back to article Feeling poor? WHO took all your money? NOT capitalist bastards?

Lies, damned lies and statistics: we all know the saying, but you'd be surprised just how many of these “facts” manage to enter the national consciousness, emerging as Guardian headlines and stories on Radio 4's Today. Allow me to tiptoe through the process as to how this happens. Let's start with this lovely little chart: A …

COMMENTS

This topic is closed for new posts.
  1. Steve Davies 3 Silver badge
    Boffin

    This is news?????

    Any organisation that does present 'the facts' showing that their particular argument is 'proved to be true' probably has something to hide.

    Slow news day methinks.

    1. Bob Vistakin
      Big Brother

      Re: This is news?????

      This is all bollocks - it's obvious where the gullible publics money has gone. Moats don't clean themselves, you know, and the last time I checked there was no such thing as a free duck houses, cable tv porn or poppies to lay at the remembrance services of those who gave their lives fighting to give our noble, honest and trustworthy MP's the freedoms they now enjoy.

      1. Bob Vistakin
        FAIL

        Re: This is news?????

        There's one for certain claiming that last one was just another a Balls up, but have no fear - we will remember. Could it be the same person admiring another mans fake buttocks whilst wearing a Nazi outfit in this photo? I think there is a worrying pattern here regarding this loathsome individual and his attitude to our fallen. Still, at least he knew how to spend our money when he had the one and only chance he'll ever get.

      2. Anonymous Coward
        WTF?

        Re: This is news?????

        I wonder, who are the sad FLICKT@RDS who down voted this comment?

  2. Nick Leaton

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    Try this paper.

    4,700 billion's worth of debt missing from the government books, and that's not the only omission.

    e.g Taxation with no services is the order of the day.

    1. dogged

      No time to read the paper but... PFI by any chance?

  3. Anonymous Coward
    Anonymous Coward

    superb trolling as usual

  4. Tom 7 Silver badge

    Starting figures are well out

    one problem is including financial institutions imaginary gains in the GDP. This lie is what gave the impression that GDP was increasing so it was OK to borrow.

    Now we know the financial figures were out by at least £420Billion it would be interesting to go back and see how much debt would have been signed for if they knew at the time it was completely unsustainable rather than believing the cities bullish claims.

    There's an old saying about not counting your chickens before they hatch. The city was counting chickens when they hadn't even evolved legs let alone wings.

    1. Andrew Moore

      Re: Starting figures are well out

      I think the City was counting the chicken before it came out of the hen's bum

      1. Ian McNee
        Alert

        Re: Starting figures are well out

        Using this analogy I expect our thieving pals in the City would have dipped-into someone else's savings to buy half a dozen battery-farmed eggs from Tesco that they knew would not hatch, then sold 250% of the shares in each egg on the basis that on maturity each egg would become 100 plump & delicious organic free-range self-basting roasting chickens.

        The rest is smoke and mirrors, just like Tim Worstall's piece. Never mind the vast omissions, what about that old turkey: "the public sector ate my breakfast"? Who do you think does all the jobs that makes life tolerable in this country? Largely low-paid public sector workers: refuse collectors that prevent us from drowning in crap, hospital cleaners who make sure that we don't die horribly from MRSA if we're injured, transport workers who keep our cities from grinding to a halt with cars, carers who look after our parents.

        Yes we all know about the horror stories in these various lines of work but they are largely caused by lack of investment in the people doing the work: wages, training, supportive management. If Tim Worstall has his way less money will be spent of these things and it will be a short walk to hell.

        1. Anonymous Coward
          Anonymous Coward

          Re: Starting figures are well out

          Low paid public sector workers! That a bad joke, the average public sector worker earn's 23% more than the equivalent private sector worker. Thats excluding better holidays, better job security and much better pensions.

          1. henrydddd

            Re: Starting figures are well out

            Could that be because many private sector jobs are nothing but mcjobs? Do you propose to get police to work for minimum wage? Most of the criticism of what public sector people earn is from crazy right wing radicals who want everyone, but themselves, to be wage slaves. The upcoming battle in society is going to be between the upper 1 percent and everyone else

            1. Bugs R Us
              Facepalm

              Re: Starting figures are well out

              Upper 1%? Pony poop. You do realize that most of the workforce IS in the top 15%. The bottom 50% is made up of the MINORITY of lower paid workforce, not the MAJORITY who are well paid.

          2. Anonymous Coward
            Anonymous Coward

            Re: Starting figures are well out

            Maybe so, but just because the private sector workers gave up trade union membership in exchange for a short-term bonus is no reason for the public sector to drop its trousers, bend over the desk, and spread its cheeks as well.

            1. kissingthecarpet
              Unhappy

              Re: Starting figures are well out

              "the private sector workers gave up trade union membership "

              Indeed they did, and often for no bonus at all. The clever thing was convincing a huge slice of the working class that they were middle class, rather than the reverse which is the truth.

              The question that is going to become louder & louder is "Whose benefit is the country run for?"

              We should be like the French used to be & have revolutions every so often. The ruling class in the UK are far too "intensely relaxed".

              1. Stewart McKenna
                Mushroom

                Re: Starting figures are well out

                The real irony is that States in the US where unionizing is basically undermined and the laws that

                enforce it are called 'Right to Work' States and 'Right to Work; laws....

        2. scrubber

          Re: Starting figures are well out

          How many transport workers are in the public sector? Is it all those bus drivers on Arriva, the Virgin train staff, FirstRail?

          Public sector is way too big, many of the tasks done by the local or national government should not be done by the state and those that are tend to be vastly overstaffed, targets focussed and have exceedingly perverse incentives.

        3. Anonymous Coward
          Anonymous Coward

          Re: Starting figures are well out

          There's something distinctly wrong when entire areas of a country have more people working for the government (national and local) than in any other job. That's nothing other than welfare payments disguised as other things.

          Even services industries can only ride along on the back of the income from "real" production.

          There's an old saying that universal democracy only lasts as long as it takes the masses to realise that they can vote themselves bread and circuses. At the moment that seems to be happening at both ends of the economic spectrum, leaving them in the middle starting to realise the best way forward is via the exit door.

          Brand me a right winger if you wish (I'm not), but there's no fundamental entitlement for anyone to have work brought to them. The UK's (and most of the world's) cities are where they are because people moved to where the work is, not the other way around and the motivation to move for a better life has a lot to do with why migrants (both from inside and outside the country) generally do better than those who stay at home.

          Perhaps there should be hard restrictions on the percentage of govt jobs as a proportion of the entire workforce in any given region.

      2. Anonymous Coward
        Anonymous Coward

        Re: Starting figures are well out

        Well it just shows if you are going to borrow money, borrow a lot because they you will have to support you in the hope they will get it back, borrow a small amount of you will get thrown to the wolves. Probably the only think we learn't from the Maxwell saga..

    2. Colin Millar
      Mushroom

      Re: Starting figures are well out

      "how much debt would have been signed for if they knew at the time it was completely unsustainable"

      A bit naive that.

      By "they" I take it you mean the government of the day. If they didn't know that their borrowing was completely unsustainable it was because they didn't want to know.

      Anyone see William Hurt in that sycophantic pile of dogshite "Too Big to Fail"? That was typical of the government attitude - "How could we be expected to know what the banks were doing?" Er - maybe cos you were at Goldman Sachs before you were Treasury Sec you dickhead. And then surprise, surprise a load of ex bankers regulating a load of current bankers gave the current bankers shed loads of tax money with no strings attached. And Dick Fuld portrayed as the bloke who got screwed over? Really - the CEO of Lehmans as a sympathetic character?

      As for this author suggesting that the tax burden is the fault of public sector employees is laughable. Sure there are some problems in the public sector but it isn't their employees.

      The biggest public sector problem is the way it is used these days simply to channel money and assets to crap private sector companies who couldn't make any money if their government mates didn't give it to them. PFI has already transferred billions to private interests and we are just at the start of the programme. In twenty years time we will have given them the NHS and all our schools together with paying a large chunk of our taxes to those same companies as compensation for the maintenance of those assets. PFI is like a guy nicking your car but you have to continue to pay for the petrol/tax/servicing and MOT - and if he knocks someone over you will have to cover the insurance claim. As for wanting to use the asset in future - stand in line in descending order of wallet size.

  5. This post has been deleted by a moderator

    1. Lord Voldemortgage

      Re: Public sector

      Totally with you on the banks - and it is unclear to me why it was obviously a good thing to bail them out; what would the effects have been if they had been allowed to fail?

      On the public sector / tax thing you're obviously right as far as the money chain goes but doing it this way (rather than just paying public sector workers less and not taxing that income) does mean that they are affected by taxation changes in the same way as the rest of us - and as their number includes people who advise on taxation matters this is probably a good thing.

      1. HamsterNet
        Unhappy

        Re: Public sector

        Considering the entire 5 years of recession has been caused by just Lehman Brothers failing, who knows how bad it could have got if they all went down.

        Something to do with just how interconnected all finical institutions have become so when the big boys fail they take a lot out on their way down.

        1. Eddy Ito Silver badge

          Re: Public sector

          "who knows how bad it could have got if they all went down"

          Your statement assumes facts not in evidence as we'll never know how "bad", or good for that matter, it would have been. We also don't know that all banks would have failed as the ones not playing quite so fast and loose would have survived albeit that likely means only smaller banks that weren't hoovered up in the M&A banking phase just prior to the "too big to fail" failure and the few stronger big banks that that wound up absorbing the zombified corpses of the failures.

          What we do know is that new business creation plummeted during the financial crisis. While I'm sure part of that was because some people were afraid of starting up in a severely down market, I'm equally sure that part of it was the lesson taught by government at the same time. That lesson was that small business doesn't matter but the big guys will always be saved so this illusion of a capitalist society we supposedly have is exactly that, an illusion. There are other ways of handling problems that appear "too big".

        2. tony2heads
          Mushroom

          Re: Public sector

          We could have tried the Icelandic solution - bail out the public, jail the bankers

      2. Tom 13

        Re: obviously a good thing to bail them out;

        You're right in that it wasn't an obviously good thing to bail them out. Problem is, we were expecting a bunch of incompetent boobs to come up with the correct solution.

        There was a real problem in that the credit market was frozen and businesses which have become accustomed to using those markets for day to day operations couldn't switch to a cash basis quickly enough to themselves avoid bankruptcy. Remember, Lehman's assets were worth more than they were bought for, their problem was a short term cash crunch. If they could have funded themselves for another 90 days, they probably would still be an ongoing and profitable concern. They certainly would be if they could have secured funding for another year.

        I don't know exactly what the right solution looks like, but it has to involve this: that when a company files for bankruptcy, while shareholders might be protected from losses beyond their immediate stock holdings, officers of it aren't. And those officers ought to include anyone in any Cx0 position for the last 10 years (exact term negotiable) even if he wasn't serving when the bankruptcy occurred.

    2. jm83

      Re: Public sector

      In my mind its not quite as simple as the private sector just paying for the public sector. The services the public sector provide enable the private sector to be successful. No one would be buying much if it wasnt for roads, healthcare, education etc etc. A private sector worker gives their money to provide these services. A public sector worker gives their time to provide these services.

      Its often a good idea to try and view the world through something other than the lens of money.

      1. Anonymous Coward
        Anonymous Coward

        Re: Public sector

        Well said jm83, but not only that there are a huge number of private companies that rely on government contracts to survive. When the government stop spending tax money with private companies, job losses soon follow

      2. Tom 13

        Re: Public sector

        Roads, healthcare, and education all started life as private services. And frankly only got bolluxed up after government seized them.

    3. Anonymous Coward
      Anonymous Coward

      Re: Public sector

      This article is a good example of the old expression 'If you can't impress them with knowledge, baffle them with bullshit'.

      First of all, in the United States, it is a well documented fact that money has been flowing from the manufacturing sector to the upper one percent and the financial sector since 1970. No amount of BS can deny this! One major reason is that the US has exported most of it's high paying manufacturing jobs to third world nations thanks to f ree trade agreements. If you bother to look it up (Wikipedia has the info), a high percentage of free trade agreements made by the US are with extremely poor or third world nations who have little ability to import little from the US. The reason for those agreements is not trade, but to make it possible for the US companies to send their highly paid manufacturing work force to those countries where people work under slave labor conditions. The Apple - Foxconn connection is a good example of this happening. Believe it or not, many US companies export most of their manufacturing to these countries. In the US, all political parties support free trade agreements. These agreements between the US (a countriy with a relatively high standard of living) to a third world nations creates a bidding war between workers in both countries!

      Also, it has been documented that even though the bottom 99 percent has lost wages since the 1970's, the upper 1 percent has gained dramatically since then. With US CEO's getting record salaries (hundreds of times higher than their employees) paints a poor picture of unbridled capitalism.

      As far as taxes are concerned, the US income tax is at a record low. Another myth of the radical right is that if the government spends less, it would mean more for the private sector. That is a lie as government spending and taxes are part of the GDP. For instance, assume the US government cuts defense spending by 80 percent. This coupled with a ripple effect would send the US into a serious depression

      1. This post has been deleted by a moderator

        1. Nightkiller

          Re: Public sector

          You were going great until you entered your own tautological fantasy with

          "The correct way is to tax people less and to have SMALL government that spends less. That way the economy grows because the money flows more in the private sector (wealth creator) than in the public sector (wealth destroyer). yes the public sector is needed but it is too BIG!".

          We already know that US taxpayers pay the lowest rates of tax in the developed world.We also know that there are aggressive moves to lower corporate tax rates (see http://www.rantfinance.com/2012/12/02/why-is-the-us-budget-deficit-so-high/ for an objective analysis). Yet the problem in the US is that people and Corporations are paying too little tax for the services they expect to receive. You cannot have Social Security, Medicare, Defense spending, Agricultural programs that pay farmers not to grow crops, foreign aid to make poor people not want to bomb you and not have the means to pay for it. In all of these situations, it does not matter if the solution is public or private. Money. will. still. need. to. be spent. The stupidity of all of this is that lowering taxes for corporations assumes the nonsensical idea that it will trickle down to us. This is wrong. They will simply hoard it, use accounting tricks to create phantom losses or move it around the world wide web just ahead of the auditors. Witness Google's Eric Schmid's non apology for not paying taxes for trade generated in Europe. What people forget is that they are also doing it to Americans as well.

          You want a prosperous developed world? Make corporations pay taxes for profits earned in the country it was generated in. No manufactured accounting losses. Ban free trade agreements with countries that do not have the same standard of living as your own. Return jobs back that were exported to employ people with work that is better paying than service jobs. There will be more people employed paying higher rate of tax. (Did you know that 47% of eligible taxpayers in America pay no taxes at all? These must be part of the same 40% of Americans that depend on Medicare because they cannot afford (private) health insurance of any kind.) If there is a job skills problem, have corporations invest in people to help create wealth as well as augment immigration within the countries where they earn their profits. I could go on. Needless to say, these would be steps in the right direction. Oh, and one more thing. Lobbying on Capitol Hill should be made a captial offense.

          1. Anonymous Coward
            Anonymous Coward

            @ Nightkiller Re: Public sector

            "We already know that US taxpayers pay the lowest rates of tax in the developed world."

            Isn't that why the US has a National Debt of over $16 trillion, so they can pay low rates?

            Or perhaps Western Civilization is a Ponzi scheme and it's peaking right now?

        2. ptmmac
          Headmaster

          Re: Public sector

          I do not accept that all public sector jobs are wealth destroying. Police, University research, road construction, and education are all examples of government functions that actively add to the GDP. We need all of these functions to operate in an environment that supports the creativity, public safety, and productivity of our culture. The problem is that there are actually bad apples in government and in private enterprise who are only looking out for themselves. Theft, graft, manipulation of the public sector rules and regulations are just a few examples of this.

          The problem with the political fantasy known as "small government" is that we don't need to get rid of all government except for the defense or medical budget that lines the nonproductive "private sector" companies. We need to get rid of any corruption, back room dealing, and legalistic manipulation of the tax code to line particular pockets at the expense of others. The silly idea that greed is always good in the private sector is just baloney. If you steal, whether it is from the government or private sector you are a leach. Pretending that all the people who agree that the tax rate has to go down are all good upstanding citizens is just as silly as saying that all those who want to lower taxes are self interested lazy bums who already have theirs and don't want to support the common good. The question is which taxes should we raise and which taxes should we lower. Which programs really are full of graft and theft, and which are adding to the GDP? The answer is not nearly as simple as "small government", but the correct decision here will count for more growth in the future and less lying to ourselves about the nature of the problem.

          The aswer ain't simple, but it will produce real results.

      2. Andrew Moore

        Re: Public sector

        From what I've read- while basic wages have dropped over the last 5 years, those of the 1% have increased 16%

      3. Alan Brown Silver badge

        Re: Public sector

        "The reason for those agreements is not trade, but to make it possible for the US companies to send their highly paid manufacturing work force to those countries where people work under slave labor conditions"

        Perhaps, but at the same time as jobs are being offshored, hard currency is flowing (in however shitty amounts) to those countries. The entire reason Manchester exists as a city rather than as a sleepy little village is that be British govt decided that sending that much money offshore to pay for manufactured goods was a "very bad idea" for the core of the Empire and started whacking punitive import tarriffs on imported indian fabrics. This is what enabled UK mills to take indian cotton and produce (vastly inferior to the original Indian product) fabrics which could be sold back to the edges of the Empire.

        Vassal economies are kept under control by importing their raw products and selling manufactured products back. Economies which keep doing the opposite eventually become vassal states. This isn't rocket science, but it is a lesson that nation-centric western governments seem to have forgotten.

        Multinationalism is a nice idea, but only if economies are fully linked up in such a way that money flows from rich to poor areas (North and South Dakota would be incredibibly shitty third world states if they weren't part of the USA) and the persistent notion of nation states prevent that happening. At some point in history they have to be considered as archaic as city-states or fuedal principalities now are.

        As for the public sector - there's one simple principle at work: "The central purpose of any bureaucracy is to perpetuate itself."

        It's just as prevalent in the private sector and I've lived through it several times. Mid-level managers seek to have more people working under them via any means possible (even if they don't do anything), because more people under them means more "prestige", more "seniority" and more income. There's a distinct need for razor gangs to pass through regularly, however any bureaucratic structure will create as many roadblocks as possible in order to distract and divert the analysts and keep the bureaucracy growing.

      4. Bugs R Us
        FAIL

        Re: Public sector

        @AC 2055

        You seem to be implying free trade is a bad thing. Free trade is a good thing and is one of the ways that humans who are better off are able to help those that are worse off. We could give money to poorer nations or we can kick-start their self-sufficiency. Only a greedy non-capitalist would think of only themselves.

  6. John 62

    All Hail Tony Blair!

    The true champion of the noble worker is obviously Tony Blair! Why else would the wage share have risen from 95-2002? After that the evil forces of conservatism must have started to gain a hold again, smashing the proletariat with their wicked petty bourgeois ways!

    1. Anonymous Coward
      Anonymous Coward

      Re: All Hail Tony Blair!

      I think Id have the whole lot of them - thats the last lot of ruinous socialists, executed in front of their own families.

  7. Pete 2

    Just a bunch of wiggly lines?

    Okaaaay, so the "workers' share" dropped a bit during the Eighties: from a long-term figure in the high fifties, percentage-wise to a number a little below 55 once the hump and following dip from 1990-2000 is levelled out.

    Now pardon me, but didn't the late 70's and 1980's see a sharp rise in unemployment / jobless numbers? If you have fewer people working (for whatever reason) wouldn't that reduce wages, too?

    For all the words in this piece - some of which I could make sense of - I can't see what the author expects to be done. ISTM the point is that workers are getting less, and government is taking more. Maybe that's true, but that's just slicing up the same cake in different ways: it's not as if taxes are removed from society and the money is burned - it's still there and is still spent. If a government took less off us - to spend on public benefits like the NHS - wouldn't all t'workers have to spend a larger proportion of their increased wages on the stuff they no longer got for free? Things like saving for their old-age, meds, child benefits, putting cash aside for time "on the bench" instead of getting the dole / housing benefit, driving granny around instead of her having a free bus pass (and a free TV licence). So the same money would just be spent by different people, but on the same things. There would be some choice: does Johnny get a new pair of spectacles, or do we have a day at the seaside? but there would still only be the same amount of money in the country.

    ISTM the main reason wages are dropping is that so few people make stuff we can sell for a profit. You can't run a country on service industries: such as Taking in each others laundry. You'd have nice, clean clothes but no food to eat. Someone, somewhere has got to make / grow / invent all the stuff to earn the money we spend. Flipping burgers and selling insurance ain't going to cover it.

    1. Anonymous Coward
      Anonymous Coward

      Re: Just a bunch of wiggly lines?

      "If a government took less off us - to spend on public benefits like the NHS - wouldn't all t'workers have to spend a larger proportion of their increased wages on the stuff they no longer got for free?" etc...

      What about the deadweight loss of taxation?

      How about you give me £1000 and then I'll buy you £1000 pounds worth of stuff I think you need, Trust me. I have your best interests in mind - I'm a politician.

      That said, I like the NHS. I like living in a caring society that will offer bypass surgery and intensive care to a homeless drunk and a company director equally.

      1. John 62

        Re: Just a bunch of wiggly lines?

        Hopefully the company director is altruistic and pays for private medical treatment, thus his taxes (and National Insurance) pay for the homeless drunk to have better treatment.

      2. Matt Bryant Silver badge
        Boffin

        Re: Re: Just a bunch of wiggly lines?

        "..... I like the NHS. I like living in a caring society that will offer bypass surgery and intensive care to a homeless drunk and a company director equally." Sorry, not true. Due to the shortage of funds, the NHS now categorise cases based on likely success of the outcome and benefit to the patient, which means the homeless drunk will not get the equal chance as anyone else. Having said that, you also neglect to mention that the company director, who will have paid far more taxes and NI than the drunk, and therefore has full rights to the treatment, will probably pay again to go private, effectively paying twice. People that argue against private medicine are simply cutting their own nose off to spite their face due to small-thinking ideologies.

      3. Anonymous Coward
        Anonymous Coward

        Re: Just a bunch of wiggly lines?

        The homeless drunk does nothing to better society, the company director is creating jobs and helping society to flourish. You can save only one, which one do you pick? I choose the company director.

    2. JB
      Happy

      Re: Just a bunch of wiggly lines?

      "If a government took less off us - to spend on public benefits like the NHS - wouldn't all t'workers have to spend a larger proportion of their increased wages on the stuff they no longer got for free?"

      This is exactly what happens here in the US. Often people in the UK complain that everything is cheaper here and people pay next-to-no tax, but then we have to pay for stuff like health insurance, and our infrastructure is abysmal, where it does exist.

      Personally I'd rather pay more tax and have better public services and more reliable infrastructure, but then I'm just a damn liberal European socialist who doesn't understand how a market economy really works!

      1. This post has been deleted by its author

      2. Efros

        @JB Re: Just a bunch of wiggly lines?

        When I first arrived in the US about 12 years ago i was truly shocked at the state of the infrastructure here. Roads and bridges left to the point of collapse and beyond before being maintained, water and power supplies work most of the time, we have lost water 4 times in the last year due to lack of investment in the local supply system, power goes out if you breathe out too quickly, or at least it seems like that. Whenever infrastructure is invested in, it seems to be an excuse for corporations and the mob to screw the system for the most you can, e.g The Big Dig in Boston. The rapacious 1% have screwed this country for the last 40 years or more and I wonder how much longer the peons will take it. The next few years are going to be "Interesting Times".

    3. Sel
      FAIL

      Re: Just a bunch of wiggly lines?

      "it's not as if taxes are removed from society and the money is burned"

      Giving money to a bunch of politicians and civil servants is no better than burning it. If there ever is anything produced it will be utterly useless, unfit for its intended purpose or will be counterproductive in some other manner (will interfere with some otherwise productive process).

      I first encountered this when the government wanted to learn about successful small technology companies. Their demands for information and the time we had to spend producing it nearly folded the company. I'm sure that the reams of paper they probably printed everything out on in triplicate, are now propping the door open in some Humphrey's office, as he shamelessly plies the minister with whatever lies the big companies have paid him to fill any open ears with.

      I can see that the same is clearly true in the rail industry as could be seen in the when Virgin lost their contract for having the audacity to know what they are doing, not duke stats and to top it off, add up in the normal way when bidding for renewal.

      The civil service are either as corrupt, or possibly more corrupt that their masters who are uniformly the sort of scum anyone would make sure were kept as far away from the productive areas of business as possible.

      Yes, after that band of scum have had their merry dance of vanity projects and pocket lining there is some trickle down to real people in the form of benefits I pay for others to have but will never enjoy myself. Left to my own devices I still save for rainy days but even there I get 'Quantitive Easing' where the scum realised they can just print more money and so long as they don't do it too obviously the natives don't get too restless. But they are still making my pocket lighter.

      1. Andrew Moore

        Re: Just a bunch of wiggly lines?

        The civil service are the puppet masters- Anytime a 'new' government is voted in, all you change are the public faces- the puppet masters are still there with no change.

      2. Johan Bastiaansen
        FAIL

        Re: Just a bunch of wiggly lines?

        "Giving money to a bunch of politicians and civil servants is no better than burning it. If there ever is anything produced it will be utterly useless, unfit for its intended purpose or will be counterproductive in some other manner (will interfere with some otherwise productive process)."

        You're right, the roads don't work, we all drive to our jobs off road. The railroads don't work. Nobody ever takes the train. The airport doesn't work. Nobody ever takes a plane. The police doesn't work, criminals roam our street uncontested. Neither do the firemen, fires rage through our cities for weeks and are only put out when everybody starts passing buckets to their neighbor. The school system doesn't work, we all learned reading and writing from our parents. The hospitals don't work, when I was ill the other day my aunt the witch doctor cured me.

        1. The Axe
          FAIL

          Roads don't work ...

          Yep, all created privately and then taken over by the government.

        2. Sel

          Re: Just a bunch of wiggly lines?

          "You're right, the roads don't work, we all drive to our jobs off road. The railroads don't work. Nobody ever takes the train. The airport doesn't work. Nobody ever takes a plane. The police doesn't work, criminals roam our street uncontested. Neither do the firemen, fires rage through our cities for weeks and are only put out when everybody starts passing buckets to their neighbor. The school system doesn't work, we all learned reading and writing from our parents. The hospitals don't work, when I was ill the other day my aunt the witch doctor cured me."

          Last year I lived in south London, so for a couple of days most of what you portray was actual reality for me. Roads, schools, police the A&E department really are all in a dire state because the money is not getting to them it's being used to line the pockets of various vested interests or prop up 'political realities'.

          My beef is not with the "people on the front line" as the platitude pushers like to call them. It is with the management that they have to contend with. Ask any of the people doing those jobs you point out we all depend on (I would have no direct family without the NHS) and they know exactly how to solve most of the problems we all see, they just don't have the power or resources to do so. That's because we let politicians and bureaucrats dictate to the professionals what they have to do when. Teachers, doctors, nurses, police, even local council members all know what needs to be done and even how they could do it efficiently but they have to contend with an army parasites second guessing them.

  8. JimC

    Execuive Pay...

    I'd be interested in how the distibuion of pay has changed... Ihave a strong impression that what one might call the executive class is paying itself a rather higher share of the wage economy than it was getting thirty years ago...

    1. Nick Leaton

      Re: Execuive Pay...

      Really?

      All I see is that the tax take has risen, which means the state is getting more of people's pay.

      1. Pete 2

        @Nick

        > All I see is that the tax take has risen,

        Try here: http://www.guardian.co.uk/news/datablog/2010/apr/25/tax-receipts-1963 for another view, It shows that since the 1960's the overall tax take as a proportion of GDP has always been somewhere in the thiry-percents.Even though during that half-century, the amount we have earned (our wealth?) has increased about fifty-fold.

      2. Snake

        Re: Execuive Pay...

        False. As you'll read in my post, Reuters's recent article proves that, at least for corporate taxes, government take as gone DOWN in comparison to rising corporate profits.

        The only taxes that have gone up are *personal* taxes, which not only effects all income brackets (conveniently, the lower and middle-classes) but also has 'loopholes' for full collection from the upper classes.

        The perfect, ideal solution...at least from the perspective of the oligarchs. The wealthy and the corporate interests have gotten you in the exact position that they want you in.

    2. blueprint

      Re: Execuive Pay...

      Correct. But in the case of this author it wouldn't do to break down the statistics to disprove one's own argument.

    3. jon 68
      Flame

      Re: Executive Pay...

      http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/

      it's all laid out there in plain english.

      1. Tim Worstal

        Re: Executive Pay...

        Now that's something we really shouldn't be doing.

        Comparing US statistics on the distribution of pay with UK statistics on the distribution of national income. We've got different countries, with different tax systems, different levels of inequality and we're even talking about different things.

        Not really very comparable

    4. Anonymous Coward
      Anonymous Coward

      Re: Execuive Pay...

      I am pretty sure this is the case.

      Also, I was reading a book about hedge funds over the Christmas period, (A Demon of our own Design by Bookstaber) and I've concluded that if anyone is even less reliable on seeing the bigger economic picture than the Government or the TUC, it's a hedge fund trader. I'd listen hard to Mr. Worsthall on lanthanides, but when it comes to take home pay, I rather suspect that the reason that public sector salaries have increased so much at the top end is because outsourcing companies are competing for those people and offering very high pay in order to deplete the public sector of expertise, so it can be claimed that only outsourcing will solve the resulting problems. Which coincidentally is a tactic of hedge funds...corner a resource and create an artificial scrcity, thus driving up prices.

    5. Tom 13

      Re: how the distibuion of pay has changed

      I'm sure you would, because that's part of the smoke and mirrors to keep you excited, and get you to the barricades where you can be used as canon fodder to advance the goals of the socialist dictators.

      But if you're really looking for some enlightenment, perhaps you should study the materials at the following link:

      http://www.heritage.org/research/reports/2012/09/defending-the-dream-why-income-inequality-does-not-threaten-opportunity

  9. JeffUK
    Flame

    tl;dr

    sorry. Merry new year :)

    1. mhoulden

      Re: tl;dr

      Tim is a "senior fellow" at the Adam Smith Institute. Rather like Lewis Page on climate change or Andrew Orlowski on the media, you can tell what his point of view is just from the headline and summary. The Wealth of Nations is fantastic for quote mining because it rambles so much that you can get almost any point of view out of it. I can't see the ASI being too impressed about this bit:

      "It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion."

      1. The Axe
        Go

        Re: tl;dr

        The ASI are impressed with the rich paying more. That's because they, or at least Tim, believes that the low pay should not pay any tax. So if the low pay pay 0% tax and the rich pay a tax rate of over 50% then it is true that the rich contribute more in proportion. Finally there is the fact the the top 1% pay over 20% of all income tax.

      2. Tim Worstal

        Re: tl;dr

        That the rich should contribute more than in proportion is why we at the ASI suggest a progressive tax system. For we do indeed suggest one. A flat tax with a large personal allowance (£15k per adult).

        The provides, above 15k, a static marginal tax rate of 33% in our proposed system. With a rising average tax rate as incomes rise. The rising average tax rate being the definition of a progressive tax system.

        1. Colin Millar

          Re: tl;dr

          That is not the definition of progressive taxation.

          A progressive system increases the rate as the taxable base amount increases.

          As the £15k isn't in the taxable base amount (clue - it isn't taxed) your proposal is proportional - not progressive.

          Proportionate taxation as a theory certainly has its merits and many proponents - the main one for me is that it is politically more stable. Maybe you should read some stuff from the Adam Smith institute to provide you with some pretty good ammo for your position rather than trying to pass it off as something else.

  10. Will Godfrey Silver badge
    Unhappy

    None of the above explains why I haven't had a pay rise in 4 years (so effectively a pay cut), and the small company I work for had to make someone redundant just before Christmas.

    Obvious really I guess - it's an engineering company.

    1. Why Not?
      Unhappy

      Because they can

      Gap between executive and worker pay widening.

      Cheap immigrant workers used to undercut workers and temporarily reducing the effects of offshoring. Thus preventing the crunch and government correction needed. No more boom & Bust.

      uncertainty in lower levels and so no pay rises.

      It was Gordon's Gift to the workers, ignoring wholesale tax avoidance and onshoring were by products.

    2. Tom 13

      Re: None of the above explains why I haven't

      Then you mustn't be a very good engineer. I thought engineers were supposed to be good with logic and numbers.

      Let's try a simpler example.

      Say your company could afford a total compensation package for you of 10,000 units in 2008. Of that 10,000 units, they have to pay 3,000 units directly to the government in taxes. In addition they have to pay for certain things like insurance and workers compensation (non-cash benefits to you) in the amount of 2,000 units. That leaves you with 5,000 units in pay.

      Now jump up to 2012 where the company can you 13,000 units. Meanwhile your benefits have gone up to 3000 units. And the taxes the company has to pay directly to the government have gone up to 5,000 units. That means you still only make 5,000 units in pay.

      1. This post has been deleted by its author

  11. blueprint

    bollocks indeed

    "But like any experts, all of you can tell when someone on the public stage is spouting bollocks."

    And I can also tell when someone is spouting it online. As someone above said, superb trolling as per. If your agenda wasn't so depressingly transparent it might even be slightly amusing.

  12. Ben Rose
    IT Angle

    The Blame

    Of course, I blame Mrs. Thatcher for all of this. Sadly, the Champagne is still on ice...for now at least.

    1. Titus Technophobe
      Thumb Up

      Re: The Blame

      Personally I blame those good old boys Tony and GB..... Or were you trying to blame somebody for allowing a non IT story in the hallowed pages of the register?

    2. AndrueC Silver badge
      Thumb Down

      Re: The Blame

      You blame Thatcher? That was 20 to 30 years ago. Why stop there? Why not blame Gladstone? Or how about Pitt the Younger?

      1. Ben Rose

        Re: The Blame

        The article clearly points out that inflation went through the roof in the late 70s and things went downhill from there. Who was in charge in the late 70s?

        1. chris lively

          Re: The Blame

          Nixon was in charge during the relevant period of the 70s. The rest of the world was taken for a ride.

        2. AndrueC Silver badge
          Facepalm

          Re: The Blame

          > Who was in charge in the late 70s?

          And you think that no-one in the 20+ years since she left office has been in a position to do anything about it? You really credit her with that much power and influence that her policies still shape and control our economy even now?

          Wow.

          So how long will her influence last then in your opinion? Will she still be to blame in another 20 years time? How about 100 years?

          I blame the state of the UK economy at the moment on a combination of Gordon 'Profligate Pillock' Brown and to a slowly increasing extent on the current government. There's been more than enough time since Maggie got booted out for remedial action.

          1. Tom 13

            Re: since Maggie got booted out for remedial action.

            Actually, that's your problem right there. Instead of recognizing how much good she did for you and the rest of the world, you've spent the last 20+ years remediating her actions instead of building on them to increase your productivity.

            Sadly, you've been less efficient at it on your side of the pond than we've been on ours. With the result that while you might have started somewhat closer to the Cliffs of Financial Armageddon, it looks like we're going over before you do. Even more unfortunate for you, once we do, you haven't got a chance either.

        3. TheOtherHobbes

          Re: The Blame

          "Who was in charge in the late 70s?"

          The Saudis. Oh, and the other oil producers - the ones who would never, ever manipulate the futures markets with the help of certain well-known financial institutions.

          And surely not for political reasons.

          You're welcome.

          Oh - and next time The Heritage Foundation or some other grubby think tank oozing intellectual pus pays for a 'feature' like this one, let's at least have that fact acknowledged. Thankyousomuch.

          1. Anonymous Coward
            Anonymous Coward

            Re: The Blame

            the price of a barrel of oil from 1971 to 1980.

            1971 $3.60

            1972 $3.60

            1973 $4.75

            1974 $9.35

            1975 $12.21

            1976 $13.10

            1977 $14.40

            1978 $14.95

            1979 $25.10

            1980 $37.42

            http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

        4. Colin Millar
          Thumb Down

          Re: The Blame

          You can hardly blame Thatcher for "the late 70s" as she only took over in May '79.

          If you want to know why inflation went through the roof in the late seventies you are going to have to settle for something a bit more complicated than "it was {name your boogie man politician}'s fault". If not - you need to learn how to look up the dates in office of your favourite boogie man politician.

        5. The Axe
          FAIL

          In charge in late 70s.

          Maggie come to power in 1979. It was James Callaghan who was in charge in the late 70s. And if you look back to Labour and Tory governments, it is always the time at the end of Labour governments when the economy is worse off.

    3. Anonymous Coward
      Anonymous Coward

      Re: The Blame

      I thought she was a half bottle of whisky a day woman...oh, I see what you mean.

  13. Rich Harding
    FAIL

    One or the other

    Tim, as JimC points out, you're either a cretin or you think we are. Your figures include all the money that the top nobs skim off as wages, not as profits. Whilst this is econometrically correct, it's entirely bogus when the argument is about fair distribution.

    1. Anonymous Coward
      Anonymous Coward

      Re: One or the other

      Rich, it's you that is the cretin. If it is "skimmed off as wages" then tax is paid on it, at a high rate what's more. Much harder to avoid tax on wages. Fair distribution, we know what that means, leeching off the back of those who actually work.

    2. GitMeMyShootinIrons

      Re: One or the other

      It always amuses when people use the word 'fair'. You could say 'fair' is in the eye of the beholder.

      For example, you can make tax 'fair' by rationalising it down to a page or two saying that everyone who has an interest in this country (work, residence, investments) pays a given rate on income above (for example) minimum wage), no exceptions or loopholes. Trouble is, you'd never get such a scheme through the politicians. A complex system works well for either side of the political spectrum - on the right, you look after the tax accountants and lawyers, while the left needs to keep plenty of union dues flowing by justifying lots of tax office workers as well as the need to be seen punishing the rich.

      As for 'fair distribution', this is even more dodgy to define. Someone who has been able to acquire and exploit a particular (or unique or rare) skill should be rewarded by having more of a share of wealth than someone who won't/can't or has less valuable skills. Is it 'fair' to punish success? To those who aspire to the idea of a 'fair distribution' of the wealth, the answer is yes - after all, it's apparently 'fair' to reduce everyone to the lowest common denominator.

      At the end of the day 'fair' is an illusion - life wasn't fair to the dinosaurs, the dodo or the cart builders and lamplighters, but c'est la vie.

      Of course, this may not be a popular view, but I'm not fussed - after all, who said life was fair?

      1. Rich Harding
        Thumb Down

        Re: One or the other

        Remove the word "fair", upon which you've conveniently fixated, and my observation still stands.

        So, to recap without the word that has derailed your logical faculties: the argument is about distribution but the graphs used do not distinguish between remuneration for "capitalist bastards" (note: author's words, not mine) and those at the other end of the scale, they lump both together and compare them with corporate profit.

        1. The Axe
          Thumb Down

          Distribution

          So removing the word fair leaves just distribution. But on what basis is the distribution carried out? There has to be some formula. Is that formula going to be unfair then? Distribution can either be unfair or fair. Its binary. Any distribution is always carried out on the basis of the creator's beliefs. If Labour want fair distribution they aim it towards the poor to keep them voting Labour. If the Tories want fair distribution they aim it to businesses because they want them to generate more profit to go towards shareholders who then keep voting Tory.

      2. Michael Dunn

        Re: One or the other @GiveMeMyShootinIrons

        You ask: "Is it 'fair' to punish success?"

        I'm not getting into any argument over that, but what Britain manages to do so completely is reward failure and incompetence.

        I wouldn't have minded drawing GBP450,000 for 54 days' work - plus, no doubt, a decent pension pot.

        And then of course, they move on to equally well-paid jobs in some other set-up in the old boys' network.

  14. Dare to Think
    Alert

    Doesn't add up

    We here in the "west" have seen the outsourcing and offshoring of manufacturing, services, research and development to other nations around the world over the past three decades, whereas the profits from these experiments were and are pipelined to low tax havens.

    The western governments, desperate to kickstart economies and keep growth followed wrong advice from Keynesian economics to borrow money for big projects on one side and to ever more deregulate whole industries and markets on the other:

    Keynesianism never works in the long term, if tax receipts don't occur and/or are diverted to other nations or indeed if the work itself is diverted to another country. Milton Friedman's moneytarism does not work in the long term and leads to the rapid rise in commodity prices and excessive liquidity, which caused the housing bubble of 2004-2006 in the US and the inflated prices for food, oil and metal which in my opinion is the real reason for people feeling poor again! So it's not a bunch of nurses, teachers and fire fighters.

    So, what's the way of of this? Growth. Simple as that.

    We have to look to a country which has been in a stagflation for more than two decades and is burdened with a public dept of 238% of the GDP : Japan. The new prime minister, Shinzō Abe, now wants to realign the priorities of the national bank of Japan and puts economic growth before the containment of inflation. Fair enough, the theory behind this policy are from Michael Dean Woodford, but I think it's quite revolutionary to effectively depart from John Maynard Keynes and Milton Friedman.

    1. Anonymous Coward
      Stop

      Re: Doesn't add up; still won't work...

      Japan is about to suffer from hyperinflation. Friedman and Keynes were both wrong. The Austiran School will soon be proved correct.

    2. Colin Millar
      Pint

      Re: Doesn't add up

      Your understanding of keynesian theory is deeply flawed as is your assertion that the western nations have followed a keynesian model in recenty decades. You would have to go back to the sixties to see anything like a keynesian policy in Europe - the UK hasn't had a whiff of it since Wilson. There has never been any implementation of a keynesian based policy in the US - it has relentlessly pursued the Hamiltonian policy since for ever and continues to do so. Japan may have exerted closer control over its banks and done lots of public spending since the 80s but not to follow any discernible keynesian theory - it's policy appears to be "throw lots of money at things - after all - how much worse can it get" - the Japanese policy has actually equated more closely to early Leninism than anything else. To equate public spending with Keynesian theory is drivel - public spending forms part of the full range of economic approaches from rule the world Hamiltonianism to despot in trouble printing of monopoly money.

      The core element of keynesian theory is not public spending - it is balance. It acknowledges that public spending can have a role (for example during economic downturns) but insists on balance - public spending should be reduced during periods of economic growth - whereas western politicians have used periods of growth and prosperity to skyrocket public spending on their pet projects. The guy practically invented the economic medum term.

      It is this element of balance that is also missing from international economic relations. Keynes begged the IMF to create mechanisms to balance deficits and surpluses between nations before they became so imbalanced that they endangered the whole system. Everyone knew it made sense but the US said no so it didn't happen. The balancing mechanism we got instead is dumping a country's currency in the toilet and lauging at all the poor starving people.

      In the 90s we jumped straight from the Friedman/Waters notion that control of money supply was the key to controlling your economy via suppression of inflation (without acknowledging that those inflationary pressures were there for a reason) to the even dafter notion dreamed up by (it seems to me) a six year old explaining how money works that you could have constant economic growth by monetising more and more activities and creating free credit for all. The fact that inflation was remarkably easy to control during this period of credit fuelled "growth" should have had alarm bells ringing all over the place - yes - we were using the despot's method of economic control - printing lots of monopoly money and the only reason we weren't seeing horrifying inflation rates was that we were storing it all up on credit cards.

      And the solution is - "quantitative easing" - i.e. people stopped believing that the monopoly money is real so we need to keep printing more till they start believing it again.

      Happy new year

      1. Dare to Think
        Pint

        Re: Doesn't add up

        "your assertion that the western nations have followed a keynesian model in recenty decades." - maybe I should have mentioned here the worldwide resurgence of interest in Keynesian economics after the 2008 recession (http://en.wikipedia.org/wiki/Keynesian_economics_in_United_States_2008#In_the_United_States_and_Great_Britain), but all I'm saying is any public spending, keynesian or not, does not help a national economy if the work, the tax returns, the profits or a combination of these are going offshore.

        "even dafter notion...that you could have constant economic growth by monetising more and more activities" - I can only agree on this.

        1. Colin Millar

          Re: Doesn't add up

          It is worth noting that about the only thing that article in wikipedia gets right is a small mention of the point of intervention in Keynesian theory - to work towards increasing employment levels during a recession.

          It is not about fiscal stimulus for the sake of it or about increasing economic volumes per se - it is about keeping your economy and your people in a state to take advantage of the cyclical upswing.

          The rest of it tends to swallow the "New classical economics"* orthodoxy that Keynesian theory is about an ever increasing state control of the economy.

          * That thought free zone which is most attractive to politicians because it absolves policy makers of any responsibility for anything whatsoever - remember all those nice charts about M1 and inflation - wonder what happened to them? They got conveniently forgotten when politicians saw that NOT controlling the money supply was the real vote winner and got them off the hook for all kinds of shit.

  15. Anonymous Coward
    Anonymous Coward

    Rate this article: 1/5

    In the continued absence of the official Rate This Article Button:

    Upvote this post if you think it's a crap article.

    Downvote if you think it's a great article (sorry about the perverse logic but I do think it's a crap article).

    Copy this idea on other articles if you think this is a good idea (I am not Apple, I will not sue).

    Happy New Year.

  16. John King 1

    Howabout..

    If we abolished all forms of tax avoidance, evasion and dodgy corporate offshore financial practices then surely we could balance the countries books? Because at the moment I see no real recovery for our finances if we continue to allow most of our spending to end up in Luxembourg, Ireland or the Cayman Islands.

    Is there a prosperous way out for this country if this doesn't stop? Or are we just going to have a 60 year depression ending in a gated Plutocracy, with 95% of all workers earning the minimum wage. After the great Resouce Wars of course.

    I'm just looking for one decent forecast that shows us a way out.

    1. Anonymous Coward
      Anonymous Coward

      Re: Howabout..

      I hate to burst your bubble, John, but we are in for a round of inflation the likes of which has not been seen since Jimmy Carter was president. Everything they teach about economics in school today is blatantly wrong. Don't buy gold, buy something useful like copper pipe. The price on copper items will shoot up about as fast as the price of gold and sliver, but the governments will not be able to force you to sell it to them at their price the way FDR did back in the 1930's. You want to know what is going on today? It's pre-world war II happening all over again. Hit the history books. They are an eye-opener.

      1. Anonymous Coward
        Anonymous Coward

        Re: Howabout..

        total bullshit

        see krugman on the zero lower bound

        1. Anonymous Coward
          Anonymous Coward

          @j arthur rhymingslang

          It's not clear who that is addressed to, nor why, but it might be interesting so feel free to expand a little.

    2. Armando 123

      Re: Howabout..

      John, money is like water: it will find the cracks.

      One of the issues Obama's people raised in both election campaigns is that American businesses are more interested in investing offshore. Well, partly: they're interested in making money, and sometimes your own country isn't the best place to invest in Doing X.

      But compounding this is that US companies will have to pay taxes on profits made overseas when the money is brought back into the US ... money that's already been taxed. So if you export your goods or services overseas, you are taxed in that country then taxed when it's brought back. Better, from the company's view, to keep it overseas to invest and make more money.

      The obvious solution here is to reduce or eliminate that tax so companies will be more willing to invest in their own country. However, Obama's view is that we should raise taxes on corporations to pay for more government ... so now they'll invest LESS in America.

      1. Andy Enderby 1
        Thumb Down

        Re: Howabout..

        Can't agree Armando....... The current incarnation of capitalism has throughly corrupted politics, the best place to invest is always somewhere else, and when doing so antics such as royalties are abused to make profitable companies appear to be basket cases, and therefore no tax is paid, pay the minimum wage concievable in any given market and all the money goes out of the country "invested" in whilst making use of the resources the tax payer paid for...... It makes no sense, is unsustainable and like the author of thie article is simply wrong.

        1. Anonymous Coward
          Anonymous Coward

          Re: Howabout..

          Sorry Andy, but you're quite simply wrong; either badly misinformed, or, like those actively peddling this line, maliciously pushing untruths to push a radical socialist style economic order. The sort of economy where you don't own your earnings but get a state endorsed share that you are allowed to keep.

          The resource the taxpayer paid for, is used by the taxpayer, fool, not companies. You only want someone else to pay for what you use; greed incarnate. Sadly far too many people seem to believe that there's this magic money tree that we can pluck to keep up this spend beyond our means entitlement society going. Good political meme, crap economics.

          1. Andy Enderby 1

            Re: Howabout..

            you really are quite rude bugger off back to the Daily Heil.

          2. Matt Bryant Silver badge
            Thumb Up

            Re: Howabout..

            ".....The resource the taxpayer paid for, is used by the taxpayer, fool, not companies. You only want someone else to pay for what you use; greed incarnate. Sadly far too many people seem to believe that there's this magic money tree that we can pluck to keep up this spend beyond our means entitlement society going. Good political meme, crap economics...." Just ask the Greeks (and now the Germans having to pay for the Greeks) how that worked out.

        2. Armando 123

          Re: Howabout..

          @Andy Enderby 1: "Can't agree Armando....... The current incarnation of capitalism has throughly corrupted politics,"

          Given that government has grown faster than the private sector for nearly a century, I'd say it's the other way around.

          1. Andy Enderby 1

            Re: Howabout..

            .....and the massive outsourcing of just about every government function currently underway in the UK resulting in directorships for the ministers concerned ?

      2. Anonymous Coward
        Anonymous Coward

        Re: Howabout..

        Next time you come to the UK, bring your Starbucks with you.

    3. h3

      Re: Howabout..

      Easy way - legalise all drugs and tax them. (Keep the quality high and at a price that cannot be matched by the criminals.) Overnight it would turn into a much smaller problem (Like we have with fake and cheap alcohol / cigs being sold in council estates.) People being able to grow hemp to make paper (Faster and Cheaper than using what they use now) might upset the status quo but it needs to be upset and the solution needs to be radical. (Cuts won't work not done in the way they are trying now anyway.)

      A solution that works (Because it will involve making a fairly big change) will never be popular with the Daily Mail reading types.

      The problem we have is the baby boomers basically who were given everything by their parents generation (Who also took part in a war from them and had a really hard time) have left nothing for their children and took everything for themselves. I was in a pub on Christmas Eve with a fair few people of my dad's generation I was close to punching a few of them. (They retired at 50 on really good pensions that cannot ever be reduced). I think each generation should have it better and easier than the last due to enhancements in Technology / Medical stuff.

      What we should be doing is trying to reduce the amount people have to work to 4 days.

      (My grandfather's generation used to work 4 1/2). Instead of just creaming off the profits to pay for the people who went to school and university with Cameron. (Clegg is worse though because it outright betrayed everyone who voted for him).

      People working for the Public Sector did so on the grounds that they would make less whilst they were working in return for a good pension. (My mother when she left university had 4 friends with the same results as her - 1st Pure Maths - She went into teaching because she wanted to do it but she could have been an acturer / finance director of big PLC's / Professor of Maths - screwing people over at the end of their lives is not a good thing to do.)

      I know a retired fireman (Over 70) gets an absolutely insane pension keeps going up. Same as police they retire early if they want to (With a full pension) and then get another job. No reason they couldn't do a desk bound job. (At the moment they just get another job.) That is nothing like teachers.

      It is going to get to the point where especially in London the only teachers are immigrants as they are the only people who could and are willing to work for what is on offer.

      The only way to improve is to invest in the young. It is only going to get worse if really expensive private schools are the only places with good teachers it won't work.

      Maybe we get a meteor hitting the earth or another ice age starting that changes things when people realise how pointless things are these days.

      (My parents will get a huge cash injection also when their parents die (They were born during the war and had nothing and lived in council estates and worked very hard and ended life pretty rich) for people starting now with nothing something like that just isn't possible. If your family is very poor now it is far more likely to stay so no matter what they do which is bad.

      1. Lord Voldemortgage

        Re: Howabout..

        "Easy way - legalise all drugs and tax them. (Keep the quality high and at a price that cannot be matched by the criminals.)"

        What criminals? Once the drugs are legal there are no criminals.

        And who else would be ready to supply this new market?

        The former criminals would become the new legitimate entrepreneurs and the only issue would be around collecting the relevant tax / duty.

        Smuggling would therefore continue at some level but it might well be possible to convince the new industry this was something it ought to help police - the cost of doing so is easily outweighed by the benefits of being 'legit' - a competitor who was rocking the boat and at the same time undercutting your supply would be welcome to no one.

      2. JimC

        Re: Baby Boomers

        ...Baby Boomers who were the first generation to pay National Insurance and fo the NHS for their entire working lives and who paid the pensions of the previous generations who hadn't... Funny how the whingers never mention that...

        1. Jediben
          FAIL

          Re: Baby Boomers

          JimC, the generation BEFORE the boomers had been involved in a rather awkward little situation called World War II. I think it's a little harsh to suggest that they start coughing up taxes to pay for all the work they should have been doing instead of fighting off the Nazis invasion of Europe...

          1. JimC

            Re: Baby Boomers/Jediben

            AH yes, good point. The baby boomers also spent their working lives paying for WW2... Aprt, of course from the Seppos, who were beig paid...

      3. J.G.Harston Silver badge

        Re: Howabout..

        "What we should be doing is trying to reduce the amount people have to work to 4 days"

        I can't afford to stay alive on four days pay!

      4. Robin 12
        Thumb Up

        Re: Howabout..

        For most of what you wrote I agree with. The biggest problem is that the kids of the baby boomers have decided to borrow for everythings. Bigger and better every few years. Baby boomers and their parents would live in the same house for most of their lives. Moving up never gets you out of debt and thus doesn't leave anything for the kids. An investment in a house is useless until you sell it and you may not recover all the money in interest or inflation.

        I am a baby boomer and a government worker. I have lived in the same house for over 30 years. I have tried to get myself 100% out of debt and will be before I retire. Run 20 year old vehicles which I do most of the work on myself. Still don't have a HDTV as my old CRT still works. 7 year old laptop which has had a new screen.

    4. Anonymous Coward
      Anonymous Coward

      Re: Howabout..

      You're just buying into the narrative that all that money that others earn, it's OURS ! (wah, wah, wah is the usual accompaniment as well). Tax avoidance is LEGAL, how can you not understand that, and much of what you think of as avoidance is simply obeying the EU dictated law of the land allowing companies to trade across boundaries.

      Read up, too, about tax incidence. Companies, to put it simply, don't "pay" tax, and they don't "benefit" from it either. Tax is paid ultimately by some combination of employees, customers, and shareholders, plus to a certain extent, wider stakeholders also pay the tax. Research suggests that the major portion of a tax burden on a company is borne by the employees and customers, capital is more able to move in response to the burdens imposed.

      So, it SOUNDS good, just take all that money from those evil corporations, but in practice what you're doing is taking it from its employees and customers. You've bought into the scam, the intention of which is to tax more and more but by indirect means so you think that somehow it isn't you (and yours) paying it but SOMEONE ELSE; YAY !

      Mug.

      1. The Axe

        Scam

        AC @ 19:48, you're right it is a scam - by UKUncut. They want more tax to be paid by companies even though it's the employees who suffer. In the case of UKUncut who want workers to be appreciated more and paid more, except if they are Starbucks workers in which case UKUncut will do their best to disrupt their job and ensure they are paid less.

  17. Andy Enderby 1
    Thumb Down

    economics......

    Is apparently a science..... That being the case maybe an economist would care to state why it is that they perform no better than tossing a coin when making predictions.

    Maybe they'd also like to comment on the disparity between rampantly buoyant boardroom pay and what every body else gets, and maybe on the impact that has on an economy???????? S'funny it's all gone quiet.....

    Maybe the author of the article would like to comment on the impact on the economy if everybody was in a position to stick two fingers up at the tax man ???????? ........crickets......

    1. Anonymous Coward
      Anonymous Coward

      Re: economics......

      “The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

      -The Rothschild brothers of London writing to associates in New York, 1863.

    2. The Axe
      Boffin

      Re: economics is a kind of science

      Economics is a "social" or soft science. That is, it at the same level as psychology and other wishy washy subjects. It is not the same kind of hard science such as physics, chemistry, astronomy, etc. That's why economists don't perform much better than tossing a coin. Studying a subject as the whole population of a country is nigh on impossible and so they come up with models and try to make it fit what's happening. But with such a varied subject being studied as the economy of a country with so many variables (potentially millions) it is not easy to say what is correlation and what is causation.

  18. Armando 123

    Published data

    Very few economists, being funded by government agencies, are going to speak out about government folly. One of the few places that will is the Cato Institute, a libertarian thinktank in the DC area. I don't agree with everything they say there, but it is nice that there is at least honest, intellectual discussion.

    Then again, P.J. O'Rourke put it best: talking about taxes to the government is like talking about garbage to your dog. You can tell the dog to leave the garbage alone, but all the dog hears is "GARBAGE!!!"

    1. Sebring
      FAIL

      Re: Published data

      Would that be the Cato Institute that is funded by billionaire business people seeking an intellectual framework for their rampant self-interest?

      1. GitMeMyShootinIrons

        Re: Published data

        As opposed to the Union funded so-called think tanks, such as the Fabians or Compass, looking after their own self-interest and trying to justify their own jaded idea of utopia?

      2. Armando 123

        Re: Published data

        If it is funded by billionaires, at least the billionaires choose to fund it or not. Most research is funded by government drones, who take money with a loaded IRS and give it to whomever they choose.

    2. Anonymous Coward
      Anonymous Coward

      Re: Published data

      I don't know when you last looked at the job ads, but most economists are employed in the finance industry, many university chairs are funded by it, and the Cato Institute is a lobbying company for oil and tobacco.

      1. Anonymous Coward
        Anonymous Coward

        Re: Published data

        Interesting - three facts and a thumbs down. Somebody doesn't like reality.

        Incidentally, Armando123, P J O'Rourke is not an economist. He is someone who has made a very successful career out of right wing humour and some memorable soundbites. One of his objections to politics seems to be that politicians and their staffs do a lot of research, which he is helping to pay for. In effect, he wants federal and state governments weakened so they cannot oppose the will of corporations. But good luck with finding anywhere in his books where he actually spells that out in print. It's all "enabling people to get rich", without specifying too closely which people.

  19. b166er

    tl:dr, just reacting to the sub heading. That WAS the intention, right?

    If it is really true that teachers, firemen and nurses took all my money, then I'm happy about that.

    In fact let's abolish government and give all that money to teachers, nurses and firemen too.

    We'll be healthy and well educated with no unemployment and consequently, there won't be a requirement for government anyway.

    1. Hollerith 1

      I'll add my mite

      Last time I checked the USA, teachers and firemen paid with their lives to do their jobs. Can't remember the last time a bank CEO sacrificed himself to save the helpless. If my taxes are going to be used to help someone, I know I'd prefer them not to go to executives of financial services, but to the teachers and the guys repairing the roads in sub-zero weather and the food inspectors and the firemen. The ones who make our everyday world better.

  20. dms
    Devil

    25% of all MPs?

    I thought the following was quite poetic:

    "The Royal Statistical Society recently reported that only 25 per cent of MPs could work out the odds of getting two heads with two coin flips"

    So I was a bit saddened to see it wasn't strictly speaking correct if this posting accurately reflects the results of the same survey.

    http://www.bbc.co.uk/news/uk-19801666

    So who do I trust El Reg or Auntie?

    1. The Axe
      Boffin

      Re: 25% of all MPs?

      You need to study statistics a bit. It's valid to ask a sample of a population a question and be able extrapolate to the whole population. In this case asking just under 1/6 of all MPs randomly chosen and asking an equal number of Labour and Tory.

      What is really interesting is that Labour MPs are more innumerate than Tory ones. 77% compared to 47%. Possibly something to do with the fact that a majority of Labour MPs come from jobs that don't require much effort in terms of numeracy? A PPE does not help much except in politics.

      So who to trust? I would trust El Reg who have a varied selection of writers on their books compared to the BBC who are very biased towards the left/socialist viewpoint as noted by the preponderance of Guardian reading that goes on.

      1. Trevor Marron

        Re: 25% of all MPs?

        "What is really interesting is that Labour MPs are more innumerate than Tory ones. 77% compared to 47%. Possibly something to do with the fact that a majority of Labour MPs come from jobs that don't require much effort in terms of numeracy? A PPE does not help much except in politics."

        What? They are all career politicians these days, none of them have ever had a proper job that required anything more than fence sitting and being snake-tongued.

  21. Ian Emery Silver badge

    SOrry, NO!

    If you want to blame it on wages for Nurses, Firemen etc, please put up a graph showing THEIR wages over the last 20 years, and do not forget to include MPs wages, and Civil Service top tier wages, including local, district and county councils for comparison.

    1. Lord Voldemortgage

      Re: SOrry, NO!

      Upvoted 'cos you were clearly genuinely angry when typing that.

      Or drunk.

      Either way, well done.

    2. The Axe

      Re: SOrry, NO!

      Check it out yourself. The Office of National Statistics site is at http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Labour+Market for labour.

  22. Boris the Cockroach Silver badge
    Windows

    Well this is strange

    First point

    Deprecation: whenever the company I worked for had their annual get together for the years sales figures, the split would be Wages, Material costs, Site costs(power, water, rates etc) , plant deprecation, and finally profit.

    Deprecation was NEVER taken from the profit figure, it was always included in the costs of running the company.

    Second point : The wage differential between the lowest paid and the highest paid has risen dramatically over the past 30 years, from a CEO who earns 40 times the lowest wage to the state today where a CEO can earn 400 times the lowest paid, and yet for all that pay, companies still report a loss sometimes and sometimes go bust.

    But for all that money the CEO earns, can he spend it all and boosting the economy in the way that splitting his $10 million /yr pay among the 5000 employees can?

    Third and last point: the cost of housing, 30 yrs ago a good rule of thumb for lenders was that the morgage payments should equal 1 weeks wages per month, so that a breadwinner could keep the family at least supplied with food with a bit extra for holidays etc, now the price of houses forces both parents out to work and takes 2 weeks combined income to pay the morgage, result more people on the breadline, more taxes are needed to pay income support and a generation in hock to the banks for $10 000 on the credit card.

    In real terms, the wages of the lowest paid have fallen yr on yr, and god help them if they protest because then their jobs are exported abroad with the government saying 'Nothing to do with us' while handing the companies tax breaks for doing it

    Tramp icon.... because we will all look like that soon... barring a revolution

    1. The Axe

      Re: Well this is strange

      1. Depreciation. It might not be taken from the profit figure but it does affect the profit.

      2. Wage differential between top and bottom depends on the company. Some might be only a fractional percentage, others 400%. In my small company I earn 50% of the MD salary - when he does get paid.

      3. Housing costs have gone up because both parents work not the other way round. Prices can only rise when their is a market of people willing and able to pay. If only the man could work (due to legal and social issues) then there is a limit to which prices can rise to. The housing issue was not helped by politicians wanting everyone to own their own home and so creating a housing boom.

      4. Wages in real terms are actually way higher than in the past. Our wages go a lot further than in the past. Even the lowest paid can afford quite a lot stuff like white goods, entertainment, takeaways, etc. In the past you had to be top end of middle class to have the same standard of living as the unskilled do today.

  23. Identity
    FAIL

    Right and wrong at the same time

    DISCLAIMER: I am writing from the US and my specific knowledge of UK finances is sorely lacking.

    From that vantage, this seems like a straw man argument to me. It matters not a whit what the "share" is: what matters is facts on the ground. Here in the US, real wages for workers have not risen since the 70's, yet CEO pay (as of the turn of the century) had risen 535%. At the same time, the S&P 500 had risen 297%, corporate profits 116%, and worker pay 32.3% less inflation of 27.5%. While the minimum wage did rise in 2007, the disparity has only increased, and been exacerbated by offshoring and the economic debacle of recent years. Since many were tempted to use their homes as bank accounts (with the concomitant bubble) a huge number are now actually behind.

    For comparison, from 1949—79, family income by quintile rose 116% for the bottom 20%, 100%, 111%, 114% and 99% for the top 20%, with the top 5% rising a 'mere' 86%. But from 1979—2001, the same figures are 3% for the bottom 20%, 11%, 17%, 26% and 53% for the top 20%, with the top 5% gaining 81%. (The source for this is the US Census Bureau).

    Taxes, however, are currently at their lowest level since the Eisenhower administration. Despite the scapegoating of many on the right (with particular attention to Governors like Scott Walker of Wisconsin and their funders, like the Koch brothers) even the "generous" salaries and benefits of public sector workers pale — they can lead a decent lifestyle (and we can't have that, can we? If you are suffering, the right thing to do is pull down the person on the rung right above you. Pay no attention to the man behind the curtain.)

    There is a group here (probably little known in the UK) callled ALEC (the American Legislative Exchange Council), though which the Koch brothers and their ilk write 'model laws' which have been passed word for word (excepting 'insert state name here') by many state legislatures. These are the source of the anti-union movement in this country — unions which had been declining for years anyway, not least because of their own shenanigans and abuse (I'm looking at you Teamsters).

    I could go on for pages. (In fact, I have. I've written a book about these and other related matters, which you can find at http://www.lulu.com/product/hardcover/the-root-of-all-evil/6525037, should you be so inclined).

    1. Tim Worstal

      Re: Right and wrong at the same time

      "For comparison, from 1949—79, family income by quintile rose 116% for the bottom 20%, 100%, 111%, 114% and 99% for the top 20%, with the top 5% rising a 'mere' 86%. But from 1979—2001, the same figures are 3% for the bottom 20%, 11%, 17%, 26% and 53% for the top 20%, with the top 5% gaining 81%. (The source for this is the US Census Bureau)."

      Erm, hello?

      Family size has changed over recent decades. Fallen quite considerably. And the US Census figures for family incomes have not been changed to show this.

      Further, the US figures usually don't include the things that are done to try to alleviate poverty: food stamps, housing vouchers, the EITC etc. So sorry, but not greatly impressed by those numbers. Never have been in fact.

      1. Identity
        FAIL

        Re: Right and wrong at the same time

        Sorry, I don't buy it. Family sizes have not changed so drastically from the fifties on, and even if I accept your caveat, the disparity in the numbers is too great to be accounted for by them.

        I just heard today (from Howard Friedman, statistician for the UN — though I'm sure that's the kiss of death for you) that the combined wealth of the TWO richest PEOPLE in the US (Bill Gates and Warren Buffet) exceeds the wealth of the bottom 40% of the population. Among his findings: income inequality is one of America's greatest challenges.

        1. The Axe
          Facepalm

          Re: Right and wrong at the same time

          "TWO richest PEOPLE in the US (Bill Gates and Warren Buffet) exceeds the wealth of the bottom 40% of the population. " Yep, that's true. But even the reasonable well off American exceeds the wealth of the bottom 40%. How does that work you ask. That's because wealth is measured in terms of possessions. When the bottom 40% have few possessions and a lot of debt, eg. mortgage, then anyone who has no debt and $1 in the bank is better off.

          And family sizes have changed drastically - when you consider a family as a unit living in a house. Actually numbers of children of parents hasn't changed, but the number of people living alone has changed. That means family sized have dropped considerably compared to the time when families consisted of three generations living under the same roof.

          1. snarf
            Thumb Down

            Re: Right and wrong at the same time

            Having a mortgage does not equate to being indebted. Only if you are in negative equity. Suggesting a reasonably well off American exceeds the wealth of the bottom 40% is either facetious or merely ludicrous.

        2. Matt Bryant Silver badge
          FAIL

          Re: Re: Right and wrong at the same time

          ".....the TWO richest PEOPLE in the US (Bill Gates and Warren Buffet) exceeds the wealth of the bottom 40% of the population....." It's probably fair to say that Bill G alone probably put more thought and work into making his money than the bottom 40% of the US population.

        3. Tim Worstal

          Re: Right and wrong at the same time

          "I just heard today (from Howard Friedman, statistician for the UN — though I'm sure that's the kiss of death for you) that the combined wealth of the TWO richest PEOPLE in the US (Bill Gates and Warren Buffet) exceeds the wealth of the bottom 40% of the population."

          This is obviously and clearly true. I've even written about it myself elsewhere.

          But it's not really all that remarkable. For some 25% of the population have no net wealth at all.

          Think about a student just out of college. They've got student debt and no monetary assets. They have negative wealth therefore. Or even someone who lives paycheque to paycheque and has $2,000 in credit card debt. Even if they're earning $50k a year, they've still no net wealth.

          In fact, as I've said elsewhere:

          "If you’ve no debts and have $10 in your pocket you have more wealth than 25% of Americans. More than that 25% of Americans have collectively that is."

          I'm sorry, but it's simply not an odd or shocking statistic.

    2. chris lively
      Mushroom

      Re: Right and wrong at the same time

      For CEO pay, there are other factors at work.

      The average company size today is far larger, employing far more people than they did 20 or 30 years ago. I find it completely reasonable that someone leading 50,000 workers is paid far more than someone leading 1000. Looking at the CEO pay breakdown, this appears to be the case.

      Getting back to the main topic: an average workers pay is impacted by a lot of different factors. The biggest factor being the availability of workers for that given skill. In today's world a lot of labor is essentially unskilled or of a type that can be easily trained for. This means wages for those jobs won't rise as long as a large number of people can do that job. Government can enforce minimum wage standards, however that is a double edged sword as prices rice primarily due to a given markets ability to pay. This is why the cost of basics like food and shelter go up shortly after a minimum wage increase; negating the reason for doing the increase in the first place.

      If you want prices to fall, then the availability of credit to the average worker needs to be heavily restricted. In the US, our housing market exploded simply because loans were being made regardless of a persons ability to repay them. If those loans weren't made, then housing costs wouldn't have skyrocketed like they did.

      The answer isn't to blame CEOs, the answer is for governments to stop screwing with the money system by flooding the banking market with low or zero interest loans. Also, banks that make bad decisions should let the market pick over their dead carcass instead of saving them. Next, banks should never be allowed to operate as an investment company. Those money matters have entirely different customer relationships and goals.

      I'll stop here, other than to say the current financial mess is going to be with us for a long time and it's a much more complicated thing than simply a "war" between the workers and the "capitalist pigs"

      1. Goat Jam
        Pint

        Re: Right and wrong at the same time

        chris lively said

        " In today's world a lot of labor is essentially unskilled or of a type that can be easily trained for. This means wages for those jobs won't rise as long as a large number of people can do that job"

        While I agree with the main thrust of your argument Chris, I would like to add that another corrupting factor in play is the inequalities created by certain influential unions, at least here in Australia.

        In Aus, one of the two main political parties is essentially the political wing of our biggest union, the incredibly corrupt Australian Workers Union (AWU).

        The effect of this is that during the part of the political cycle that the union affiliated ALP is in power large Keynesian style infrastructure projects that include backroom deals to guarantee exorbidant pay rates for unionised workers are embarked upon.

        When they are not signing off on incredibly expensive white elephants they are busy propping up commercial companies that coincidentally just happen to be held hostage by their heavily unionised workforce by channelling taxpayers funds to those unionised workers.

        This has had the inevitable effect of artificially inflating the salaries of union affiliated blue collar workers to insane levels while workers who are not affiliated with those unions are left behind.

        This has reached the point where uneducated blue collar workers now earn more than educated white collar workers in this country.

        It truly is the Age of the Bogans downunder, which probably explains why hardly anybody seems overly concerned by the rampant cronyism and corruption at play.

        Chuck us another beer Shazza.

        Go the 'pies!

        Hey, watch the bloody ute ya dickhead

        * bogan mating calls

      2. This post has been deleted by its author

      3. Identity

        Re: Right and wrong at the same time

        @ Chris Lively

        I agree, but the rise in CEO pay exceeds any reasonable factor, such as company size, and far exceeds historical norms. More to be said, but I'll leave it at that...

        1. Matt Bryant Silver badge
          Boffin

          Re: Re: Right and wrong at the same time

          ".....the rise in CEO pay exceeds any reasonable factor....." Hmmmmmm, I find this fixation with CEO pay illuminating in that it seems to be guided by envy rather than simple economic reality. I'm sure there are plenty of top CEOs that have seen above average payrises, but I'm also certain there are plenty of CEOs that have actually seen a paydrop or lost their jobs. If you look at the market, it is easy to understand the rise in "top" CEO pay simply as a factor of demand, whether you agree with it as "fair" or not. It's simple supply and demand - there are a limited number of "top" CEOs, and companies will pay more to secure one. When the economy is in the duldrums, having that "top" CEO becomes even more important to guarantee survival, and companies will pay even more to secure one. Sometimes their desperation leads to idiotic choices (Leo Apotheker springs to mind), but other times those pay packets are justified by results (did anyone question Steve Jobs' paypacket?).

          In a growing economy, most businesses do better anyway, so there is an expectation that a CEO will return good results and may not be the same pressure to achieve stellar results unless the CEO works for a company very much in the spotlight (such as Microsoft, IBM, etc.). However, in a downturn, the pressure is on and the profit bonuses aren't there to satisfy the top CEOs, but shareholders will want the best CEO possible in an effort to achieve better-than-average results, and hence they offer better renumeration. The average CEO is no longer good enough when company survival is top of the agenda. It's simply supply and demand applied to a limited resource - "top" CEOs. It's a simple but cruel factor of economics, but a CEO is usually a more valued employee than Joe Deskworker, and a downturn can make the CEO even more important to a company worried about survival, so they will screw Joe Deskworker in pursuit of a better CEO. Hence the "top" CEOs will see a payrise above that of the average worker even in bad times.

          You may think that is simplistic, but it holds for all parts of the corporation where supply and demand can be applied. A simple example is coders - when the economy is rising and work is plentiful, there is usually no problem securing average or good coders for a reasonable wage. If you can't secure a top coder you may shrug and employ two or three average coders to do the same job. However, when the economy dips, and the pressure is on to deliver projects faster, to smaller budgets, then suddenly the really good coders are more sought after and will actually see a rise in their contract rates. When the pressure is on the average coder is no longer good enough, everyone wants the best coders and will pay more in the hope that having that limited resource will actually lower their overall costs. The pay for average coders goes down as there is less work, but the top coders earn more because they are even more sought after.

    3. Irony Deficient

      ambiguity

      Identity, when you state that Taxes, however, are currently at their lowest level since the Eisenhower administration, are you referring to taxes as a percentage of nominal GDP? Are you referring to marginal tax rates? What precisely do you refer to by the single word taxes?

      1. Identity

        Re: ambiguity

        Tax rates

        1. Irony Deficient

          [Tax rates] are currently at their lowest level since the Eisenhower administration?

          Identity, this is not the case. Tax rates were at their lowest level since the Eisenhower administration during the first half of the Bush père administration.

  24. Anonymous Coward
    Anonymous Coward

    If the Reg

    feels the need to to run economics pieces like this they need to be much better than these ill-considered, poorly researched lefty-bashing rants from a pseudo-libertarian. Take a quick look at Tim's "blog"....little more stream of insulting invective aimed at the Graunaid and other supposedly left-of-center media outlets.

    Still, at least Tim is proving that socialist arts graduates don't have a monopoly on being innumerate idiots.

  25. WylieCoyoteUK
    Coat

    Scuse me, but

    I am I the only one who noticed that the green and blue lines in the first graph are almost mirroring each other (not identical, but quite closely).

    Which sort of defeats the main argument.

    It would seem that if Wages rise, profits drop, and vice versa.

    Mine's the one with a brown envelope sticking out of the pocket.

    1. The Axe

      Re: Scuse me, but

      Tim doesn't say there is no correlation between wages and profit as he shows in the second (not first) graph. What he says is that the link is not that strong.

      "a decline in the labour share does not necessarily mean a rise in the profit share"

      If you look a bit more closely you'll see that wages have dropped by nearly 10% but profit fluctuates about 5%, if that, either side of a median.

  26. Stevie Silver badge

    Bah!

    Yes, it's all the public sector's fault, which is why you should have your house burn down when you dial 999 instead of having nice shiny fire engines arrive to put it out. Of course, when your house burns down it will likely take a good portion of the street with it, and if it all gets going nicely large sections of the town could burn until there's nothing flammable left. Never mind, you can build a new house with all the money you saved from not having firemen.

    You'd know what "flammable" meant if you hadn't fired all the teachers. Never mind. Someone rich will tell you, if they feel like it. They can afford private tuition.

    It's very sad that no-one can remember why we made all this stuff a publicly-funded right until they pull it all down in a fit of idiot "fiscal responsibility".

    Look what happened with the Severn-Trent water system: So badly polluted in the late 60s that fish couldn't live in most of it. All the 70s spent cleaning it up (at public expense) until it was shiny again, only to have the whole business undone in a year by the Thatcher privatization of the water companies. Who could've guessed that no-one would want to buy the expensive-to-run water cleaning part of the system, that they'd only want to buy the parts that sold water to people (or dumped sewage into the river system)?

    Or the British Rail sell-off fiasco, when no-one realized that trains and the permanent way require lots of expensive maintenance or the London to Glasgow express goes for a 100 mph stroll across the countryside, scattering passengers across the landscape? Oh how we laughed as the speculators learned that lesson and were bailed out by someone...who was it...oh yes, the public. Makes you wonder where the savings were supposed to be dunnit?

    I shall watch with interest the dismantling of the publicly-funded civic infrastructure, and weep with everyone else at the number of deaths for those too poor to pay the ambulance to come, and decry the riots of the uneducated masses who have no prospect of ever lifting themselves out of the morass other than crime. Maybe when the only employer is the army, Britain can have an Empire again.

    1. Anonymous Coward
      Pint

      Re: Bah!

      "You'd know what "flammable" meant if you hadn't fired all the teachers."

      <- have a pint on me!

  27. Lloyd
    Facepalm

    Try mapping inflation to the 40% tax bracket

    I went back to the early 80's (I got bored trying to track the stats further back), and if the 40% tax bracket had followed yearly inflation it would now stand at around just under £50k (I can't remember exactly, this was 2 years ago and obviously it'll have increased by now), where on earth could all of that excess money be going?

  28. Tom 35 Silver badge

    capitalist bastards

    Since the multinationals don't make any "profit" at all how would you expect anything to add up to 100%?

  29. Jason Hindle

    If a job needs doing, it needs doing

    And if it needs doing, it's probably worth doing. A job worth doing is probably deserving of reasonable compensation, regardless of which side of the private/public fence it happens to be on. All those nurses, firemen, plods and so on seem pretty necessary to me. We could take the US route and just privatise everything but guess what? We all end up paying anyway, and as we know from the privatisation of our utilities, we end up paying more, and often for worse service.

    So, thanks El Reg for a nice round of neoliberal bellyaching. And yes, by neoliberal I am referring to that school of economic thinking that probably ought to join state planned communism in the dustbin of history. Isn't it amazing how the two extremes of capitalism and communism are both proven, abject failures?

  30. Will Godfrey Silver badge

    And another thing...

    Can someone explain to me how it is that (supposedly) intelligent people believe in the concept of endless growth?

    1. Jason Hindle

      Re: It's worse than that, it's magic!

      They expect unlimited growth with the finite resources of a finite world. How can we expect that to end?

    2. The Axe

      Re: And another thing...

      Because it's not growth based just on product, but also on services. So the growth of the economy, as measured by the GDP, can increase all the time as more value is added to services and products. For instance, the UK used to have a large workforce in manufacturing. Now it has a lot smaller workforce, but the value from the manufacturing has increased (we produce products with more added value by using our knowledge and skills). And all the workers not working in manufacturing are now doing more productive work in other industries. Many of these industries are in new sectors and again, this creates growth.

    3. Tim Worstal

      Re: And another thing...

      "Can someone explain to me how it is that (supposedly) intelligent people believe in the concept of endless growth?"

      Assuming you mean growth in GDP it's because we know what the definition of GDP is. The value of all goods and services at market prices.

      Perfectly willing to agree that we cannot have infinite growth in the volume of goods because of resource constraints. I wouldn't say we're anywhere near them as yet but that's a different matter. Quite happy to agree that there is indeed a limit out there.

      But resource constraints don't mean that we cannot increase the value of what we're producing with those limited resources. Thus infinite GDP growth is constrained by our ability to add value, not by resource constraints.

      Just as a trivial example, there's a limited number of copper atoms on the planet. Imagine, just as a thought experiment, we used them all to make paperweights. Then we decided instead we would use them to make computer motherboards instead. Those motherboards are more valuable to us: we have had economic growth through adding more value, not by using more resources.

  31. Lars Silver badge
    Flame

    Capitalist, communist, leftist, what ever.

    Word like these represent the first sign of a person having absolutely no knowledge about anything.

    Try to work it out with words like, change, expectations, world economy, education, time, history, failure, weather, climate, age structure, voting system, what ever, just try leaving the shit behind you.

  32. Anonymous Coward
    Anonymous Coward

    Or to put it another way, the rich capitalist bastards aren't paying their fair share of taxes.

    1. Armando 123

      Or to put it more accurately, the rich capitalist bastards are better at hiding their money from the lazy piratical bureaucrats who aren't worth the cost of their constituent atoms.

  33. Mr Mick
    Meh

    Economics is a science nay it more than that.

    I see economics as a balancing act between art and science, predicting trends i see parallels with weather predictions. With all the best talent/tech working to make predictions that tornado still comes in and hits then we have to mop up after. Just my take on this.

    1. Tom 7 Silver badge

      Re: Economics is a science nay it more than that.

      if its a science its a science for the calculation of value and wealth in the same way Stonehenge is an astronomical calculator for the management of the milky way. Hits a couple of points and misses out on billions but gets the gullible to come and make offerings which the managers of the stones then enjoy at their leisure.

  34. Dakuan

    Torygraph

    Every day El Reg seems more and more like The Telegraphs IT supplement.

    1. Mick Stranahan
      Thumb Up

      Re: Torygraph

      Glad I'm not the only one who thinks this. I come here for IT news and reviews not right-wing claptrap masquerading as journalism.

  35. All names Taken
    Paris Hilton

    1 - the poor have always been poor, always will be poor and presently are the poor

    2 - all statistics need some base assumptions. Good stats providers make these explicit , poor stats providers tend to omit mentioning the base premise

    3 - any analysis has to simplify reality otherwise reality becomes far too real

    4 - the models should not outweigh reality but really predictable stuff MIGHT be important no?

    5 - the human element tends to prevent stats as a means to support what is being posited and despair alternatives (but these are just model based on premise with varying degrees of oversight, varying degrees of overestimations, all subject to humanistic whim of the moment, subject to subjective influence(s), ...

    You no it makes sense koz it all makes on-sense no?

  36. All names Taken

    1 - the poor have always been poor, always will be poor and presently are the poor

    2 - all statistics need some base assumptions. Good stats providers make these explicit , poor stats providers tend to omit mentioning the base premise

    3 - any analysis has to simplify reality otherwise reality becomes far too real

    4 - the models should not outweigh reality but really predictable stuff MIGHT be important no?

    5 - the human element tends to prevent stats as a means to support what is being posited and despair alternatives (but these are just model based on premise with varying degrees of oversight, varying degrees of overestimations, all subject to humanistic whim of the moment, subject to subjective influence(s), ...

    You no it makes sense koz it all makes on-sense no?

    1. All names Taken

      I don't know what happened there but ...

      should be

      5 - the human element tends to PRESENT stats as a means to support what is being posited and despair alternatives (but these are just models based on ALTERNATIVING premises with varying degrees of oversight, varying degrees of overestimations, all subject to humanistic whim of the moment, subject to subjective influence(s), ...

      You no it makes sense koz it all makes NO-SENSE no?

      And what I was trying to show is that stats are really secondary or tertiary stuff derived from base premise subject to analysis subject to human whim so sort of make for irreverent irrelevancy.

      Is this important?

      You betcha!

      Whereas normal numbers are really, really absolutely important statistical numbers are derivatives derivations subject to premise, subject to human whim.

      And while ordinary numbers and stats numbers look exactly the same they are not and are totally different (well, ordinary numbers may be subject to human whim at least once but stats numbers are subject to human whim at least multiple times yes?

  37. Anonymous Coward
    Anonymous Coward

    BBC

    One organisation you can look at to see what is wrong with the "public" sector is the BBC.

    Their redundancy pay offs 2010-2011 doubled to £58M with over 200 people getting more than £100,000 pay off. Quite staggering waste of money given how the BBC is funded by a TV tax.

    Nobody in the public sector should be earning more than the PM either.

    1. All names Taken

      Re: BBC

      I put it down to poor strategic management overwhelmed even willingly overwhelmed by executive management.

      Similar observances hold true in Police, Local Authority, Education, Blah-blah-de-blah blah

      In essence: milk it koz we don't no when it will dry up?

    2. Davey1000
      Boffin

      Re: BBC

      Please note that one does not need a Television Licence to own a television. Nor does one need a Television Licence to view time-delayed programmes on the iPlayer. Saves about £140 per annum!

  38. Dan 55 Silver badge
    Boffin

    Lies, damn lies, and statistics

    If the great majority of people are now earning one chicken a week instead of two 20 years ago, and the great majority of directors and CEOs are earning 1000 chickens a week instead of 100 20 years ago, just because the government still receives more-or-less the same amount of wings every week when it charges chicken tax as it did 20 years ago it doesn't mean that it's the nurses, fireman, and teachers that are to blame that the great majority of people now earn one chicken a week instead of two.

  39. johnwerneken
    Mushroom

    Government by definition involves lies

    Government at bottom protects us from other people at the cost of some of our living standard. To the extent we can cooperate and compete without endless injuries motivating government interventions, we can get along with less government. Particularly is the lessened part is the part where our wages are taxed to increase someone else's wages.

  40. Robin 12

    Look into the mirror before blaming anyone else.

    Anything based on the GDP is problematic. The GDP will go up in a disaster. Why? Things need to be repaired and this helps the GDP. Do a search on problems with using the GDP. I have even seen a government website some time ago that had a full document on these problems.

    I would prefer to see a chart showing the take home wages of the executives in comparison to the workers over the same time period. Remember that those multimillion dollar wages are also included in this data.

    I do agree that inflation has stripped much of the spending power of individuals but most have this to blame on themselves. Don't spend beyond your means and the wages will either go up or prices will freeze. Don't use debt and you won't have the latest greatest things but you also won't be surviving from one pay cheque to the next. To put blame on anyone, look into the mirror.

    If you don't like government debts, don't go into debt yourself. If you don't like struggling from pay cheque to pay cheque, get out of debt. Get rid of credit cards and only use them in an emergency. Keep zero balances. As I have once heard, don't give the rich bankers all your money in interest payments.

    Once upon a time. A single income could easily afford to support a family of four or more and purchase a house. Try that today.

    When I read headlines like " CEO Pay Grew 127 Times Faster Than Worker Pay Over Last 30 Years: Study" on the Huffington Post or "Firms Cringe" at revealing executive to employee wage ratios on the Wall Street Journal.

    No, compare wage increases over the same time for those that work at or above minimum wage and then those that are allowed to vote themselves massive bonuses each year. In 2008, I remember reading an article about executives at a business getting massive bonuses for laying people off.

    Also remember that governments will change the way statistics are calculated to make them look better. Unemployment in the USA is now counted differently than in the 1930's so this recessiion isn't as bad as it was back then. Compare apples to apples.

    As I said before, look into the mirror to see how to fix the problem.

  41. Sebring

    Never trust someone offering to 'lead you through the economics'...

    ...when they don't understand economics themselves.

    You can only laugh at a fellow of the Adam Smith Institute who doesn't understand Smith's Four Principles of Taxation (you know, the first thing that was taught in 'O' Level Economics).

    Why the f**k does The Register employ this clown? Is it purely for the hit rate?

    1. Anonymous Coward
      Anonymous Coward

      Re: Never trust someone offering to 'lead you through the economics'...

      The "Adam Smith Institute" (slogan "putting forward bonkers ideas to screw up the real world even further" ) exists solely for the purpose of ensuring that Adam Smith continues to spin in his grave at 7200 rpm.

      The Economist also thinks it follows the principles of someone who lived in an age when the largest corporation was the Royal Navy and never had an opportunity to comment on the presents state of capitalism. But his comment about business people getting together only to defraud the public really does seem a prescient description of the banks.

    2. The Axe

      Four principles

      "Taxes should be simple, predictable, support work, and they should be fair"

      I gather that Tim does understand the 4. In what way does this article go against the four?

      Simple means fewer exceptions. Predictable means set out in law and not controlled by the mob such as UKUncut. Support work means that companies (who don't actually pay tax themselves but take it from their employees, shareholders and customer) should pay less tax so that more goes to the employees. And fair again means set out in law so that everyone knows the rules.

      1. Sebring

        Re: Four principles

        "I gather that Tim does understand the 4 (principles of taxation)"

        How do you gather that? Tim has been supporting the likes of Starbucks taking advantage of mechanisms to reduce their corporation tax payments to virtually zero when direct competitors like Costa with a comparable amount of pre-tax profit are unable to.

        How exactly is that fair? And if Tim does understand the Four Principles, then why is he unable to tell us how the practice he defends to the hilt is fair?

        1. Tim Worstal

          Re: Four principles

          "Tim has been supporting the likes of Starbucks taking advantage of mechanisms to reduce their corporation tax payments to virtually zero when direct competitors like Costa with a comparable amount of pre-tax profit are unable to."

          Not quite. I've been pointing out that the tax arrangements (royalties etc) have been specifically put into the law by the EU so that companies will indeed use them. For example, it is actually illegal (yes, specifically defined as illegal) for the UK to try to tax royalty payments going to another company incorporated in the EU.

          I've thus been saying that this isn't tax avoidance (which is usually defined as using the law in ways that those who wrote it didn't want you to do). And then I've been pointing out the same thing about each of UK Uncut's targets. Vodafone was obeying EU law: the Greens are obeying UK law (dividends to foreigners who don't live here simply aren't taxable in the UK) and so on and so on.

          1. Sebring
            FAIL

            re: Four principles

            Tim

            It's still interesting to note that you still plugging the line that 'it's legal, so there's nothing wrong with it'.

            What's even more interesting that you still can't bring yourself to comment on Adam Smith's Four Principles of Taxation in this instance. Instead, we get a soft-shoe shuffle - from someone who belongs to the Adam Smith Institute, no less!

            The irony of the whole situation is that you whine and sneer about groups like UK Uncut, but they seem to have a clearer idea on taxes being equitable between persons than you do!

            An outsider would think that you should therefore have nothing to do with the ASI, but of course anyone possessing a reasonable smattering of economic history can recognise that the Adam Smith Institute doesn't in fact promote all of Smith's work but instead cherry-picks the parts that support its own biased and morally corrupt agenda.

            So crack on, fella. It's always entertaining to see the moral and intellectual somersaults that a fat cheque can encourage.

            1. John 62

              Re: re: Four principles

              "Not quite. I've been pointing out that the tax arrangements (royalties etc) have been specifically put into the law by the EU so that companies will indeed use them. For example, it is actually illegal (yes, specifically defined as illegal) for the UK to try to tax royalty payments going to another company incorporated in the EU."

              @Sebring: You have uncovered Mr Worstall's clandestine membership of UKIP!! If we were not subject to EU law we could make our own tax arrangements unencumbered by the rapacious jackboot of the capitalist pig-dog EU. If UKUncut wants to change things it will have to get the Dutch and Irish to agree, which is unlikely given how much revenue their governments get from this system.

              Anyway, Mr Worstall's view on the morality of the system is irrelevant, he is merely pointing out that the system is working as designed and we shouldn't be surprised when a tax system designed for one purpose (not allowing punitive taxation of a company based in another member state) is used for another, more morally ambiguous purpose (channelling profits made in a high-tax jurisdiction to a lower-tax jurisdiction). We either have to amend the law or suck it up. Government should not be run like a charity with tax payments being made based on perceived PR advantages.

  42. Anonymous Coward
    Anonymous Coward

    If only public spending was mainly on nurses, teachers and firemen. Instead of all the highly paid, politically correct non-jobs to be found in the Guardian every week.

  43. Anonymous Coward
    Anonymous Coward

    Much of the tax revenue is spent on benefits etc. Housing benefit alone is £30 Billion a year. The public spending is a massive drag on the economy, spending (mainly wasting) over half of the total GDP now.

    1. All names Taken
      Paris Hilton

      Whoah! Hold on dood!

      Please allow me to indulge in a moment of your time - it probably is important no?

      The recipient-beneficiary of housing benefit is not the tenant Uh-huh baby.

      The ultimate recipient-beneficiary of housing benefit is (wait for it) Another government department!

      The ultimate destination of housing benefit is the landlord transient via a tenant following due process subject to due diligence.

      The biggest landlords in the UK are the council houses or new found mostly state owned new-council house landlords.

      Why?

      I am glad you asked - because her majesty's civil servants do not want competition

      Oh - and there same landlords are now officially and formally slum landlords (see RIBA Case for Space should you believe otherwise.

      UK civil servants philanthropic? Pah - you josh yes?

  44. Psyx
    Stop

    If anyone in this country genuinely believes that the 'problem' with it is that nurses and teachers are taking too much money (both massively SH!T jobs with SH!T salaries), they are smoking crack.

    Personally, I'd rather carry on with my job at nurse's pay than I would do a nurse's job at my salary.

    It's pretty fecked up when the people who wipe people's ar$es for them at 3am in the morning earn less than half of what we earn sitting around sipping coffee at keyboards all day.

  45. Mike 102

    Lots of nonsense being spouted

    Hi, lots of stuff on here is clearly biased or deliberately trolling. Quite disappointing.

    Things I believe to be true:

    Most of us don't really understand how things would pan out with lower tax or higher tax or no tax, with goverment capital expenditure, with lower benefits, without free trade agreements or with more.

    Spouting nonsense on here only gives temporary uplift in feeling

  46. Anonymous Coward
    Anonymous Coward

    say it with statistics or facts

    I prefer logic and facts...Foss...http://www.realityinfo.org there are other models where by that whole discussion disappears. Far too much vested interest in that discussion passing for intelligence for that to happen though:/ Foss...

  47. Kar98
    Pirate

    The whole world cries out, "Peace, Freedom, and a few less fat bastards eating all the pie."

  48. JJSmith1950

    Optional

    Erm... Corporate profits are at record levels and workers' pay has stagnated, and in some sectors declined, over the past 30 years.These are verifiable facts. The author of this "article" needs to do better research before expressing an opinion.

  49. Anonymous Coward
    Anonymous Coward

    Pictures worth 100s of words

    http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

    Money shot:

    9 Biggest Banks' Derivative Exposure - $228.72 Trillion

    all a house of cards waiting for one CDS to unwind.

  50. Anonymous Coward
    Anonymous Coward

    GINI Indexes

    You could look at GINI indexes to see which countries have the biggest "oligarch" problems.... (this probably matches up with your gut instincts BTW) and you might find this correlates in some advanced cases with Failed State indexes. Some of them are our bestest pals and in no way are economic models to emulate. Just sayin' ;)

    1. Anonymous Coward
      Anonymous Coward

      Re: GINI Indexes

      In fact, here's some maps for you.

      http://en.wikipedia.org/wiki/File:GINI_retouched_legend.gif

      http://www.imapbuilder.com/customization/samples.php?sampleid=distribution-of-family-income

  51. Matt Bryant Silver badge
    Facepalm

    The TUC lying?

    Gosh, this is my surprised face, honest!

  52. feanor

    So the upshot of your article is that the government has increased taxes on businesses, and said businesses passed that extra taxation directly on to the workers thus not taking any of the hit on themselves? Or did I mis-read something?

  53. Anonymous Coward
    Anonymous Coward

    Hmmm...no

    In fact most of the problems with the public sector at the moment stem from the way in which the private sector is being allowed to access it as a cash cow. The fact that the private sector is then allowed to set up fake companies in Luxembourg to avoid paying tax on the money they're stealing from us via the NHS, the police, and so on just adds insult to injury.

    Generally speaking, problems in large organizations most often are rooted in someone somewhere being unaccountable. It doesn't matter whether this is a public or private sector organization, and by and large, the worst excesses and wastes of money in recent years have been private sector companies rather than public. Go back to the 70's and it was public and mostly for the same reasons - people in charge making risky or plain stupid decisions which they knew they would never have to pay for if it went wrong. Look at HP for a nice example of this happening in your wonderful private sector.

    The thing is, we want an NHS. We want a decent Post Office, and we want a train network that isn't a joke. And we, mostly, don't want those things to only be available to the rich. So we are all supposed to chip in.

    Now, if you don't like that then vote for someone that will openly say that they are against these things and if they lose then shut up and deal with it or, alternatively, you know where the ports are. What we have had for decades now is a series of governments who say they are for these things but in fact hate them with a passion because they're not pulling in big bucks for the people who own the politicians. So they they are trying to "fix" these things but instead take actions specifically intended to undermine them, and then throw their hands up and go "well, we did our best, but the problems were too deep, so we'll have to hand the whole thing over to BigBloatedInefficientCorp to run. In completely unconnected news, I'm leaving to become a non-exec of BBIC next month by an amazing and entirely predictable coincidence".

    Random executions of MPs is the obvious solution.

    1. All names Taken
      Paris Hilton

      Re: Hmmm...no

      Maybe - just maybe the private sector is not stealing money merely by following the laws proposed by (harshly self serving) civil servants manifested by (dull-witted?) elected representatives?

      The biggest threats to democracy are not those of free enterprise, they are those of increased state control.

      Fact 1: the more you send to UK Treasury the less you get

      Fact 2: the more UK Treasury gets the more it spends on its own empire building

    2. The Axe

      Re: Hmmm...no

      The private sector is only taking advantage of the market by naturally finding the weak links. When interacting with the public sector who usually employ dull witted then naturally they will take advantage of the stupid. It is not just the stupid, it also includes those who are willing to spend other peoples money.

      As for NHS, PO and Rail. Well I want working ones, not the basket cases that we currently have. A privately run health system who cares about profit as in people not dying and wanting to come back for more not just monetary, a mail system that is as quick as other private couriers and not controlled by a trade union that cares more about employing more than about delivering post , and a rail system that doesn't need to pay billions to the government thereby loading that cost on to ticket prices. Those are what "we" want. The point is efficient systems, not nationalised ones.

      Though I agree about the executions of MPs. That will solve everything.

    3. Davey1000
      Unhappy

      Re: Hmmm...no

      Disagree with "Random" it should be targeted onto those who fucked-up the most. What could be unfair about that?

  54. Anonymous Coward
    Anonymous Coward

    Am I the only one who read the headline and wondered why people would accuse the World Health Organization of theft?

  55. Anonymous Coward
    Anonymous Coward

    Explain this ..

    Explain why our governments took on the capitalists debts and us wage payers are going to spend the next two decades paying it off. Abd why in the middle of a depression, the top executives at these corporations are paying themselves massive bonuses

  56. Um

    Not bollocks...

    The Economist has some relevent articles for thoes interested.

    http://www.economist.com/node/17849199

    http://www.economist.com/node/17851305

    There was even and article in the Daily Mail.

    http://www.dailymail.co.uk/debate/article-2175843/Public-sector-workers-better-paid-private-sector-equivalents-Public-sector-unions-note.html

    I guess the public sector workers in receipt of this 'good deal' find the story hard to accept because they have experienced a reduction in pay, pension, etc. and increased workload. What they don't seem to realise is that, on average, the rest of us have suffered a greater reduction in pay, etc. and greater increase in workload.... with a few exceptions in the city of course!

    Given the current situation maybe we should swap the term "Public Servant" for a more appropriate one.... any suggestions?

  57. jonathanb Silver badge

    Some comments here

    Some comments here:

    When the evil bankers extract money from us, they do it in the form of bonuses, which for tax and reporting purposes is additional salary. Bankers bonuses are a lot lower than they used to be, which probably makes up the bulk of the explanation of why wages have gone down as a proportion of GDP.

    When the government takes money off us in tax to spend on nurses and doctors, the bulk of it is spent on their salaries.

    If you are looking to see where GDP is going if it isn't going on salaries, you need to look at three things. The first is imports. That is the money that leaves the country to pay Chinese Foxconn workers to make all our shiny iDevices. It isn't wages in this country. The second is benefits payments. Benefits go to people in this country, but they are not wages. The third is rent payments for our houses and commercial properties. That is money that goes to the evil capitalists that isn't wages.

  58. Jonjonz
    Linux

    Complete Rubbish

    This is complete rubbish.

    It is a zero sum game, the point this rube misses is that corporations and the richest individuals convert resources (i.e. your productivity) into assets (real estate, stocks, bonds, derivatives) which are hardly taxed at all, yet consume the most resources (all that military and police to prevent the theft of said private property.)

    Fantastic deal if your the 1% holding 80% of the assets.

  59. IT Hack
    Pint

    Why the fuck is this shit being published on el reg? What part of this partisan fuckwittery has anything to do with IT?

    I know! Absolutely fuck all. Not only that but it is blatant bollocks to boot, as has been shown by quite a few commentards so far. Both for and against.

    Hopefully this is the last piece of "economic" reporting from Mr Worstall.

    Pint for the remembering to close the door on yer way out.

  60. Anonymous Coward
    Anonymous Coward

    Less disposable income

    I used to be able to turn up at a train station, and take a ride, but today it is unaffordable. Economy of scale should mean that a train ride should be the cheapest form of transport, but often costs more than taking a taxi.

    You used to get pay rises that slowly followed rising basic prices. Today fuel and electricity jumps by so much, that salaries are held in order to keep inflation down, so I pay proportionately more for fuel, electricity and other basics. That leaves less disposable income to do with as I please.

    1. Davey1000
      Stop

      Re: Less disposable income

      You are so lucky to have a train! Try living over fifty miles from a main-line railway station. As to the bus that gets you to the train station and the super-slab, they are badly sprung and badly driven as a rule with "digital drivers" as I call them. To avoid vomiting it is better to ignore ones bus pass and travel by car.

  61. dante999

    Tim starts his article with “lies, damned lies and statistics” and, although he did not lie, he didn’t tell the “whole truth and nothing but the truth”.

    The undisputed fact is that since the mid 80s, depending where you live, the income of about 75% of the population in industrialized countries has barely kept pace with inflation. By contrast, the top 25% has seen its wealth increase well above inflation. To make things worse, the top 2% has tripled its wealth over the past 30 years. Any number of reports, official documents, scholarly research etc. will confirm this. I suggest Hacker & Pierson “Winner-take-all politics” as essential reading for anyone interested knowing the reasons for the widening wealth gap between the top 2% versus the other 98%. Suffice to say that Reaganism, the disastrous ‘trickle down economy’ concepts and greater reliance on non-progressive consumption taxes have sawn the seed of this cycle that, unless reversed, will see the collapse of current western capitalism. This form of capitalism has seen Senior Management pay explosion, even when firms they manage go to the wall (US Treasury figures reports that in 1978 the average pay of CEO was 26.5 times that of average wages, in 2011 the ratio was 209.4 times! http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_n_1471685.html).

    Governments have caught up on the idea that the average person is gullible and hence have promised tax cut for all and increased services in order to be re-elected. This has resulted in ever-growing national debts which will see economies fail when the lenders, both internal and external, will demand their capital back. In the end it will always be the gullible public that will pay through unemployment, lack of services and lower standard of living.

    It never ceases to surprise me how easy it is to fool people. Lowering income taxes benefits ONLY the wealthy because the flip side is an increase in consumption taxes which applies equally to all irrespective of income. Progressive countries have understood this and they apply progressive taxation even to traffic fines (http://www.poliisi.fi/poliisi/lp/home.nsf/pages/F3BCD1C2A09C374FC225759900338B68?opendocument).

    Tim appears to advocate, but not in so many words, the typical Right Wing response to government debts, i.e. cut government spending! A more equitable approach is to return to pre-Reaganism tax rates where marginal tax rates of 70%+ was the norm. This would achieve 3 good outcomes: 1. it would put an end to ever growing CEO pays, 2. it would reduce government debts worldwide, and 3. re-establish some form of equity within the community.

    I would like Tim to tackle these issues and tell us why they wouldn’t work.

    1. Matt Bryant Silver badge
      FAIL

      Re: dante999

      "......I would like Tim to tackle these issues and tell us why they wouldn’t work." Simple - the whole CEO pay issue has become subject to supply and demand. As long as the companies think they need the best CEOs they will pay more for them. Increasing taxes on the top-earners will just mean they will be paid more and in more tax-avoiding methods, it will not reduce their pay one dollar. Companies will move their offices to tax havens and individuals will move to avoid high taxation - the Gerard Depardieu response. Just look at how many companies are already registered in the Isle of Man, Monaco, Lichtenstein, the Bahamas. High taxation is only a threat to those who are not mobile, and CEOs can be very mobile. The only ones trapped by higher taxes are the middle-income and lower-income earners that cannot pick up sticks and go play the tax avoidance game. To think otherwise is to be blinded by political desire. It would be a better idea to legalize the idea that a fixed portion of the CEO's pay is in company shares that have to be retained for x years after being issued, meaning the CEO then has a long term interest in securing the future of the company.

  62. Davey1000
    Alien

    Asymmetric Warfare

    B0ll0cks!

    The people who have drained off my money are Cornwall Council and Colombian drug cartels! How? Simple - the council get money for rehousing "problem people". Many of these "problem people" are drug addicts, allegedly Heroin, not just "Wacky Baccy". Now Dole money doesn't run to Heroin does it? As a consequence these "problem people" that the council has imported are persistent burglars. I have been burgled repeatedly and some people that I know slightly have been assaulted and stabbed. One was in Intensive Care for a fortnight after his abdomen was slashed open; another suffered a broken jawbone as a result of being punched. Exactly what these disagreements were over one can only speculate but one case I know of was very naughty. One bedsit dweller allegedly bummed a lift to the Co-op on another bedsit dwellers motorbike. Allegedly he said "Wait here while I get my shopping". Minutes later the bloke came running out of the shop with the shop staff chasing him. He jumped on the pillion and shouted "GO GO GO!" Phew that was a close call as later the motorcyclist had the Police doing a door-to-door looking for a shoplifter on a motorbike! The bike had been parked elsewhere "just in case" but he was lucky to get away with that even though in reality he was an innocent party who had been duped. Thanks to Cornwall Council this town has become a Gulag. Don't you just LURV councils? After all apart from importing burglars and drug addicts they put speed humps everywhere to ruin your cars suspension, they also paint wall-to-wall double yellow lines and employ traffic wardens.

    Would I get all this horse-sh1t in Florida I wonder? Nooooooooo! Over there when scumbags get locked-up they are Senior Citizens when they get released and that's if they are lucky!

    1. Anonymous Coward
      Anonymous Coward

      Re: Asymmetric Warfare

      Oh, talk about the grass being greener in the other guy's yard! You'd be surprised wha they are tolerating in Florida as I sit here and write this. We put up with a lot of it here in Texas. I shudder to think of what it must be liike in Chicago where only the criminals and the cops are allowed to have guns.

  63. The Godfather
    Unhappy

    Nowt new..

    ALL Governments lie....

  64. Bootneck
    Pirate

    Why are here

    The real problem is as plain as your face, all politicians are lying bastards and like capitalists only there to feather their own nest.

    1. Anonymous Coward
      Anonymous Coward

      Re: Why are here

      True, but then the Capitalists are obliged to give you a job and none of them are allowed to use force against you so that you must buy from them. The Politicians, on the other hand, are not quite that gray. They are basically just blackguards.

  65. TrickyCharacter

    So where is the Money?

    Forgive this laymans question but if http://www.economist.com/content/global_debt_clock is somewhere near correct at listing the countries that have national debts collectively summing up to just under $50 Trillion, to whom do they owe this money? I suspect it will be Oil rich countries but would be interested in others opinions based on fact and not guess work.

    1. JJSmith1950

      Re: So where is the Money?

      Governments owe the money, largely, to themselves. Governments issue bonds then print money to buy those bonds. I'm not joking either.

  66. DanceMan
    Boffin

    @The Axe: A privately run health system who cares about profit

    Figures are 2010, The World Bank

    Health expenditure as % of GDP:

    US 17.9%

    Canada 11.3%

    UK 9.6%

    I don't know the UK system, but Canada covers essentially everybody. The US does not, yet costs nearly twice what your NHS does, over half again more than Canada's system. Private works for who? Not for the benefit of the public.

    Yet paid shills like the author of this polemic have convinced the fuckwits in the US that a single payer health system will cost too much. And you've drunk the kool-aid too.

    1. Matt Bryant Silver badge
      FAIL

      Re: @The Axe: A privately run health system who cares about profit

      "...The US does not, yet costs nearly twice what your NHS does. ...." You ignore what you get for the money. In the UK we cannot get treatments available in the US. We also usually have massive waiting lists which do not happen in the States, waiting lists so long people actually die waiting for the surgery they need! I have friends that paid taxes for decades but had to take their daughter to the States to pay again for private medicine, for a life-saving treatment the NHS told them the NHS was not willing to pay for. It wasn't the fault of the doctors here in the UK, they were just as frustrated as the parents, it was the fault of beancounter civil servants having to make decisions based on the limited budgets rather than what was actually best for the patients. If you seriously want to repeat the NHS experience in the US without understanding what that means then I would suggest you are drowning in the koolaid.

      1. DanceMan
        FAIL

        Re: @The Axe: A privately run health system who cares about profit

        I have a son who'll be 24 in two weeks whose neo-natal care would have bankrupted his mother and I if we'd been Americans instead of Canadians. Yes the health care there can be very good, *if you have lots of money*. Obviously, your friends do. You failed to understand the issue I raised. Private, for profit, works for those with wealth. It's unaffordable for everyone. The issue you raised is one of management of the system. Most right-wing idealogues prattle on about private being the answer for everything, perhaps because so many right-wing politicos are incapable of managing complex systems. As are many of the lefties. But turning it all over to private industry is not the answer, though it appeals to the simple-minded. All large organizations will get bureaucratic, top-heavy and inefficient if not well-managed and if not shaken up periodically, whether public or private. Go back and read the stories of those who worked for Motorola on these very forums.

        There are many ways of doing health care. Germany has mandatory purchase of health insurance, but it comes from two large *non-profit* societies. The US private for profit system is far and away the worst way to do it, unless you are wealthy.

        Freedom to choose your doctor or your care, which is the issue you raised, and which the American right brings up? In Canada I can choose my doctor, although family doctors are harder to find. Most Americans with job-provided health care get it from a HMO. It will tell them who their doctor is, and what procedures will be provided, and what not provided. No difference from your story with NHS. Your fairy tale image of private health care is based on solid ignorance of the US reality. And for that they pay far more than any other first world country. Look up the figures. I did and gave you some. But don't let reality interfere with your cherished beliefs.

        1. Matt Bryant Silver badge
          FAIL

          Re: @The Axe: A privately run health system who cares about profit

          ".....Obviously, your friends do....." No, they didn't, they took out a second mortgage and a lot of debt. Stop trying to insist anyone that disagrees with you or has an alternative story must be rolling in money.

          ".....You failed to understand the issue I raised....." You didn't raise an issue, you simply stated that having a clone of the NHS would be a far better solution for the Yanks because you said that US healthcare was massively more expensive than the NHS using percentage of GDP spent, trying to imply the NHS was twice as good on cost grounds wthout looking at the care provided. That's like saying a third-hand Yugo would be a better car than a brand-new BMW 5-series simply because the Yugo would have a lower sticker price. Your comparison is doubly invalid as it does not even consider spending per capita, it's just percentage of GDP. Indeed, seeing as you have not even bothered to link the source, it could be you've pulled those figures out of your rectrum. In short, it's just some figures you want to throw out there because you think they settle the argument for you, and woe betide anyone that might disagree.

          ".....Your fairy tale image of private health care is based on solid ignorance of the US reality......" I see your political bent precludes you from seeing anything but your own "story" as valid. Shame, I was going to suggest you simply try making a more valid comparison, but it seems that would be a waste of time seeing as it is obvious you have predetermined the outcome and reject all facts to the contrary. Enjoy your blinkers.

  67. All names Taken
    Paris Hilton

    It is complicated?

    Systems - people working in those systems - the desire to be effective, efficient and fair?

    But!

    The problem in UK system arises from

    + too much cash flow to the Treasury (it means that cash-flow is not going anywhere else)

    + formation over a century or so of a maudlin middle class morality that does not create wealth but knows how to generate wealth by taxation for its own purposes

    + lack of an enterprise culture or any sizeable enterprise based middle class with a sense of modern Luddites emanating from state employees

    I believe there are no single shot solutions only solutions for the time and the place in which case former soviet block nations have a great deal to teach the West (perhaps it is moralities and ethics rather than systems and structures? Add a dash of mutual help and ... )

  68. sege122

    So Much Assumption

    There is so much assumption here. The public sector and the private sector are not two walled gardens but changes in both make such comparisons very dubious. Low paid public sector jobs have been extensively privatised in the last 20 years meaning that people cleaning hospital floors, doing home care or many other things are now private sector workers. This transfer of low pay into the private sector has been substantial.

    If you look at pensions the collapse of private sector schemes and saving in general means that public sector schemes are bound to be "better". Should we be celebrating a race to reduce wages, pensions and provision.

    However for the purposes of an argument lets assume it's all true and the big conspirators of the crash are public sector workers. People being made redundant by the score to save bust banks - banks who were theoretically private sector!

    The analysis seems to be that if you were in the public sector with strong trade unions, rights at work, a strong culture of negotiating collectively on wages and conditions you have done well. If you work in the private sector with little or no trade union representation you do badly. So the message to all workers is surely to join trade unions and negotiate collectively with your employer.

  69. Snake

    Oh yes, lies

    This "article" should be removed from The Reg due to (a), gross inaccuracies and (b) political bias on an IT site.

    The public sector took all of (our) money? REALLY??! Just ONE WEEK after this "article" was posted, here is the TRUTH:

    http://www.reuters.com/article/2012/12/27/us-tax-britain-bigfirms-idUSBRE8BQ02V20121227

    "Big companies in Britain now pay less tax than they did 12 years ago despite a big jump in profitability, a Reuters analysis of official data shows. Tax campaigners say the trend is the clearest signal yet that tax avoidance has blossomed under a more business-friendly strategy at the UK tax authority Her Majesty's Revenue and Customs (HMRC)."

    *Less* money is going to (public) tax coffers from large corporations. That means that the only "money" coming out of (our) pockets is *personal* - that is, more burden is being put on the individual while the corporations, who have been granted the status and rights of an individual in our societies, gain access to the benefits of the system while not paying their share of the burden.

    And the co-politically/economically connected people - the same people who either are gaining the benefits now or (naively) think they will benefit later ("trickle down economics"), support the imbalance.

    A large percentage of the population has been...well, brainwashed...into believing that such an imbalance, in the long term, will benefit their personal needs. 30 years later...we are in debt, in a recession that came *this close* to becoming a massive depression, crumbling infrastructure, etc. And the solution? Lower taxes on Big Business and the wealthy, of course.

    I find it INCREDIBLY naive for people to believe that what did not work in the 30 years prior...will begin to work NOW. They still keep believing in the Kool Aid, yet they never bother to look behind themselves to see the history that they themselves lived through. Income that has not kept up with inflation indexes, gross national debt, recessions, white collar crimes with slap-on-the-wrist penalties, massive upper management remuneration contracts...and more of the same will save us, the masses believe. And told so by ridiculous "articles" such as this with no factual proof and adequate "statistical" spin without telling you the *entire* truth.

    1. Matt Bryant Silver badge
      Pirate

      Re: Oh yes, lies

      ".....Big companies in Britain now pay less tax than they did 12 years ago....." Snake, did you ever stop to think that in those last twelve years, but especially in a downturn, the UK is competing with other companies in Europe for the attentions of those "large corporations"? Whilst it would be nice to charge them a chunk of extra tax, it would not be good if the result was they jumped ship and moved to France. Well, OK, given the recent idiocy of Hollande and his 75% tax on the rich (which you probably approve of), that is unlikely, but Switzerland might be an option. Or Germany.

      There is less and less unique value that the UK can offer international companies other than "we kinda speak the same lingo as the US". Having "large corporations" (and, come on, admit it, you mean large US corporations, right?) in the UK does provide more jobs than if we didn't have any here at all. And please don't forget those large corporations pay National Insurance contributions for employees, so encouraging them to base offices in the UK does have a benefit beyond the simple benefit of employing people. Making the UK an unattractive base by insisting on taxing "large corporations" more could have the opposite affect to what is desired as those corporations simply move elsewhere.

      Every day in London I meet European, Asian and African professionals that have come to London for work they couldn't find in their own countries, and many of them will quite openly state one of the reasons was the chance to work for those same "large corporations". Care has to be taken that in looking for solutions to current funding problems we do not create an even bigger funding crisis.

  70. Terence McCarthy

    Feeling Rather Sick...

    Your point (last paragraphs) about those who know a subject well to speak up against those who don't but pontificate about it, is well judged. For years my late wife and I would comment incredulously about stories in the press, or other media, that were twisted or downright wrong in our respective areas of speciality.

    Our conclusion was that if so many "facts" that we knew to be wrong were being published we could not trust the "facts" in other subject areas.

    I was surprised, though, that as many as 25% of MPs knew the odds on getting two consectutive heads in a coin toss. Although perhaps this figure is also wrong......

  71. Tom Richardson
    WTF?

    Stick to tech

    Between your ill-informed climate change denial and your Tory-loving politics you're pretty close to losing a reader here, Reg. Please stick to technology stories. You're at least passable at that.

    1. Colin Millar
      Thumb Down

      Re: Stick to tech

      No no no - lets have more like this - techies are not immune from the rest of the stuff in the world.

      I don't agree with much that TW says on economics stuff but at least there is a political basis and rationale for most of it which can be discussed. Simply saying - stay away we're all lefties here is really pathetic and part of the problem of modern politics - every one gets into their entrenched position and nothing useful is ever said.

      Plus - the level and standard of comment on ElReg is actually pretty good. If you think iWars are bad go and see just about any CIF discussion.

  72. walatam
    IT Angle

    A couple of points

    "As you can see, the workforce's share of the nation's economic output has been falling. Clearly a bad case of the capitalist bastards watering the workers' beer."

    The author appears to be claiming that capitalists do not work and that the workforce can not be capitalists (yes I'm being literal but he started with the massive over-simplifications)

    I think wage distribution might explain part of the problem too. If wages at all levels increased at the same rate then the comparisons the author makes might be worthy of a bit more scrutiny. It is quite amazing what you can do with a set of figures, a couple of charts and an agenda.

  73. Anonymous Coward
    Anonymous Coward

    Greedy bastards will always be greedy bastards.

    Like it or not, the measure of a man is not in pounds/pence, dollars/cents.

    The richest "people" can be the scummiest lowlives out there. They are usually psycopaths.

    Others, can be normal human beings with a sense of responsibility, but usully they are power hungry psyco's who think that being rich allows them to manipulate others for their own gain.

    No amount of money could buy me! I'm worth more than money, regardless of how much I earn.

  74. briesmith

    Past Party Politics

    I haven't seen any comments here pointing out errors in Tim Worstall's figures and/or charts. I assume it is therefore safe to rely on the content, that they tell a true story and give a reliable picture of the real world.

    In which case it is truly worrying. For the TUC to spin a story is one thing but to tell outright falsehoods aware of the impact such dishonesty will have is not just shameful, it is dangerous.

    The charts reflect some fundamentals about the UK economy that are way beyond party politics.

    Firstly while the numbers in the workforce have grown considerably - vastly more women, immigration, longer living etc - allowing for inflation, the national GDP hasn't grown very much.

    If you divide a constant sum by a growing number you get an increasingly smaller result so that yes more people are getting a wage packet but the packet itself is smaller.

    If the amount is topped off - by taxation and other government costs - then the total amount available is getting smaller even more quickly and the resulting wage packets reduced even more so.

    It would be to everyone's benefit if the Office of Budget Responsibility (I notice they didn't call it the Office of Responsible Budgets - I wonder why that was?) could publish this sort of analysis on a regular basis.

    The electorate is pretty much head in the sand pretty much most of the time but we do need to move these unarguables out of the political arena into the world most of us live in where 2 + 2 always equals 4.

    Basically this is a “we can’t go on like this” message I suppose.

This topic is closed for new posts.

Biting the hand that feeds IT © 1998–2019