Wednesday, 15 July 2015
TTIP is OK.
One of the main elements of TTIP is to enable corporations to sue governments where governments implement legislation that causes a loss of business for corporations. Compensating corporations for what might be called “windfall” losses of that sort seems fair enough, on the following three conditions.
First, governments should be able to sue corporations where the opposite effect occurs. That is, governments should be able to sue corporations where the latter enjoy windfall GAINS from changes to government inspired legislation.
In fact wherever a corporation suffers a windfall loss, there pretty well HAS TO BE an equal and opposite set of windfall gains. Reason is that if corporation X and Y suffer a decline in sales of $Z as a result of new legislation, then consumers will almost certainly transfer about $Z of spending to other products, assuming total consumer spending stays approximately constant, which is a not unreasonable assumption.
In fact why should government get involved in this process at all? That is, why not cut out the middleman, and just let corporations X and Y sue the corporations that gain from a change in legislation?
Banks should be charged for recessions.
Second, banks or the finance industry in general should be charged for the loss of GDP resulting from recessions and credit crunches sparked off by irresponsible bank lending. The sum involved there would come to several trillion dollars, which would bankrupt every bank in the US several times over.
That should knock some sense into them!
But seriously, the effect would be that banks would have to greatly increase the charges for their services, which would vastly reduce the overall size of the bank industry. Adair Turner (former head of the UK’s Financial Services Authority) said that much of what banks do is “socially useless”. So if Turner is correct, then a big reduction in the size of the bank industry would do no harm at all.
The cost of education.
Third, corporations are currently supplied free of charge with an educated and skilled workforce: much of the cost of that education and training being born by the state.
There is no excuse for that: corporations should be charged for use of that capital investment.
If a corporation wants to the use of a $100k piece of equipment, it has to pay, and quite right. So if a corporation wants the use of someone who has skills that cost $100k to impart to the individual concerned, why shouldn’t the corporation pay?
So on those three conditions, TTIP is fine by me. Moreover, that “TTIP on three conditions” arrangement has a further benefit: it would create millions of jobs for lawyers.