Posts Tagged ‘Pension Funds’

Lobster Review of Pro-Jewish, Pro-Zionist Book Against Israel, and Against Israel Lobby In America: Part Two

April 8, 2018

Neumann then moves on to what Israel should do now in ensure its survival: it must leave the Occupied Territories.

‘with the acquisition of the
Occupied Territories in 1967,
Israel had a chance to make
handsome amends for the crimes
on which it was built. Saint-
lines or selfless optimism
were not required. Israel could
have sponsored and supported,
with true generosity, the
establishment of a sovereign
Palestinian state by backing
those amenable to reconciliation
and attacking those who were not.
This might not have been a just
settlement, but it would have
worked.’

American support for Israel following 1967 has made that possibility harder to achieve, and an exploration of this relationship is the subject of the book by James Petras. He dedicates the Power of Israel in the United States to Rachel Corrie, ‘US citizen and humanitarian internationalist volunteer in Palestine murdered by the Israeli military’. His style is that of the committed activist, in sharp contrast to the cool rigour of Neumann. There re times when his use of capitals, as in Terror Experts or Zionist Power Configuration, irritate. But while his writing is urgent, at times to the point of stridency, it is well sourced and invites the reader to inquire further into the areas he explores. Here is a flavour of the Petras style:

‘Through overseas networks the
Israeli state can directly inter-
vene and set the parameters to US
foreign aid in the Middle East.
The overseas networks play a major
role in shaping the internal debate
on US policy toward Israel.
Propaganda associating Israeli
repression of Palestinians as the
righteous response of the victims of
the Holocaust has been repeated
throughout the mass media. President
Ahmadinejad’s suggestion that
Holocaust victims might more properly
be compensated by land located in
Europe or in the countries that
victimised them was misreported, then
highly circulated to fuel, instead,
the notion of a rabid, anti-Semitic
Iran. From the height of the network
to the lawyers’ board-rooms, and the
doctors’ lounges, the pro-Israel
supporters of the network aggressively
attack as “anti-Semites” any critical
voices. Through local intimidation and
malicious intervention in the
professions, the zealots defend Israeli
policy and leaders, contribute money
organise voters, and run for office.
Once in office they tune in to Israel’s
policy needs.’

But hasn’t the United States always been subject to pressures exerted by those of its citizens with connections in other countries, be they links with Ireland or the countries of the former Eastern bloc? Petras accepts this, but answers:

‘The Cuban exiles in Miami
exercise significant influence
in both major parties. But in
no other case has linkage led
to the establishment of an
enduring hegemonic relationship:
an empire colonised by a
regional power, with the US
paying tribute to Israel, subject
to the ideological blinders of
its overseas colons, and launching
aggressive wars on its behalf.’

Who are these ‘overseas colons’? Petras has a very long line of ‘Israel Firsters’, people both inside Congress and electoral politics, and those unelected, such as Paul Wolfowitz and his friends in the Office of Special Plans driving the Iraq invasion, as well as many in the media. He tells us about the muscle asserted by the American Israel Public Affairs Committee (AIPAC) of the Conference of Presidents of Major American Jewish Organisations
with its Daily Alert (www.dailyalert.org/) prepared by the Jerusalem Centre for Public Affairs; the American Jewish Committee; the Anti-Defamation League, and the Zionist Organisation of America.

Petras looks critically at the four principal US sources of financial support for Israel he lists as:

‘1. Wealthy, Jewish contributors
and powerful disciplined fund-
raising organisations. 2: The US
government – both Congress and
the Presidency. 3: The mass media,
particularly the
New York Times,
Hollywood and the major television
networks. 4: The trade union bosses
and the heads of pension funds.’

In addition there are well-organised fundamentalist Christian groups with close links to Israel. Petras also sees the emergence under President Yeltsin of the Russian oligarchs (most possessing Israeli passports and having major financial interests in that country) as in part being due to President Clinton’s closeness to the Zionist lobby in the United States.

At times Petras is a little breathless in his description of the activities of those close to Israel, especially the people against whom legal proceedings have been taken after spying for that country while holding important Washington positions. This seems to be a measure of his anger and frustration at his native country being drawn into conflicts that he believes do not serve its interests. While I prefer the cooler logic of Neumann I also recognise the value of an emeritus professor of sociology like Petras alerting his readers in matters they can then look into in their own way and about which they can reach their own conclusions.

If Attorney General Lord Goldsmith advises prosecutions over cash for honours we may learn something of the financial network to which Tony Blair’s Middle East ‘envoy’ seems so central, and then perhaps something of the extent to which the Israel lobby has been influential on the politics of New labour. Whether or not the Crown Prosecution Service gets to dig a little below the surface of our political life, Britain could use both a Neumann and a Petras
to provoke examination of the way our electoral politics is linked to the fortunes of Israel. We should not be distracted by controversy over the veil covering the faces of Muslim women: there are other forms of concealment requiring our more urgent attention.

(Pp. 40-2, Winter 2006/7).

Another Crisis in the Outsourcing Industry: Capita Now in Trouble

February 1, 2018

Yesterday, Mike reported on his blog that the outsourcing giant, Capita, was now in trouble. Its share price has apparently halved, knocking £1.1 billion of its stock market value. It has axed its scheme to issue £500 million in dividends to its shareholders. Instead, it intends to raise £700 million, partly by selling off parts of the company, which it needs to balance the books. There are also fears that it will make part of its 67,000 strong workforce redundant as well as concerns for the firm’s pension fund.

Mike in his article notes that the company was responsible for assessing the infamous fitness for work tests, for which the government has imposed hidden targets. One of these is that 80 per cent of reconsidered cases should be turned down. Mike therefore comments that if the crisis means that some of these assessors get a taste of what they inflicted on benefit claimants, this would be a case of poetic justice. He also wonders what the firm was doing when it devised the scheme to issue those massive dividends to its shareholders. Did they believe that the government’s magic money tree would continue to allow them to give heaps of money to their rich shareholders? He also asks other searching questions, such as whether it was deliberately underbidding to get government contracts, and then using the money to help finance those projects it had already won.

Mike concludes

So: First Carillion collapsed. Now both Interserve (remember them?) and Capita are in trouble.

Who’s next? And what will happen to public services while the Tories dither over this crisis?

See: https://voxpoliticalonline.com/2018/01/31/in-the-crap-ita-government-contractor-responsible-for-benefit-assessments-is-in-deep-financial-doo-doo/

Capita, or as Private Eye dubbed it, ‘Crapita’, has a long history of incompetence behind it. Way back in the 1990s it seemed that hardly a fortnight went by without Capita turning up in the pages of the satirical magazine. And the story was nearly always the same. The outsourcing company won a government or local authority contract to set up an IT system or run IT services. The project would then go over time and over budget, and would be massively flawed. And then a few weeks or months later, the company would be given a contract somewhere, and do exactly the same thing there.

You’re left wondering how Crapita kept winning those contracts, when it was so manifestly unfit to carry them out. Who did it have on its board? Or was there a deliberate policy by Major’s government to support outsourcing, no matter how inefficient and incompetent they were, because it was private enterprise and so preferred and supported for purely ideological reasons?

In any case, what seems to have placed the company in a very precarious financial situation is the usual tactics of big companies in this stage of capitalism: award massive dividends to the shareholders. This usually goes along with starving the rest of the company of investment, which seems to have been done to. And granting massive, and massively unsustainable pay awards to senior management. There’s no mention of that in Mike’s article, but I don’t doubt that this was done too. I’ve got the impression that it’s just about standard practice across a huge swathe of industry.

This is a financial strategy that has driven far more than one company to the wall. I also wonder if the executives weren’t also trying deliberately to create a debt, so that they could dodge corporation tax for five years. This is one of the tricks Stewart Lansley and Joanna Mack describe in their book on contemporary British poverty, Breadline Britain.

Over the years the outsourcing policy has been in operation, there’s been one crisis after another. The outsourcing companies have repeatedly shown themselves to be incompetent, not just in the case of capita, but also notoriously with G4S and the scandals over the violence and brutality it meted out towards asylum seekers in the detention centres it ran. And, of course, when a whole load of prisoners escaped on their way to court. Or jail.

Private industry has repeatedly shown that it is incompetent to do the work of the state sector. These firms have the disadvantage of having to make a profit for their shareholders, as well as the demands of their management for multi-million pound pay packets. The only way they can afford this is by cutting wages to their workers, and spending as little as possible on the service they are meant to be providing. The result of this has been a series of financial collapses. Carillion was the first. Now Capita and Interserve, another outsourcing company, is in similar trouble.

The only sensible recourse should be to cancel these companies’ contracts, and take everything back in-house. But this won’t be done. I think there’s a problem in that the state sector has been so decimated by the past four decades of Thatcherism, that it no longer has the capacity to run these services itself. There’s also the additional problem that too many politicians and media magnates have connections to these companies, or to firms in a similar position hoping for government contracts. Acknowledging that outsourcing was a failure would damage the interests of these politicos and press barons. There’s also the challenge of actually facing up to the fact that a central plank of Thatcherite dogma – that private enterprise is always more efficient than the state – is absolutely, undeniably wrong. Anybody who makes this point is denounced as a Communist in screaming headlines. You only have to look at the way the Tory press has vilified Jeremy Corbyn for daring to want to renationalise the NHS, the electricity net and the railways. His policies are very far from the total nationalisation demanded by Communists and Trotskyites, but you wouldn’t know it from the frothing abuse hurled in his direction by the Tories and Blairites.

There’s also another problem with calling an end to the outsourcing scam. PFI contracts and outsourcing allow some of the costs to be written off the official government accounts sheet. They’re still there, and we have to keep paying them, but they’re not included in the official figures. It’s why Mussolini used a similar scam when he was Duce of Fascist Italy. Any government that restores these projects to the way they were handled before risks putting millions back the official figures. And if that’s the Labour party, you can imagine the Tories making their usual hackneyed and untrue comments about ‘high-spending Labour’, and then re-iterating the spurious arguments for austerity.

I’ve no doubt that the government will do what it can to shore up the current mess the outsourcing companies are in. But the collapse of Carillion and now the severe financial troubles faced by Capita and Interserve show that outsourcing does not work. And given these companies’ highly checkered history, they should never have been given governments to begin with.

And it bears out exactly the description the author of Zombie Economics used for them in the very title of his book. Outsourcing, and the rest of the Thatcherite economic strategy of privatisation, wage restraint, low taxation and declining welfare are ‘zombie economics’ as they don’t work, but haven’t yet been put it into the grave.

It’s high time they were, and Thatcherite free trade capitalism was abandoned as the failure it so glaringly is.

Financial Speculators, Not Cost, Are the Real Oil Prices Are Rising

February 10, 2017

This week it was reported that British Gas were considering raising their prices by 9 per cent. This is frightening, as it means that the other companies may also raise their prices as well. Many people are increasingly finding themselves faced with a choice due to austerity, benefit cuts and stagnating wages. They can eat, and freeze, or stay warm and starve.

I don’t know what the reason given for raising the price of gas is. I suspect, however, from the behaviour of the oil industry, that any justification presented is spurious. William Blum in the chapter on capitalism in his book America’s Deadliest Export: Democracy, shows that the rise in oil prices aren’t due to rising costs. The cost of getting the stuff out of the ground has remained the same, despite all the guff about having reached peak oil. The real cause of the rise in fuel prices, including gas, is financial speculation, and quotes a US Senate report, The Role of Market Speculation in Rising Oil and Gas Prices. This states

The traditional forces of supply and demand cannot fully account for these increases [in crude oil, gasoline, etc.]. While global demand for oil has been increasing… global oil supplies have increased by an even greater amount. As a result, global inventories have increased as well. Today, US oil inventories are at an 8-year high, and OECD [mainly European] oil inventories are at a 20 year high. Accordingly, factors other than basic supply and demand must be examined…

Over the past few years, large financial institutions, hedge funds, pension funds, and other investment funds have been pouring billions of dollars into the energy commodities markets … to try to take advantage of price changes or to hedge against them. Because much of this additional investment has come from financial institutions and investment funds that do not use the commodity as part of their business, it is defined as ‘speculation’ by the Commodity Futures Trading Commission (CTFC). According to the CTFC, a speculator ‘does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.’ The large purchases of crude oil futures contracts by speculators have, in effect, created an additional demand for oil to be delivered in the future in the same manner that additional demand for the immediate delivery of a physical barrel of oil drives up the price on the spot market… Although it is difficult to quantify the effect of speculation on prices, there is substantial evidence that the large amount of speculation in the current market has significantly increased prices. (p. 248).

Blum goes on to make the point that the American financial regulators have been unable to combat these rises, because their ability to do so has been taken away from them by Congress. (pp. 249-50). As a result, although it still costs ExxonMobil $20 to get a barrel of oil out of the ground, the oil itself can trade at $40, $80 or $130 a barrel. (p. 251).

So if you’re worried about paying the gas or heating oil bill, the reason it’s gone up is due the financial sector. The very people that donate to political parties, especially the Tories and employ MPs when they leave.

Philip Green Threatens to Sue Frank Field over Comparison with Maxwell

July 26, 2016

Here’s one incident of bullying that this time doesn’t come from the embittered remnants of New Labour. Mike also reported that Sir Philip Green, the man, who ran BHS into the ground, now wants to sue Frank Field for comparing him with Robert Maxwell. Maxwell, if you remember, was the media mogul, who stole money from the Mirror Group’s pension fund, leaving the newspaper in a precarious financial position. Maxwell did so illegally. Green, on the other hand, also took massive amounts of money from BHS, including its pension fund, quite legally. The company still collapsed, however. His lawyers, Schillings, who specialise in libel actions, claim that Field’s comments are defamatory. Field, on his part, has made it clear that he is not going to apologise, and described Green’s attack as displacement therapy.

See Mike’s article: http://voxpoliticalonline.com/2016/07/25/green-demands-apology-from-field-over-comparison-to-robert-maxwell/

Schillings, and the other overpaid firms of solicitors specialising in this area of the law, Carter-Ruck, are regularly in the pages of Private Eye for the way they sue and bully the weak on behalf of the rich, powerful and corrupt. Carter-Ruck have been in the magazine’s pages so often, that they’ve acquired a nickname: Carter-F*ck. In fact it seems to me that the comparison between Maxwell and Green is entirely appropriate, as their personal greed did imperil their companies. Maxwell plunged the Mirror Group into a financial crisis, and Green’s own cupidity has effectively destroyed BHS. Even the question of legality, which is the chief difference between the two cases, does not seem to me to be as clear cut as Green would like everyone to believe. I’m sure that Green did act perfectly legally. But although Robert Maxwell acted illegally, I think that his plundering of the Mirror’s pension fund was enabled by a piece of legislation Margaret Thatcher had passed. This allowed businessmen to include pension schemes as part of their companies’ assets. This, it appears to me, encouraged Maxwell and some others like him, who are less notorious, to rob these accounts under the attitude that they were just another source of money.

Anyway, I think that the parallels between Maxwell and Green are so close, that the only correct response is Arkell Vs Pressdram, as Private Eye would say.

Meme on the Poisoning of Navajo Land by Mining Corporations

February 10, 2016

The big environmental news in America over the past few weeks is the massive poisoning of the local water supply in Flint, Michigan. This has been going on for years, and the water is seriously contaminated with lead, even in the local hospitals. The authorities did absolutely nothing, and continued to ignore the problem despite coverage from the local press. After about a year, the story’s managed to get through to the national American media, and it’s became a major scandal.

This is another scandal involving the poisoning of a people’s water supply, but it’s one that hasn’t made the news yet. It’s the contamination of the water supply of the Navajo First Nation by abandoned uranium and coal mines. The meme states that 75 per cent of all abandoned uranium mines are on tribal lands, which might indicate that other Native American peoples are affected.

Now this is very much an American issue, but it’s also part of what’s happening globally. Way back in the 1980s the Telegraph over here was moaning about how environmentalists weren’t letting the uranium mining corporations dig out the fuel from Aboriginal tribal lands in Oz. I’ve got a feeling there’s still a scandal and controversy going on about it, which centres around proper payment for the Aboriginal owners and clean-up operations afterwards. I have a feeling – though I don’t know – that the same is being done to the Aboriginals Down Under. Their land is being trashed, and not cleaned up afterwards.

And I have a horrible feeling that some of those corporate vultures involved may be British, or will want to come to Britain to do the same thing to our Green and Pleasant Land. If they aren’t doing it already, thanks to Bliar and Cameron. One of the companies that poisoned another Amerindian people’s land decades ago certainly was. Way back in the 1980s the Hanson Trust was in the Sunday Express. It was being sued by the Sioux, because their cement works was polluting their reservation. And this didn’t surprise me at all.

Lord Hanson was an asset-stripper, who bought up other companies, only to strip them and sell them off at a profit, before going on to carve up the next one. He was the Thatcherite dream. And he did it to W.H. and H.O. Wills in Bristol. Wills were a booze and cigarettes combine. They had several tobacco factories in Bristol, one of which was a huge construction that was used as a location in the Tom Baker Dr Who story, ‘The Sunmakers’. They also owned Courage’s brewery in the centre of the city. These both went their separate ways when Hanson got hold of them.

And he also tried to get his mitts, Maxwell-like, on the company’s pension fund. However, he found the pensioners’ lawyers were too good for him, and ended up selling the company off a few years later. Although that kind of corporate theft is associated with Robert Maxwell’s looting of the Mirror pension fund, the legislation that allowed it was Tory. It was passed by one Margaret Thatcher. You could also tell how grotty the Hanson Trust was because they also launched a PR campaign on TV. This bent your ear about how many times the plastic chairs they made would go around the world, if you lined them up one by one. It ended with the slogan ‘A company from over here, doing rather well over there’. ‘Over there’ meaning America. Well, God help our American cousins. Ben Elton recognised what they were and sent them up as the archetypal nasty corporation in his stand-up tour, Motorvation.

It doesn’t matter what colour the ordinary man or woman’s skin is to these vultures, whether your White, Black, Asian, Amerindian, whatever – companies like the Hanson Trust just loot, pollute and move on. They’re everywhere, and we need to stand up to them, no matter where in the world they’re operating. Because if the do it to one of us, they’ll do it to all of us.

Navajo Water

If you want to see the original, it’s on the over 18 Tumblr site, 1000 Natural shocks at http://greybeard55.tumblr.com/image/138997619025.

Beyond the affect on the Navajo people’s own health, and the global politics of the situation, there’s also the issue of the destruction of the ancient heritage of the American people as a whole. The Navajo reservation contains some of the most stunning and beautiful scenery in the US. The sand paintings made by the tribal shamans during their healing ceremonies are highly regarded by art connoisseurs. And the area possesses some of the most enigmatic and fascinating indigenous American archaeology in the US. From the 12th to 14th centuries AD the area was the centre of several highly developed civilisations. They built brick fortress cities high up in caves in the canyon walls, and a system of irrigation canals. They also had a peculiar system of roads. These appear to have been cut straight through the landscape, like the Romans. They also made them double, so that there was a pair of roads running parallel to the same destination. No-one quite understands why, though it’s thought that there might be some ideological or religious reason for it. I also think that, like many of the other Native American civilisations in the South West, they had extensive trade contacts with Mexico and the great civilisations there, such as the Aztecs. But it’s another mystery how those trade systems operated. Mesoamerican goods and motifs appear in the remains of the peoples of the Southwestern US, but they don’t appear in the material record of the peoples in between. What was going on? Why not? How were these items traded, and why?

And the history of the area also bears witness to the devastation caused by climate change. Many of the civilisations in what is now the Navajo reservation vanished in the 14th century as drought finally dried up their water supplies, and they were forced to move out of the area. Their cities and crops were abandoned. Now there’s a lesson relevant to today, and the contemporary crisis surrounding climate change and global warming.

There are still many unanswered questions, and vital lessons to be learned from the Navajo and similar peoples. The poisoning of them, and the destruction of their land are an attack both on their people and civilisation, and that of the wider American people. And needless to say, they and the people of Flint, deserve better.

Socialist Criticism of the Financial Sector from 1986

February 28, 2014

The present savage cuts to the welfare state by the Tories and their Coalition partners are legitimated by an appeal to the massive debt created by the financial crisis of four years ago. The root cause of this was ultimately the wholesale deregulation of the financial sector by Thatcher’s government, a policy that was carried on by Major’s, Blair’s and Brown’s administrations, and which the Coalition today promotes even further. The conspiracy/ parapolitics magazine, Lobster, has also carried a number of articles showing how the Tories’ preference for the financial sector has severely damaged British manufacturing industry. This was clear from as long ago as 1986, when the book Socialist Enterprise: Reclaiming the Economy, by Diana Gilhespy, Ken Jones, Ton Manwaring, Henry Neuberger, and Adam Sharples, was published. Looking through it recently, I found this passage criticising the rise of the financial sector and the harmful effect it was having on society and the economy:

The continued growth of the finance sector is also highly significant in terms of the distribution of economic power. Industrial companies in this country have behaved as independent and usually competitive organisations, even though they have sometimes acted in alliance. But the finance sector is far more centralised, and serves as an organising focus of class power. The growth of the finance sector reflects the decreasing ability of manufacturing companies to finance investment from their own retained profits. In the era of manufacturing dominance, manufacturing companies used to finance their relatively limited investments from their own substantial profits. Since then, the underlying trend in profitability has been downwards, while the costs of new investment have increased (especially because of higher inflation). As a result, manufacturing and commercial companies have increasingly come to rely on banks for new finance, both for working capital and for fixed investment needs. This often takes the form of short-term finance through overdrafts or leasing arrangements whereby companies hire equipment owned by banks. The effect of the latter is to concentrate the control of a large amount of equipment, at least in principle, in the hands of the banks.

These development have left the banks with considerable power over industry and commerce. But the banks have not developed the same sense of responsibility shown by their German and Japanese counterparts, who have been the source of finance for their industries for much longer. The form in which British banks provide their finance does not encourage them to take a long-term view of the companies and industries in which they are involved. Recently banks have been forced by the economic recession to become more directly involved, but even when acting collectively, as in the case of the Stone Platt engineering company, they have overwhelmingly taken a short-term view.

There have also been changes in the ultimate source of finance, as witnessed by the rise of the pension funds. Thirty years ago rich individuals were the main source of outside finance for industry. But now pension funds have taken over. Some people argue that this has somehow d9ispersed the ownership of property, in a way, which has also increased democratic control. In practice, however, the members of a pension fund have no control over the way in which it is operated, and have no legal rights to challenge its investment policies. The rise of pension funds has simply concentrated even more economic power in the hands of the City institutions which operate and ‘advise’ the pension funds. It has also had the effect of providing them with greater political power: when it comes to defending the rights of property there are 13 million members of pension funds, many of them trade unionists, who can be made to feel they have a stake in the free enterprise economy. (pp. 32-3).

This pessimistic analysis has been born out to a very large extent by history, and particularly by the recklessness of the banks’ policies, which created the crash. It was this, not the Labour government’s welfare spending, that has resulted in the massive budget deficit.