The Good Times Are Back

The crisis is over - get out the champagne. Normal service has been resumed.

As unemployment rose to 2.38m yesterday as a result of the recession and credit crunch, it is good to know that all those banks we bailed out are putting the money to good use. Figures from Goldman Sachs show a 65% rise in profits and a bonus pool of some $20bn is to be set aside for its executives.

You put the two events side by side and it brings it all home. The world is only now feeling the full effect of the financial crisis we have experienced and we are talking of a 'Lost Generation' of 1m young people on the dole and ever increasing retirement ages as the pension hole cannot be filled. Meanwhile, in the City, normal service has resumed.

We haven't even sorted out the new regulation as the same old faces dither about how much interference regulators should have in running banks and yet we are talking of enormous bonuses being paid to a bank that was thrown a lifeline by the US Treasury. Goldmans will not be the only ones at it - you can expect a whole raft of banks across the globe announcing record increases in profits shortly as the hungry pigs get back to the newly stocked troughs.

In case we should think that this is a good thing, just remember the legacy that taxpayers will be paying for the incredible mismanagement in the Financial and Political world we have suffered. In Britain alone over £1.3 trillion has been put aside to shore up the financial system and it is feared that we will be paying the debts until 2032, while the long term social impact has yet to be assessed, but already Mandelson is predicting that there will be 10 years of severe cut backs to Public Services and the age of retirement is set to disappear, making it harder and harder for young people to get jobs.

The world has profoundly changed but in some respects you would not know it. There is still rampant consumerism out there and we are encouraged that this is still the way forward. We are told that we all need to borrow more money even though the average household earnings are dropping, the amount we save is negative, and we are a highly leveraged nation using our houses as collateral still to all our debts rather than our cashflow.

But the Financial world is ok. As real businesses experience the toughest of times and bankruptcies are at record levels, there has been scant support available to small business people. But at the highest level, banks and financial institutions were bailed out on a scale that most calculators struggle to handle. The executives, Boards and Traders in that world had to bide their time and see their bonus earnings disappear for a while as thousands of administration and telling staff were culled at the sacrificial alter for the excesses they wrought. And now business is back to the usual and the bonuses will flow freely and excessively as the financial world enjoys a post-crisis bonanza.

What goes up, in their world, will come down - but everyone else has to pay for it.

Here Is A Thought

As it was OUR money that went into saving the necks of these idiots, how about a Windfall Tax on all these financial institutions. As they make record profits, we take back 90% of their profits and pay off just some of the debt we are paying. And why don't we do that for the next 10 years?

All that is going to happen is that a small number of people get incredibly rich once again so why don't we just remind them of who saved their skins and ask for the money back. All of it - before they use it on themselves as if they actually deserve it.

Perhaps then we can pump some real money into the economy and stop real businesses going bust, save jobs and actually do something useful with the profits before it is all frittered away again until the next economic bust, which is looming as inevitable as last the one - already.

But, hey, I'm just one of those idiots that finds it hard to spell 'Macroprudential Regulation', let alone understand it, aren't I? Because it seems to me no more strict than the last set of rules by the FSA.