for that little knee-jerk reaction.

The likely level of a currency transaction tax would be half a basis point, ie 0.005%, ie absolutely fuck all. Far too small to distort trade at all, far too small to throw any sand in any wheels, and far too small to hinder economic recovery one iota.

Large enough though, given the sums of money transferred around the world, to raise a huge fund to combat climate change, and/or fight global poverty, and/or repay some of the funds spent bailing out the banks.

Experiments of putting this into place in practice have shown that it's very easy to do and has next to no negative effects, other than raising substantial sums of money.

It's a good idea.

John Pickworth said...

Gordon Brown has seriously lost the plot... but no matter what we say or what his more knowledgeable colleagues might tell him; he'll bloody well press on with this silly nonsense. You watch.

Interestingly, reading the many reports in the press, I did notice a strange solitary voice of support for Gordon's master plan chirping from the sidelines...

Oxfam welcomed Mr Brown's comments. Mark Lawson, Oxfam's senior policy adviser, said: "A tax on banks would be a major step towards clearing up the mess caused by their greed. The G20 has a responsibility to act. Money raised by a financial transaction tax on banks could make a massive difference to the lives of ordinary people."

Well, he's not wrong there. I'm sure the 'massive difference' would be spectacular for all the wrong reasons. And what's this to do with Oxfam anyway? Is this how they spend the money donated to good causes?

Seems it is. Here's Oxfam from 1999: Time for a Tobin Tax? (RTF document)

While Gordon states this tax is for the purposes of future bank rescues, its clear that the freeloaders, the charities, the unions and the ever present greenies intend having a share of it too. In fact should a fund ever come into existence, you can bet your shirt that the thieving lefties will carve it up for other 'worthwhile' initiatives. Come a bank rescue, they'll be n'owt left but the lefties.

You know what? I think that global warming might just be caused by my boiling blood alone. I'm sure I can plot that on a hockey stick graph (the up tick beginning 1997).

Gordon Brown, the world's best economist since Viv Nicholson.

Gareth said...

RyanB said: "Large enough though, given the sums of money transferred around the world, to raise a huge fund to combat climate change, and/or fight global poverty, and/or repay some of the funds spent bailing out the banks."

No taxation without representation.

Until the world is directly electing global representatives there is no legitimate basis whatsoever for trying to impose a global tax.

For the same reason the EU should never be granted tax raising powers as we do not elect the executive (Commission) or the President.

Pavlov's Cat said...

Also fisked.

We are being ruled over by fuckwits and the delusional.

Henry Crun said...

@RyanB. Banks already levy commission on foreign currency transactions - a small percentage levied against the commissions banks rake in every year would provide sufficient cash to the IMF to set up the proposed fund.

But, as ever with Brown, he isn't satisfied until the little people have been well and truly shafted.

Nick said...

The Tobin tax proposal looks like just another excuse to extend the tax base. Also RyanB (& other commenters online) have suggested that any proceeds would also be used to combat global warming & aid projects. So it could in other words be used to support pet political projects, which only reinforces the impression of a legislative cash grab.

Steve Horgan said...

It is a stupid policy because it absolutely depends on perfect international control of the financial markets by governments. The result wouldn't be 'markets' as we understand them, rather some sort of global economic central planning. It didn't work for Soviet tractors and it certainly wouldn't work for finance.

What is really disturbing is the way Brown tried to do this. It shows an epic lack of grip to think that other nations could be bounced into such a policy. So, our country's reputation sinks a little lower. For God's sake roll on the election.

Roger Thornhill said...

"Unless, of course, all that they are interested in is taking control of the entire money supply and thus ensuring complete control over the British nation—in which case, they might just be evil genuises."

that is how I see it except for the final word.

I have said for years Brown hates cash as it means he cannot monitor and thus tax and control every transaction.

As to the RyanB's of this world who think they are so tight about how money should be spent, try using your own and cinvince through rational argument, not theft and coercion.

What? No rational arguments? Never!

Anonymous said...

"Experiments of putting this into place in practice have shown that it's very easy to do and has next to no negative effects, other than raising substantial sums of money."

How can stealing 'substantial sums of money' from the productive people of the world to funnel to useless government employees and their 'private sector' cronies possibly have 'next to no negative effects'?

It's hard to tell whether the left are morons or they just think that we're morons.

thefrollickingmole said...

I remember reading somewhere that the gold sales by Brown are reffered to in the market as "the brown bottom". Takes a lot of skill to sell gold at the lowest historical price for decades....

Lord T said...

Lets not forget the real reason for this.

Gordo is skint and he needs every penny he can get. Although as thick as pig shit he has been told several times by more sane people, outside the labour party, that if he does this alone everyone that can will move their cash abroad so he needs it to be global. It took 10 years to sink in that is why it has taken 10 years for him to work on this because that is how thick he is. It's not like he is doing anything else. His logical reasoning and his decision making facilities are only working on 10 neurons. Even a nodding bird gets it right more times than he does.