'Greedy' charity shops under fire for prices beyond means of poor

Bargains are becoming a thing of the past as stores attract label hunters with deep pockets

• Tess Reidy
• The Observer, Sunday 29 December 2013

A happy shopper with her Victoria Beckham charity-shop bargain. Photograph: Rex Features/London News Pictures

June Houghton, 83, from Rhyl in north Wales, pointed to a necklace in the window of an Oxfam shop in the Buckinghamshire town of Beaconsfield. "That's £150!" she said in disbelief. "I don't care if it's real gold, you don't sell that in a charity shop for £150! This may be a very affluent area, but there are pensioners and young people here too. I'm against charity shops now. I don't shop in them any more."

Her husband, Roy Turner, 86, agreed. "The prices here are double to three times those of any charity shop in north Wales."

In some cities and more affluent towns, scenes such as this are becoming increasingly common, as charity wardrobe chic pushes prices up and moves charity shops out of the reach of poorer people, a reversal of the original goal of creating a win-win situation. Traditionally, charity shops make money from stuff people don't want, the money goes to a good cause and buyers get a bargain for something they need – or value.

Sarah Raphael, deputy editor of i-D magazine, said: "The whole fun of charity-shop shopping is that it's a hunt; when you find that Yves Saint Laurent jacket from the 1970s beneath a jigsaw, it's that much more satisfying."

Now, however, the rules are changing – and the charity-shop industry, in parts, is beginning to look greedy. More than 10,000 charity shops now vie for business on our high streets. In the past six months their number has risen by more than 10%.

The shops, which have long enjoyed 80% mandatory relief on business rates, received a high-profile boost recently when a number of celebrities donated designer items. Donors on the A-list include Victoria and David Beckham, who gave boxes of their clothes and shoes to the British Red Cross in Chelsea, raising thousands of pounds for the charity. In spite of this, after earlier bumper profits, some charities are now experiencing a downturn.

Giants such as Oxfam have seen their profits plunge. In the past year, Oxfam's income fell by £17.6m. The charity, which has a network of nearly 700 shops, puts this down to the high street facing another year of economic downturn. But in spite of that, prices in shops in affluent areas can be surprisingly high.

Ian Matthews, Oxfam's head of retail, said: "The public kindly donates stock to Oxfam and we believe the best way to thank our donors is to get the best price we can, which in turn raises as much money as possible for Oxfam's work. All our shop managers have the flexibility to set their own prices, using their judgment and some guidance, to decide what prices and products will best suit customers in their location."

In the fashionable seaside town of Deal, Kent, there are now eight charity shops on the high street. Locals say they are packed, but people are not necessarily spending. Retired teacher Jane Neal, 63, said: "It used to be you could pick up amazing things, but now I think the people who work in the shops check on the computer and see an item's value immediately. The culture has changed."

Even in London, where vintage obsessives have long been prepared to rifle through the racks to find a fairly priced gem, customers complain that they are being priced out – and not just for designer labels. Modupe Tijani, 59, a carer from London, said she often sees clothing from Primark being sold at higher prices than it cost brand new. "It's not supposed to be like this," she said.

Mustafa Sami, 61, from London, who lost his job 18 months ago, agreed: "If you want a nice jacket, it costs a lot now."

One explanation for the rise in prices is that there is an increase in the number of dealers making excessive profits out of charity shops. One manager of a charity shop said: "We are trying to do what is best for everyone. We don't get it right every time, but we get it far more right than wrong. It has to be fair for the customer, for the donor and for the charity."

Brainwashed by the cult of the super-rich

Followers, in thrall to Harrods and Downton Abbey, repeat the mantra that the greed of a few means prosperity for all

• 
• • Priyamvada Gopal
  • The Guardian, Wednesday 25 December 2013 17.00 GMT

'We are invited to deceive ourselves into believing we are playing for the same stakes while worshipping the same ideals, a process labelled ­'aspiration'.' Photograph: Alamy

Last week, Tory MP Esther McVey, Iain Duncan Smith's deputy, insisted it was "right" that half a million Britons be dependent on food banks in "tough times". Around the same time, the motor racing heiress Tamara Ecclestone totted up a champagne bill of £30,000 in one evening. A rich teenager in Texas has just got away with probation for drunkenly running over and killing four people because his lawyers argued successfully that he suffered from "affluenza", which rendered him unable to handle a car responsibly. What we've been realising for some time now is that, for all the team sport rhetoric, only two sides are really at play in Britain and beyond: Team Super-Rich and Team Everyone Else.

The rich are not merely different: they've become a cult which drafts us as members. We are invited to deceive ourselves into believing we are playing for the same stakes while worshipping the same ideals, a process labelled "aspiration". Reaching its zenith at this time of year, our participation in cult rituals – buy, consume, accumulate beyond need – helps mute our criticism and diffuse anger at systemic exploitation. That's why we buy into the notion that a £20 Zara necklace worn by the Duchess of Cambridge on a designer gown costing thousands of pounds is evidence that she is like us. We hear that the monarch begrudges police officers who guard her family and her palaces a handful of cashew nuts and interpret it as eccentricity rather than an apt metaphor for the Dickensian meanness of spirit that underlies the selective concentration of wealth. The adulation of royalty is not a harmless anachronism; it is calculated totem worship that only entrenches the bizarre notion that some people are rich simply because they are more deserving but somehow they are still just like us.

Cults rely on spectacles of opulence intended to stoke an obsessive veneration for riches. The Rich Kids of Instagram who showed us what the "unapologetically uber-rich" can do because they have "more money than you" will find further fame in a novel and a reality show. Beyond the sumptuous lifestyle spreads in glossies or the gift-strewn shop windows at Harrods and Selfridges, and Gwyneth Paltrow's Goop website, shows like Downton Abbey keep us in thrall to the idea of moolah, mansions and autocratic power. They help us forget that wealthy British landowners, including the Queen, get millions of pounds in farming subsidies while the rest of us take back to the modest homes, which we probably don't own, lower salaries and slashed pensions. Transfixed by courtroom dramas involving people who can spend a small family's living income on flower arrangements, we don't ask why inherited wealth is rewarded by more revenue but tough manual labour or care work by low wages.

Cue the predictable charge of "class envy" or what Boris Johnson dismisses as "bashing or moaning or preaching or bitching". Issued by its high priests, this brand of condemnation is integral to the cult of the rich. We must repeat the mantra that the greed of a few means prosperity for all. Those who stick to writ and offer humble thanks to the acquisitive are contradictorily assured by mansion-dwellers that money does not buy happiness and that electric blankets can replace central heating. Enter "austerity chic" wherein celebrity footballers are hailed for the odd Poundland foray, millionaire property pundits teach us how to "make do" with handmade home projects and celebrity chefs demonstrate how to "save" on ingredients – after we've purchased their money-spinning books, of course.

Cultish thinking means that the stupendously rich who throw small slivers of their fortunes at charity, or merely grace lavish fundraisers – like Prince William's Winter Whites gala for the homeless at his taxpayer-funded Kensington Palace home – with their presence, become instant saints. The poor and the less well-off, subject to austerity and exploitation, their "excesses" constantly policed and criminalised, are turned into objects of patronage, grateful canvasses against which the generosity of wealth can be stirringly displayed. The cult of the rich propounds the idea that vast economic inequalities are both natural and just: the winner who takes most is, like any cult hero, just more intelligent and deserving, even when inherited affluence gives them a head start.

We are mildly baffled rather than galvanised into righteous indignation when told that the rich are being persecuted – bullied for taxes and lynched for bonuses. The demonising of the poor is the flip side of the cult of the rich or, as a friend puts it, together they comprise the yin and yang of maintaining a dismal status quo. It is time to change it through reality checks, not reality shows.

Nobel Prize winners say markets are irrational, yet efficient

S A Aiyar in The Times of India

Are stock markets irrational, driven by greed and fear, subject to euphoria and panic? Or are they highly efficient indicators of intrinsic value? Both, says the Nobel Prize Comittee for Economics, with no sense of contradiction.

It has just awarded the prize jointly to economists with opposing views. Robert Shiller is famous for two versions of his book 'Irrational Exuberance'. The first version appeared in 2000 at the height of the dotcom boom, and correctly predicted that this was a bubble about to burst. The second version came in 2005 just as the housing market was skyrocketing, and predicted (again correctly) that this too was a bubble likely to burst resoundingly.

This confirmed Shiller's status as a behavioural economist. Such economists laugh at the notion that human beings are rational economic actors, as portrayed in textbooks. No, say behaviourists, humans are driven by fads, prejudices, manias, and irrational bouts of optimism and pessimism. Yet Shiller is going to share the Nobel Prize with Eugene Fama, famous for his "efficient markets hypothesis." This states that markets are like computers processing information from millions of sources on millions of economic actors, and hence produce more efficient long-run valuations than the most talented genius.

Fama's market behaviour is fundamentally random, so future trends cannot be predicted by even the cleverest investors. He implies that choosing stocks by throwing darts at a stock market chart can beat the recommendations of top experts. This has been verified by some, though not all, dartthrowing contests.

Corollary: ordinary investors must not pay high fees to experts to pick winners. Instead they should invest passively in a group of shares (like the 30 shares constituting the Bombay Sensex or Dow Jones Industrial Average), and ride these bandwagons without paying any fees. This has led to the spectacularly successful emergence of Index-traded funds (like those run by Vanguard in the US). Such funds are indexed to share groups like the Sensex or the Banks Nifty. Rather than try to pick individual winners in say the auto, pharma or realty sectors, index funds invest passively in a group of auto, pharma or realty companies. This has proved successful and popular.

Two groups criticize the efficient markets hypothesis: big investment gurus and, paradoxically, leftists viewing financial markets as instruments of the devil. Investment gurus like Warren Buffett in the US or Rakesh Jhunjhunwala in India claim to have beaten the market average handsomely, thus disproving the efficient markets hypothesis. Not so says Fama: in any large collection of investors there will always be some who perform above average and some below average - this is a matter of statistical chance, not skill. Moreover, investment gurus have so many contacts that they may have insider information enabling them to beat the market by unfair means.

As for Shiller's successful predictions, Fama says capitalism is driven by booms and busts. To predict at the height of a boom (like Shiller) that a bust will follow is banality, not genius. It is as unremarkable to predict during every bust that a boom will follow.

After the 2008 global financial crisis, the new conventional wisdom is that governments need macro prudential policies to check future financial crises, and that finance should be more strictly regulated than ever before. However, the counter is that the financial crisis occurred even though the financial sector was already the most regulated (with 12,000 regulators in the US alone). Governments had encouraged reckless lending by guaranteeing large banks and investment banks against failure, and by creating governmentbacked underwriters like Fannie Mae who shouldered any burdens caused by mass default.

Perhaps the Nobel Prize Committee is right in implying that markets can be both irrational and efficient at the same time. Since humans are irrational, they will always create markets that have booms and busts, marked by irrational optimism and pessimism. An efficient markets defined by Fama and his followers is not one that produces steady growth without booms, busts or crises. It is efficient only in the limited sense that, whether the markets are calm or irrational, they represent the processed information of millions of actions of millions of actors, and this is inherently more efficient than the efforts of any individual investor.

The argument is analogous to the one against communism or dictatorship. Communists believed that the great and good politburo, motivated entirely by the public interest and not profit, would run the economy better than the chaos, irrationality and imperfections of the capitalist market. Yet the market, with all its flaws and irrationality, proved infinitely more efficient.

Fama holds that this is true of financial markets too. This is compatible with Shiller's analysis. Markets can be both irrational and efficient.

How Much Land Does a Man Need?

"How Much Land Does a Man Require?" (Russian: Много ли человеку земли нужно?, Mnogo li cheloveku zemli nuzhno) is an 1886 short story by Leo Tolstoy about a man who, in his lust for land, forfeits everything.

Synopsis

The protagonist of the story is a peasant named Pakhom, whose wife at the beginning can be heard complaining that they do not own enough land to satisfy them. He states that "if I had plenty of land, I shouldn't fear the Devil himself!". Unbeknownst to him, Satan is present sitting behind the stove and listening. Satan abruptly accepts his challenge and also tells that he would give Pakhom more land and then snatch everything from him. A short amount of time later, a landlady in the village decides to sell her estate, and the peasants of the village buy as much of that land as they can. Pakhom himself purchases some land, and by working off the extra land is able to repay his debts and live a more comfortable life. 

However, Pakhóm then becomes very possessive of his land, and this causes arguments with his neighbours. "Threats to burn his building began to be uttered." Later, he moves to a larger area of land at another Commune. Here, he can grow even more crops and amass a small fortune, but he has to grow the crops on rented land, which irritates him. Finally, after buying and selling a lot of fertile and good land, he is introduced to the Bashkirs, and is told that they are simple-minded people who own a huge amount of land. Pakhóm goes to them to take as much of their land for as low a price as he can negotiate. Their offer is very unusual: for a sum of one thousand rubles, Pakhóm can walk around as large an area as he wants, starting at daybreak, marking his route with a spade along the way. If he reaches his starting point by sunset that day, the entire area of land his route encloses will be his, but if he does not reach his starting point he will lose his money and receive no land. He is delighted as he believes that he can cover a great distance and has chanced upon the bargain of a lifetime. That night, Pakhóm experiences a surreal dream in which he sees himself lying dead by the feet of the Devil, who is laughing.

He stays out as late as possible, marking out land until just before the sun sets. Toward the end, he realizes he is far from the starting point and runs back as fast as he can to the waiting Bashkirs. He finally arrives at the starting point just as the sun sets. The Bashkirs cheer his good fortune, but exhausted from the run, Pakhóm drops dead. His servant buries him in an ordinary grave only six feet long, thus ironically answering the question posed in the title of the story.

Britain is far more corrupt than we think

Mary Dejevsky in The Independent

Within Britain, there is a widespread view – seriously dented neither by the MPs’ expenses saga nor by the newspaper phone-hacking scandal – that this is not a corrupt country. It might not be quite as squeaky clean as Scandinavia, but it is nothing like – let’s see, who shall we offend? – Italy or Spain. As for Russia or China, well, we can strut the moral high ground – can’t we? – certain of our superiority.

Incorruptibility is part of our national self-image. But we flatter and deceive ourselves. Over the past few weeks, The Independent has exposed private investigators who routinely break the law, digging for dirt on behalf of commercial clients. The techniques – phone hacking and “blagging” – are the same as those for which journalists have been hauled before the courts and pilloried by public opinion.

If there seems to be a slight edge to our reports, how could there not be? On present evidence, law enforcers would appear to take a dimmer view of journalists applying these illegal methods, or buying them in, than it does of business people and lawyers who do the same. That, at least, was the message from the Serious Organised Crime Agency, which initially instructed MPs not to name the companies commissioning such services on the grounds that it could “undermine their financial viability” by “tainting them with… criminality”.  Yesterday, however, there was a change of heart and Soca supplied the Home Affairs Select Committee with a list of a list of 101 names of people and organisations who have hired private investigators. The committee’s chairman, Keith Vaz, is now deciding whether to publish them.

Strictly speaking, blagging – obtaining information by deceit – can succeed without a partner. The offence is all on one side: no money or favour changes hands. But this is not the only way in which information is obtained. As with journalists and the police or others who hold  sensitive information, it is now known that money or favours have changed hands. And in these cases, those who sell are as culpable as those who buy. There has to be a market for the transaction to work.

The sellers might not see themselves as corrupt, merely as individuals exploiting an opportunity, or enjoying a perk of the job. That such practices may not always have been recognised as corrupt does not make them less so. It just means we are more adept than some of our neighbours at not calling things by their proper names. A gift for euphemism is something else that defines our national character.

If journalists and private investigators were the only ones under investigation, and the only commodity changing hands was information, we might just be able to file it away and argue that Britain has a very limited and very specific corruption problem. But this is not true, either.  In banking, we have had the rigging of Libor, the key lending rate, by individual bank employees for personal gain. As corruption goes, this comes close to the top of any list because  greed compromised a major pillar of the financial system – in a global financial centre which was built largely on its word being its bond.

A few steps further down we have claims of corrupt behaviour by British companies abroad. Only last week accusations were made against employees of a British company in China, GlaxoSmithKline. According to the Chinese, other pharmaceutical firms are also in the frame – for allegedly bribing doctors to prescribe their products. It is not, of course, that paying backhanders, or “doing as the natives do”, was unheard of in the operations of UK companies outside Britain. But the Bribery Act of 2010 made it expressly illegal, and it comes to something when it is the Chinese authorities doing the exposing and British companies that find themselves in the dock. The reputational damage flows only one way.

Again, it might be just possible to winkle out a “British” exception and claim that this sort of corruption reflects the malign influence of “foreigners” rather than any home-grown proclivity. But such complacency is challenged by the latest “global corruption barometer” compiled by Transparency International. Published earlier this month, its findings show not only that the perception of corruption in Britain has increased markedly over the past two years – not surprising, giving the prominence of the phone-hacking scandal – but that in the same period one person in 20 claims to have paid a bribe to a public official for services as diverse as health, justice and education.

A first instinct is, naturally, to question these conclusions. A second would be to surmise that those who admitted paying a bribe were at the margins – newcomers, perhaps or illegal migrants. But that would be too easy an escape. As with journalists and police, corruption is a transaction. There must be takers as well as givers. But I find it credible, too, because of a mini-brush of my own. When posted abroad more than 10 years ago, I checked that my husband, if he became non-resident, would have to pay privately for his (expensive) Parkinson’s medicine. The doctor, a locum, said yes, that was so. Then he paused, and – as I read it – implied, no more, that a deal could be struck. I left, but a possibility was there. 

And this is where corruption begins. Not with GSK in China, but with crimes left unpunished, names left unnamed and the prosaic minutiae of daily needs debased. If the Serious Organised Crime Agency is telling MPs – our representatives – what we the public may and may not know for national commercial reasons, the UK is on a slipperly slope indeed.

The Murthys and the Maoists

HARISH KHARE in the hindu

  

Between the relentless demands of corporate leaders and the capacity of the underclass to match the state’s violence, India needs a vision for itself that is morally defensible.

In the first week of 2011, Prime Minister Manmohan Singh allowed himself to be persuaded to accept N.R. Narayana Murthy’s invitation to travel to Mumbai to preside over a function to give away the Infosys Social Science Prizes. The Prime Minister even agreed to attend a dinner that Mr. Murthy wanted to host in his honour after the function at the Taj Mahal Hotel. So far so good. A few days before the event, there was a massive behind-the-scenes dust up between the Prime Minister’s staff and Mr. Murthy. The rub was that Mr. Murthy thought that since he was paying for the dinner, he had a right to dictate not only the guest list but even the seating arrangement. However, there is something called protocol and the dignity of constitutional offices. If the Governor and the Chief Minister of Maharashtra were to be at the dinner, they had to necessarily be seated on either side of the Prime Minister, whereas the host thought he ought to be sitting next to Dr. Singh. Mr. Murthy, however, was not one to be so easily rebuffed. As soon as the first course was served, he sought to convert the evening into a grand intellectual conversation and proceeded to invite his son to open the bowling. And the young son wanted to know from the Prime Minister what the government proposed to do so that young men like him could come back to India.

All this is recalled because the young man is now back in India, as executive assistant to his father, who in turn has allowed himself to be persuaded to take charge of Infosys again. Nepotism, did you say? No; no sir. A private company is free to hire anyone. Fair enough, but not exactly.

Mr. Murthy is not just a private businessman, minding his own business. He has often sought to inject himself into the public domain, telling a thing or two to the political class about how to behave. He has been serenaded as an “iconic” entrepreneur. During the heyday of civil society triumphalism two years ago, there was even a suggestion that Mr. Murthy be made President of India. That was the time when India’s corporate leaders thought they had the ethical credentials to write open letters to the Prime Minister and preach virtues of good governance.

Also read 1. Just how corrupt is Britain
2. Prices, Profits and Markets
3. Dantewada and the Maoists

Like other corporate leaders, the Murthys, father and son, represent an unrepentant ideological approach to the Indian state, its morals, manners and policies and purpose, but they are not the only ones to do so. The Maoists — who once again made their presence felt last month when they massacred the Congress top political leadership in Chhattisgarh — too have a list of ideological claims of their own on the Indian state. Both groups are relentless; both are unforgiving.

The May 25 attack was the boldest ideological challenge that the Maoists have posed to the country’s political leadership. Violence makes a demand on all stakeholders. It was no surprise, then, that as soon as news trickled in of the attack on the Congress convoy in Bastar, the party’s vice-president, Rahul Gandhi, should have taken off for Raipur. It was a commendable journey of political solidarity. It would be interesting to find out if the bloody massacre in Sukma has helped Mr. Gandhi re-set his ideological compass.

Let it be recalled that this is the same Mr. Gandhi who had allowed himself to be persuaded in August 2010 to travel to the Niyamgiri Hills in Orissa, where he told the adivasis that he was their “sipahi,” or soldier in Delhi. Only two days before that visit, the Central government had pointedly withdrawn environmental permission to the Vedanta Group to mine the area for bauxite. For good measure, the young Gandhi had proclaimed that development meant that “every voice, including that of the poor and adivasis, should be heard.” It would be nice to know if Mr. Gandhi has resolved his ideological equivocations in the aftermath of the Chhattisgarh violence.

For two decades the Indian political class has gone about believing that “development” and “growth” are innocuous and painless. The prevailing orthodoxy insists that the Indian state has one and only one business: to get out of the businessman’s way. There is an unwillingness to acknowledge the basic nature of power: irrespective of its political arrangement, every society plays host to a ceaseless struggle over who gains what at whose expense. Growth and development invariably produce dislocation and dispossession. Good politics in a democratic idiom can go a long way in ameliorating the alienation and anger.

PRO-POOR INITIATIVES

The UPA’s approach has been to let the corporate marauders run amok while salving its democratic conscience with a slew of pro-poor, aam aadmi-centric initiatives. In the process, for the past nine years, the country has periodically been treated to a mock controversy over whether Sonia Gandhi’s National Advisory Council was usurping the government’s space and prerogatives, or, when this or that NAC member walks out in a huff, whether the government is not being sufficiently pro-poor. The UPA’s approach neither mollifies the corporate buccaneers nor satisfies the poor and the disadvantaged.

The corporates, however, have sized up the divided political leadership across the spectrum. They have finessed their tactics. If a government is slow to give them the policy breaks that they demand, the democratic space and its anarchic habits will be creatively used to unleash civil unrest on this or that pretext. There is always the age old anger against “corruption” to be tapped. And, as it were, one can always rely on an auditor or a judge to step in to divert attention away from corporate misdemeanours of the most serious kind.

PINCER MOVEMENT

No wonder, then, that the Indian state is caught in a pincer movement. From one side, the ideologues and practitioners of “growth” are unrelenting in their insistence that the country’s natural resources and citizens’ savings be made available to them for exploitation; and, from the other direction, the state is confronted by a vast underclass that is unwilling to see any reason to sacrifice its land and forests so that some others can enjoy the benefit of “progress.” Just as the corporates have served sufficient notice that they have no qualms in taking the state on and causing misery to its political functionaries, the underclass, too, is willing to match the state’s capacity for violence, bullet for bullet.

Both the Murthys and the Maoists are forcing the Indian state to take a stand. For too long, the Indian political leadership has refused to confront the Grand Conundrum: for whom does the state exist, whom does the state seek to reward and whom does it strive to protect against whom. The UPA leadership has neither the appetite for a brutal repression of the angry tribal, nor is it likely to be able to lure the Naxalites into a democratic engagement without a demonstrable capacity to stand up to corporate greed. A kind of alternative arrangement is already on the drawing board: the Gujarat model of no dissent, no trade unions, no civil society, no Medha Patkar, no tribal resistance, no protests.

The great sociologist, Edward Shils, once observed that every society needs grandiose visions and austere standards; the political and intellectual leadership is obliged to prod society to its own historical ideals — “elements which must be recurrently realized without even being definitively realizable, once and for all.” Perhaps we should be thankful that both the Murthys and the Maoists are inviting us to find a vision for India that is morally defensible.

Cricket - Playing on a rotten wicket

by Bishan Singh Bedi

The Indian Premier League is rotten to the core. But let’s be clear that the rot did not set in yesterday. It has been this way since its inception. The first, almost self-anointed, chairman of the governing council of the IPL, Lalit Modi, has been on the run for reasons best known to the present BCCI president. And the less said about his successor, the better.

Whoever thought these two gentlemen were fit to head IPL ought to be hauled up for all its ills. Equally, anybody associated with IPL, in whatever capacity, is party to the malaise that wraps itself around it.

My life’s experience also tells me that all undeserving holders of high profile offices often meet the end they deserve. But who has been the biggest loser all along? Cricket, of course. And is anybody bothered really? I could have died a million deaths the other day when my wife asked me: “Aren't you ashamed of yourself as a cricketer?” Mind you she’s not a cricket buff at all, but her observation was piercing enough. My misfortune is that I am still alive to face the barrage of questions from others, but there is little I can do to prevent them.

I’m not ashamed to have been a cricketer; but I am ashamed to have my background linked to the present in which cricket has been turned into a religion without any spiritual ethics.

“No punishment would be big enough for ‘dirty/greedy’ cricketers,” the BCCI boss thundered from Kodaikanal. My humble query is this: who created the ‘dirt’ and ‘greed’ in the first place? Surely, the cricketers could not have discovered the ‘dirt’ and the ‘greed’ on their own. So if the cricketers fell prey to an organised brand of avarice, do we really blame them or the IPL and its widespread net of sleaze money?

Not for a moment do I wish to condone the action of the cricketers who have been nabbed. But is this the first instance of crime in cricket IPL-style, and will it be the last?

IPL bares the soullessness of some of the giants of Indian cricket who cannot stop raving about it. It is nauseating to observe, day in day out, India’s former greats competing with each other to outsmart the cricketing dictionary.

“Do you watch IPL?” I've been asked this question often enough. Yes, I do, on TV. Not because I want to, but mustn’t I know what the hell is going on around me in the name of cricket? Sadly, what I see makes for a revolting spectacle that begs a question: why do we not say “this is not cricket?” We never use any other sport to describe the ‘dignity, honesty, uprightness and integrity’ of a human activity better than cricket. But what is provided by the IPL, and highlighted brazenly by the Indian giants, is nothing but a crass cacophony of sycophancy — each trying to outdo the other to impress the bosses who obviously seem to enjoy it no end.

Yes, we see huge crowds in stadia, but I am convinced only a few come to see the cricket. For the rest, it’s just a chance to be part of the din and, and perhaps be caught by television cameras, even if only for a split second.

Am I surprised that the most influential, arrogant and haughty sports official in the history of Indian sport — its present President — has been reduced to an object of mockery?  Here is a man blinded by his own monumental craving for insatiable authority. He is not prone to tolerating any opposition and the entire BCCI is shamelessly familiar with his clout. And now, all these cronies are dumbfounded. They are buying time so that the sixth edition of the IPL can be confined to the corrupted cupboards.

Finally, BCCI is not IPL, but IPL is BCCI.  Youngsters jumping on the IPL bandwagon may do so, at their own peril. I am up to my neck listening to ‘experts’ about how IPL has helped youngsters gain cricket knowledge by sharing dressing rooms with the crème de la crème of the cricketing world.

I am also constrained to remark that the Indian media is sadly running with the hare and hunting with the hounds. It doesn’t quite add up, if you ask me.

Scandal: Just how corrupt is Britain?

Rotten banks, dodgy cops, MPs on the fiddle. A conference on public life has evidence to
topple long-held assumptions

Jonathan Brown
Friday, 10 May 2013

Looking across the seas at political scandals surrounding the likes of Silvio Berlusconi and
Jacques Chirac, at match-fixing in Pakistani cricket and Italian football, or claims of tax
avoidance on a nationwide scale in Greece, it was said jingoistically for many years that
humble Britain could never compete with the explosive corruption scandals that "Johnny
Foreigner" seemed to specialise in.

Yet recent British scandals can compete with the best Europe can offer. Besides MPs fiddling
their expenses and Jimmy Savile's history of paedophilia, racing has been hit by Frankie
Dettori's six-month drugs ban, we've seen London-based banks Barclays and UBS
embarrassed by the Libor rate-fixing scandal, and BAE Systems has been investigated over
its arms deals.

The police have become embroiled, too, with Detective Chief Inspector April Casburn jailed
for offering to sell information to the now defunct News of the World and evidence of a
cover-up on the Hillsborough disaster. And while none of our Prime Ministers have yet had to
stand before a court, MPs including Jonathan Aitken and Margaret Moran have been
convicted and Neil Hamilton famously lost his libel claim against Mohamed al Fayed over the
cash-for-questions affair.

Even royalty has not been immune, thanks to the tabloid sting that saw Sarah Ferguson
offering access to Prince Andrew for cash.

With this weighty list and other cases to examine, it will be claimed today that corruption
has in fact become an everyday part of British national life.

A conference of campaigners and academics, entitled "How Corrupt is Britain?", will hear
evidence that wrongdoing is not confined to a few corrupt officials but is systemic within
leading institutions.

The conference organiser, Dr David Whyte, of the University of Liverpool's School of Law and
Social Justice which is hosting the event, said the aim was to challenge two "long-outdated"
assumptions.

"First, that corruption is a problem that happens in far-away places, in governments that do
not have our traditions. Secondly, that corruption is something that we can understand
merely as a problem that stems from the actions of a minority of public officials who are 'on
the make', rather than something that is routine in our most venerated institutions," he said.
Among the speakers will be Carole Duggan who has campaigned on behalf of her late nephew
Mark Duggan who was shot by police in Tottenham, north London, in an incident that
sparked the summer riots of 2011.10/05/2013 Scandal: Just howcorrupt is Britain?

An Independent Police Complaints Commission (IPCC) report into his death is still not
complete and investigators have not spoken to the firearms officers involved. She claims she
has faced persistent collusion between official bodies preventing her bid to find out the truth
– with her lawyer, Michael Mansfield, arguing earlier this year that the cases showed the
IPCC was "not fit for purpose".

She believes that society as a whole has become more corrupt because of the anger at the
high salaries and bonuses still paid in the City despite its financial failings.

"Corruption is now endemic – just look at the bankers," she said. "They are teaching kids to
just take what they want – which is why they were taking trainers from shops in the riots.
That is what they are being taught by the greedy people."

Joanna Gilmore, of the Northern Police Monitoring Project – an organisation which brings
together campaign groups across the north of England – said many sections of the
population were losing faith in public bodies particularly the police and the IPPC.

Ms Gilmore said: "Corruption and violence is central to what people have experienced.
Communities feel powerless when they try to seek redress through official channels. They are
hitting a brick wall when they make a complaint."

Organisers hope that by sharing their experiences groups can pool expertise and find new
ways of dealing with systemic corruption across the whole of public life.

Co-organiser Richard Garside, director of the Centre for Crime and Justice Studies, said there
was an urgent need to view corruption as a nationwide problem that spanned both public and
private spheres of national life.

He said: "In Britain it has often been thought that corruption is something that happens in
other countries, not ours. The conference will join the dots across the public and private
domains, and begin a dialogue between campaigns for police accountability, tax justice,
executive pay, political and corporate accountability.

"Rarely, if ever, do we talk about those things in the same place. This conference will make
links across those different spheres of public life."

If bankers leave the country, it would be no loss

Ignore their howls of protest. 

They took home unheard of sums. Only in Britain do ministers dance to their tune. But public fury cannot be defied for ever

• 
• • Simon Jenkins
  • The Guardian, Wednesday 6 March 2013

Illustration by Belle Mellor

The peasants are revolting across Europe. They want bankers' blood and mean to get it. Until now, public response to the credit crunch has been one of general bafflement and wrist-slapping. The banks persuaded the world it was all an act of fate. As it was, they were too big to fail and their leaders too saintly to atone for it. For four years, British banks were showered with nearly half a trillion pounds of public and printed money. They duly recovered and stayed rich, while everyone else went poor.

The worm has turned. The banks and government alike have failed to deliver recovery. The people want revenge, and have found it – of all places – in the European parliament. It has declared that EU bankers cannot get bonuses bigger than their salaries, or twice as big if shareholders approve. This applies wherever EU bankers work, and to any overseas banker working in the EU.

Meanwhile, a Swiss referendum now requires top executives to seek explicit shareholder approval for their pay, with a ban on golden hellos and goodbyes. The Netherlands is talking of a tighter 20% cap on bonuses. Even laissez-faire Britain has seen the National Association of Pension Funds demand that boards keep executive pay rises down to inflation.

Europe's once omnipotent banking lobby has been all but neutered by the scale of scandal. The German government caved in to the EU parliament under pressure from the opposition Social Democrats. This was after the Libor scandal revealed Deutsche Bank cutting one trader's bonus by £34m, thus implying a staggering original sum. The Swiss campaign was kicked into life by the drugs firm Novartis giving its departing chairman a $76m gift. Some 68% of Swiss voted for the new curb.

Only in Britain do ministers still dance to the bankers' tune. Last month RBS executives brushed aside their state shareholder and paid themselves £600m in bonuses after posting a £5bn loss. Loss-making Lloyds dipped into its till and gave senior staff an extra £365m. Money-laundering HSBC announced 78 of its London executives would take home more than £1m each. They all say bonuses were unrelated to fines or losses, but they always say that. George Osborne was humiliated in Brussels on Tuesday by having to plead their fruitless cause.

Last year the City of London's much-heralded "shareholder spring" got nowhere. Revolts against executive pay at WPP, Barclays, Trinity Mirror and elsewhere had little noticeable impact. While overall pay stagnated, that of top executives rose 12%. Opinion polls showed the public overwhelmingly hostile to top pay. Only the government and the London mayor stand between the very rich and a furious public. The peasants' revolt means that even British ministers cannot defy opinion for ever.

The reality is that the banking community has allowed this thirst for revenge to build up for over four years, and it just did not care. Ever since the 1980s and financial deregulation, the profession took home sums of money unheard of in any other line of work.

This had nothing to do with free markets, except within a tight group of high-rolling traders. Modern bankers derive "economic rent" from exploiting oligopolistic cartels in financial services, with shareholders kept at one remove. The astronomical traders' bonuses are asymmetric returns on cash that properly belongs to depositors and shareholders whose money bears the risk. In any other business such bonuses would be regarded as theft from the firm.

For four years the British government – Labour and the coalition – huffed and puffed but was too terrified of the banks to act. Regulators were suborned by lobbyists and ministers, their offices packed with seconded bankers, and did as they were told. They gave huge sums to the banks in the belief that this was benefiting the demand economy. In Britain, some £400bn of cash was "pumped into the economy" via the banks. They merely traded or hoarded it, to their ever greater enrichment. The money vanished. A thousand pounds handed to every British citizen would have had more impact on the economy.

Last year, as if learning nothing, the Treasury gave the banks another £80bn to boost business and mortgage lending. This week it was predictably revealed that lending to small businesses actually fell as result. It was like giving money to a drunk and telling him to support his children. Never in the history of money can policy have been so glaringly inept. The banks laughed.

No trade unions are fiercer in defending their interests than the rich professions. As we saw this week with lawyers, cut their largesse and they threaten to take it out on the poor, the economy, the government, everyone. The banks howl that the bonus cap means their greed will go "offshore". This seems exaggerated. But the EU curbs could possibly see the start of the high-rollers moving out of over-regulated Europe towards the Americas and Asia.

This would not be wholly good news for Britain: finance has been the boom industry of the past quarter-century. But more likely is that the more toxic activities will go, and that is no loss. Either way, the banks have themselves to blame. They flew their golden wings too near the sun, and rage has melted them. They have only one plea on their side. The culture of greed in the City was nothing to the culture of ineptitude at the Bank of England and the Treasury. They pumped out the money. Never in British economic history can so much have been so wasted on so fruitless a cause. And still no hint of remorse.

Standard & Poor's feels Justice's lash, but can the law ever conquer greed?

The DOJ is making headlines with high-profile suits against Wall Street firms, but singling out a few won't fix systemic wrongdoing

• 
• • Heidi Moore
  • guardian.co.uk, Tuesday 5 February 2013 21.16 GMT

Standard & Poor's faces a Department of Justice lawsuit alleging the firm succumbed to conflicts of interest in their ratings for banks of mortgage-backed securities. Photograph: Stan Honda/AFP/Getty Images

 

In politics, public humiliation can often be a useful motivator. Take the Department of Justice, which was hauled over the coals in a recent PBS Frontline documentary on its lack of vigor in Wall Street prosecutions. The DOJ has been on a rampage lately.

The DOJ has been reportedly planning to file charges against the Royal Bank of Scotland, and last night, it filed an actual lawsuit against Standard & Poor's for misrating mortgage bonds before the financial crisis.

The Department of Justice is also getting creative and taking a novel tack. Standard & Poor's and other ratings firms have long maintained that their ratings, which were opinions, were protected under freedom of speech; in essence, you can't kill the messenger. This has proven a bulletproof defense for years.

The DOJ, in its lawsuit, counters that S&P acted as a double agent by allegedly violating its own standards. Ratings firms are paid by banks to rate products created by banks – an obvious conflict of interest in many cases. Standard & Poor's, like other firms, promised objectivity.

Thus the DOJ has alleged that S&P, while purporting to provide objectivity, was working on behalf of banks that needed good ratings for bad mortgage securities. To support this allegation, the DOJ quotes several emails that show S&P fretting over losing business to Moody's.

DOJ v Wall Street: from zero to hero

This rampage is great … directionally. The DOJ generally has to go crawling to Wall Street, tentatively striking deals that won't hurt financial reputations too badly and the bottom line hardly at all.

So, who doesn't love a major character finally overcoming its low self-esteem and owning its power?
In movie terms, this is the equivalent of the nerdy librarian who doffs her glasses and shakes out her hair, at which someone must yell, "Why, Miss Jones, you are magnificent!" It is Beyonce, pointedly filing her nails in the video for "Irreplaceable", squaring her shoulders and declaring, "You must not know about me. You got me twisted." It is Patrick Dempsey growing from spindly tween idol into a silvery heartthrob.


Considering that the DOJ is trying to regain its swagger, it seems churlish to object that it still may not be thinking big enough. And yet …

The DOJ's approach is great, in theory. It's good for a prosecutor's reputation to rake one firm over the coals and humiliate it publicly. But the truth is, the effect is limited. Other firms, rather than looking at the embarrassed firm and thinking, chastened, "there but for the grace of God go I," instead think, "God, glad I'm not like that poor sucker who got caught for doing what everyone does."
The DOJ is the greatest prosecutorial force in the country. It has subpoena power – excellent for commandeering embarrassing financial documents – and just enough resources and publicity power to really strike fear into Wall Street wrongdoers. The SEC is too underfunded; the CFTC has a shorter reach. The DOJ is, in short, the only entity in the country with any hope of accomplishing anything in the way of white-collar law enforcement.

Why 'making an example' doesn't work


There is some method to striking fear into the hearts of villains. For one thing, villains always believe they are exceptional. This is the case on Wall Street as well. Anyone who does anything dodgy involving money is usually pretty self-aware. He never deludes himself into thinking, "Oh, I am not doing anything wrong." He thinks, instead, "The authorities will never be smart enough to catch me."
This is why singling out RBS, or UBS, or S&P, will never have the fearsome deterrent effect that the DOJ really wants. In fact, by going after the firms piecemeal, the DOJ may actually be encouraging future wrongdoers rather than turning them away from crime.

You see, the DOJ is going after one or two firms for actions that were widespread across the industry. Fixing interest rates was the work of thousands of people. It's safe to say that S&P was not the only ratings firm that fretted that it would lose fees if it started downgrading bonds. In fact, S&P, according to the emails provided by the DOJ, frequently worried that it was not keeping up with Moody's.

This is a familiar pattern in Wall Street cases: Merrill Lynch, for instance, packaged all those bad mortgage securities partly because it was trying to outdo the profits of Goldman Sachs.

Wall Street's culture of rule-breaking

The dirty secret of Wall Street is that it delights in evading rules – not just for profit, but also for sport. To keep its skills sharp. The finance industry is full of clever people who love nothing more than finding loopholes to subvert authority, whether of government or of their own head of trading. The reason Wall Street leaders are always yelling about the necessity of teamwork is because acting mostly in one's individual self-interest – and the interest of one's bonus payment – is almost always the rule.

So, yes, this sudden burst of enthusiasm from the DOJ is a great development. There's no question that it's good, for most of the populace, to see one of America's great prosecutorial forces finally pull its act together on one of the defining scandals of our age: the greed – and sometimes fraud – that turned the housing crash into a financial crisis.

Yes, it's late – in fact, it pushes the traditional statute of limitations on such cases – but at least, some of the gears are finally moving. "Wisdom too often never comes, and so one ought not to reject it merely because it comes late," the supreme court Justice Felix Frankfurter once said, and he could have been talking about all these delayed actions.

It's also always fun to participate in the ritual of reading the hilariously self-incriminating internal emails that the DOJ captured. One of the best includes an S&P analyst sarcastically commenting that, after the crisis, the firm looked like something out of the 1980s hapless Wall Street comedy Trading Places:

"You should see how it is here. It's like a friggin trading floor. 'Downgrade, Mortimer, downgrade!'"

Bond ratings now less relevant

Wall Street, of course, didn't need to see these emails to see which way the wind was blowing with the ratings firms. Most banks and trading floors stopped depending on official bond ratings ages ago, even though all the ratings firms retain excellent records on corporate and municipal bonds (in fact, anything that is not mortgage-related).

BlackRock, one of the favorite bond managers of the federal government, has boasted for years that it does its own analysis on potential defaults rather than rely on ratings firms. (BlackRock's founder, Larry Fink, was not coincidentally one of the creators of the mortgage-backed security.) Official ratings are often only a technical requirement, but rarely do many banks or investors rely on them any more – the same way those banks don't rely on the Libor interest rate any more.

Which is why the DOJ should cast its net wider. Ultimately, the DOJ lawsuit against S&P may make a splash, but it probably won't be a deterrent. The only thing that will do that is banks and investors forcing ratings firms to behave differently.

That's easy in times of calm, like now, but much harder in bubble times, when greed rules.