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    (Original post by Quamquam123)
    The UK government announced yesterday that it was prepared to take a 25% stake in Tata Steel's UK operations in an attempt to save the UK steel industry. I was just wondering what people thought on the matter?
    Bad idea. More taxpayer money being wasted.

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    The thought just crossed my mind about how hypocritical the NUS is given how they refuse to condemn IS because that would be islamaphobic, but are these not the same sorts of people saying that IS aren't Muslims?

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    We didn't have a vote whether to disaffiliate or not... We had a vote on whether to have a vote to disaffiliate, and that failed... Like WTF!!!
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    Nationalising Tata Steel is a bad idea. Nationalised industries should be new-ish, exciting, and profit-making. It's a boon if they're high-variance too because the huge capital of the state gives it a significant competitive advantage. Possibly consider nationalising most insurance industries, maybe investment banking.
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    (Original post by TheDefiniteArticle)
    Possibly consider nationalising most insurance industries, maybe investment banking.
    I'm going to assume you mean we should have a state-backed competitor and not the entire nationalisation of the industries. Insurance requires talent to ensure the company is able to generate enough returns to cover its payments. A public company cannot compete on pay or incentives (other than perhaps a good pension) to secure the best individuals, which will impact on its ability to generate a return. In other words, public ownership and the restrictions that come with it strangle the company's performance because if your staff are second-rate and unable to generate a profitable return, which is currently ultra-difficult enough in such a low yield environment in the financial markets, you're loss making.

    With Investment Banking, it's also about the contacts which are built up between the bank and hedge funds, institutional investors etc. and where the talent is. A nationalised bank will not be able to compete with the likes of Goldman Sachs, JP Morgan, Morgan Stanley etc. (case in point: RBS since being rescued) for the best individuals, nor will it secure good contacts with institutional investors. You also can't offer more pay to compensate for the talent factor because there is no political incentive to do so (otherwise you'll get people complaining about excessive pay as already happens).
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    (Original post by The Financier)
    I'm going to assume you mean we should have a state-backed competitor and not the entire nationalisation of the industries. Insurance requires talent to ensure the company is able to generate enough returns to cover its payments. A public company cannot compete on pay or incentives (other than perhaps a good pension) to secure the best individuals, which will impact on its ability to generate a return. In other words, public ownership and the restrictions that come with it strangle the company's performance because if your staff are second-rate and unable to generate a profitable return, which is currently ultra-difficult enough in such a low yield environment in the financial markets, you're loss making.

    With Investment Banking, it's also about the contacts which are built up between the bank and hedge funds, institutional investors etc. and where the talent is. A nationalised bank will not be able to compete with the likes of Goldman Sachs, JP Morgan, Morgan Stanley etc. (case in point: RBS since being rescued) for the best individuals, nor will it secure good contacts with institutional investors. You also can't offer more pay to compensate for the talent factor because there is no political incentive to do so (otherwise you'll get people complaining about excessive pay as already happens).
    1) Why are you assuming the state can't compete on pay? This is another change I'd make - pay for most public sector workers needs to be dramatically increased across all industries
    2) The way to do all this is to set up a state competitor, then tax transactions with non-state entities in the market (this might be a little tougher with IB due to the international nature thereof)
    3) Your comparisons with the big US banks are moot because no European bank can compete any more, it's not a question of nationalised/privately owned industry
    4) RBS is a unique example because there's immense pressure on it to take a low variance strategy, whereas most private banks have had a lot of the moral hazard adopted by the state in which they operate, so are able to operate higher-variance strategies than their access to capital ought to allow (whereas a true state-run insurance/IB approach would have a competitive edge because of its actual access to capital) - that's why there's such a huge hoo-hah about these 'too big to fail' banks setting up plans for their own demise
    5) I'm yet to be convinced that in certain long-term investment industries, anyone actually has a demonstrable edge over the market, since the volume practised in e.g. VC or value investment is such that one can easily be (un)lucky for a lifetime
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    (Original post by TheDefiniteArticle)
    1) Why are you assuming the state can't compete on pay? This is another change I'd make - pay for most public sector workers needs to be dramatically increased across all industries
    Because they need paying for somehow...remember, even rabid socialists don't like the idea of having to pay for what they want to do.
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    (Original post by TheDefiniteArticle)
    1) Why are you assuming the state can't compete on pay? This is another change I'd make - pay for most public sector workers needs to be dramatically increased across all industries
    2) The way to do all this is to set up a state competitor, then tax transactions with non-state entities in the market (this might be a little tougher with IB due to the international nature thereof)
    3) Your comparisons with the big US banks are moot because no European bank can compete any more, it's not a question of nationalised/privately owned industry
    4) RBS is a unique example because there's immense pressure on it to take a low variance strategy, whereas most private banks have had a lot of the moral hazard adopted by the state in which they operate, so are able to operate higher-variance strategies than their access to capital ought to allow (whereas a true state-run insurance/IB approach would have a competitive edge because of its actual access to capital) - that's why there's such a huge hoo-hah about these 'too big to fail' banks setting up plans for their own demise
    5) I'm yet to be convinced that in certain long-term investment industries, anyone actually has a demonstrable edge over the market, since the volume practised in e.g. VC or value investment is such that one can easily be (un)lucky for a lifetime
    1) Lack of political incentive. Increasing pay across the board reduces the positive returns for the entire public sector from having a nationalised and profitable insurance/banking corporation. I.E. higher costs eat away much of, if not all, the profits you get.
    2) That significantly pushes away the incentives to come to London for the financial markets. Paris, Dublin, Frankfurt and New York would enjoy a massive surge of new business and we would damage our industry for no reason.
    3) Irrelevant. Though that case may be, it does not provide an argument that a public alternative is any better.
    4) What increased access to capital does a state competitor enjoy? Public funds?
    5) Irrelevant. If that is the case, there is no logical incentive to have a state run competitor as in the long run it will become loss-making (I.E. that it breaks a condition you set out as it cannot sustainably be profitable).

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    While i don't agree with a state entrant in the insurance or banking industries anyway (both are competitive sectors) i'm actually not sold that paying for talent is a massive factor. While i have no doubt that somebody on £250k is superior to somebody on £40k, i'm far from convinced that the effect is linear and suspect that by the time you get to six figures you'll be seeing severely diminished returns when paying somebody £100k vs £175k.

    Obviously there's an element of supply and demand involved that still needs to be borne in mind (most people in those type of jobs probably have a more maths orientated degree than generic business and therefore the labour pool is probably smaller) but assuming sufficient graduate production then i dare say most firms like that could probably cut costs by cutting wages a little.
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    Leaders, I have a fun challenge for you!

    Follow my example and present each of your MP appointees with an emoticon, aye?
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    (Original post by Life_peer)
    Leaders, I have a fun challenge for you!

    Follow my example and present each of your MP appointees with an emoticon, aye?
    And try to be the first to publish next time
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    (Original post by Life_peer)
    Leaders, I have a fun challenge for you!

    Follow my example and present each of your MP appointees with an emoticon, aye?
    The lists incomplete so you haven't come first just yet

    I've finalised the Liberal MPs pretty much so I'm posting our list when I get home from college


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    (Original post by Jammy Duel)
    Because they need paying for somehow...remember, even rabid socialists don't like the idea of having to pay for what they want to do.
    The private sector manages to pay for them. Pay them out of profit. I see no problem with a profit-making public sector company.

    (Original post by The Financier)
    1) Lack of political incentive. Increasing pay across the board reduces the positive returns for the entire public sector from having a nationalised and profitable insurance/banking corporation. I.E. higher costs eat away much of, if not all, the profits you get.
    2) That significantly pushes away the incentives to come to London for the financial markets. Paris, Dublin, Frankfurt and New York would enjoy a massive surge of new business and we would damage our industry for no reason.
    3) Irrelevant. Though that case may be, it does not provide an argument that a public alternative is any better.
    4) What increased access to capital does a state competitor enjoy? Public funds?
    5) Irrelevant. If that is the case, there is no logical incentive to have a state run competitor as in the long run it will become loss-making (I.E. that it breaks a condition you set out as it cannot sustainably be profitable).

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    1) I can't see how the same reasoning doesn't apply equally to the private sector. There are no intrinsic costs special to a public organisation in these industries.
    2) Hence the note about IB possibly being different, but insurance is a largely domestic industry (incidentally, this is the reason why the world is optimised with a single global superstate).
    3) This is not intended to illustrate why it would work well in the public sector, but rather why your use of RBS compared with the big US banks as an example is inappropriate. The public alternative is better because a) reduced cost of capitalisation and b) allows utility-efficient distribution of profit across society.
    4) Yes, public funds.
    5) If that is the case, I agree that there would be no point in entering those industries (but, for instance, there may be a use in creating a state algorithmic day trading business due to higher volume indicating to a significantly greater degree of certainty that those can profit), but this was intended to respond to your point about greater pay being needed to attract talent. Where results don't necessarily correlate well to ability (and therefore, capability to produce results in the future), the difference in expected future results between existing poor and good performers is going to be small enough to not warrant a significant difference in pay.
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    :poker: TheDefiniteArticle
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    TheDefiniteArticle barnetlad I expect you're both right. I won't attend, but I'll wish them many years of happiness.
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    (Original post by cranbrook_aspie)
    Great, now do that three more times and it'll all be good.
    PROSM. I can't help but wonder whether it is just a token gesture.
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    (Original post by Life_peer)
    Leaders, I have a fun challenge for you!

    Follow my example and present each of your MP appointees with an emoticon, aye?
    Us Greens have a vote on who to be our MPs. We believe in all members having the vote, unlike it seems does the NUS when ir comes to choosing a President.
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    (Original post by barnetlad)
    Us Greens have a vote on who to be our MPs. We believe in all members having the vote, unlike it seems does the NUS when ir comes to choosing a President.
    Do you also believe in life after love?
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