Yves here. Even though this piece describes how Brexit is a useful tool for advancing neoliberal aims, the techniques need to become more widely known here as well. For instance, “impact assessments” are a particularly nasty bit of business.
It also goes without saying that the Brexit deregulation push isn’t going to endear the UK to the EU in trade talks.
By Emily Scurrah, an Assistant Researcher at the New Economics Foundation and Christiane Heisse, a quantitative researcher at the New Economics Foundation. Originally published at openDemocracy
Shortly before leaving office, the former Chancellor Sajid Javid announced a Brexit ‘red tape challenge’ for the upcoming budget. For avid followers of the deregulation agenda, these are three words that have become all too familiar. Javid is merely the latest in a long line of ministers to use them.
Despite Javid’s departure, this looks set to be a big year for cuts to regulations, as the UK and EU prepare to negotiate their new economic relationship. Today the Confederation of British Industry (CBI) has called on the government to “minimise red tape through negotiations so companies can focus on jobs and growth.” They won’t be the last lobby group to do so.
In this context, it is important to understand the ideology underlying the ‘red tape’ agenda, and why big business embraces it so wholeheartedly. We urgently need better healthcare, large-scale environmental action, safe buildings and food, and well-defended labour rights. So why do those in power want to deregulate? And what exactly does deregulation entail?
One In, Three Out
Deregulation is when the government weakens, or removes rules on businesses in a particular market. It is based on the idea that markets, if left alone, produce the best outcomes – economic thinking that can be traced back to Ludwig von Mises and Friedrich Hayek in the early 20th century. Together with privatisation, tax cuts for high earners and corporations and public funding cuts, deregulation is a central tenet of neoliberalism – the economic and political philosophy that has dominated policy-making in Britain since the 1980s.
The process of deregulation comes in many shapes and forms. Technocratic rule-cutting exercises such as the business impact target, or the one-in-three-out rule aim to cut the ‘costs’ that laws impose on businesses. The one-in-three-out rule in Britain – which stipulates that “for every pound of new regulatory burden introduced, government departments must reduce burden elsewhere by at least three times that amount” – is indicative of the arbitrariness of this legislation. The drive to reduce regulation is based on ideology rather than evidence.
Other deregulatory instruments include measures to prevent new regulations from being introduced, or deregulating by stealth by not enforcing existing regulation. What these methods all have in common is a narrative which sees laws as a burden to business and society, rather than tools to shape and protect the kind of society in which we want to live.
‘Better’ Regulation
This framing of laws as inherently burdensome has given big corporations seats at the policymaking table alongside democratically elected lawmakers. When this happens, the scale of state capture (where private companies are able to influence a state’s decision-making process to their own advantage) that results is mesmerising: big oil and tobacco firms even managed to initiate an ongoing EU-wide programme of deregulatory reform called ‘Better Regulation’. Better Regulation paints itself as providing more scrutiny and transparency in lawmaking, but in reality it creates fast tracks for firms to shape legislation in a way that serves them.
Shrouded in technical reports, driven by revolving doors between regulators and industry and protected by huge lobbying budgets, the immediate effects of deregulation are often difficult to pin down, which is part of the reason why there has only been limited pushback against it. But a three-year research project by the New Economics Foundation has identified cases from the health and safety and the health sectors.
One example of how the Better Regulation agenda has impacted people’s lives in the UK is through ‘impact assessments.’ In principle, impact assessments impartially weigh up the financial cost of a particular regulation to businesses, against the benefits to business, society and the environment. The Better Regulation agenda has changed impact assessments so that the latter objective has become completely subsumed by the former. Estimating compliance costs to businesses is prioritised over analysing the benefits a regulation might bring to people, environment, and nature – which can also be more complex and therefore more difficult to calculate.
What’s more, bureaucrats have warned that impact assessments are often used retrospectively to justify policy decisions that have already been taken, as opposed to being used as part of the process through which policy is developed. In 2014, the former EU chief scientific advisor Anne Glover warned that civil servants preparing impact assessments may face political pressure to include evidence to support a predetermined conclusion. In this process, the views of ‘social partners’ – a term the EU uses to refer to employer organisations and trade unions – are repeatedly ignored in favour of powerful business and expert stakeholders.
Pregnant workers across Britain and the EU have already suffered the consequences of this. The European Commission launched a consultation with social partners in 2006 on revisions to the directive on pregnant workers. In 2009, a proposal to increase maternity leave to 20 weeks, with an allowance of 100% of the mother’s salary, and the creation of adoption leave was put forward by the European Parliament’s FEMM Committee. Business partners and employers’ organisations strongly opposed women receiving a full salary during maternity leave. Despite initial adoption by the European Parliament, the Commission surrendered to business opposition and withdrew the proposal.
Civil society and trade unions widely challenged the withdrawal. Businesses claimed that pregnant workers were already adequately protected. Using the impact assessment as evidence, they claimed that, against the backdrop of economic crisis, there was no justification for proposals which would be costly for companies.
The capitulation to business interests over the concerns of social partners is indicative of the way in which supposedly neutral tools for consultation are weighted in favour of business interests and frequently override the concerns of social partners. Women’s rights across Britain and the EU were sacrificed in the name of a dominant economic culture, which prioritises minimising costs to business above all else, infecting processes which are purportedly ‘neutral’.
Corporate Capture
Technical impact assessments and the one-in-three-out rule are just one part of the equation. Health policy in the UK is brimming with deregulation by stealth and confusion. The UK is required by EU law to share results of all clinical trials in a public registry. In practice, however, the results from studies finding that drugs are unsuccessful or have harmful side effects rarely see the light of day because the British government fails to enforce this important rule.
Keeping this evidence hidden away can make new drugs seem more effective than they are, as billions of public money spent on important medical research is used for the private gains of big pharma firms. In 2014, the NHS was found to pay £500 million for a flu drug that, as it turned out, was not even proven to work. There is a human cost to this system: one study found tens of thousands of people might have died from unrecognised side effects of a popular drug for heart conditions.
Of course, none of this is isolated from other forms of deregulation. A recent report on state capture by lobby groups in the EU explains that revolving doors and seats on high-level advisory groups have historically given big pharma firms high-level access to policymaking. Similarly in the UK, industry groups were so strongly involved in the Drinkaware campaign that government consultations on alcohol legislation failed to even discuss minimum unit pricing in a fair way.
Brexit: A New Dawn for Deregulation?
For decades in Brussels, Britain has pushed harder for deregulation than any of its European counterparts. The Brexit campaign has been underpinned by a consistent argument that Europe enforces burdensome and costly regulations, ignoring how these regulations protect British people.
As laws are redrawn in the aftermath of Brexit, it will come as no surprise to see the deregulation agenda pushed further. There are already grave concerns about possible financial deregulation, and about the type of trade deal that the government will seek with the EU. We are facing a climate emergency which will require much more regulation, so this agenda is a significant threat.
Britain may face poor economic conditions following its exit from the EU, which have historically been exploited by multinational corporations who lobby for weaker working conditions, less corporate regulation, and lower environmental standards. In an economy like Britain’s, which prioritises deregulation as one of its core ideological tenets, this is a significant threat.
As this deregulatory agenda threatens to inflict more harm on us, it is easy to feel powerless. But perhaps counterintuitively, the very instruments and functions which are repeatedly ignored, overridden, and bypassed through the Better Regulation agenda reveal the levers of power which are available to us.
The groups that make up the social partners, whose interests stand separate to a myopic and harmful profit motive, are in desperate need of strengthening. Enhancing the power of these partners – trades unions, campaigning organisations and civil society – in relation to national and international policy can only be done through growing these institutions to increase their membership and put greater pressure on governments. Doing this means joining up social movements – such as those struggling for workers’ rights and those campaigning for environmental justice – in order to develop collective strength, as well as having greater readiness to take action.
We can also establish a counter narrative to the prevailing calls to ‘cut red tape’. This narrative has led to the slashing of laws protecting our health and environment to increase the profits to business – with the tacit approval of a public assailed by this narrative, which has dominated the British press for decades.
It is only by revealing the deregulation narrative for what it really is, and highlighting the threat that it poses to our health and environment, that we can generate public and electoral pressure to halt this agenda.
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Interestingly, news yesterday that life expectancy in Britain has stagnated and is now falling after 10 years of neoliberal austerity, is today being spun as not due to austerity but because people are eating more junk food. And of course, red tape cutting of health and safety standards (disparagingly called ‘elf n’safety’ by sneering tabloid journalists) , will mean more deaths and work-related injuries to further reduce overall life expectancy.
Regulations also protect business from themselves as has been repeatedly said here.
A bonfire of protections, with a five year Conservative ideological assault on the vast majority of UK citizens.
Social movements may be thrown a few bones alongside some cynical economic spinoff, but won’t change anything. The government’s only balancing act will be to discourage mass dissent as people realise what they’re doing, which has already started with their redefining of “extremism”.
This is what a lack of political education, flaccid media and ID politics divide and rule has achieved. Perpetual establishment enabling of corporate greed.
A race to slash red tape or a race to the bottom? Getting rid of regulations does have major consequences. Will the European Union allow UK goods into the EU if they are of substandard quality according to EU regulations? Will UK manufacturing achieve the same quality as some Chinese industries?
I can see it now. In a few short years, you will have stories on the net how British in EU countries are buying cartons of powdered milk to send to the UK on order as it is a high-quality product that will not poison UK babies – unlike the local UK stuff!
If the poisoned powdered milk doesn’t kill babies, slashing legislation against toxic flame retardants surely will:
https://www.theguardian.com/commentisfree/2020/feb/26/toxic-sofa-eu-red-tape-flame-retardants
Look to U.S. Big Ag and Govt to seize this opportunity to foist our, er, efficiencies on UK. There is a special place in hell for peeps who don’t recognize the sentience in animals. Of course by doing so, they deny human sentience as well.
https://www.theguardian.com/commentisfree/2019/mar/06/us-chlorinated-chicken-trade-deal-agriculture#img-1
I saw some interesting analysis, possibly from “Clive”. He noticed that chicken is currently more expensive in US than UK, so it seems unlikely that it will be profitable to import US chickens.
Ironically, the chlorinated aspect of US chicken is ‘elf and safety gone mad. If 1 raw chicken is detected to have food poisoning on it, the whole crop is declared to be tainted and unsellable. So they wash it all with bleach to kill the bugs. In the UK everyone knows raw chicken is probably covered in food poisoning, and handles and cooks it accordingly.
https://www.thegrocer.co.uk/food-safety/chlorinated-chicken-explained-why-do-the-americans-treat-their-poultry-with-chlorine/555618.article
A reason for those low prices is, in part, commerce with EU countries. The UK consumes a lot of breasts (and imports some from EU countries) while other chicken parts are exported to the same countries that have a different pattern of chicken consumption.
“1 Day, 1 Pound, 3 Meals – Limited Budget Food Challenge”. I watched this video https://youtu.be/fJDg3lMlmBU recently.
I looked around my local supermarket in AZ and I noticed that you cannot really buy any item for less than 99c here. Food seems to be much cheaper in UK generally speaking.
Grocery retail here is hyper-competitive. Even in my fairly modestly sized town there is one “hypermarket” (80,000-100,000 sq ft) store, one other chain which has a footprint only a little smaller, two mid-sized stores from a middle market player, two medium format stores from the discount chains and a small-medium store from an upmarket brand.
It’s so fierce competition, Walmart wants to quit the U.K. and is trying to hawk its Asda brand stores to anyone who’ll take them. Unlike the US, where a Walmart can successfully dominate grocery retailing in an entire community. Walmart tried its US model here, it was a dismal failure when it couldn’t absolutely control a big geographical area and actually had to face some genuine opposition players.
Sorry Clive, that’s just not the case – the UK grocery market is probably the most profitable in the world – precisely because of its lack of competition. The gross profit margins of UK retailers are the envy of retailers around the world. Even Ireland, with a market maybe one twelfth the size, has a larger number of peer competitors in any given urban area.
There is far greater peer to peer competition in most European countries, especially in northern Europe. This is precisely why so many retailers try to enter the UK market. The reason they usually fail is because the big retailers in the UK have a vice like grip on the available locations. They use their financial muscle, lands banks, along with their knowledge of the intricacies of the UK planning system to keep out pretty much all the hypermarket and mid sized supermarket competition. The only reason Lidl and Aldi got a foothold is that their model (smaller units) allowed them a greater range of available sites within city centres. Just as with South Korea, Walmart was driven out by local companies cutting off the supply of available high quality sites, it was nothing to do with customer preferences (as the clueless financial press regularly opines). Walmart doesn’t complain, because it does the exact same thing on its home ground.
There is also a huge loophole in UK anti-monopoly law when it comes to aggressive pricing. All the major players use the threat of cheap food dumping to eliminate discounter rivals (I well recall living in a suburb of Birmingham in the 1990’s when the Sainsburys has super cheap basics, for as long as the local Kwik Save survived). Until the German discounters arrived, the big 4 in the UK had successfully wiped out or marginalised all the smaller discount chains, allowing them to maintain a pretence of low prices.
That used to be true. But the high margin U.K. supermarket is a thing of the past. This Guardian piece gives a long-form analysis and shows how margins fell from 7%+ to 2-3%.
As noted, the Competition Commission’s decision to block the Asda/Sainsbury’s merger showed a, perhaps belated, reaction by the competition authorities and government to say that the days of stitching up the grocery consumer are gone and not coming back.
It’s been startling how quickly the market has changed in U.K. grocery retailing, given the inherent inertia in turning round these supertanker-like businesses. Stores, formats, SKU ranges, prices and numbers are scarcely recognisable from what you saw ten years ago. Not all the changes have been good. There’s a lot of duplication and it’s hard to see everything surviving in the long terms, so instability is inevitable. And quality products such as fresh baked bread might be doomed to disappear.
I don’t buy the premise of that article at all. Aldi and Lidl have made even greater inroads to the Irish retail market without significantly impacting on the profit margins of established Irish retailers (except for Tesco, which isn’t saying much). They attacked some of the fat in the UK system without significantly changing the overall market. The main Irish retailers have lost market share, but have maintained profitability by doubling down on their established niches. The problems with Tesco and Sainsburys and Morrisons have as much to do with their poorly managed international expansions, overinvestments domestically, and the fact that they have sat too cosily on their laurels for years. They simply aren’t very good retailers anymore, as anyone who visits a branch of one of their shops after spending time in (for example), a Carrefour or Auchan or Dunnes or Supervalu will know.
Tesco themselves have an enormous landbank, and these are the key sites any incoming competitor will need. They’ve used this to keep Irish retailers (including Dunnes, a famously rapacious company) out of the UK market – quite simply, nobody will sell them the right sites – they’ve been trying for decades. Its that simple. They have vigorously used the planning system to keep Costco and the French hypermarkets at bay (Tesco and Sainsburys pretty much write UK retail policy). They control their markets through land control, not through their aisles.
A landbank in today’s retail environment is a potential liability, not a source of profit if it is undeveloped and quite possibly undevelopable.
The big UK supermarket chains did buy and hold a lot of development sites with the aim, as you rightly say, with locking out competition from putting up their own stores in a limited catchment area. That strategy made sense at the time.
Now, not so much. Large format stores have reduced in relevance as the “weekly shop” has been supplanted by a less-frequent (usually car-enabled or home delivery) big stock up for bulky and heavy products maybe only once or twice a month augmented by “top up shops” in discounters, specialist food outlets and high-end small format supermarkets.
A 50-acre development site bought at the top of the market 10 years ago which isn’t any longer a potential venue for an economically-viable large format store contributes nothing to the bottom line and is an asset write-down waiting to happen. That’s before you get to a portfolio of 100,000 sq ft units where footfall is down 20 to 30 percent on what they were designed for.
Thats very true about overinvestment in land – and a key reason why the retailers have been in some financial trouble recently. However, I’m still a little sceptical (admittedly I’m not on top of the latest data as I used to be), that there have been fundamental changes to shopping patterns in the UK. The big retailers are still very keen on suitable sites for very large scale shops – the problem for them is that there simply aren’t many available, mostly because of the slow-down in road construction since the 1990’s and the gradual choking off of many major roads. It is traffic flows that are operating as the main constraint on the growth of ‘big box’ retailing in my experience, they simply can’t find the right sites with sufficient flow capacity.
2-3% is still high comparatively. In France it is probably higher tho.
Here in Germany, Rewe which I would classify as higher end of the market, similarTesco or Sainsbury I guess, has a margin of less than 1%
Last year, they acutally grew quite well, when Aldi Nord had the first loss in its history. Still, they made 54 billion in sales volume and got only 430 million in profit. Profits or margins from both Aldi corporations and Lidl are hard to come by since they aren’t public. Last news snippet I could find was one from 2017 when the marginwas halved compared to 2016 to 1.7%. And of course the unprecedented loss by Aldi Nord in 2018.
As for things like bread, they never were or are a quality product in supermarkets or discount stores. (Fresh) bread has always been sold in an adjacent mini shop inside the supermarket but after the check-out. Typically by a local bakery, tho the bakery is nowadays usually an industrial bakery for all the greater cities. Countryside it can still be an actual local traditional bakery.
For example we have ~8000 population and are 10km away from a 100.000 city. One cheap discounter has a local bakery shop, the other, a Rewe, has an industrial bakery shop stocked by an industrial bakery from the nearby 100k city.
The third local shop, Lidl, has no bakery at all but only sells crisped up stuff inside like all of them do. Which is obviously inferior even to the dedicated industrial bakeries.
One reason for the lack of baked goods in shops is also that Germany has a very localized baking culture. Drive less than an hour and there are very different products for sale, also the variety is very high: lots of different breads.
I actually don’t think they will get very far with that.
The most immediate problem for the Cummings Regime seems to be cleansing the Ministries and the Civil Service of everyone deemed to be more competent or more intelligent than Dominick Cummings. That will keep everyone busy for quite a while. Possibly all the way past the hard Brexit.
Once everyone tasked with executing the directives of the regime are replaced with people more stupid / deranged than their ‘Benevolent Dictator for Life’, the new underlings will constantly miss important details and fail in their assignments, but, since failure is never allowed to taint the perfect vision of the ‘Benevolent Dictator for Life’, the underlings will simply fudge the KPI’s or lie about it.
And, once it becomes known in the organisations that lying to the bosses is nearly as good as doing the work, then no work will be done at all, because, Why risk it?
They are, in my opinion, re-implementing the Soviet Model of Government and it will work the same way as it did for the USSR.
Let’s assume, reductio ad absurdum, that all businesses were equally owned by all citizens, i.e. all citizens had equal shares and voting rights in all businesses.
Then how much regulation would be needed to protect the public from its own equally owned businesses? Or, at least, how much opposition would sensible regulation provoke?
Then note that government privileges for private credit creation enable businesses to bypass the need to share wealth and power.
Just another reason among many why “the banks” should be de-privileged…
your first question: still the same, as people can self-harm quite easily, especially if they don’t know whether they are self-harming or not, and majority would have no clue about their workings.
second question: How do you tell whether something is sensible or not, across many different areas? Most people can’t – even reasonably educated ones.
You may have removed the profit incentive, but there still would be power incentive (even if you rolled all the competing companies into one).
Another minor problem,even if citizens owned,what makes you think the companies would do what they wanted?
“ Deregulation is when the government weakens, or removes rules on businesses”
When I encounter someone who still believes that this approach is being done to “create jobs and growth”, I usually point out that regulations on business are fairly similar to “laws” on individuals. If laws are weakened or removed on individuals they too could be more prosperous. As an example, if pesky and limiting laws were weakened or removed that prevented me from going over to the old lady next door, hitting her over the head and taking all her stuff, then I’ll likely be richer and able to buy more things and that might create a job. Or not. I might just cash in and move to Belize.
Sometimes I get a bit of pushback, but not often, as this pretty much describes what business has been doing for the past few decades.
Umm.. so? The people of Great Britain voted for this. They have been voting for this again and again. The left or those so darn concerned need to come to terms with this and the intellectual capacity of its voter base.
I feel that way, sometimes, but that feeling I think is born out of exasperation and frustration. The thing is,
people in the UK are seduced quite a bit by the malefactors in this country. The seduction takes place with
1. political performances ( BREXIT, Tories, billionaires eg Branson, Dyson etc )
2. lazy, venal, biased media
3. short term memories and a forgotten history
4. distraction
As for your last point, if we follow through with your proposition, we sort of end up with Hillary Clinton and
her “deplorables” comment.
Yes, blaming the voters turned out to be a losing proposition and calling them stupid didn’t endear them to your cause.
Who coulda known?
A failure to by Remain understand that the Leave voters did quite often themselves understand the issues in play led, unsurprisingly, to an inability to get onto euroskepticic voters’ agendas. There was a lot of fairly condescending and, frankly, risible wonkery, too which couldn’t pull the intellectual skin off a rice pudding. VoxEU suffers from this on occasions — the above piece threatens to wander into this territory at times because it has an implicit assumption that everything that came out of The Berlaymont is unimpeachably Devine. I for one would be quite happy never to have to see GDPR, MiFID II, ErP and that hideous internet copyright Directive ever again and would personally light the blue touchpaper on a bonfire in Parliament Square to burn the statutes containing these miserable pieces of nonsense on the 31st December.
But then there’s an awful lot of good regulation, such as drinking water quality, bathing water, vehicle safety etc. which are excellent.
And the most important aspect is enforcement. It’s no use having regulation if there’s no on-the-ground enforcement which is worthy of name. And it’s no use having some Member States playing fair while others drag their feet or protect national interests. And it’s no use supposed court enforcement proceedings in the ECJ just doing slaps on the wrist when “national champions” get threatened.
Shorter, regulation, if it is to be credible and to have public support, must be whiter-than-white from top to bottom. If the EU isn’t, and it is not, then public sentiment will inevitably start to shift back to considering national regulation to be a better approach.
Do you honestly believe that without GDPR data protection will be better in the US?
Do you really think the UK won’t have something like the awful internet copyright directive in the future? How are the circulation numbers of the Sun, Times, etc.lately? Which UK MEPs have voted against the directive?
Do you really think that any regulation in the UK is enforced uniformly? Don’t make me laugh.
That will all rather depend on what people vote for.
And I cited evidence that enforcement is patchy and prone to corporatism in EU Member States. I could provide a lot more than what I quoted. UK compliance with EU Directives is generally good. Certainly not perfect, that I would never claim. But no worse than, and arguably better than, EU Member States (especially former eastern block ones).
An argument which only goes “you stink” “no, you stink stinkier” isn’t one which shows one party or another comes up smelling of roses. Saying the EU is better, in some regard, than the UK needs evidence to do that. You’ve not supplied that, so you’ve not shown your argument is valid.
They’ll deregulate the hospitals just in time for coronavirus. So they’ll prolly have to deregulate the crematoriums. Then they will have to deregulate land use restrictions against human/ash disposal. So as long as they are at it they will deregulate all waste disposal just to save administrative costs. It won’t be long until groundwater is dangerously polluted so they’ll have a deregulation for that all lined up. They’ll deregulate restrictions on price gouging on commercial water bottlers. And they’ll create lotsa jobs when they dredge a giant hole in southern England (since it will soon be under water itself) and dump all the plastic bottles. And miscellaneous corpses. Etc.
I’ve never understood the argument that less regulation is necessarily better. Whence do these people think the regulations came in the first place? Because some segment of the population (one large or influential enough) was getting screwed by whatever prevailing non-regulated arrangements led to the demand for regulation of that space.
So I can see modification of regulations when circumstances change such that existing regulations no longer achieve what they were designed for, but this is a far cry from “more regulation bad; less regulation good”
Its similar to the anti-vaccination movement. The memory of what it was like when polio, measles, smallpox etc. roamed the earth unabated has been gone for a couple of generations, so the vaccines now become the boogieman. Similar with regulations for safety etc.
Glass-Steagal and other financial laws in the 30s and 40s had dramatically reduced the potential for a major financial crisis, so the lack of a financial crisis meant that the regulations were no longer needed, because surely the geniuses in the financial sector would never blow up the financial planet again if left to their own devices. It took them less than 10 years to make and detonate the Doomsday Device.
Imagine if banks were 100% private with 100% voluntary depositors?
Then why should the public at large even be concerned with them?
So why aren’t banks 100% private with 100% voluntary depositors?
Americans have a habit of creating great organizations that are promptly junked. The episode in post war Europe when there had been created the American Constabulary Force that supervised reinstallation of civilian police forces was extremely successful. Once the job was considered done, no more American Constabulary. As if there would be no more wars. Certainly post Iraq such as the American Constabulary would have mitigated damage to the nation.
I personally miss Glass Steagall. I despise Clinton Unit 1 for signing it away. I become ill whenever I look at Timothy Geithner’s signature on a dollar.
Even I was sceptical of the EU and their banking set up before ever becoming familiar with the greats of economics that are now Warren Mosler, Stephanie Kelton, Michael Hudson and Randall Wray. P.S. not to forget Susan Webber.
Warren Mosler would provide banks with:
1) UNLIMITED deposit guarantees FOR FREE.
2) UNLIMITED, unsecured loans from the Central Bank at ZERO percent interest.
In other words, more welfare for the banks and, by extension, for the rich, the most so-called “credit worthy” of what would be even more so than now, the public’s credit but for private gain.
There’s a just way to reform the fiat and credit creation systems but I’m not hearing it from Warren Mosler or the other big names of MMT.
Shorter: Justice and stability are trade-offs when it comes to banking and the MMT approach is to increase the stability of the banking system at the expense of justice.
The problem is when regulation is used as an excuse to not de-privilege; e.g. the “solution” to redlining was to outlaw racial discrimination wrt bank lending – ignoring the inherent discrimination of government privileged banks in favor of the richer, the more so-called “credit worthy”, at the expense of the poorer, the less so-called “credit worthy.”
Yes and no. Regulation for example come often to protect one corporation, usually a local one, from a competitor preferably foreign. So it’s not necessarily a part of the population unless you count the corporation owner or their employees as this population.
Such a new regulation then harms the general population for the benefit of the minority.
Also regulations have a tendency to get more and more complicated over time. The tax system is the best and most hated of these. So less regulation there would actually be a good thing, since it would free many resources, legions of accountants, to do something more useful and productive. Of course these legions of accountants will fight to the death to stop any deregulation.
In practice however, most deregulations of the last 50 years have shown to vastly benefit the rich while shafting the poor. So obviously deregulation has a richly deserved bad name.
At a public lecture in January at the London School of Economics (not normally viewed as a right-wing organisation), Prof. Tony Travers expressed views diametrically opposed to those of Emily Seurah. Prof. Travers thinks there will be less deregulation, not more.
Listen to him at http://www.lse.ac.uk/lse-player?id=4830 , about 24 minutes into the podcast.
The whole podcast is worth a listen, except for the long-winded introduction by the Chairman.
Thank you, David.
As a regular attendee and former speaker there, when I was a bankster lobbyist, I can say that if Tony Travers did not say that, he would not be on the airwaves. He knows where his bread is buttered.
This stuff is not his specialism anyway. He’s a local government expert.
Colonel
I don’t think it would make sense for Prof. Travers to offer hostages to Fortune by making forecasts that he doesn’t believe in, about the near future.
Furthermore, his remarks about decreasing deregulation tie in with his earlier remarks about increasing centralisation of power in the person of the British Prome Minister.
In other words, if Boris wants less deregulationm he is likely to get it. And Boris has learnt a thing or two while Mayor of London, about pleasing Labour voters.
I haven’t read the entire entry, but as a lawyer it is my opinion that there are too damn many laws. I understand that these pushes for deregulation are thinly-veiled attempts to help industry. But I often wish we could just repeal the lot of them, go back to English or Spanish common law and start over.
I think the big issues are the laws written by lobbyists to have lots of exemptions and loopholes to have profitable market protections put in place where the laws provide a shield against competition. Paperwork creates a barrier to entry to keep out the upstarts but the people with the money, lawyers, and paperwork can do almost anything they want.
Simple laws that just say “Thou shalt not….” are hard to game which is why the lobbyists write phonebook sized laws.
Thank you and well said, RD.
I read law at university, England and France, and am a former bankster lobbyist. It works as you describe. Exhibits one and two, the first draft Volcker Rule and the final rules. There’s no need to read either. Just look at or weigh them.
I do wonder why the UK is going through the motions to ‘try’ to negotiate with EU when they don’t want to do any thing that EU will agree too. I suppose its for show, we tried but they (EU) wouldn’t agree to our simple easy demands. Then I wonder why is the EU bothering to go through the UK charade as they know the UK isn’t serious. So just start on the border check points already, or at least appear to be
I think that at his point both sides just want to keep their home turf ‘Clean, and Ready For Inspection’ by slavishly sticking to their principles and ‘letting the other side fail’.
Being ‘big’ on process, the EU will follow through all the steps, despite the negotiators knowing on a personal level that the UK will never deliver anything. It’s the EU version of Virtue Signalling, like: “We did everything we possibly could within the scope of our legal framework to avoid a hard Brexit”.
As Yves always writes: in the end the bigger trading block wins.
The show therefore is more on the UK side. Theater for the home crowd. The heroic government is fighting for the british fishermen or whoever. Nothing else.
The EU would be stupid to build border check points for tons of money when they don’t know if they are actually needed or how big they need to be.
At this point, they will be needed, unless the UK decides to vote to rejoin (not this decade it would seem…course parts might..like NI joking the ROI and maybe a Scotland too)
The pendulum will swing against human rights as far as the people allow. The alliance of government and merchants will assure it. As a general rule I suspect there are very few of us Poms who will do more than whinge to the neighbors. Things will have to go right down – energy, food and health care become unaffordable – then we might see a popular response.