Fabio, George and the Earnings Ratio

So England is out of the 2010 World Cup and Fabio Capello is not resigning. No surprise there he is part of the problem that the UK governments have encouraged over the past thirty years - untrammelled avarice has been supported against all logic and evidence that it never works.

Meanwhile, the PM, David Cameron, has recently berated the public sector for having their top earners paid 15 times as much as their lowest paid. (£180k to £12k). He should have also examined and commented on the disparity of pay levels in the private sector. A rough comparison is that managing an organisation in the public sector spending £500m plus per annum with 10,000 plus employees (an average unitary authority in Scotland) gives a salary of £125k for a Chief Executive and an earning ratio of about 1:10. Councils provide scores of different products and services and are under intense scrutiny by its citizens, elected representatives and government inspection agencies. Their salary is often less than that of a Managing Director of many single-product private companies with turnovers of £10m or less and maybe 30 to 100 employees, the lowest paid of whom are probably paid the minimum wage with no sick pay and minimum holiday entitlement. Meanwhile, according to the magazine Marie Claire, David Cameron's wife, Samantha was paid £400k  before she resigned when he became PM as a Director with Smythsons of Bond Street. A company that employs less than a hundred staff and an annual turnover of £40 to £50m. This would give an earning ratio of about 1:40. If this was in the public sector it would be a scandal but then entitlement is a free pass to hypocrisy.

Premier League Football clubs have a ratio of highest to lowest paid of about 1:300. UK Banks have ratios that average about 1:150 and even the much-lauded John Lewis Partnership operates with a ratio of 1:60. The £millions that have entered football in England over the past decade have not trickled down to the grassroots, they have been siphoned off by the greed and selfish behaviour of clubs, the Premier League and the FA alike. It is the absence of street football or facilities where kids as young as 5 or 6 acquire and practice the skills that are losing out on the income streams from TV rights, sponsorship, and inflated season ticket prices. These skills are being developed as the game flourishes across Africa, South America, and parts of Asia. This is what will thwart future attempts at the World Cup by England. The Premiership doesn't care it can buy its talent on the world market.

So by paying top gun for enterprise and shredding public services the Chancellor, George Osborne, who has never worked in the real world, has decided to adopt the football model for the rest of the economy. No pay increases for the lowest paid, more VAT, reduced benefits, and minimum regulation against the financial institutions and media moguls who are bankrolling this fiscal madness. Oh, and let's not rail against the ratio of income distribution for the private sector, they deserve it they are the wealth creators!

Will it make us happy? Well, not according to all the research into happiness which shows that the Danes and other Scandinavian countries have the greatest happiness quotients and where the disparity between top and bottom income levels is the least. Progressive tax and spending policies have made a difference.

Unfortunately, we will probably have to wait until 2014 for Fabio Capello(or his replacement) and George

Osborne (and hopefully his replacement) to have it confirmed that they have really messed up and those regressive income distributions in both football and the economy are no paradigm for success. Success for the wealth creators is assured by this approach, it is the population as a whole who will be the losers.