Tuesday 20 March 2012

Enron Accounting: Like Gordon, Like George

Alternatively; despise Gordon, ...

Alphaville is right: it's surprising that the boy Osborne's sleight of hand over the Post Office pension liability hasn't been more widely slated. This is the merest Enron accounting trick.

When I started blogging here 5 years ago, à propos of the commonplace accusation that Gordon Brown indulged freely in Enron's accounting methods I asked the following qu

1. why would a sovereign nation with a developed economy and enormous borrowing capacity bother with such fun and games? (Is anyone fooled?)

2. how and when, exactly, is it all going to come unstuck?

Today we may be a little nearer to seeing the answers. But it's just so tempting, isn't it George ? Really, really tempting. Welcome to the Gordon'n'Ed Enron tribute band. Now - how about some PFI ?



Anonymous said...

Hate to say it but George Osborne is becoming Gordon Brown. Phoney accounting, fiddling with the schemes and rates, this is micro-tinkering when the economy needs radical help.

Time to give a budget speech that is five minutes long:
- a promise to shrink the tax code to 5 pages of A4
- shut down Vince Cable's dept.
- combine NI and Income Tax
- stop phoney talk of austerity when you just can't stop borrowing.
- announce take it or leave it public sector pension reform to save billions
- sit down.

Bill Quango MP said...

If we recall the whole PO sell off, under a labour government, was very fishy at the time.

Why would a Labour government sell off one of its biggest union backers? £1 million a year minimum from CWU.

We thought it might be because a certain tax & doublespend chancellor needed a £25bn plus to take off the bailout's minus.

Anonymous said...

Osborne will only be like Brown if he tries to take the 'windfall' and spend it on some pet scheme.

At the moment there is no indication that is what he is going to do, with the money simply being used to pay off some of the debt. Certainly he has not been crowing over how he has reduced the deficit by more than ecpected.

I think you are getting over excited about an administrative move that is necessary to allow the Post Office to become more commercial and get sold off.

Electro-Kevin said...

Anon @ 12.43: I still don't think it a good idea. Surely a nationalised and essential nation wide provider should have the advantage of economies of scale over a privatised set up ?

ie purchasing power for fleet vehicles and an integrated computer system.

That Network Rail doesn't work - for example - is redolent of the fact that the privatised Railtrack couldn't work either. But even so - Network Rail should have the benefit of shared technology and equipment and fewer directors and no dividends to pay.

Before the newly privatised (fragmented) postal system becomes profitable it must begin to employ more multi-millionaire directors, pay share dividends and cut jobs and worker's pay (thus relying on the welfare system - taxpayer - to top it up)

If we look at the cost of bills for privatised energy and water and the failure to keep up with storage demands...

Or our fuel crisis and energy dependency brought by the collapse of the coal industry (aided and abetted by Germans dumping cheap coal) And what we've been left with - 30% of our taxes going on welfare and kids growing up fatherless, feckless and talking like Ali G in former pit towns.

Electro-Kevin said...

Sorry. Bit of a bee in my bonnet over roads privatisation.

The roads are already maintained and built by private tender - so competition is there. The Tories are out to keep tax-and-spend and want to keep VEL, high petrol duty and VAT on parts whilst taking a massive injection form foreign investors allowing them to shaft the British public even more.

Here I go. Off at a tangent.

It all comes down to uncontrolled immigration.

You can only keep displacing low/semi skilled indiginous workers through a system of high taxation (33% on welfare.)

That's unless you're going to impoverish them to such an extent that you really ought to put it in your election manifesto.

I believe that these privatisations are what it's all about.


Electro-Kevin said...

'Foreigners' 'Immigration' ...

I know what it sounds like. But trust me when I say I'm standing up for Brits whatever their creed or colour.

They've lost control. They can't stop it. Polite company won't allow it to be discussed. The only way they can keep a lid on it is by selling more family silver and taxing everyone to buggery to support the ever growing army of people who can't contribute to the economy.

Electro-Kevin said...

Did I really say all that ???

Y Ddraig Goch said...


You may be about to discover what really happened to the little boy who blurted out that the King was in fact naked ...

Demetrius said...

When I saw this Royal Mail deal, it was then it became clear that along with other things the Coalition is a hopeless case.

Electro-Kevin said...

Y Ddraig Goch

I know.

I'm absolutely petrified whenever I see men wearing black nowadays.

alan said...

(Apologies totally off-topic)
Mass immigration is an accounting trick. Without it UK GDP growth would be negative by now.

Would you prefer..

a) social problems because of mass immigration
b) economic problems because of no immigration.

This would be obvious by looking at GDP per capita. However no-one knows the population of the UK. If you look at population size proxies (volume of sewage) the UK population is much larger than the official figures.

And this all goes back to ND previous post. Most MP's we elect do not have the skills, intelligence or integrity to run this country.

It is easy to think that we are all doomed, but that is not necessarily the case.

Humanity is entering into a new renaissance period brought about by digital technology. This will bring changes to society more profound than the invention of the printing press.

One of the many game changers is transparency. When a child is born today they will have been entered into a database before they were born. Every detail of their lives will be tracked and entered into databases everywhere. The state has the ability, even today, to find out more information about an individual than they know about themselves.

The same is not true of the state. The lives of citizens are completely transparent to the state, but the state is not transparent to its citizens. Such large imbalances of power always get resolved. As we live in a democracy this imbalance will be likely resolved peacefully, although very slowly.

Digital technology is never going to disappear, eventually the state will become transparent to its citizens.

For example. There is no reason why the state does not give detailed accounts of every transaction down to the last penny (with obvious exceptions for security MI5/MI6/MoD etc). It is, after all, the citizens money so they should know everything. Politician's will resist the change, but will eventually fail. Initially there will be significant fallout when the citizens find out exactly how bad the accounts are. In the days that follow everyone working for the state will fundamentally change (for the better) because they know the citizens are watching. (MP's expenses on steriods...)

Even today almost imperceivable small changes are taking place. The state and the press blatantly abuse statistics and information for their own gain and have gotten away with it for a long time. Now we have professionals, experts in their own field, writing blogs and clearly documenting the mis-truths being told on a daily basis.

Sometimes the cup look half empty, when in fact its half full.

Electro-Kevin said...

Depends which half of the cup you're in.

Nick Drew said...

Certainly he has not been crowing over how he has reduced the deficit by more than ecpected

not so sure about that, anon@12:43, look at the pre-budget spin

Bill - that must be right

Demetrius - yes, it was a bit of a last straw with me, too:

Bill's perspective on the probable origin of this is interesting - but no excuse(?)

Did I really say all that ??? - yes you did, EK, and our thousands of readers were reading!

you are always welcome

and you, Alan - hey, threads go where they go

Electro-Kevin said...

Further to that, Alan.

Where did I say (or do I ever say) 'no' immigration ?

Shall we sell this idea of unchecked immigration to the Australians or the Canadians on the grounds that it will improve their GDP growth ?

The figures speak for themselves. In the order of 300k emigrating and 500k immigrating.

As we have no points system we have no way of controlling the usefulness/wealth of people coming in.

As the wider world doesn't offer anyone a free living we can assume that a lot of useful/wealthy people are going out.

You may say the UK is a magnet for the super rich and is a boon to Britain:

- they are rich enough to fiddle tax

- they would pass any nation's points test anyway

So what we have is the mass immigration of illiterates. And also the mass immigration of low skilled to replace people who have been given the choice not to work.

A system like that (plus its NHS system) requires an awful lot of tax from an ever dwindling pool of useful people.

I believe it to be the root cause of the need to explore ever wider fields of privatisation (roads ???)

I also believe it to be the root cause of pension raids (this blog post ?)

Why not add the housing boom too (credit crunch UK) ?

Electro-Kevin said...

Nick - you've got thousands of readers ?

I thought you only had about six ... like me !

Nick Drew said...

Kev - check the roll-call of the weekly QT compo!

(and those are just the ones who don't mind makin eejits of themselves once in a while)

then there are our long-time faithful supporters (Sid & Doris Bankers) ...

Budgie said...

E-K is right about immigration, though he left off the bit where Labour deliberately and knowingly let in people as an attack on the indigenous culture.

GDP is not wealth, it is turnover. 10 million immigrants use almost as much wealth as they generate (at best) so making little difference to overall UK wealth. In fact many immigrants require, and get, more services - translation for Somalis, extra NHS for those dedicated to marrying their cousins, for example.

As for the Royal Mail, people seem to have forgotten the EU. The European Postal Services Directive (2002 and 2008) agreed by Labour forces us to allow direct competition, destroying the state monopoly anyway. For RM to provide the universal service therefore puts it at a disadvantage to the likes of TNT.

Jan said...

Alan I love the idea that we measure the population by the amount of sewage (probably far more reliable than censuses).

EK I was in the hairdresser yesterday and my hair was cut by a girl with limited English (prob E European but I didn't ask). She was overjoyed to have the job and had previously done it for weekends only whilst doing another job during the week ie working 7 days per week. The other job was unskilled packing supplies for posh weddings and the like. If immigrants are all like her then let them come. They deserve to do well if they are prepared to work so hard. Not many British-born would do the same.

Electro-Kevin said...

Jan - don't dispute any of that. In fact I work with lots of Eastern Europeans (as an equal) in my second calling.

They are an utter delight.

That is not my point.

Using them to cover indiginous people who are not up to scratch and who are allowed to CHOOSE not to work is a 'system' which requires an awful lot of tax to run.

Ditto a system in which wages are suppressed and topped up with various benefits.

Budgie - Endorsement much valued.

Jan said...

EK Agree completely