Wednesday 25 July 2012

It don't add up!

Hmmm, The Daily Mail headlines the tale of the unemployed accountant. I'm not sure why they felt the need to highlight his plight, or why this story had any merit over and above the thousands of similar tales of financial woe. Or, more pertinently, why anybody would really care; he is an accountant, after all.

According to the article: "...the Timpsons drove two cars [and] enjoyed two foreign holidays a year [and] an affluent life in their four bedroom semi-detached house which they bought 12 years ago for £300,000 [and] felt so financially comfortable they remortgaged their property and took out a £50,000 loan in a bid to build their dream home on a plot of land they bought nearby in 2005..."

You assume as an accountant you will always be needed ..."

You would also assume, as an accountant, that he'd understand the fickle nature of money and instead of living high on the hog, would have salted away as much as possible for when times got difficult. Surely, he would never have advised employers or clients to borrow and spend like there was no tomorrow? Silly me - that's exactly what 'leverage' was. The buy-to-let market was all about borrow and spend... and hope.

For years small businesmen have been so terrified of finances and running foul of the taxman that they have paid the hourly rate for a qualified accountant, only to have a junior back-office clerk add up two columns of figures, subtract one from the other and fill in an online tax return. It was only a matter of time before some would wake up and realise an accountant was an unnecessary , non-deductible luxury they could no longer justify

If I and many like me watched in incredulous horror as the thrift model was overtaken by the ever accelerating credit economy and wondered just when that bloated, wobbly bubble was going to burst, surely an accountant should have been much more informed and wary - especially with his own money.

Interesting that this story appears on the same day as Exchequer Secretary David Gauke's rash condemnation that those who both paid and accepted cash-in-hand were just as bad as the bankers. Shame about the today's Daily Telegraph lead story that the cash economy is neither wrong nor immoral. Early polling suggests 75% of the readers also support that view. (Why aren't the government spin doctors stamping heavily on these almost daily ill-thought-out leaks?)

The root cause? Human greed, plain and simple. The possibility of getting something for nothing, or more for less, is a prospect that raises a gleam in the eye of humans rich and poor, big and small, the world over. As for tax avoidance, surely it is one of the principle aims of accountancy? Public servants, private businesses, charities and individuals have always been advised, nay encouraged, to avoid paying more tax than they had to. (SIPPS, ISAs Gift Aid to charity, etc)

Pugh cartoon from the Daily Mail

Our society runs on, promotes and excuses greed at all levels. Consumerism is pure greed. Saving is healthy, responsible greed. Addiction is greed, profiteering is greed. false accounting is greed, market-fixing is greed. Theft is greed and even murder is often motivated by greed. It's there, at the heart of the drive for human survival and advancement. Like it or not, greed gets you out of bed in the morning.

Now, if I put my other fist in there?

In the movie Wall Street, Gordon Gecko said "Greed is good". He was wrong, it's much, much simpler than that, Greed is human.

So, now it's agreed we're greedy fuckers, can we shift the debate back, not to who is to blame (all of us) but how we're going to fix it?

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