October 22nd, 2008

Complex Sums

Posted in Other Stuff by 200

I don’t really understand all this business about the ‘credit crunch’. Funnily enough, I studied A-level economics. I have forgotten most of what I learned, unfortunately, this was before the exam over 30 years ago, which was a little worrying.

It does seem strange to me that the government has to give billions of taxpayer’s cash to institutions who have made a pretty healthy cash profit from charging me £30 every time a transaction goes through my account when I’ve overdrawn, & paying all that cash to a few individuals in the ‘city’, who earn more money than I’ll be paid in a lifetime, in one year’s bonuses.

What I really don’t understand is, if the government can’t find £30million to fund last year’s back-pay, how can they find 150squillion to give to banks?

It’s probably no wonder I failed my economics.

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  1. Chris says:

    “What I really don’t understand is, if the government can’t find £30million to fund last year’s back-pay, how can they find 150squillion to give to banks?”

    Ah, but this isn’t the simple and straightforward world of paying peoples’ wages; this is the esoteric, through-the-looking-glass world of high finance: a place where sufficient money will always be there, so long as no-one ever asks to see it. ;-)

    October 22nd, 2008 at 11:22

  2. john says:

    If all economists were laid end to end they would not reach a conclusion.

    - George Bernard Shaw


    A mathematician, an accountant and an economist apply for the same job.

    The interviewer calls in the mathematician and asks “What do two plus two equal?” The mathematician replies “Four.” The interviewer asks “Four, exactly?” The mathematician looks at the interviewer incredulously and says “Yes, four, exactly.”

    Then the interviewer calls in the accountant and asks the same question “What do two plus two equal?” The accountant says “On average, four – give or take ten percent, but on average, four.”

    Then the interviewer calls in the economist and poses the same question “What do two plus two equal?” The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says “What do you want it to equal?”

    Any more ?

    October 22nd, 2008 at 13:50

  3. James says:

    From what I can work out with only GCSE maths is that credit was given to people who shouldn’t have been given credit. Once banks got bailed out eg Lehman’s, the head people took themselves for $1/2m spa weekend. In Europe (Fortis) they took themselves to Monaco for an expensive lunch for €150K (€3k/head). So, personally I can kind of see why they ended up they way they did.

    As to the gov’t finding the money to bail them out, being a cynic I would tentatively suggest it’s what they’ve always wanted – to own the banks.

    October 22nd, 2008 at 14:42

  4. Noddy says:

    I also took my ‘A’ level Economics over 30 years ago and then went onto Uni to study it. I well remember one double period of Econometrics when the lecturer had annotated and rotated the chalkboard (it was still a blackboard in those days) a few mind boggling times as he wrote countless algebraic equations supposed to illustrate the GNP of the UK and proudly arrived at his QED.

    One bright spark in the class, who was miraculously still awake, queried the final equation and asked if a certain + sign should not be in fact a – sign. You have to picture a rapidly rotating blackboard and a very flustered tweed jacketed lecturer, who had to admit he was wrong. I think I lost the will to live at that point and headed for the bar!

    October 22nd, 2008 at 15:55

  5. Tony F says:

    Now you have to realise, all this money they are pushing around and yea, verily, are selling to each other is not, indeed, real money at all. In fact, it is ‘paper’ money…..hang on, They are doing what’s in my wallet, moving old receipts about.

    October 22nd, 2008 at 19:15

  6. Blueknight says:

    I heard a radio interview with Sir Alan Sugar. His view is that the Govt has not lost the money because in one year, two years or maybe five years, the economy will pick up and the Govt will get all the money back with interest.

    October 22nd, 2008 at 21:20

  7. Meldrew says:

    Of course, a number of MPs become directors of banks when they retire.

    Obviously that is purely coincidence, though.

    I am sure that just as many MPs become PCs when their career in politics is over.

    I am also very ashamed of my suspicious nature.

    November 2nd, 2008 at 15:30

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