Posts Tagged ‘Bank of England’

Lobster on the Economic Damage Caused by the Financial Sector

November 22, 2019

Lobster over the years has criticised the dominance of the financial sector over the British economy, and attacked the way this has actively harmed other sectors, particularly manufacturing industry. Thatcher, Major and then Tony Blair favoured banking and financial services over the industries, partly from economic illiteracy and partly from the conviction that Britain’s manufacturing sector was doomed. Thatcher believed very much in a strong pound and didn’t think it would harm the manufacturing industries. One of the few businessmen from that sector in Thatcher’s government tried to tell her otherwise, and show her that it would damage our exports by making them too expensive over our competitors. But Thatcher wouldn’t hear of it. She was convinced that it wouldn’t have any effect on manufacturing because the Germans had a strong manufacturing base, and they had a strong Deutschmark. The businessman tried to explain to her that the Mark was strong because they had a strong manufacturing base, not the other way around. But it was too much for the Leaderene’s brain and she refused to listen.

Thatcher also made it very clear that she was not going to help failing industries. What help there was, was supposed to come from the privatisation of state utilities and the operation of market forces. This was supposed to open up new forms of private investment. If they didn’t, then that company or industry was uncompetitive and doomed to fail. Meanwhile, the thinking went that the financial sector would take over from the failing manufacturing industries as a new source of wealth and employment. Thus Blair, Brown and the late Mo Mowlam opened up the ‘prawn cocktail’ campaign to win over the City of London, promising light regulation. One of the chief executives at the Bank of England, imported from America, was Deanne Julius, who said that Britain should abandon its manufacturing industries and allow them to be replaced by America’s. Instead, Britain should concentrate on the service industries.

This is another load of neoliberal economic rubbish that has been conclusively proved wrong. The Oxford economics professor, Ha-Joon Chang, in his book 23 Things They Don’t Tell You About Capitalism shows that despite Thatcherite dogma, manufacturing is still crucially important for the British economy. It only looks weaker than the other sectors, because it has grown at a slower rate.

Now Robin Ramsay in the latest update to his ‘News from the Bridge’ column in Lobster 78 has published a piece actually describing the active harm the privileged position of the financial sector has done the British economy as a whole. It’s in a piece ‘The Future of Britain’s Crisis’, which begins with a few sharp observations about the impotence of the House of Commons Security and Intelligence Committee. This is supposed to supervise Britain’s intelligence services, but its lack of effective power is demonstrated by Johnson’s suppression of the report into Russian influence in UK politics. From leaks to CNN and others, it shows that rich Russians have purchased UK citizenship and poured money into Tory coffers. He states that this is just part of the price Britain has to pay for Britain being one of the leading centres of money laundering. He continues

The idea that there is a structural conflict between the interests of the manufacturing economy and that of the City has been around since the late 1970s in my experience, and probably much longer. The conflict was rarely articulated by public figures beyond the British left but in 1980, with Bank of England base rates lifted to 14% ‘to control inflation’, Sir Terence Beckett, director-general of the Confederation of British Industry (CBI), told its annual conference that they had to ‘to take the gloves off and have a bare-knuckle fight’ with the Thatcher government. But no such fight ensued, Beckett resigned and in the following decade while the City boomed, British manufacturing shrank by about 20%.

The focus these days is less on structural conflict than on what is known as ‘over-financialisation’: roughly, that the financial sector gets to be too big for the rest of the economy. Recently a trio of economists/econometricians (from the Sheffield Political Economy Research Institute at the University of Sheffield) have tried to quantify the cost of UK over-financialisation and have concluded:

‘Our calculations suggest that the total cost of lost growth potential for the UK caused by “too much finance” between 1995 and 2015 is in the region of £4,500 billion. This total figure amounts to roughly 2.5 years of the average GDP across the period.

The data suggests that the UK economy, may have performed much better in overall growth terms if: (a) its financial sector was smaller; (b) if finance was more focused on supporting other areas of the economy, rather than trying to act as a source of wealth generation (extraction) in its own right.

This evidence also provides support for the idea that the UK suffers from a form of “finance curse”: a development trajectory of financial overdependence involving a crowding out of other sectors and a skewing of social relations, geography and politics.’ [Emphases in the original.] 

On similar lines, Grace Blakeley writes in her On Borrowed Time: Finance and
the UK’s current account deficit, that

‘Rebalancing the UK’s international position requires moderating the significance of finance within the UK economy and bringing asset price volatility under control, while nurturing non-financial exporting sectors.’

Ramsay concludes the article by remarking that it would be a difficult job convincing the political establishment of this, never mind the electorate. The failure of people working within London to understand that the capital’s influence and share of the country’s wealth is harming the rest of the country has helped the rise of the Scots and Welsh Nationalists, along with less significant movements like the Yorkshire Party, the Campaign for the North and Mebyon Kernow.

See: https://www.lobster-magazine.co.uk/free/lobster78/lob78-view-from-the-bridge.pdf

£4,500 billion lost to the British economy between 1995 and 2015! 

And never mind the millions of jobs lost, the destruction of working class communities right across the country from Cornwall to Scotland and Northern Ireland, lost skills and damaged lives!

All that simply so that Thatcher’s, Blair’s, and now Boris and Rees-Mogg and their chums in the City of London could make a tidy profit.

This is proof that we need a Corbyn government that will do something for public services and manufacturing industry, rather than more of the self-serving Tory economic policies that benefits only the City.

Elderly Rabbi Arrested at Extinction Rebellion Protest

October 16, 2019

Yesterday’s I, for Tuesday, 15th October 2019, carried an article by Jennifer Logan reporting that an elderly rabbi had been arrested by the rozzers after praying at an Extinction Rebellion protest in London. The article ran

A rabbi who was arrested after kneeling and praying in the middle of a road during the Extinction Rebellion protests in London said yesterday that he was “standing up for his grandchildren.”

Police have now arrested 1,405 people in connection with the protests, which will continue tomorrow when activists are understood to be planning to block roads outside MI5 on what will be the seventh day of direct action over the global climate crisis.

Jeffrey Newman, the Rabbi Emeritus of Finchley Reform Synagogue in north London, was protesting alongside about 30 Jewish activists. He was arrested near the Bank of England as hundreds of people descended upon the financial centre for a second week of protests.

The 77-year-old, who was wearing a white yarmulka branded with the black Extinction Rebellion logo, said: “I see it as my religious and moral duty to stand up for what I believe in, and what I care about, for my grandchildren.

“I haven’t tried to involve the synagogue, because if you are asking for permission, you might not get it. I think it’s much more important to do what I’m doing.”

After last week’s protests, which blockaded Parliament and targeted City Airport, protesters are now focusing on the City of London over financial backing for fossil fuels. They claim that trillions of pounds are flowing through financial markets to invest in fossil fuels which damage the climate.

Extinction Rebellion said dozens of activists were due to appear in court this week, including trials connected with previous action in April.

I have to say that Extinction Rebellion aren’t exactly my favourite protest group, because their demonstrations seem to inconvenience the general public more than the politicians and the big corporations behind the fossil fuel industries and global warming. But they have a very, very good cause. Meteorologists, ecologists, along with other scientists and broadcasters like Sir David Attenborough have been warning for decades that unless something is done, our beautiful world may very well die and humanity along with it. When I was studying for my doctorate in Archaeology at Bristol Uni, one of the postgraduate seminars in the department was by an archaeologist on the impact of climate change on human cultures throughout history. He was particularly concerned about drought and desertification, which certainly has catastrophically affected human civilisations around the world. One of the most dramatic examples was the abandonment of the Amerindian pueblo cities in the Canyon de Chelly in the American southwest around the 12th century AD. The pueblo cultures had created an extensive irrigation to supply water to their crops in the southwestern desert. However, in the 12th century that part of America entered an extremely dry period during which the available water dried up. Civilisation was not destroyed, as the Amerindian peoples themselves survived by retreating to more fertile areas. Nevertheless, it resulted in those pueblos, which had survived for centuries, being abandoned.

And now we face a similar crisis in the 21st century, thanks in part to global warming and an increasingly intense demand for water. Back in the 1990s one edition of the Financial Times predicted that climate change and competition for water resources would be the major force for war in the 21st century. In West Africa one of the reasons for the conflict in the north of Nigeria, for example, between Christians and Muslims is the desertification of the traditional grazing territory of nomadic pastoralists. These are mainly Muslim, who have been forced to move south onto land belonging to mainly Christian peoples in order to feed their flocks. The result has been ethnic and religious conflict. But it’s important to realise that the roots of this conflict are primarily ecological. It is not simply about religion. Examples of desertification and global dry periods in the past have been used by the Right to argue that the current climate crisis really isn’t as acute as scientists have claimed. It’s just the world’s natural climatic cycle repeating itself. This certainly wasn’t the view of the archaeologist giving that talk at uni, who warned that there was only a finite amount of water and urged us all to use it sparingly.

It was interesting to read the good rabbi’s concern for the planet and his grandchildren. People of all faiths are now worried about climate change. One of the priests at our local church preached a very long sermon on Sunday, no doubt partly inspired by the coming Extinction Rebellion protests, on the need to save the planet. I’ve no doubt that the involvement of practising Jews in this protest, and others, will cause something of a problem for some of the propaganda used to attack Green groups. Because there was a very strong ecological aspect to Nazism, the Right tries to close off sympathy for Green politics as a whole by smearing it as a form of Nazism, even when it’s blatantly clear that they aren’t. But the IHRC definition of anti-Semitism states that it is anti-Semitic to describe a Jew as a Nazi. Which is going to make it rather difficult for the organisations and rags that follow this line to claim that Jewish Greens are somehow supporting Nazism for getting involved in protests like this.

But it seems the cops are becoming very heavy-handed in their treatment of protesters. Mike over on his blog condemned the arrest of a 91/2 year old gentleman on another climate protest. This spirited old chap used the same explanation for his actions as Rabbi Newman: he was worried for the future of his grandchildren. Or great-grandchildren. He was arrested because he was caught protesting outside the Cabinet Office, and so frightened that doughty defender of British freedom, Boris Johnson. Yeah, our current excuse for a Prime Minister, who seems to fancy himself as the heir to Julius Caesar, Admiral Nelson, the Duke of Wellington, and Winston Churchill, was ‘frit’ – to use Thatcher’s word – of a 91 or 92 year old gent. Mike concluded of this gentleman’s arrest

Conclusion: John was committing an offence against nobody but Boris Johnson. A Boris Johnson government is an offence against the very environment in which we live.

See: https://voxpoliticalonline.com/2019/10/09/92-year-old-man-arrested-while-supporting-extinction-rebellion-because-the-tories-dont-like-it/

As ever, Mike is correct. In a subsequent article he showed that the Tories are far more likely than Labour to vote for policies that actively harm the planet. BoJo himself ‘was also among 10 ministers who received donations or gifts from oil companies, airports, petrostates, climate sceptics or thinktanks identified as spreading information against climate action.’ Mike’s article was based on a Guardian piece, that developed a scoreboard for the parties’ and individual politicians’ voting record. The Tories on average scored 17. Labour scored 90, and Jeremy Corbyn 92. Mike’s conclusion:

if you want a government that acts against climate change and to protect the environment for you, your children and future generations, you need to vote LABOUR.

See: https://voxpoliticalonline.com/2019/10/12/worried-about-climate-change-then-dont-vote-tory/

And we have to stop the cops being used as BoJo’s private police force, so that no more decent people, including senior citizens and members of the clergy of this country’s diverse religious communities, are picked up because they dare to frighten BoJob and his wretched corporate backers.

The Stepford Daughters of Brexit and Slavery and the Emergence of Capitalism

August 15, 2019

Yesterday for our amusement the awesome Kerry Anne Mendoza posted a video on twitter made by two very definitely overprivileged girls talking about the evils of socialism. The two young ladies were Alice and Beatrice Grant, the privately educated granddaughters of the late industrialist and former governor of the Bank of England, Sir Alistair Grant. With their cut-glass accents and glazed, robotic delivery of their lines, they seemed to fit the stereotype of the idiotic Sloane perfectly, right down to the ‘Okay, yah’, pronunciation. Mendoza commented ‘I don’t think this was meant to be a parody, but it’s the perfect roast of the “yah-yah” anti-left.’

Absolutely. In fact, what the girls were describing as socialism was really Communism, completely ignoring democratic socialism, or social democracy – the form of socialism that demands a mixed economy, with a strong welfare state and trade unions, progressive taxation and social mobility. It also ignored anti-authoritarian forms of socialism, like syndicalism, guild socialism or anarcho-Communism. They were also unaware that Marx himself had said that, regarding the interpretations of his views promoted by some of his followers, he wouldn’t be a Marxist.

But it would obviously be too much to expect such extremely rich, public school girls to know any of this. They clearly believed, and had been brought up to believe, the Andrew Roberts line about capitalism being the most wonderful thing every invented, a mechanism that has lifted millions around the world out of poverty. Etc. Except, as Trev, one of the great commenters on Mike’s and this blog, said

If “Capitalism works” why are there a million people using foodbanks in Britain today? Not working that well is it? Why did the Government bail out the Banks using our money? Why did the Banking system collapse in the first place, was it because of Socialism? I don’t find these idiotic spoilt brats in the least bit funny, I feel bloody angry. When was the last time they ate food they found in the street? Bring back the Guillotine!

See: https://voxpoliticalonline.com/2019/08/14/these-young-ladies-of-brexit-need-to-be-seen-to-be-believed/

The two girls were passionate supporters of the Fuhrage and his wretched party, and were really looking forward to a no-deal Brexit. It shows how out of touch these girls are, as Brexit is already wrecking the British economy, and a no-deal Brexit and subsequent deal with a predatory America would just wipe it out completely. Along with everything that has made post-war Britain great – the NHS and welfare state. But these girls obviously have no connection with working people or, I guess, the many businesses that actually depend on manufacturing and exports. I think the girls’ family is part of financial sector, who stand to make big profits from Brexit, or at least are insulated from its effects because they can move their capital around the globe.

The girls’ views on the EU was similarly moronic. They really do seem to believe that the EU is somehow an oppressive, communistic superstate like the USSR. It wasn’t. And the reason anti-EU socialists, like the late, great Tony Benn distrusted it was partly because in their view it stood for capital and free trade against the interests of the nation state and its working people.

And they also have weird views on slavery and the EU’s attitude to the world’s indigenous peoples. To the comment by David Lammy, the Black Labour politico, who dared to correct Anne Widdecombe for comparing Brexit to the great slave revolts, they tweeted

Lammy being pathetic as usual. The chains of slavery can be intangible, as amply shown in China, the Soviet Union and the EU; to deny that just shows your ignorance and petty hatred for the truth”.

To which Zelo Street commented that there two things there. First of all, it’s best not to tell a Black man he doesn’t understand slavery. And second, the EU isn’t the USSR.

They were also against the Mercosur deal the EU wishes to sign with the South American nations, because these would lead to environmental destruction and the dispossession and exploitation of the indigenous peoples.

As usual the GREED and selfishness of the EU imposes itself using their trade ‘deals’ in the name of cooperation and fake prosperity. The indigenous tribes of the Amazon need our protection not deforestation”.

To which Zelo Street responded with incredulity about how they could claim environmental concern for a party headed by Nigel Farage.

And they went on. And on, going on about how the EU was a threat to civil liberties. And there was more than a touch of racism in their statement that Sadiq Khan should be more concerned to make all Londoners feel safe, not just EU migrants. They also ranted about how Labour had sold out the working class over Brexit in favour of the ‘immoral, money hungry London elite’. Which shows that these ladies have absolutely no sense of irony or any self-awareness whatsoever.

In fact, Zelo Street found them so moronic and robotic, that it dubbed them the Brexit party’s Stepford Daughters, referring to the 70s SF film, the Stepford Wives. Based on the novel by Ira Levin, the films about a community where the men have killed their wives and replaced them with robots.

See:  https://zelo-street.blogspot.com/2019/08/brexit-party-presents-stepford-daughters.html

There’s a lot to take apart with their tweets. And perhaps we shouldn’t be two hard on the girls. They’re only 15 and 17. A lot of young people at that age have stupid views, which they grow out of. But there is one issue that really needs to be challenged.

It’s their assumptions about slavery and the genocide of indigenous peoples. Because this is one massive problem to any assumption that capitalism is automatically good and beneficial.

There’s a very large amount of scholarship, much of it by Black activists and researchers, about slavery and the emergence of European capitalism and the conquest of the Americas. They have argued that European capitalism was greatly assisted by the profits from New World slavery. Caribbean historians like Dr Richard Hart, in his Blacks in Bondage, have shown that transatlantic slavery was a capitalist industry. For the enslaved indigenous peoples and the African men and women, who replaced them when they died out, capitalism certainly did not raise them out of poverty. Rather it has done the opposite – it enslaved them, and kept them in chains until they were able to overthrow it successfully with assistance of European and American abolitionists in the 19th century.

And among some left-wing West Indians, there’s still bitterness towards America for its constant interference in the Caribbean and Central and South America. America did overthrow liberal and progressive regimes across the world, and especially in the New World, when these dared to challenge the domination of American corporations. The overthrow of Jacobo Arbenz’s democratic socialist regime in Guatemala is a case in point. Arbenz was overthrown because he dared to nationalise the banana plantations. Which upset the American United Fruit Company, who got their government to overthrow him in coup. He was replaced by a brutal Fascistic dictatorship that kept the plantation workers as virtual slaves. And the Americans also interfered in Jamaican politics. They were absolutely opposed to the Jamaican Labour party politician, Michael Manley, becoming his nation’s Prime Minister, and so did everything they could to stop him. Including cutting trade.

And then there’s the enslavement and genocide of the indigenous peoples.

Before Columbus landed in the New World, South America had a population of about seven million. There were one million people in the Caribbean. I think there were similar numbers in North America. But the indigenous peoples were enslaved and worked to death. They were also decimated through diseases carried by Europeans, to which they had no immunity. The Taino people were driven to extinction. The Caribs, from whom the region takes its name, were able to survive on a reservation granted to them in the 18th century by the British after centuries of determined resistance. The conquest of the New World was a real horror story.

And Britain also profited from the enslavement of indigenous peoples. I doubt the girls have heard of it, but one of the scandals that rocked British imperialism in the late 19th and early 20th centuries was that of the Putomayo Indians of South America. They had been enslaved by British rubber corporations. It was this abuse of a subject people that turned the Irish patriot, Roger Casement, from a British civil servant to an ardent Nationalist.

On the other side of the world, in the Pacific, British imperialism also managed to dispossess an entire Polynesian people and trash their island. This was in the 1920s. The island was rich in mineral deposits, and so moved the indigenous people out, ultimately relocating them to Fiji. Their island was then strip-mined, leaving it a barren, uninhabitable rock. In the 1980s the survivors were trying to sue the government over their maltreatment, but with no success.

This is what unfettered British imperialism and capitalism did. And what I’ve no doubt Farage and other far right British politicians would like to do again without the restraints of international law. It’s why I believe that, whatever the demerits of the Mercosur agreement are, it’s probably better than what individual nations would do without the restraint of the EU.

The girls are right to be concerned about the fate of indigenous peoples. But they are profoundly wrong in their absolute, uninformed belief that unregulated capitalism will benefit them.

It doesn’t. It enslaves, dehumanises and dispossesses. Which is why we need international organisations like the EU, and why the Brexit party isn’t just a danger to Britain, but to the world’s weaker, developing nations and their indigenous peoples.

Now Tories Troubled by Split

February 21, 2019

Yesterday, a group of three MPs, Sarah Wollaston, Heidi Allen and Anna Soubry, defected from the Tory party to join the Independent corporation, that had split from Labour.

At their press conference they gave three reasons why they had left. Heidi Allen said she was disgusted with the suffering the party had inflicted and its lack of benevolence. For Sarah Wollaston, it was the harm the Tories had done to the manufacturing industry. And for Anna Soubry it was the way her former party had wrecked the country with their massively inept handling of Brexit. Or it might have been Wollaston, who was most concerned about Brexit, and Soubry about the destruction of Britain’s manufacturing sector under the Tories. This is how the reasons for their departure was presented on one of the short videos on YouTube, although I got the impression from listening to Heidi Allen speaking on the 45 minute long video of their press conference put out by Channel 4 News that she was also concerned about Brexit and the attack on manufacturing, as she also ran her own manufacturing firm.

The Tories, who had previously been gleefully exploiting Chuka Umunna and company’s split from the Labour party, were left outraged in their turn. Hunt gave a speech saying how much he regretted the departure of such valued colleagues. Other Tory functionaries demanded that the Splitters should now call a bye-election. Just like the real supporters and activists in the Labour party have been demanding Umunna and his coteries of bitter Blairites do.

I don’t know how sincere Allen and her two colleagues are about the suffering caused by the Tory party. She made a number of speeches saying how upset she was by the suffering caused by her former party’s wretched welfare reforms, but voted for them all the same. So in her case it was, as Mike pointed out, a case of crocodile tears. She may be genuine, and that after years of dutifully following the party line her conscience has won at last. Or it may simply be that, like some other Tories, she’s just worried that the electorate will punish the Tories for the misery they’ve inflicted at the next election.

I think the three’s statement that they’re concerned about British manufacturing and the devastating effects of Brexit are rather more genuine. Margaret Thatcher and Blair in his turn ignored the manufacturing sector. One members of Thatcher’s cabinet, who was the only member in it from that sector of the economy, described how he couldn’t get Thatcher to understand that a strong pound would harm British manufacturing by making our products more expensive. She also uncritically accepted as an article of her neoliberal, free market dogma, that failing firms and industries should be allowed to go under, and should not be given government assistance. Which contrasted with Labour’s promotion of the National Enterprise Boards and state assistance for British industry, where the government would help firms acquire plant and equipment.

And as a good Thatcherite, Blair also adopted her destructive attitude to British industry. He was also quite happy to see British manufacturing collapse. Instead, its place at the heart of the British economy would be taken by the financial sector and the service industries. Deanne Julius, a leading official at the Bank of England, recruited from America, actually said that Britain should give up its manufacturing industry, and simply concentrate on the service industries.

The result has been that vast swathes of traditional British industry have been destroyed by Thatcherism, including mining. Which was done simply to destroy the miners’ union, so they could never overthrow a Tory government as they had Heath’s. However, as Ha Joon-Chang has shown in his book, 23 Things They Don’t Tell You About Capitalism, manufacturing is still an extremely important part of the British economy. It looks weak simply because it hasn’t expanded as much as the other sectors of the British economy. But if it went, the British economy would collapse completely.

As for Brexit, the past few weeks have seen company after company leave the UK because of the Tory party’s incompetence. They’re leaving because we haven’t reached a trade agreement with EU, and so the tariff barriers that will be erected after Britain leaves will make it difficult for them to sell their products after our departure. The latest firm to announce it was closing down its British plant has been Honda in Swindon. When this goes, so do 3,500 jobs.

But I doubt that this will concern those in the Tory party demanding a hard Brexit, like the odious Jacob Rees-Mogg. The financial sector has also been hit, with various banks and international financial regulators announcing that they will leave Britain for Dublin, Paris and the Netherlands. But this doesn’t seem to dismay Mogg and his comrades. They seem to be all financiers, who make their money through investing in companies around the world. And so the destruction of the British manufacturing sector simply doesn’t affect them. They’ll get their money anyway.

The Tory party is seriously split over Brexit. It was to call the Eurosceptics’ bluff that Cameron called the referendum in the first place. He was so confident that people would vote ‘remain’ that he didn’t do any proper campaigning. The result was that he was astonished when the ‘Leave’ vote prevailed. But I gather that the Tories were on the edge of splitting years before, when Tony Blair was in power. Blair stole their policies, and indeed moved further right than the Tories had dared. The party was also split between the Tory paternalists and Thatcherites, and the rural sector, which believed that British agriculture and country communities were being ignored. I’ve heard it said that if Brown had won the 2010 election, the Tories would have collapsed completely, and would have tried to rebrand themselves instead as the English Nationalists. This has the ring of truth, as I do remember one opinion piece in the Heil actually recommending that the party thus rename itself.

I hope that the departure of Allen, Wollaston and Soubry will spark a series of other defections from the Tories and bring about the party’s much-need demise. It’s brought nothing but misery and poverty to Britain’s working people since Thatcher came to power in 1979. And even if the party doesn’t collapse completely, I want there to be so many defections that at the least it causes the collapse of May’s vile, malignant, destructive government.

Corbyn Attacks May for Laughing at Poor Wage Growth

December 5, 2018

This is a great little video from RT. It’s only less than half a minute long, but it shows Jeremy Corbyn tearing into Theresa May for laughing about the smallness of the rise in wages.

Corbyn says

The chief economist at the Bank of England describes the last decade as a lost decade for wages and well the Prime Minister might laugh at this, it’s the reality of peoples’ lives! It’s the reality of peoples’ lives!

It ends with the House in uproar and Bercow crying “Order! Order!”

But Corbyn’s right, as you can see when the video shows May and her wretched gang shaking their heads with their stupid, facetious smiles on their face. They’re no doubt trying to show that they don’t take his accusation seriously, but it instead shows that Corbyn is absolutely right. They don’t take ordinary peoples’ misery seriously. You could see that on a previous video, where Cameron and Iain Duncan Smith had a good guffaw as one woman told her story of how the bedroom tax had left her in poverty and despair. And May herself has done this before, when Corbyn has read out the letters he’s had from people describing how they’ve been left worse off – much worse off – due to the government’s benefit cuts.

They have no sympathy for the poor. Not a shred. All the care about is cutting taxes for the rich. Ordinary people are simply raw material for corporate capitalism, either as a workforce, who are to be kept on low wages to increase profits, or as consumers to be exploited. Like when the government privatizes the healthcare and educational systems, so that private medical firms and academy chains can get big profits from government contracts before the whole lot is privatized completely and they can exploit everyone through private hospital and insurance charges and school fees.

That snide, smug grin is the real face of Tweezer and her cabinet. They’ve got to go. All of them. NOW!

EU Tells Tweezer Unwelcome Fact, So Bojo Spout Nonsense as Distraction

January 20, 2018

More spin and misdirection from the Tories. Yesterday, Mike put up a piece commenting on Bojo’s bizarre utterance about building a channel bridge. He doesn’t like the Chunnel, you see, and thought that a bridge would be much better. This drew down a barrage of criticism from everyone, who had any connection or knew anything about the shipping industry. 500 ships go through the straights of Dover daily, and so the construction of the bridge, if not the structure itself, would cause massive disruption to international shipping. This was pointed out by one of the shipping associations.

The idea’s a complete non-starter.

But as Mike points out, it looks like a clever piece of misdirection on the Tories’ part. Tweezer had been told earlier that day by the EU that Brexit would mean the financial sector leaving London. This is absolutely true. The EU financial regulatory body has packed up and moved to Paris, another international financial organisation has sought pastures new overseas, and Frankfurt ‘Manhattan’ Am Main is doing its level best to encourage financial houses to relocate there.

But the Tories, and Blairite Labour, are handsomely support by the financial sector, and govern on their behalf. One Tory industrialist, who actually came from manufacturing, has said that he couldn’t get Thatcher to understand that a strong pound damaged British exports abroad. And under Blair we were told that British manufacturing was finished, and we shall concentrate on getting jobs and supporting the financial and service sectors. Deanne Julius, who was given a high-ranking post at the Bank of England after working in various American banks, actually said that we should concentrate on servicing American industry. Which shows you which way the Americans think the ‘Special Relationship’ goes.

Bojo is known for uttering nonsense, and saying things that are stupid and controversial. It seems the Tories have weaponised this. And so when the EU told Tweezer the unwelcome news, which would upset her backers in the financial sector, someone it seems prodded Bojo to make a stupid comment. Thus the bilge about a Channel Bridge, which got everyone talking about that, rather than the boring, but very real threat, that the City of London was going to be decimated by Brexit.

And I expect that as more unpleasant news comes out about the effects of Brexit, we can expect more stupidity from Bojo to take the heat away from his party, and the mistress he barely supports.

Philip Hammond Wants to Turn Britain into Neoliberal Tax Haven for the Rich

January 19, 2017

This is more evidence of the Tories’ obsession with turning Britain into ‘America junior’. On Sunday Mike over at Vox Political put up a piece about the current chancellor, Philip Hammond’s interview with the German newspaper, Welt am Sonntag, in which he said that if Britain could not gain access to European markets after Brexit, it would allow the country to turn away from the European political and economic model. Instead of following the ‘European-style’ social model, with high taxation and regulation, Britain would become ‘something different’.

Mike called this Tory stupidity and arrogance at its worst, and he’s right. Britain cannot win a trade war with Europe. Europe constitutes more than half of the market for Britain’s exports. And every time Theresa May opens her trap about Brexit, investors take fright and the pound plummets to a new level. Mike’s article quotes Jeremy Corbyn as saying that he expected the majority of MPs to be worried about Hammond’s ideas. And he’s right. Mike predicts that Hammond’s idea would result in massive unemployment, as exclusion from the European market means that demands for our products would fall. Furthermore, the low taxation Hammond so glowingly looks forward to would mean that the state would receive less. Mike doesn’t point out what that means, but it’s fairly obvious: state expenditure would immediately slashed, meaning even more welfare cuts, the further rationing and privatisation of the NHS and the education system.

http://voxpoliticalonline.com/2017/01/15/seriously-philip-hammond-youd-cripple-our-economy-for-some-anti-eu-sabre-rattling/

Of course, this is precisely what the Tories have wanted ever since Thatcher. They want to make Britain more like the USA, with its private healthcare system and minimal welfare provision. It’s an economy which has traditionally been based on low taxes, although under Bush the people of America actually started paying nearly the same amount in tax as the people in this country because of the vast military expenditure. At least, that’s what I was told by American friends. However, Bush made a series of tax cuts, followed by Obama with more promised by Trump, which will deprive the poor of even further employment protection and welfare benefits in favour of massive tax cuts for the rich. Just like Cameron and May have done and are doing for the Tories.

Hammond’s moronic idea is not original either. It’s just a continuation of Cameron’s attempts to stop the EU extending its financial regulations over Britain, so that London could become the centre of the global fraud that constitutes offshore banking.

It also shows the absolute ignorance and contempt of Thatcherite economists for the manufacturing industry. Thatcher’s cabinet was dominated by people from the financial sector, as was Blair’s, Broon’s, and, I assume, Cameron’s and May’s. There was one cabinet member, whose background was in manufacturing, who tried to point out to Thatcher that her pursuit of a strong pound would harm British manufacturing industry, as it would make our products more expensive than our foreign competitors. But she couldn’t understand this basic economic fact. As for Tony Blair, he rejected the manufacturing sector, as it was economic dogma during his tenure of No. 10 that the financial sector would become the major industry in the UK. We were supposed to be a ‘post-industrial economy’. Deanne Julius, one of the experts at the Bank of England, and a former officer with one of the big American banks, actually said that we should give up manufacturing and concentrate on the service sector. Manufacturing industry, she believed, should be left to the Americans.

Ha-Joon Chang has pointed out in his books how wrong this attitude is. Britain is still very dependent on its manufacturing industries. These are less significant than they were, because they have not grown as much as the financial and service sectors, but are still very important parts of our economy. If this part of our economy contracts even further, it will be disastrous for the British economy as a whole.

Not that you will hear that from the Blairites or the Tories. New Labour was very keen not to be seen as the party of high state regulation. During the ‘prawn cocktail offensive’ in the late ’80s, Broon and Mo Mowlam went round the City reassuring the bankers that New Labour would adopt a ‘light touch’ attitude to regulating the financial sector.

And we can all see how well that paid off, with the great financial crash of 2008. We’re still paying for that. Not the bankers, not the big industrialists, but the ordinary people of Britain, who are seeing are tax bills go up, our welfare benefits and employment rights taken away, and the NHS sold off to private contractors, all to give the 1 per cent even more tax breaks.

And last Sunday, Philip Hammond told the German press he wanted more of the same, but much worse.

This shows his and May’s attitude to Britain’s working people. They are to be forced into even more precarity, with fewer opportunities for employment and massive poverty. Because Hammond wants to make his bankster friends in the City even richer.

And defend the NHS. May and Hunt should resign. Now.

John McConnell Promises National Investment Bank and £500 Billion Credit for UK

July 19, 2016

Mike over at Vox Political has put up another piece today, which reports that Jeremy Corbyn’s deputy, John McConnell, has promised to set up a National Investment Bank, tied in with a network of regional banks, to regenerate Britain’s communities and revive Britain’s industries after years of neglect. The bank is based on the German Development Bank. In addition, he promised £500 billion of investment. This follows Owen Smith’s promise when launching his leadership campaign this week end, to introduce a British ‘New Deal’, and an investment programme of £200 billion.

See Mike’s article: http://voxpoliticalonline.com/2016/07/18/labour-pledges-national-investment-bank-to-mobilise-500bn/

Both McConnell and Smith are right about investment in British firms by the British state being sorely needed. But McConnell is absolutely correct about the necessity of a special British investment bank to channel the money and provide the necessary credit. It’s been needed for decades. The authors of the 1s987 book, Socialist Enterprise, noted that the British financial sector was structured into investing abroad, and recommended the creation of such a bank. Neil Kinnock, in his 1987 book, Making Our Way, recognised the need for it. G.D.H. Cole, in his book, Great Britain in the Post-War World, written as long ago as 1942, recommended a similar radical reform of the banking industry. That should tell you how desperately it’s needed, and why McConnell is right.

Han-Joon Chang, in his book, 23 Things They Don’t Tell You About Capitalism, argues in one of his chapters that it simply isn’t true that we are living in a post-industrial society. Britain still has a manufacturing industry, and it’s still immensely important. It only appears unimportant, because it hasn’t grown as much as the financial sector. It is, however, still of fundamentally vital importance to our economy.

All of this, of course, will be unwelcome news to the Tory party and New Labour. Both of these turned to subsidising and supporting the financial sector as an alternative to, and at the expensive of, manufacturing. One of the functionaries Blair appointed to the Bank of England was an American banker, Deanne Julius, who stated that Britain should give up manufacturing products and leave that to America. As for the Conservatives, half of their funding at the last election came from the City of London. They have no interest and absolutely no desire to aid a British manufacturing revival. Not if it means having to spend government money, rather than rely on a bail-out by a foreign firm.

Way back in the 1970s the late Tony Benn tried something similar. The government set up various zones, and schemes in which firms could receive government grants to renovate and modernise plant and equipment. I don’t think it was taken up, and British firms continued to lag behind their foreign competitors. And the result has been the decimation of British industry in the decades since Thatcher took power.

McConnell and Benn stand for British industry, and investment to create real jobs and economic growth. All Maggie Thatcher did was cut, and hope foreign firms would come in to invest in what was left. All the while favouring the financial sector and her friends in the City. It also shows the hollowness of the Tories’ claim to represent British industry. They don’t. Labour represents industry, and the people who work in it. The Tories simply represent capital and those, who own it. The very people, who seem to enjoy increased bonuses and share options by cutting down to the point of destroying the very firms they manage.

Vox Political: Bank of England Economist Says High Executive Pay Damages Economy

May 19, 2016

Mike over at Vox Political has posted a piece about the remarks by Andy Haldane, the Chief Economist at the Bank of England, that Britain’s economy is being damaged by exorbitantly high executive pay. An article in the Independent notes that the average pay of FTSE 100 bosses is now 150 times that of the average UK worker. The Indie then went on to say

This large and growing remuneration gap, Mr Haldane said, “drive[s] a wedge between management and employees…that in turn erodes social capital. A company, like a country, whose physical and social capital is being eroded is one whose wealth-creation capacity is being impaired.”

Social capital refers to trust and relationships in a society and Mr Haldane argued this matters “every bit as much to wealth and well-being” as financial capital such as stocks and shares and other such assets.

It also reported that there have been a number of shareholder rebellions against the high pay awarded to chief executives.

Mike comments

Trust between bosses and employees is at an all-time low – not helped by Conservative Government policies that trample on workers and try to reduce their rights and remuneration. Look at the junior doctors’ strike for an example.

Mr Haldane is saying the direct result of this is harm to the economy, and we can see that this is true.

Why would any worker want to provide a high-quality product for an employer who is ripping them off?

And if they lose their job, why would the next worker want to provide a high-quality product for an employer who is paying them less than the last worker (because they can)?

Go read Mike’s piece at http://voxpoliticalonline.com/2016/05/19/highly-paid-bosses-are-harming-the-economy-says-bank-of-england-bigwig/ for more information and his very relevant remarks.

Chang Capitalism Book pic

The Korean-born economist, Ha-Joon Chang tackles this problem in his book 23 Things They Don’t Tell You About Capitalism in the chapter ‘Thing 14 US Managers Are Over-Priced’. Chang concentrates on American managers because they are paid a whopping 300-400 times that of the average American blue-collar Jose or Josie. They are paid way more than the managers of comparable companies elsewhere in the world, including Japan. The chapter is an attack on the Neo-Liberal attitude that if the managers are paid so much more than their counterparts elsewhere in the world, and their workforce, it must be because their performance is somehow worth it in the market economy. Chang shows that this is not the case. He argues that US managers now are not more efficient and effective than they were a generation ago, when they were only paid 30 to 40 times more than their workers. And they certainly aren’t worth that money compared to their European and Japanese competitors, who are actually beating them.

Finally, he discusses the damage such executive pay actually does to the wider economy. He argues that the managerial class now has so much power through their contacts in government and their grossly inflated pay that even when they fail, they are not punished, but instead rewarded. They most they receive are extremely generous severance packages. And the people who have to suffer, ultimately, to pay for their bloated salaries are the workers and the taxpayers, who have had to bail out the banks. He writes

Despite this, little is done to check excessive and biased (in that failures are hardly punished) executive pay packages because the managerial classes in the US and Britain have become so powerful, not least because of the fat paycheques they have been getting over the last few decades. They have come to control the boardrooms, through interlocking directorship and manipulation of information that they provide to independent directors, and as a result few boards of directors question the level and the structure of executive pay set by the CEO. High and rising dividend payments also keep the shareholders happy. By flexing their economic muscle, the managerial classes have gained enormous influence over the political sphere, including the supposedly centre-left parties such as Britain’s New Labour and America’s Democratic Party. Especially in the US, many private sector CEOs end up running government departments. Most importantly, they have used their economic and political influence to spread the free-market ideology that says that whatever exists must be there because it the most efficient.

The power of this managerial class has been most vividly demonstrated by the aftermath of the 2008 financial crisis. When the American and the British governments injected astronomical sums of taxpayers’ money into troubled financial institutions in the autumn of 2008, few of the managers who were responsible for their institutions failure were punished. Yes, a small number of CEOs have lost their jobs, but few of those who have remained in their jobs have taken a serious pay cut and there has been an enormous, and effective, resistance to the attempt by the US Congress to put a cap on pay of the managers of financial firms receiving taxpayers’ money. The British government refused to do anything about the £15-20 million pensions payout (which gives him around £700,000 yearly income) to the disgraced former boss of the R.B.S. (Royal Bank of Scotland), Sir Fred Goodwin, although the intense negative publicity forced him subsequently to return £4 million. The fact that the British and the American taxpayers, who have become the shareholders of the bailed-out financial institutions, cannot even punish their now-employees for poor performance and force them to accept a more efficient compensation scheme shows the extent of power that the managerial class now possesses in these countries.

Markets weed out inefficient practices, but only when no one has sufficient power to manipulate them. Moreover, even if they are eventually weeded out, one-sided managerial compensation packages impose huge costs on the rest of the economy while they last. The workers have to be constantly squeezed through downward pressure on wages, casualization of employment and permanent downsizing, so that the managers can generate enough extra profits to distribute to the shareholders and keep them from raising issues with high executive pay (for more on this, see Thing 2). Having to maximise dividends to keep the shareholders quiet, investment is minimized, weakening the company’s long-term productive capabilities. When combined with excessive managerial pay, this puts the American and British firms at a disadvantage in international competition, eventually costing the workers their jobs. Finally, when things go wrong on a large scale, as in the 2008 financial crisis, taxpayers are forced to bail out the failed companies, while the managers who created the failure get off almost scot-free.

When the managerial classes in the US and, to a lesser extent Britain, possess such economic, political and ideological power that they can manipulate the market and pass on the negative consequences of their actions to other people, it is an illusion to think that executive pay is something whose optimal levels and structures are going to be, and should be, determined by the market. (pp. 155-6).

George Monbiot on the Political Power of the Supermarkets

April 20, 2016

As well as documenting the pernicious economic and social effects of the supermarkets, as they force out small business people and exploit their suppliers through some highly manipulative contracts and trading practices, Monbiot also discusses the political power of these vast corporate chains. He details the various chief executives and senior managers, who were given important political posts by New Labour and the Tories, and the various lobbying organisations they have set up to further their already extensive political influence. This goes on for several pages, but considering the immense power the supermarkets still hold, I think it’s worth reproducing this section of the chapter in full. Monbiot writes:

No commercial sector is better represented in British politics than the supermarkets. David Sainsbury, the chain’s former chief executive and the richest man in Britain, is a minister at the Department of Trade and Industry (DTI), which oversees competition policy. Tesco executives inhabit no fewer than six government task forces, including the DTI’s Competitiveness Advisory Group. A Tesco executive also sits on both the United Kingdom Eco-labelling Board and, alongside a representative of Marks and Spencer, the government’s Advisory Committee on Packaging. The superstores have lobbied to ensure that regulations in both areas remain as ‘flexible’ as possible. Andrew Stone, Managing Director of Marks and Spencer, was made a life peer soon after Labour took office. the official spokesperson for the four biggest supermarkets at the British Retail Consortium is Baroness Thornton, a Labour peer and Director of the Labour Women’s Network, and previous Chair of the Greater London Labour Party. Delegates to the 1998 Labour Party Conference wore identification badges sponsored and labelled by Somerfield. While Tesco gave £12m to the government’s Millennium Dome, David Sainsbury (Lord Sainsbury of Turville) has personally donated a total of £5m to the Labour Party.

The Sainsbury family has long been blessed with a direct line to power. While David Sainsbury, a Labour peer, is one of the businessmen closest to Tony Blair, his cousin and predecessor as chairman of the firm, the Conservative peer Sir John Sainsbury (now Lord Sainsbury of Preston Candover), appears to have been Margaret Thatcher’s most frequent confidant. His brother, Sir Tim Sainsbury, another member of the Sainsbury board, was a Conservative MP who once held the same government post as David Sainsbury does today.

The opposition is unlikely to challenge the superstores’ power. The shadow Secretary of State for the Environment, Transport and the Regions, who – if he took office – would be responsible for most of the decisions affecting the supermarket chains, is Archie Norman, previously the Chief Executive of Asda. Francis Maude, the shadow Foreign Secretary, was one of Asda’s non-executive directors.

The supermarkets conduct much of their lobbying through their trade association, the British Retail Consortium. According to its Director General, ‘BRC is no longer an organisation that simply reacts to Government proposed legislation or White Papers but sets out to help shape them. By creating significant links with special advisers, policy specialists and the leading think tanks, the intention is to work in a non-confrontational way so we are involved at the beginning of any legislative process.

Its tactics appear to be successful. it has persuaded the government to allow 41-tonne lorries on to British roads and to consider its request for 44-tone trucks to be permitted in a few years’ time. It claims to have played an important role in the government’s decision not to tax out-of-town car parking spaces. Speakers at the BRC’s annual dinner have included the Chancellor of the Exchequer, Gordon Brown, the Conservative Chancellor, Kenneth Clarke, John Major and Tony Blair. the Consortium’s submission on the minimum wage ‘was read by Chancellor Gordon Brown, the Treasury and the Bank of England’ and was ‘influential in persuading the Government and the Low Pay Commission’ to hold the level down to £3.60 per hour and introduce a separate, lower rate ‘not just for young people, but for returners to the labour market’. The consortium successfully lobbied the government to introduce amendments to the Competition Bill to permit ‘vertical agreements’ of the kind the superstores strike with their suppliers.

The BRC is also ‘ready to shape the Brussels agenda in the same way it does the UK Government agenda’. In Europe it has lobbied for ‘flexible’ consumer guarantees and against the European legislation requiring companies to inform and consult their workers. It has influenced European food safety standards and defended its members against the European requirement that the pesticides used on the foods they sell should be listed on the packaging. It has succeeded in keeping the definition of ‘free range’ as broad as possible.

Government is not the only realm in which the influence of superstores and their employees raises public concern. Sainsbury, for example, is a sponsor of the Soil Association, which regulates organic standards in Britain. In 1998, the Sunday Times alleged that a chemist from Sainsbury’s presented much of the case for the preservative sodium nitrate to the government’s United Kingdom Register of Organic Food Standards. The chemical is banned from organic produce in Germany and Holland, partly because, in large doses, it has been linked to cancer. What the Sunday Times did not discover, however, was that one of the members of the register is Robert Duxbury, an employee of J. Sainsbury Plc. Sainsbury was also one of the three sponsors of the Town and Country Planning Association’s inquiry into the future of planning, a subject in which the superstore chain has more than a passing interest. The Chairman of the Post Office, Neville Bain, is also a non-executive director of Safeway. This causes alarm to some of the people campaigning to keep post offices on the high street and out of the superstores.

In 1999,. the government published the first of its ‘annual reports’, which would tell the nation how well it was doing. It was launched not in Westminster, but in the Kensington Tesco’s. The Prime Minister’s office had given the supermarket chain an exclusive contract to sell it. It officially entered the public domain when Jack Cunningham, the Chancellor of the Duchy of Lancaster, handed a copy of the head of Tesco. (Captive State, pp. 203-206).

So Sainsbury’s, Tesco’s and the rest are involved in making sure that road and planning policy reflects their interests, as does employment and agricultural legislation. They have ensured that a known carcinogen is permitted as a pesticide in this country, and have campaigned to keep the minimum wage low. It is therefore absolutely no surprise that the same exploitative gang have been so keen to back workfare. One of the personal stories recounted on the Boycott Workfare website is from someone who was taken on by the supermarkets. At the end of their official stint, they were asked by their boss to stay on. When they asked if they would be paid, their boss stated quite openly that there was no need for him to do so, when he could simply get more unpaid labour from workfare.

Britain is rapidly descending into a corporate oligarchy like America, and the supermarkets are at the centre of this mess of political corruption. It’s about time they were cleaned out, along with the rest of the corporatists occupying government posts.