Two interesting stories

Interesting for those further to the left of me I think.

The two above the fold stories on the front page of the FT today.

One is that limiting the growth of government spending to less than 1.1% in real terms is in fact "savage cuts". It\’s something of a sign of how the language has become debased, don\’t you think? That slowing the growth of the State is now "cuts"?

The other story is about the mutuals, the Building Societies. There are many who state that the solution to our banking ills is that we should get rid of the capitalist, shareholder owned, banks and stick purely with mutuals. They won\’t cock things up by haring after short term profits.

Unfortunately, the story in the FT is that those mutuals did indeed hare off after short term profits and did indeed cock things up.

I\’ve no objection to mutuals at all. But they\’re not the golden bullet perhaps?

Ho hum.

9 comments on “Two interesting stories

  1. Labour will continue to use the word ‘cuts’ because of its emotive qualities. Unless the Conservatives agree to everything Labour does, they are labelled as ‘cutting spending’ in a deliberate attempt to instil fear in the voters.

    That said, a bit of austerity might be appreciated by many voters in the current climate.

  2. “slowing the growth of the State is now “cuts”?
    Well, it was the standard Labour/BBC line in Maggie’s time.

  3. On cuts:
    Reducing the rate of increase of spending will probably result in cuts to services thanks to the ever diminishing returns the whole system gives us.

    On building societies:
    This is of course different to mutual banking and a free market in banking, which would arguably not have been subject to these problems (although no system is problem free – I’d expect other problems to occur, but to be dealt with more quickly thanks to competition)

  4. Furthermore, Building Socities are among the most highly regulated of all the financial institutions. Not only by the FSA but also by Parliamentary Acts.

    Doesn’t say much for the “need more regulation” argument.

  5. “Reducing the rate of increase of spending will probably result in cuts to services thanks to the ever diminishing returns the whole system gives us.”

    Yes. The next government needs to ensure that the ‘cuts’ are targetted at the legions of useless backroom staff in evey department and council, employed to record useless stats, pump out pointless publicity or provide a ‘diversity/sustainability’ figleaf, rather than the people at the front end actually doing the work.

    I think we all know, of course, that they won’t…

  6. I think spending on benefits will increase so much that they will have to make cuts to public services.

    I think they should start with a wage freeze and then look at proper contributions to pensions (probably banded so that the higher earners pay a larger percentage).

  7. This is nothing new. During Mrs T’s era, anything that was a reduction in planned expenditure was called a cut-back. This included if the Treasury reduced the request from a government department. It is like a seller in a Moroccan Bazaar complaining that his customer’s get price reductions.

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