Sharing The Blame

I was intrigued to see thad Shadow Chancellor George Osborne saying that the financial sector must share the blame for the current financial crisis.

Shadow chancellor George Osborne is to tell the City it must bear part of the cost and blame for the current financial crisis affecting the UK.BBC News

Share the blame? Well, I hate to be pernickety about this, but it isn’t your ordinary taxpayer who was lending large sums of money to people who couldn’t afford to pay it back. It wasn’t your ordinary taxpayer who didn’t even know how much bad debt they were likely to have. It isn’t your ordinary taxpayer who is paid vast sums of money — in good and bad times — for effectively gambling with other people’s money on the stock markets. Nope. It’s your ordinary tax payer who finds that their job at Northern Rock, or Bradford & Bingley, or wherever, has gone because someone else has made a bad judgement call.

When things are going well, the shareholders get money paid out to them. When things go badly, the taxpayer props up the shareholders. Those city financiers who have gambled (and lost) billions won’t be the ones who are struggling to pay their mortgage or to feed their family.

So George, I’m sorry, but the city is to blame. And your inability to see that suggests to me that you are significantly out of touch with me, at least.

2 Responses to “Sharing The Blame”

  1. mark fairlamb responds:

    i would never claim to be a financial whizz - you just have to see my bank statements to work that out - but was it just me who noticed that loans have been going to people & companies with bad debt histories?
    it’s ok saying your books look good because you are owed lots of money, but that’s no good to anyone unless you’ve actually got a chance of seeing that money again.
    companies have been selling these debts on, but somewhere down the line someone has to reclaim the cash.
    like the saying goes - if i owe you £100 i’ve got a problem, if i owe you £1000 you’ve got a problem.

  2. JackP responds:

    I also liked the comedian (can’t remember who - was on ‘8 out of 10 cats’) who pointed out the problem with 125% mortgages.

    Basically, when you start one, you don’t own 0% of the property. You own -25% of the property, meaning that a man who walks past your house actually owns more of it than you.

    The comedian suggested this was probably not a good thing.

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