The price of everything

Literae humaniores

“God ! How men of letters are stupid.”

 

-       Napoleon Bonaparte.

 

 

The commentary will now be taking its summer holiday; regular, bitingly objective service will resume in early October.

Since the financial crisis slowly wove itself into the popular consciousness, we have tried, on occasion, to highlight our own hopes and fears via that tried and tested monitor of the financial commentariat’s blood pressure, the FT letters page. Not all of the following submissions were published. In fact so very few of them made it, the simple, hopeful act of their conveyance resembled nothing so much as the opening day of the Battle of the Somme. We (re)publish them here so that they can be shared for posterity and savoured on those vast sunlit uplands that will play host to random financial chatter once the current crisis abates. If it ever does.

Sir,

Peter Cave (Letters, October 3) contributes to the debate over the “unjustness” of inheritance tax which has occupied many recently. On the basis that taxation consists of plucking the maximum amount of feathers from the goose with the minimum of hissing, one has to question whether a tax that contributes such a paltry amount of revenue to the exchequer will outlive such justifiable indignation from Middle England.

Many taxpayers might question the “justness” of the government stealing a portion of their capital gains from property, a theft the (im)morality of which is compounded by being inflicted on the dead, and which may result in the original property being forcibly sold. I would suggest that inheritors are “more deserving” than any bureaucracy, and “the lucky result of property value increases” is irrelevant to this debate.

If inheritance tax amounts to a tax on rising real estate values, will the government write cheques to inheritors when house prices enter a protracted fall ?

Published: October 10 2007.

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Screwed

“..we in Britain are, to use a technical economic term, screwed. Economies across the whole world are struggling. Because nobody is spending money, even relatively blameless countries such as Germany, with low levels of debt and workforces who actually make things, are having a difficult time. Germany’s economy is predicted to contract by 5.4 percent this year. A banker explained it like this: ‘When your country’s economy depends on people buying a car every three years, and they decide that they’ll only buy a car every five years, you’re f*****. Off a cliff.’ So the German economy is f***** off a cliff. But it will recover, when people start buying cars again, and when it does, at least their underlying levels of debt are manageable. Something similar goes for Spain, where the ending of the property boom has caused a spike in unemployment to 17.4 percent, almost doubling in a year, or Ireland, which has contracted by a truly horrendous 8 percent and where people have gone from owning private helicopters to losing their homes in six months flat. All of these countries are in deep trouble. But there are four things you don’t want to have, going into the current crisis. 1. You don’t want to have had a boom based on a property bubble. 2. You don’t want to have a consumer credit bubble. 3. You don’t want to have an economy based on financial services. 4. You don’t want your government to have just gone on a massive spending spree. We have all four of those things that you don’t want.”

 

-       From ‘It’s Finished’ by John Lanchester, published in the London Review of Books, May 2009.

 

There’s apparently a Chinese proverb that says that a man who cannot smile should not open a shop. For this reason, from time to time, we try to leaven our commentary with some gallows humour, whistling as we jog, with increasing speed, past the churchyard. But our cousins in the financial media, free of the burdens of either regulation or the responsibility that comes with managing people’s life savings, can operate with impunity, having set the doom-o-meter all the way up to eleven.

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