“Hey I’m all for it! 🙂 I think it’s fucking hilarious… a group of maybe few thousand men, with no guns (no military experience), all working within a square mile… can absolutely rape the shit out of 70 million people! 😀 … the entire Western civilisation really!
(The only offshore dickheads I target are those involved in the Nazi Fourth Reich… ain’t that right Rothschild! ;D)
Just think… these goyim morons can barely read and write, are being robbed and sexually assaulted, are dying of cancer in a failing healthcare system (if they can even remember that they have cancer)…. and The City just keeps on sucking them dry!
… MONEY TALKS!
AND THEY GOT THESE ILLITERATE FUCKING MORONS TO VOTE FOR BREXIT!
By Robert Woodward – TruePublica: A seriously important and highly credible study was published five months ago last October. It was completely ignored by all of the mainstream media. Not one took the opportunity to publish the stunning revelations for fear of what might happen if they did. The report has unpalatable political consequences for the government – in fact, both Labour and Tory are implicated by the exposure of this colossal crime.
On the 5th October the 2018 SPERI report was published. The Sheffield Political Economy Research Institute made some stunning statements. Its first paragraph stated that – “(this report) suggests that the total cost of lost growth potential for the UK caused by ‘too much finance’ between 1995 and 2015 is in the region of £4,500 billion. This total figure amounts to roughly 2.5 years of the average GDP across the period.”
To put that statement in context we need to deconstruct it a little. We are talking £4.5 trillion over two decades. That’s £225 billion a year.
Each year, the banking and financial services industry in the City of London is sucking out of Britain’s economy the equivalent of 160 per cent of total government spending on all health care including the NHS, or 100 per cent on social protection, which includes that of all pension payments per year, or 700 per cent spent on public order and safety or 230 per cent of spending on education.
To go further, this sum of money represents the equivalent of £67,500 of wealth losses to every person in the country.
The SPERI report breaks it down into current losses and losses incurred as a result of the 2008 banking led financial crisis. The report says that it – “provides the first-ever numerical estimate for the scale of damage caused by the UK’s finance sector growing beyond a useful size. Of the £4,500 billion loss in economic output, £2,700 billion is accounted for by the misallocation of resources where resources, skills and investments are diverted away from more productive non-financial activities into finance. The other £1,800 billion arises from the 2008 banking crisis.”
News reports galore tell us that the financial crisis cost Britains economy about £500 billion. Some say more, some less. Not one, anywhere, has stated that in the first decade it cost the economy £1.8 trillion. And it’s not over yet.
Interestingly, Britain’s national debt is almost exactly £1.8 trillion. That’s about 86 per cent of total GDP and just servicing that debt in interest payments now amounts to around £48billion, which is roughly 4% of GDP or 8% of UK government tax income.
The Professorial Fellow in Political Economy in SPERI is Professor Andrew Baker. He said of the findings: “For the UK, the numbers are powerful and hint at a deep underlying problem of misallocation, and ‘crowding out.’ UK economic strategy in a post-Brexit world needs to make addressing this the central challenge, recognising that where finance is concerned, more can sometimes be less, and less could be more.”
The evidence in this report also provides support for the idea that the UK suffers from a form of ‘finance curse’ – a development of financial over-dependence involving a crowding out of other sectors, such as manufacturing, and a skewing of social relations, geography and politics. In reality, the banking sector has been allowed by a lack of government restraint to act as a source of wealth generation, in other words, extraction, for the peole who keep them in power.
The Tory party are by far the most guilty albeit that Tony Blair’s government did nothing to abate what should really be called out for what it is – crimes against that nation-state. This is theft, it is fraud.
Evidence of the weakness of government is no more apparent than in the current PM Theresa May. The government’s decision to pull its financial services bill is at best revealing about who calls the shots in parliament. At worst, it indicates corruption at the highest level. And there is no doubting who is calling the shots. The people who largely fund the Tories in the first place – The City of London.
A Guardian article published just yesterday tells us all we need to know about pulling of this financial services bill in its first paragraph.
“Rather than accept a small step forward for tax fairness, a move backed by a cross-party coalition, ministers dropped one of six key pieces of legislation required to pass by the end of March as part of a no-deal Brexit safety net. It is a sign of Theresa May’s weakness in office that the bill could not pass in the form the government wanted and a clear demonstration that big finance continues to call the tune in the upper reaches of the Conservative party.”
Here, we have evidence that even Brexit is being manipulated for the sake of the City of London.
We have written endlessly at TruePublica on the matter of Britain’s laundromat – the money laundering centre of the world. The editor here, various journalists and contributors along with Global Justice to the Tax Justice Network have been screaming for financial regulation because the banking industry is seriously damaging Britain, its prospects and place in the world. The head of the National Crime Agency warns year after year of the economic and political threats that industrial-scale financial crime presents to Britain.
And yet, over the last 40 years or so, Britain’s economy and its failing tax system have been completely reconfigured to serve the interests of the rich who have off-shored their wealth to ring-fence it away from contributing to the country of its extraction. No-one though, it seems, is prepared to fully challenge the sheer power of the City of London. The non-publication of the SPERI report by the mainstream media, that lays bare the realities of this monumental crime is surely evidence of that.
Transparency International is just one of a long list of organisations that continues to provide cover. Its annual Corruption Perceptions Index calculates Britain has a score of 80 out of 100 and therefore one of the least corrupt countries in the world. In fact, the 11th least corrupt. I have challenged this ranking time and time again as Britain is one of the leading money launderers for terror finance, human and other trafficking, drugs, weapons and all manner of heinous crimes anywhere on the planet. I even met TI in London but all they were interested in was uncovering my sources of information.
The square mile makes up its own rules, its own laws and even has its own police force. It is, as we wrote back in 2016 the epicentre of the global crime scene. Many do not know the power of the City of London. Most people do not know just how Britain’s democratic principles are challenged when it comes to its global financial operations.
A (City of London) ‘watchman’ sits at the high table of parliament and is its official lobbyist sitting in the seat of power right next to the Speaker of the House who is “charged with maintaining and enhancing the City’s status and ensuring that its established rights are safeguarded.” The job is to maintain order and seek out political dissent that might arise against the City.
The Square Mile is a hub that facilitates London bankers, accountants and lawyers to create a tax-free way for the richest people on the planet to hide their assets under UK management but without proper regulatory oversight. Britain has consistently resisted almost all reform proposals from the EU and used its powers of veto to ensure the status quo continues. Britain’s crown dependencies and territories are now the go-to bankers where almost a third of all global offshore financial services are provided to non-residents.
In 2012 it was known that about $32 trillion was stuffed away in off-shore centres around the world. Global GDP in 2018 was just over $80 trillion – it gives some sort of perspective into the scale of it all.
This report and one by the Tax Justice Network also calculates that financial crime and the costs imposed by hosting an oversized financial sector are more than two times greater for the UK than the US. It is of no wonder America wants to do a trade deal with Britain – it would provide additional facilities for its own financial crimes.
A Bank of England report makes it quite clear what the banking industry is doing with its money. Only 3.5 per cent of all business lending by UK banks in 2017 went to Britain’s manufacturing sector, while 60 per cent of all lending went to financial intermediation, ie financial intermediaries who channel funds between lenders and borrowers.
Asked to comment of the STERI report, John Christensen, a director at the Tax Justice Network said:
“This new evidence overturns the entrenched orthodoxy that what is good for the City of London must be good for the rest of Britain. For decades City interests have been inflicting a finance curse on the UK economy, inflating the exchange rate, slowing growth of the productive sectors, and lobbying governments into deregulating financial services, which led directly to the 2008 banking crisis. UK productivity has fallen dramatically behind most EU member states, and excess household and corporate debt is holding back growth.“
And as many have said, ourselves included, if Brexit was a cry for help from those being left behind, then nothing will change. It was supposed to end the political and financial class’s power and malfeasance. There is now a strong suspicion that Brexit, far from answering that call, will indeed be boosted by the forthcoming relaxation of regulations. Brexit will only make it worse for everyone – except the very, very few who actually hold the strings of power in the first place, which clearly isn’t Theresa May or her paralysed and incompetent government.
A new report reveals the UK’s oversized financial sector has cost the economy £4.5 trillion in lost economic output between 1995 and 2015 – equivalent to £67,500 for every person in the UK, or 2.5 years of economic output.1
The report, published today by the Sheffield Political Economy Research Institute at the University of Sheffield, reveals that the UK economy would likely have performed much better in overall growth terms if its finance sector was smaller, and if finance was more focused on supporting other productive areas of the economy.
Crunching the numbers
The report provides the first ever numerical estimate for the scale of damage caused by the UK’s finance sector growing beyond a useful size. Of the £4.5tn loss in economic output, £2.7tn arises from the misallocation of resources where skills, investments and resources are diverted away from their most productive uses by the gravitational pull of oversized finance.2 The other £1.8tn arises from the 2008 financial crisis.
In addition to the cost of the stunting effect that the City of London inflicts on the overall UK economy, the report also estimates the cost of the City of London’s excessive redistribution of wealth from the majority of the population to a small group of financial elites (less than 10 per cent of the population) arising from wasteful overpaying for financial products and services. The salaries, bonuses and profits paid out by the City of London exceeded the incomes needed to incentivise the supply of financial products and services in an efficient, competitive market by £680bn between 1995 to 2015.3
How does the UK compare with the US?
A study in 2016 using the same methodology found the US’s finance sector to have cost the US economy $22.3tn (£17.9tn) in lost economic output between 1990 and 2023 – equivalent to slightly above total US economic output in 2018.4 In comparison to the 2.5 years of lost British economic output, the costs imposed by hosting an oversized financial sector are more than two times greater for the UK than the US.
The report adds to growing evidence that the City of London extracts significantly more wealth from the rest of the UK economy than it contributes. Only 3.5 per cent of all business lending by UK banks in 2017 went to Britain’s manufacturing sector, while 60 per cent of all lending went to financial intermediation, ie financial intermediaries who channel funds between lenders and borrowers.5
The data also provides support for the idea that the UK suffers from a “finance curse”: the condition where a financial sector becomes predatory and harmful to the economy that hosts it after it grows beyond a useful size and role. The subject of an upcoming book by tax haven and financial-centre expert Nicholas Shaxson, the finance curse involves the crowding out of other economic sectors and shaping of laws and social norms to suit the interests of the finance sector.
Professor Andrew Baker, co-author of the report and Professorial Fellow at the University of Sheffield, said:
“The ‘too much finance’ problem has been identified in previous studies. For the UK, the numbers are powerful and hint at a deep underlying problem of misallocation and crowding out of the economy by the financial sector. UK economic strategy in a post-Brexit world needs to make addressing this the central challenge, recognising that where finance is concerned, more can sometimes be less, and less could be more.”
Nicholas Shaxson, author of the new book The Finance Curse: How Global Finance is Making Us All Poorer, said:
“The fallacy that we need to give the City of London a free pass so Britain can prosper as a nation has made us all poorer.
“The City of London likes to describe itself as the goose that lays Britain’s golden eggs, contributing jobs and tax revenues and export surpluses. But in reality, the costs of an oversized financial sector overwhelm these benefits. The City is in fact a different bird: a cuckoo in the nest, crowding out and killing other sectors which could have made Britain more prosperous.“
John Christensen, a director at the Tax Justice Network who helped co-develop the finance curse framework, said:
“This new evidence overturns the entrenched orthodoxy that what is good for the City of London must be good for the rest of Britain. For decades City interests have been inflicting a finance curse on the UK economy, inflating the exchange rate, slowing growth of the productive sectors, and lobbying governments into deregulating financial services, which led directly to the 2008 banking crisis. UK productivity has fallen dramatically behind most EU member states6, and excess household and corporate debt is holding back growth.
The good news is today’s research confirms we can and should rein in the City’s harmful excesses. Loosening the City’s leaden grip on our economy will free up our local businesses and hardworking citizens to prosper and flourish. Reducing the size of Britain’s financial industry by strengthening regulation, increasing taxes, and introducing a financial transaction tax, would serve Britain’s long-term interests. Enforcing transparency measures on Britain’s offshore secrecy jurisdictions would also reduce London’s role as a money-laundering centre.”
The Tax Justice Network is calling on the UK government to:
Create a UK super regulator responsible for policing financial risks, tackling money-laundering and all variants of financial crime
Ensure senior bankers face custodial sentences when their banks are culpable of financial crime
Implement tax transparency measures
Introduce an across the board Financial Transaction Tax of 3 per cent to deter speculative trading
Raise the Corporate Income Tax rate to 25 per cent (removing the majority of reliefs)
Strengthen HM Revenue & Customs capacity to tackle tax avoidance
Introduce smart capital controls to protect the economy from harmful inflows and outflows of capital
– ENDs –
Link to report: http://speri.dept.shef.ac.uk/2018/10/05/uk-finance-curse-report/
Contact: Mark Bou Mansour, Tax Justice Network Communications Coordinator, email: firstname.lastname@example.org mobile: 07562 403078
Notes to Editor:
A new report The UK’s Finance Curse? Costs and Processes reveals that the UK has suffered a £4.5 trillion cumulative cost in lost economic output from 1995-2015, equivalent to roughly 2.5 years of the average GDP across the period. The costs of this wasteful overpaying for financial products and services are not added to the total £4.5tn cost to the UK economy because some of these costs are incurred overseas.
Per cent of 2015 GDP
Total (excluding excess costs)
The research defines misallocation costs as the price of diverting resources away from non-financial activities and into finance through lost productivity and lower investment of skills and capital in R&D intensive areas in particular. Misallocation can take at least three forms:
Harmful financial agency: conscious intentional financial allocation decisions that result in short termism and rent extraction.
Structural gravitational pull: largely unintentional brain drain and rent attraction caused by the presence of an extensive financial infrastructure.
Unintended distortionary price spillovers: eg Dutch disease – exchange rate and property price inflation that impedes alternative tradable sectors and exports.
Excess profits and compensation are excess incomes that operators and investors in the financial sector receive over and above the incomes they would need in order to induce them to supply their financial products or services in an efficient, competitive market. The costs of this wasteful overpaying for financial products and services are not added to the total £4.5tn cost to the UK economy because some of these costs are incurred overseas.
A 2016 report title Overcharged: the High Costs of High Finance by two of the authors of The UK’s Finance Curse? Costs and Processes report, Professor Gerald Epstein of the University of Massachusetts and Juan Montecino of Columbia University, estimated that the United States would have suffered a cumulative $13-23 trillion in lost economic output from 1990-2023, as a result of its financial sector having grown beyond its useful size and roles. The report is available here: http://rooseveltinstitute.org/overcharged-high-cost-high-finance/
Bank of England, 2 – Industrial analysis of monetary financial institutions’ lending to UK residents, 31 December 2017
Bank of England data set
Percentage of business lending
Lending in all currencies
Electricity gas water
Wholesale and Retail
Accommodation + food services
Transport, Storage and Comms
Real estate + professional services
Public admin and defence
Human Health + Social Work
Recreational, personal, community service
Financial intermediation (excluding insurance, pensions)
Insurance and pensions
Auxiliary to financial intermediation (eg central clearing)
OECD data on GDP per hour worked shows that the UK lags behind other EU countries: https://data.oecd.org/chart/5jsZ
The Tax Justice Network did not contribute to The UK’s Finance Curse? Costs and Processes The Tax Justice Network began developing the concept of the ‘finance curse’ back in 2013, with John Christensen and Nicholas Shaxson, in a 2013 report: https://www.taxjustice.net/topics/finance-sector/finance-curse/
The UK’s Finance Curse? Costs and Processes report is the latest research development in a longer-running theme.
The report constructs a path, or trajectory, the economy would follow if the financial sector was optimal in terms of size and operation, then effectively measure the gap between this hypothetical path in a given year, and the line or path actual GDP takes in that year, to arrive at aggregate figures of misallocation costs across the time period 1995-2015. The optimal size and operation of the financial sector and misallocation costs are derived using established data and cross-country empirical analysis developed in the ‘too much finance’ literature.
Another hypothetical line considered is the trajectory GDP would take if there were no finance. In this case, the line would be expected to be substantially lower than actual GDP, illustrating that finance aids growth up to a certain point, but starts to hamper economic performance when it goes past that point. The gap between actual GDP and the optimal trajectory derived from the ‘too much finance’ literature data is referred to as a net cost at the margin. In this respect, what we are measuring is the cost of having too “big a financial sector” (due to misallocation) compared with having the “optimal” financial sector, over a period of time.
About Sheffield Political Economy Research Institute (SPERI)
SPERI is an interdisciplinary research institute at the University of Sheffield that aims to bring together leading international researchers, policy-makers, journalists and opinion formers to develop new ways of thinking about the economic and political challenges posed for the whole world by the current combination of financial crisis, shifting economic power and environmental threat.
About the Tax Justice Network
The Tax Justice Network is an independent international network, launched in 2003. It is dedicated to high-level research, analysis and advocacy in the area of international tax and financial regulation, including the role of tax havens.
The Tax Justice Network maps, analyses and explains the harmful impacts of tax evasion, tax avoidance and tax competition; and supports the engagement of citizens, civil society organisations and policymakers with the aim of a more just tax system.