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Wednesday 11 February 2009
Letters: Anglo-American model for financial disaster
Anglo-American model for financial disaster
It will be too glib to dismiss Ed Balls's warning of the worst global recession in a hundred years (10 February) as a preparatory exercise in self-exculpation. Crises and events (barring unemployment, for the moment) are indeed moving at a speed at least equal to that experienced during the Great Depression of the 1930s.
Equally, his prediction that its impact will last 15 years, is more or less what you'd expect from the downside of a cyclical event. The present decade of "financial exuberance" dates from 1999 when a Republican Congress pushed through, and a Democrat President, Bill Clinton, signed, a definitive repeal of the Glass-Stegall Act of 1933, which had separated commercial banking from investment banking.
Ed Balls is more honest than he thinks. We are in the mess that we're in because our government decided to hitch the British workhorse on to the American bandwagon. If President Sarkozy of France last week was rather rude to us, he was merely repaying Gordon Brown for his lecturing European leaders, in sunnier economic times, for not embracing the Anglo-American model of deregulated finances.
So much for being overtaken by a storm. Gordon Brown and his predecessor, Tony Blair, steered us into that storm with all sails aloft. If those sails have now been shredded and the ship of state is shipping water, whom should we blame? The weather?
Dr Yen-Chung Chong
Banks on the wrong planet
Do the banks inhabit the same planet as the rest of the business world? Bonuses should reward personal performance. But commercial common sense argues that bonuses do not get paid unless the employer hits certain profit targets. In particular, they do not get paid unless the organisation can afford to do so from its own resources. Certainly, an insolvent organisation does not pay bonuses to anyone.
The vast majority of commercial organisations (and their employees) accept this as entirely natural. For the banks to do otherwise – protected as they are by the taxpayer – would be a display of contempt for their clients and, in current circumstances, for the taxpayer.
The banks will argue that unless they pay bonuses their people will go elsewhere. Well, perhaps; though quite where they will go in current circumstances is not clear. In any event, so be it. This is what other commercial organisations have to face and the argument is sloppy and over-used.
It is sometimes suggested that it takes a crisis to trigger a change in culture. Surely we now have such a crisis. The banks should be required by their private and public shareholders to return to the planet inhabited by their clients and the rest of the business world. This would be a radical change but the banks might gain some friends.
Can I implore your reporters and readers to make a distinction between senior bank executives and the "foot soldiers"? The former lose money and pocket huge bonuses; the latter work very hard and receive peanuts in a good year. A typical branch-based bank clerk is poorly paid by the standards of most of us, works several hours a week of unpaid overtime because of understaffing and is kicked from pillar to post in trying to achieve often impossible sales targets.
In return, they have seen the value of any shares they may have held smashed by the actions of the senior executives and are sitting on share options that will give them their savings back and not a penny more at maturity.
It is not unreasonable that they should be allowed to receive some sort of bonus in recognition of their efforts. They have been making the profits for others to throw away on madcap investments.
R P Wallen
Gordon Brown is said to be "very angry" that many bankers in the recently nationalised banks may still be paid large bonuses. Surely a competent Prime Minister and ex-Chancellor would have checked something as obvious as this before agreeing to hand over billions of pounds of taxpayers' money? This should have been negotiated as a condition of the bailout of the incompetent banks.
It is good to see that at least two bankers have apologised for the mess the global economy is in. But should bankers shoulder all the blame? In our grab-it-all, have-it-all, use-it-all-up, because-you're-worth-it society, addicted to pampering ourselves at the expense of the climate and of third-world countries, might it not just be that we get the bankers we deserve?
Couldn't the bankers' bonus question be simply resolved by the immediate imposition of a bankers' bonus tax? This would overcome the alleged problems whereby banks may have "contractual obligations" to pay bonuses. A suitably high rate of bonus tax, say 99p in the pound, would not only top up the Government's dwindling coffers but would give the public a deep sense of satisfaction.
I am sure that we are all deeply moved by the profound apologies that Fred the Shredded and others have made before the Treasury Select Committee. Now, when are they going to pay the money back?
B J Fearnley
Self-regulation of the press is failing
Stephen Glover's analysis of the Media Standards Trust report into the self-regulation of the press (9 February) was wide of the mark. He refers to it as "consistently negative", with the implication that the focus of the complaint is Britain's media. The report is in fact a diagnostic of the body established to regulate the press, which is evidently failing to do its job in light of the lack of public confidence in the media.
Contrary to Mr Glover's interpretation, the report is not a call for government intervention, nor is it an outdated attack on journalists or newspapers. Our research shows that concern among the public continues to grow and the press will increasingly lose public confidence if there is no sufficient avenue for complaint. Equally at risk through lack of adequate regulation will be the press freedom Mr Glover enjoys, as the ineffective Press Complaints Commission (PCC) is increasingly bypassed in favour of the courts, creating a precedent-based privacy law.
To ensure public confidence, an industry's regulatory body must be transparent, accountable and sufficiently resourced. The PCC is none of these things and its processes are a stark contrast to those of Ofcom or the Advertising Standards Authority, two equivalent organisations which actively promote their services to the public, share information about complaint handling and have successfully instilled public confidence in the industries they represent.
Yes, public trust in the media is at an all-time low, journalists are in the dock and media standards are being called into question. It is precisely at this time that the PCC should be inspiring public confidence, but it fails to do so. Without a complete overhaul of the system of self-regulation, the press will continue to lose public confidence and press freedom will be in jeopardy.
Baroness Helena Kennedy QC
The writer is a member of the Media Standards Trust's independent review panel reporting on the self-regulation of the press
Jade Goody's approach to death
Jade Goody will reach a much bigger audience than John Diamond or Ruth Picardie did with their run-up-to-death columns, even if she doesn't write her own (Philip Hensher, 9 February). Her example will encourage many women to make sure they follow up abnormal results from cervical smears.
It might not be as fine a read as professional journalists' diaries; does that mean that sharing the experience is less valid? Society is wary of discussing death and how to die. Jade Goody's approach, to share all, will make it easier to talk about a topic that is going to get all of us in the end. The volume of commentary already proves that.
Her experience is just as real, even if it is shared through a ghost writer, even if she is getting paid, not sharing out of altruistic conviction. She is 27, she's got two small kids, and not much time. Good luck to her; it would be great if she survived.
Simple restaurants for hard times
The fate of the bankers is being mirrored by restaurant owners. Houses built on sand.
The only restaurant I have visited in the last two weeks offers a two-course meal at £7.75. The menu is limited to four starters, five main courses and four puddings. You select one main course and one from the other two. The place is busy, the food is good and the service friendly.
I say to restaurant owners: pare down your menu, offer better value, but don't skimp on quality. When times are hard, do what Henry Thoreau did in Walden; simplify. The French have been doing the fixed-price menu for decades. Let it catch on more widely here.
John Idris Jones
The challenges academies face
Your headline referring to the Oasis Academies programme, "My academies may be failing, admits chief" (2 February) is a gross misrepresentation of the conversation I had with Richard Garner, your reporter. The real story about Oasis Academies is the progress we are making to bring transformation to under-achieving schools and give opportunity to young people.
The point that I was making, which your reporter picks up, is that each of our academies is unique. Each faces different issues on its transformational journey. By definition, each school that becomes an academy is in challenging circumstances, and that transformation takes time and happens at different speeds.
Founder, Oasis Global
Widowed foxes are dangerous
David Brown has lost his dozen chickens to a vixen (letter, 7 February). Bad husbandry. Our chickens were locked in their laying boxes at night and free to roam their secure pen during the day. If you have large trees on your land and don't clip the chickens' wings, they will roost in the trees at night.
John Barrington, a shepherd in Scotland, noted that since it is the dog fox that brings prey to the vixen and cubs during the breeding season, aberrant behaviour (like killing everything in reach) can result if one of the pair is killed and the remaining fox suddenly finds itself a lone parent. He made certain that none of the breeding foxes in his territory were disturbed when they had cubs and suffered no losses to his flock from foxes.
There is only one way to sort out the unfair advantages of technological suiting in Olympic cycling and swimming (letter, 9 February): go back to basic Olympic principles and have them all compete naked.
Hailsham, East Sussex
Science of meditation
David Ridge (letter, 6 February) says we need an evidence-based religion – which is, of course, impossible when all religions require of their followers faith in imaginary worlds. What we can have is evidence-based spirituality. Studies conducted by western scientists under the sponsorship of His Holiness, the Dalai Lama, are examining the practice and impact of ancient and modern meditation techniques with results that can be quantified in terms of neuro-physiology, but are beyond measure in their impacts on our lives and our evolution.
If Malcolm Richardson is going to be pedantic (letter, 7 February), he should get it right. Earl's Court is named for the (second) Earl of Warwick and Holland, so the apostrophe is in the right place after all.
Bury St Edmunds, Suffolk
Schools in the snow
On a day of deep snow in the 1980s when all our local schools were closed, a neighbour was very scathing about teachers giving up so easily. Asked why he wasn't working himself, he explained that so many of his colleagues lived out of town and couldn't get there that the establishment had not opened. He could not see the connection: like many children in Key Stage 1, he apparently assumed that teachers were stored upside down in the stock room overnight.
The value of Clarkson
People like Jeremy Clarkson (letter, 10 February) are vital to our wellbeing. How else are we to express our moral indignation around the office water cooler rather than getting on with our work?
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