MPs' expenses

British Members of Parliament have been enjoying a very relaxed system of indirect remuneration. Instead of voting themselves pay rises, they have voted themselves allowances which do not show as part of their basic pay.

Two things made this system different from normal: firstly, MPs voted themselves special tax exemptions which members of the public did not have; secondly, the culture surrounding the management of such expenses encouraged MPs to 'use up' their allowances, rather than minimise costs. This was plainly a system and culture which encouraged spending as an MP's 'right', and viewed allowances as a perk of the job.

There will always be those who push things as far as the rules will allow. But they are not always exposed so ruthlessly. What is driving the additional attention and hostility?

We are in a recession, with many worried about their finances. At times of acute threat, people tend to place more blame outside themselves, to avoid immediate pressure. In extreme and focussed form, this turns into scapegoating, where one class of people becomes the repository for everyone else's anger and despair. British MPs are suffering because the British public has turned on them in this way.

As to the system itself, my suggestions are: to tax MPs allowances in exactly the same way as everyone else's; and to give design and control of the system to a non-MP with a specific remit to keep costs down.

Is BAA in trouble?

Running UK airports used to be a monopolistic licence to print money, and an attractive cash cow for outside investors. At the moment, however, BAA, which runs many UK airports, is suffering several attacks - from financial losses; from falls in passenger numbers; and from the Competition Commission's quest to break up its market power.

Passenger volumes have fallen by around 10%, but BAA's main problems relate to financing issues, include interest charges and losses on financial instruments. BAA refinanced its debt (currently around £10bn) last summer.

BAA (majority-owned by Spanish company Ferrovial) has been ordered by the Competition Commission to sell Gatwick and Stansted airports, as well as Glasgow or Edinburgh. The Gatwick sale is well under way, and BAA are considering three rival bids - from Global Infrastructure Partners; Manchester Airport Group and Borealis; and Citi Infrastructure Investors.

The question for me is whether, once the sales are completed, BAA has enough cash-generating ability to finance whatever debt remains on the books. In a buyer's market, this isn't guaranteed. The situation reminds me of BT, a one-time perennial cash-earner, which is now saddled with debt as well as periodic de-monopolising pressure.

Is it better if the giants fall?

Would it be better all round if the two troubled US car giants, Chrysler and General Motors, go into bankruptcy?

Both are teetering between restructuring and going bust. With regard to debt, although, Chrysler's main lenders have accepted $2bn cash in lieu of $7bn secured debt, GM's more diverse lenders have not proved so easy to get together in one agreement. With regard to other obligations, both companies have contracts to fulfil with a network of dealerships which is just too big for the current market.

Bankruptcy would have its advantages for the companies: not least, the protection afforded would enable them to downscale operations, reducing the number of dealerships with fewer legal repercussions.

Should bankers be forgiven?

The new chairman of the Royal Bank of Scotland wants to draw a line under the past; the former chairman apologised last November, and the argument is that we should now move on. But, as recent public protests in London show, it is proving hard for people to forgive bankers for their role in the current financial crisis. There are two aspects to forgiveness here: the banks' wish to regain goodwill, and the public's need to see the past resolved.

What did the bankers do to lose goodwill, and how can they therefore regain it? They prioritised reward over risk management. In the quest to generate short-term wealth, they overestimated the longer-term sustainability of the growth mechanisms they were using. Many bankers knew the growth was unsustainable, but continued because the short term gain was so attractive, and because their competitors would get the business if they did not. They can only credibly regain goodwill if they show they are putting in place a new corporate culture of lower reward and lower risk.

And for the people, what still feels wrong, and how could it be resolved? An abiding feeling is that the main parties responsible have not shared equitably in the suffering they helped to create. This finds its expression in a wish to challenge the generous pension deal given to retired RBS chief executive Sir Fred Goodwin. The people might have forgiven more easily if Sir Fred had voluntarily given up a significant part of his benefit. But the legal deal in this country is that, unless reckless or dishonest, a director can take what is contractually agreed for his efforts, whether a company is successful or not. Those who were so generous to Sir Fred are themselves being challenged, but again, unless they were reckless or fraudulent, not a lot can be forced upon anyone. The best that can be hoped for, is that the government, on behalf of the people, wins fair repayment for its support for the banks.

Earlier I mentioned the two aspects of forgiveness: the banks' need to retain goodwill, and the public's need to see the past resolved. The best hope of both of these happening is for banks to introduce a new low-reward, low-risk culture, and for the government to exact proper repayment on behalf of the public.

Financial crisis and people-protest

The cycle of work and personal reward keeps people busy and well-behaved. If you have a job, it keeps you out of mischief. If your job is gone, you have more time on your hands. Time to question and argue. Time to challenge the status quo. With less reason to keep your mouth shut. As more people lose their livelihood, recession is likely to involve more protest.

Even in China, employment is becoming more of an issue. China's growth has been helped by huge exports to other countries - countries which are not now buying goods at the same level. As demand evens off or falls, growth in the cities dwindles. The Financial Times today suggests that China may now face up to 27m newly jobless people returning to the countryside. They are returning to an agricultural sector already shocked by downward pressure on prices and production. This year, 6.5m graduates will leave China's higher educational system: those who cannot find jobs could become a voice of unrest. The government may already be seeking strategies to manage potential protests. Of course in China, the power of government, and restrictions on press freedom, may dampen down protest, at least in the short term.

But in other places, recessionary pressure is already seeing an increase in protests and their reporting. People alienated from the economy have less to lose in protesting against perceived unfairness; journalists in a threatened economy will spin copy from sensationalising perceived injustice. In the UK, at the oil company Total, workers are feeling threatened by contracts which involve the use of overseas labour. This story has been given significant airtime by journalists, many of whom are pushing it towards a people-versus-government issue.

If unemployment continues to rise in many economies, we can expect more protest, more unrest. Governments - particularly those with greater press freedom - will be working overtime to make sure they themselves are not put out of a job.