Archive for December, 2010

The Irish bailout and why it is a good idea for Britain

December 12, 2010

I’d like to start this article by saying that I am not flying the flag of any political party, most leave a bad taste in the mouth as far as I am concerned, but I think Chancellor Osborne has got something right…

Ireland is being bailed out to the tune of £72 billion. It is estimated that the UK will be giving Ireland around £7 billion. I believe this is the right thing to do. For several reasons despite what many newspapers have been saying

1: Economically, and this is one of the best arguments. We will be lending this money to Ireland at a rate of about 5%. We can borrow at around 2.5%. This means that the UK, Lending 7 Billion to Ireland will make around 2.5% a year. Thats £175,000,000. Pretty nice really.

What’s that? You think Ireland will default? Not a chance. Angela Merkel recently talked about a system where countries would be able to default on bonds whilst being bailed out by other countries, but she has gone very quiet on that lately.

The countries of the Eurozone can not fail financially, it would destroy the Euro. This is why all countries which have the Euro, in my opinion will not be allowed to fail. I would argue that all Eurozone bonds should be trading at roughly equal amounts, whereas in reality Greece bond yields have to be far higher because people think they might default, but Germany, will once more foot the bill if problems arise.

The Irish, for all their faults, are one of the few countries in this world which we have a trade surplus with. This means they are one of the few countries where the value of all the things we send them is higher than all the things they send us. And that is very rare for the UK these days….

Social: Socially, Ireland is a very similar country to us, and a lot of the British see the Irish as their neighbours, and in some parts of the UK the Irish are favoured more than other regions of their own country!!!!

It’s a tough pill to swallow, but the UK will get their money back, with interest. They will also be helping out a neighbour, and a friend in need, is a friend indeed….


Student Tuition Fees, whats the big (bad?) deal?

December 12, 2010

Students and money. These are two words that have to be used very carefully in the same sentence.
Students, supposedly have no money, and get very upset if you try to take money from them.

One of the things which could be argued over the past few months is that students are amongst the most selfish people that we have in the UK, with self interest reigning supreme. Another person could just as easily argue that these are one of the few groups of people in society today who are not only willing to stand up for themselves, but also for the (mostly poorer) people of the nation, and good on them for doing so.
It’s a tough debate to have, as emotions seem to run high, and in some cases pure lack of emotional intelligence on the student’s part means that most grown up arguments result in abuse slinging (or fire extinguisher slinging) as the case may be.
So… Why are the students upset?
Their grievances’ are threefold, I would argue these are:
They are upset that tuition fees are rising (obviously)
They are furious that they have been “betrayed” (I will analyse this soon) by the Liberal Democrats, and
They are upset that there are cuts throughout wider society as a whole.
All 3 of these could be seen as logical grievances’, however, you can kick down 10 sand castles in the time it takes for you to build just one. None of the students seem to be offering a logical solution to their issues.
Does the state need a well educated workforce? Unquestionably. Will that workforce exist if tuition fees rise? I would argue so.
It can easily be argued that a well educated workforce is a happier, more productive workforce, however (and here is where I can see a few of you sticking a finger up to me) I would argue that if the degrees which this “well educated workforce” are committing themselves to are degrees such as home economics or media studies, then we may not in fact, have a well educated workforce after all.
It is easily arguable that you will earn a lot more in the future as a result of university education, and if you will not, then why go to university in the first place?

It could also, easily be argued that simply, far too many people go to university at the moment and the state can not afford it… But try telling that to the students, who feel that education is a “right.”
Education is a right, but rights are not always free, and it is subjective. In the UK, I would argue till the cows come home that it is a right to have free education up till the age of 16, where we can all get a comprehensive education in a wide area of topics, and if you don’t want that education, tough you have to have it. Free education up to the point of 18 I would also argue is very important, but I do not feel university is the same, and here is why?
One of the main things that the students have said is a reason for why tuition fees should not rise, or in many cases should be abolished is because it aids social mobility. University does aid social mobility, but these fee raises will not stop that. The fees are more flexible than ever and I would argue that, as is often the case with political reform over the past 15 years, it is the middle class who will foot the bill.
The absence of logic seems clear in the students minds, but the politicians could be accused of the same. Several economic analysts have predicted that there will be no real financial benefits to this plan which will be realised within the next 5 years. The government could also be accused of shifting public sector debt over to the private sector (students).
This is going to be a topic that I will return to, and as this is a blog, it will be up to date. This is just an overview of the scenario for now, I will be going into each of the main points in more depth over the coming weeks.