Dear Activist
We are now back into the serious season. And what a way to start!
National media has woken up to the concept of the public sector pensions deficit - giving the issue 10 minutes of airtime at 8.10am BBC Radio 4 "Today" programme - whilst government is pouring billions into the banking sector to keep it from collapsing. At the bottom of the same bucket, however, guess who's lost billions of pounds in deposits? Yes, the same public sector put money in Icelandic banks. No wonder this arrogant government abused the Terrorism Act to confiscate Icelandic assets. There's a warning there for all citizens, bankers or otherwise.
The economic situation looks grim, too. Rampant deflation is going to trigger a recession, the Bank of England is about to reduce interest rates for GBP (the overnight commercial deposit rate for USD went negative on Friday 17-Oct-08!) and so we can expect the value of GBP to slump.
The slump in GBP will cause re-inflation via imports, as - arithmetically - lower exchange rates make imported goods cost more. Imports? Oh yes: everything from French electricity, via Arabic oil and Kenyan runner beans.
So, within 12 months, expect stagflation: a falling economy (GDP slows or goes negative), rollocking inflation and soaring interest rates to combat said inflation. Oops.
Meanwhile, the public sector's splurging over the past ten years will make the state bankrupt. With no additional tax receipts to match the additional expenditure of the state, any intelligent state would retract now. But, so far, this hasn't happened. And it's unlikely to: unions are threatening strike action to deter the public sector from taking necessary action to protect its financial viability (what little of that is left). Public sector management being weak, overpaid box-tickers (without the gumption to do a proper wealth-creating job in the private sector), the unions will have already won.
Yet no political party is talking about tax tactics at all, let alone financial strategy or even thinking the unthinkable: two acts of Parliament that would permanently, arbitrarily and unilaterally convert public sector unfunded pensions into private sector funded defined contribution schemes.
Not one single politician has commented on the root cause of both public sector splurging and banking sector greed: lack of individual, personal liability. Make individual employees liable for the consequences of their actions - unlimited, personal, financial liability! - and watch responsibility suddenly appear out of nowhere, without a regulation in sight.
On the contrary (again!), our incompetent politicians are desparately trying to keep the lid on the debate of public sector fat cats, ranging from the greedy CEOs of local authorities to the humble non-job jobsworth, keeping his salary very quiet.
Some of the more economically illiterate politicians strongly support Lord Turner's statement that he will increase the pay of the Financial Services Authority (of which he is CEO) to "attract the best" to regulate better the City. Sounds like tripe to me. The only people he will recruit are the money-hungry don't-give-a-damn animals that gave rise to the crunch in the first place, not the principled, meek, humble quasi-priests that are required to run proper, intelligent regulation. Sorry, but the clueness shall not inherit the Earth.
Looks like our work is cut out for us this year!
And, in Hertfordshire, it starts on Saturday 1 November 2008 at the Hatfield Farmer's Market, 9am to 12pm. The group's monthly meeting takes place on Tuesday 11 November 2008, 6.30pm to 8pm at the Hatfield Arms.
Kind regards
Martin
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