The list of idiots

This is a useful list to use for future reference.

They\’re calling for a windfall tax on the banks.

Now, just at the moment, we\’d like banks to shore up their capital ratios. Both to pay for the losses they\’ve already made and also to pay for the losses to come (and yes, we know they\’re out there too). We\’d also like higher capital ratios so that we\’re less on the hook for whatever the next stupidity is going to be.

There are two ways that banks can raise their capital ratios: they can retain profits that they \’ve made or they can issue new shares to investors. If we impose a windfall tax upon them then they have fewer retained profits with which to bolster their capital ratios. If we impose a windfall tax then investing in the banks is less attractive, making it more difficult to issue new equity. For of whatever profit there is to be made more will be going to the taxman and less to the investors.

There is in fact a third way that the banks can raise capital ratios. They can shrink their business. That is, lend less: in the midst of a recession this is a policy choice known as \”fucking insane\”.

So, higher taxes on bank profits right now is absolutely not something we want to do. Something which is entirely at odds with any rational economic desire we might have. Those proposing it are therefore idiots.

So here is the list of idiots:

1. Jon Cruddas MP
2. Ken Livingstone
3. Richard Murphy, Tax Justice Network
4. Dr Martin Parker, University of Leicester School of Management
5. Prem Sikka, Professor of Accounting, University of Essex
6. Andrew Simms, nef
7. Ismail Erturk, Senior Lecturer in Banking, Manchester Business School
8. Prof Karel Williams, Professor of Accounting and Political Economy, University of Manchester
9. Prof Sukhdev Johal, Royal Holloway School of Management, University of London
10. Professor Richard Wilkinson, Equality Trust
11. Kate Green, Child Poverty Action Group
12. Ed Matthew, Friends of the Earth
13. Ann Pettifor
14. Paddy Tipping MP
15. Neal Lawson, Chair, Compass
16. Gavin Hayes, General Secretary, Compass
17. Dr Adam Leaver, Manchester Business School
18. Professor George Irvin, University of London, SOAS
19. Cllr Jenny Jones, London Assembly Member, Green Party
20. Professor Peter Case, Bristol Business School
21. Howard Reed, economist
22. Duncan Weldon, economist
23. Sam Tarry, Young Labour Chair
24. Chuka Umunna, Labour PPC Streatham
25. Baroness Helena Kennedy QC
26. Stewart Lansley, economic journalist
27. Nick Isles, Managing Director, Corporate Agenda
28. Tony Robinson, actor & broadcaster
29. Tony Woodley, General Secretary, Unite
30. Polly Toynbee, The Guardian
31. David Byrne, Professor of Sociology and Social Policy, University of Durham
32. Jo Littler, Senior Lecturer, Middlesex University
33. Dr David Alderson, Senior Lecturer, University of Manchester
34. Peter Tatchell, Human Rights Campaigner
35. Richard Scorer, Labour PPC, Hazel Grove
36. Professor Christine Cooper, University of Strathclyde Business School
37. Paul Holmes MP
38. Lord Trevor Smith
39. Dr Eryl Price-Davies, Principal Lecturer, Thames Valley University
40. Stephen Linstead York University Management School
41. Dai Davies MP
42. Derek Wyatt MP
43. Professor Stefano Harney, Queen Mary, University of London School of Business and Management
44. Sunny Hundal, Liberal Conspiracy
45. Clifford Singer, The Other Taxpayer\’s Alliance
46. Professor Gregor Gall, Professor of Industrial Relations, University of Hertfordshire
47. Professor Ruth Lister CBE, FBA, Professor of Social Policy, Loughborough University
48. Professor Hugh Willmott, Cardiff University Business School
49. Rob Macgregor, Unite National Officer, Finance and Legal Sector
50. Priscilla Alderson, University of London
51. Noel Hatch, Chair, Compass Youth
52. Will Straw, Editor, Left Foot Forward
53. Roger Levett, Author
54. Michael Moran, University of Manchester
55. Lynne Jones MP
56. Tony Juniper, Green PPC Cambridge
57. John Austin MP
58. Hilary Cottam
59. Colin Hines, Convener Green New Deal Group
60. Pat Devine, University of Manchester
61. Professor Malcolm Sawyer, Leeds University Business School
62. Aditya Chakrabortty, The Guardian
63. Cllr Salma Yaqoob, Leader, Respect

Worth marking this list and using it to measure any other insanity proposed by any of them.

19 comments on “The list of idiots

  1. Acts as a handy ready reckoner for business schools to avoid, too, if that’s what passes for intellectual thought from the faculty. I’m not surprised to see Cranfield, Imperial and London Business School unrepresented.

  2. Excellent list. Come regime change we know where to make funding cuts because, as pointed out by Kit, we’re all paying them. There’s billions to be saved right there.

  3. Bloody hell, what a list. The list contains those running “business schools”, mind I have always thought that a lot of them were stupid.

  4. So I presume they are in favour of windfall subsidies then. We shouldn’t have been lending money when banks made a loss, nor buying their stock- we should simply give them money.
    Sounds like a plan.

  5. Windfall taxes are also an example of Retroactive law. I can see no reason why it should be acceptable for government to claim tax for actions that, at the time of the act, were not taxable.

  6. oh dear, why does the UK left have to be so witless? Martin Wolf’s more radical than this lot. Unlike you, I think there’s a case for reducing the future profitablity of the banking sector, hence making it harder for the banks to raise new capital, because I think parts of banking do little more than extract rents from the economy, and I’d like to see the rules change to make certain activities less profitable for them. There are various proposals by various economists along these lines – of course it would be too much to expect this bunch of clowns to be familiar with that sort of thing.

  7. I can see no reason why it should be acceptable for government to claim tax for actions that, at the time of the act, were not taxable.

    Take that up with #3 on the list..

  8. so, what’s the best argument in favour of this … that, by virtue of having been bailed out by the taxpayer, enjoying increased market share, and the opportunity to profit from chaotic market conditions and very cheap access to capital, the banks are enjoying a one-off bounty that ought to be reclaimed? Are they up to this sort of thing?

    Presumably Compass intend this tax to apply to the high street banks, whereas aren’t the big profits being made in investment banking?

  9. Well I’ve always believed that admitting one’s mistakes is salutary, and worth the embarrassment, and I think I might have to prepare myself to climb down from my initial response to this windfall tax idea. Martin Wolf, a man whom I regard as about as far removed from an idiot as its possible to get, is also in favour of a windfall tax on bonuses. I need to think again.

  10. The list is very unfair. Tim Worstall should be heading it, but then he is hardly known for any original thinking.

  11. As one of the idiots, I’d like to thank Mr Worstall for being so right about everything. His absolute certainty in his own judgement makes me feel confident that his policy recommendations must make complete sense and that his analysis of how capitalism works is clearly the only correct one. Unless he might be wrong? But no, someone capable of dismissing everyone he doesn’t agree with as idiots must be right.

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