I am writing this while sitting on a Ryanair flight to the Canary Islands. My wife and I are taking advantage of a cheap deal we found and soon we will be enjoying a week of sun, a welcome break from the personal stresses at home as well as the wider economic turmoil beseeching all of us.
Our trip takes place while the euros in my pocket are rapidly losing value, and the Bank of England has tried to boost the economy with an extra £75bn of quantitative easing.
As the hours whittle away on the aeroplane, I have come to think that this policy is a waste of time. Already just an hour and a half into the flight there have been announcements encouraging passengers to purchase a "refreshing" bottle of a well known soft drink, or purchase a lottery scratchcard, beer, bap, bacon sandwich or chocolate bar from the in-flight menu. Then flyers are encouraged to finish off the meal with a pack of flight-safe cigarettes. These are a viable alternative to cigarettes, the steward explains, as they do not emit smoke but have the same level of nicotine. He then finishes by stating a price of £5 or 6 euros. None of the people ordering these goods seems to be question the prices.
Meanwhile I feel quite smug having eaten my homemade sandwiches.
Maybe it is not only financial institutions that are stifling economic growth. Perhaps it is society's obsession with consumption. Why is it so hard for a plane load of people to not have the opportunity to spend money for three hours? Do we have to have duty free, and a "dish if the day" thrown at us every half hour?
There is no point in pumping more money into the system until people learn some personal responsibility and hold back on unnecessary spending. This could come from a public awareness campaign from the government similar to efforts to stop speeding or encourage people to wear seat belts, or perhaps tax incentives for companies to ensure that in these tough times people buy stuff they need, rather than always just what they think they want.
09 October 2011
Budgeting goes further than a Ryanair flight
05 October 2011
Bankers are people too
I started a Masters in financial journalism in September. I am studying part time so am only attending weekly lectures on a wednesday which should take two years.
So far it has been a whirlwind, I have picked up fascinating information about previous financial crises dating back to the 17th century and gained some good writing tips.
However, the biggest aspect that caught my interest took place today in a heated lecture where the speaker waxed lyrical about how he felt the incompetence and excessive remuneration of bankers caused the latest economic crash. He said the banks should have been allowed to fail, nationalised, split up and sold on once they returned to profit.
This caused a student to storm out.
The student's beef- that is a phrase I have picked up from the listening to the undergraduates on campus - was that this was an overly simplistic way of describing the crisis which neglected the role of the regulators, credit agencies, shareholders and investors, as well as the work some bankers put in and the wealth they created and spent in the economy.
The lecturer retorted that he would prefer they had done less work so less damage was done.
This made me think, is there a place for sticking up for financial services? Has the narrative moved on from the causes of the crash to the cures or are we stuck in a cycle of banker bashing?
Everybody accepts that "bankers" - the catch all term for individuals who involved themselves in risky lending practises - behaved irresponsibly. Some have suffered with regulatory bans, although others have got off with large pay-offs and a nice pension.
Most of the media and academia is full of prose about how the financial services industry did wrong and needs reform. That is inarguable and the process is already underway.
But hardly anyone focuses on the good financial services can and has brought, such as job and wealth creation (in some areas), pension provision, sensible mortgage lending, providing bank account and insurance products, or philanthropy.
Should there be sympathy for bankers having their bonuses or pay cut? Maybe not. What about empathy for those left in the industry at firms now struggling from the prospect of another crash and facing bank failure or redundancy? They also have bills to pay.
I don't think it was just bankers who caused the crisis. The main cause was greed. And that could be found everywhere, from the Square Mile to the regulators in Canary Wharf, from the MPs to the first time buyer on a 120 per cent mortgage, or the man on the high street with a maxed out credit card.
The bankers, or the specific individuals in the finance sector, need to be held responsible, but it must be remembered that they did not act in a vacuum.
It is easy to argue that bankers are paid too much because they do not contribute to society like a doctor or nurse. But how relevant is that point. People can choose their vocation. Is it a banker's fault that the remuneration levels are so high?
Surely that is just capitalism? Is there a viable alternative or do we accept that everybody made mistakes and got fat on greed?
So far it has been a whirlwind, I have picked up fascinating information about previous financial crises dating back to the 17th century and gained some good writing tips.
However, the biggest aspect that caught my interest took place today in a heated lecture where the speaker waxed lyrical about how he felt the incompetence and excessive remuneration of bankers caused the latest economic crash. He said the banks should have been allowed to fail, nationalised, split up and sold on once they returned to profit.
This caused a student to storm out.
The student's beef- that is a phrase I have picked up from the listening to the undergraduates on campus - was that this was an overly simplistic way of describing the crisis which neglected the role of the regulators, credit agencies, shareholders and investors, as well as the work some bankers put in and the wealth they created and spent in the economy.
The lecturer retorted that he would prefer they had done less work so less damage was done.
This made me think, is there a place for sticking up for financial services? Has the narrative moved on from the causes of the crash to the cures or are we stuck in a cycle of banker bashing?
Everybody accepts that "bankers" - the catch all term for individuals who involved themselves in risky lending practises - behaved irresponsibly. Some have suffered with regulatory bans, although others have got off with large pay-offs and a nice pension.
Most of the media and academia is full of prose about how the financial services industry did wrong and needs reform. That is inarguable and the process is already underway.
But hardly anyone focuses on the good financial services can and has brought, such as job and wealth creation (in some areas), pension provision, sensible mortgage lending, providing bank account and insurance products, or philanthropy.
Should there be sympathy for bankers having their bonuses or pay cut? Maybe not. What about empathy for those left in the industry at firms now struggling from the prospect of another crash and facing bank failure or redundancy? They also have bills to pay.
I don't think it was just bankers who caused the crisis. The main cause was greed. And that could be found everywhere, from the Square Mile to the regulators in Canary Wharf, from the MPs to the first time buyer on a 120 per cent mortgage, or the man on the high street with a maxed out credit card.
The bankers, or the specific individuals in the finance sector, need to be held responsible, but it must be remembered that they did not act in a vacuum.
It is easy to argue that bankers are paid too much because they do not contribute to society like a doctor or nurse. But how relevant is that point. People can choose their vocation. Is it a banker's fault that the remuneration levels are so high?
Surely that is just capitalism? Is there a viable alternative or do we accept that everybody made mistakes and got fat on greed?
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