The front page headlines are really important for newspapers: they're what grab peoples' attention and persuade them to spend their cash to read the full story. A good headline may be worth £40 000 in sales!
The news that the government "spent" £850 billion to bail out the banks, and that that equates to £40 000 per household, certainly grabbed attention, especially in light of the demands from RBS to pay £1.5 billion in bonuses. Outrage!
But the headlines aren't the full story. According to this report from the BBC the £850 billion figure isn't actually all spent. The vast majority of it is loans and loan guarantees, which will only be required if the economy goes from bad to worse.
£37 billion was spent buying RBS shares, making us all owners of that bank. I hope we will be able to sell it for a profit in the future, but if we are to find a buyer it needs to be an attractive proposition, run by talented staff. By denying them their enormous (I assume, contracted) bonuses won't the best talent leave, undermining the very value of the bank that we own? Will we cut our nose to spite our face?
And, from another perspective, the £1.5 billion in bonuses means a tax take for the exchequer (at 40%) of £600 million - enough to buy a couple of new hospitals(?). What doesn't go to the exchequer may be saved, boosting liquidity, invested, boosting pension values, or spent, boosting retail sales and protecting jobs.
Whether you agree with my analysis or not (admittedly there's more to it than this), the point is that Interactive Democracy needs to be a slow and considered process, not one that reacts to every headline. I've previously written about the need for truth in the media, which I think is essential for Interactive Democracy, but my concern in writing this post is that what may be a true headline disguises a bigger, deeper truth and may give the wrong impression.
(According to my calculations the £37 billion invested in RBS equates to £1423 per household, assuming there are 26 million households in the UK.)
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1 comment:
I completely agree that the headlines rarely serve to enlighten nor do I disagree (on the bases of no reaserch) with the figures you quote. Where I am less in agreement is in the area of whether or not individuals should be rewarded with bonuses which are beyond the dreams of avarice. This is a time to reward people for their abilities and talents and not for their greed. I think it is probably a myth that the best people will leave if they don't get their bonuses but if it is true then let them go and let us promote younger talent, those who are not accustomed to the sort behaviours that have so blighted our economy of late. Let us not forget that the banks have played fast and loose with our money in a quite startlingly stupid game of economic Russian roullette; all the while extolling the pre-eminence of capitalism and now having failed to demonstrate an understanding of their own busness models they have the brass neck to expect, as of right, tax payers money (mine and yours) to help them on there merry way. In short the idea is; capitalism on the way up and socalism on the way down. I contend that these people are bad for this country its economy and its sense of self worth, no other class of employee could bring about such a calamity and keep their jobs, but these guys ask for a raise with a staight face and what apears to be moral conviction. And finally let us not forget that the real impact of these events has yet to be felt and not just in increased taxes but deep cuts in public services, below inflation wage settlemnts leading to industrial unrest and postponement of job generating infastructure investement. Pause for breath.
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