Did you say Recovery .. What Recovery?

Quote

Recovery? What Recovery?

From Luke James

Morning Star

Unions reminded backslapping  Tory leaders  that Britain is in the grip of the worst economic crisis in a century despite 0.6 per cent growth in the last quarter.

Tiny boosts in construction and manufacturing sector were partly behind the slight respite for the battered economy.

Smug PM David Cameron claimed on Twitter that the figures showed Britain is “on the right track” and insisted his government is “building an economy for hardworking people.”

Tory Chancellor George Osborne said Britain’s gross domestic product (GDP) was “better than forecast” but failed to mention that it is still 3.3 per cent below pre-recession levels.

TUC leader Frances O’Grady reminded the pair that the economy has grown half as much as they boasted it would when they cobbled together the Con-Dem coalition in 2010.

“It’s a measure of how poor the economy is faring that this level of growth is being welcomed,” she said.

“With workers in the midst of the longest wage squeeze since the 1870s and unemployment still over 2.5 million, it certainly doesn’t feel like a recovery to many people.”

Labour shadow chancellor Ed Balls pointed out “this is also the slowest recovery for over 100 years” despite the fractional shift forwards.

He said Britain would need to seal 1.3 per cent growth every quarter for the next two years “simply to catch up all the ground we have lost under David Cameron and George Osborne.”

Overall output in construction and manufacturing remains more than 10 per cent below pre-recession levels despite progress in the last quarter.

Manufacturing recovered by 0.4 per cent after slumping consecutively for the last six quarters and the 0.9 per cent rise in construction is eclipsed by the 1.8 per cent fall in the first quarter.

Construction union Ucatt labelled the figures “disappointing” and general secretary Steve Murphy reissued his call for “urgent” investment in infrastructure projects and social housing.

There was also a 0.6 per cent growth in the service sector but concerns were raised that companies are hoarding billions of pounds that could be invested to spark real growth.

Left Economics Advisory Panel co-ordinator Andrew Fisher said privateers have amassed the surplus, equal to 6 or 7 per cent of GDP, thanks to successive cuts to corporation tax and by slashing workers’ wages.

“Companies are quite logically refusing to invest substantially in new products, services or jobs at a time when consumer demand is depressed by falling living standards,” he said.

Dear Ed Miliband – forget about Disraeli, focus on the Greenbacks.

Quote

Shameless filching of Ellen Brown’s open letter to President Obama April 8th 2009.

Dear Ed Miliband

Your focus on Disraeli is all very well but why won’t you look across the Atlantic to his contemporary Abraham Lincoln?  Like you, he also had to find the way to finance what needed to be done but was initially blocked by the predatory banks.

You can solve our economic crisis quickly and permanently, by implementing the same economic solution that allowed Lincoln to win the Civil War and thus save the Union from foreign economic masters.

 

The bankers had Lincoln’s government over a barrel, just as Wall Street has Congress in its vice-like grip today. The North needed money to fund a war, and the bankers were willing to lend it only under circumstances that amounted to extortion, involving staggering interest rates of 24 to 36 percent. Lincoln saw that this would bankrupt the North and asked a trusted colleague to research the matter and find a solution… Colonel Dick Taylor of Illinois reported back that the Union had the power under the Constitution to solve its financing problem by printing its money as a sovereign government. Taylor said:

“Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes . . . and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender . . . they will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution.”

…  Lincoln took Col. Taylor’s advice and funded the war by printing paper notes backed by the credit of the government. These legal-tender U.S. Notes or “Greenbacks” represented receipts for labor and goods delivered to the United States. They were paid to soldiers and suppliers and were tradeable for goods and services of a value equivalent to their service to the community.

The Greenbacks aided the Union not only in winning the war but in funding a period of unprecedented economic expansion. Lincoln’s government created the greatest industrial giant the world had yet seen. The steel industry was launched, a continental railroad system was created, a new era of farm machinery and cheap tools was promoted, free higher education was established, government support was provided to all branches of science, the Bureau of Mines was organized, and labor productivity was increased by 50 to 75 percent. The Greenback was not the only currency used to fund these achievements; but they could not have been accomplished without it, and they could not have been accomplished on money borrowed at the usurious rates the bankers were attempting to extort from the North.

Lincoln, succeeded in restoring the government’s power to issue the national currency, but his revolutionary monetary policy was opposed by powerful forces. The threat to established interests was captured in an editorial of unknown authorship, said to have been published in The London Times in 1865:

“If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”

Lincoln was assassinated in 1865. According to historian W. Cleon Skousen:

“Right after the Civil War there was considerable talk about reviving Lincoln’s brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution.”

The institution that became established instead was the Federal Reserve, a privately-owned central bank (just like the Bank of England) given the power in 1913 to print Federal Reserve Notes (or dollar bills) and lend them to the government. The government was submerged in a debt that has grown exponentially since…

 

Lincoln did not invent government-issued paper money. Rather, he restored a brilliant innovation of the American colonists. According to Benjamin Franklin, it was the colonists’ home-grown paper “scrip” that was responsible for the remarkable abundance in the colonies at a time when England was suffering from the ravages of the Industrial Revolution. Like with Lincoln’s Greenbacks, this prosperity posed a threat to the control of the British Crown and the emerging network of private British banks, prompting the King to ban the colonists’ paper money and require the payment of taxes in gold. According to Franklin and several other historians of the period, it was these onerous demands by the Crown, and the corresponding collapse of the colonists’ paper money supply, that actually sparked the Revolutionary War.

The colonists won the war but ultimately lost the money power to a private banking cartel, one that issued another form of paper money called “banknotes.” Today the bankers’ debt-based money has come to dominate most of the economies of the world; but there are a number of historical examples of the successful funding of economic development in other countries simply with government-issued credit….

 

The objection invariably raised to government-issued currency or credit is that it would create dangerous hyperinflation. However, in none of these models has that proven to be true. Price inflation results either when the supply of money goes up but the supply of goods doesn’t, or when speculators devalue currencies by massive short selling, as in those cases of Latin American hyperinflation when printing-press money was used to pay off foreign debt. When new money is used to produce new goods and services, price inflation does not result because supply and demand rise together…

… Thomas Edison astutely observed:

“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way.

It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.”

Henry Ford observed at about the same time:

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Today we the people are starting to understand our banking and monetary system, and we are shocked, dismayed, and furious at what we are discovering. The wizard behind the curtain turns out to be a small group of men pulling levers and dials, creating an illusory money scheme that, behind all the talk and bravado, is mere smoke and mirrors. These levers are controlled by a privately-owned, unaccountable central bank … which has recently dispensed billions … in funds to its banker cronies…

“Any government that can disburse £375bn, without any accountability, is not a democratic government. It is government of, by, and, for the bankers.”

.. The bankers are scrambling, trying to patch up their crumbling creations with schemes, bailouts and sleight of hand. That effort, however, must ultimately prove futile. As investment adviser Rolfe Winkler said in a recent article:

“The great Ponzi scheme that is the Western World’s economy has grown so big there’s simply no ‘fixing’ it. Flushing more debt through the system would be like giving Madoff a few billion to tide him over. Or like adding another floor to the Tower of Babel. To what end? The collapse is already here. The question is: How much do we want it to hurt? Using the public’s purse to finance ‘confidence’ in a system that is already kaput may delay the Day of Reckoning, sure, but at the cost of multiplying our losses. Perhaps fantastically.”

The bankers are on the run, feverishly trying to use the collapse of the current system to steer us towards…  a one-world private banking system and privately-issued global currency that they and only they control. We the people will not accept those solutions, however, no matter how bad things get. We demand real solutions that empower us, not further enslave us.

You are looking for an alternative to Margaret Thatcher’s TINA.  Abraham Lincoln had such a solution.  Ed Miliband , you and Ed Balls, can finally bring his monetary solution to fruition.  Manifest the vision of Lincoln, Jefferson, Madison and Franklin…  but for this to happen, we need to expose and root out the deceptive banking scheme that would enslave us to a future of debt … The time has come for democracy to rise superior to a private banking cartel and take back the power to create money once again.  Incorporate the Bank of England into the Treasury and bring it back under democratic control.

Such a transformation would confront neoliberalism and even go far in creating your idea of a ‘One Nation’.  Reject the neoliberal myths of supply-side economics, ‘trickle down’, Laffer curves, ‘Crowding out’, NAIRU and pandering to the transnational corporates/financial sector.  The only valuable aspect of George Osborne’s disastrous economic ‘experiment’ is that it has conclusively demonstrated these mythologies as unworkable and erroneous.

PS. Mitigation of Climate change/peak oil is crying out for direct government investment.  Not only would it provide new jobs, apprenticeships and new manufacturing, the UK could also be a net exporter of energy with our abundance of potential renewable resources.

PPS. Restoring (and increasing) benefits, together with ‘living wages’, is both morally desirable, and would also quickly help increase demand in George Osborne’s flat-lining economy.  We also need a job’s guarantee and commitment to full employment.

PPPS.  Then perhaps we could challenge the contradictions of perpetual growth?

 

REVIVE LINCOLN’S MONETARY POLICY:
AN OPEN LETTER TO PRESIDENT OBAMA

Ellen Brown, April 8th, 2009 

Originally posted on Yes! Magazine Online April 7, 2009.

Has Ed Balls scored an own-goal over benefits ‘big stick’?

Quote

Owen Jones thinks the LP has scored an own goal:

The big problem is – and my apologies for the politico jargon – “framing”. The Guardian headline reads “Balls: work for six months or no dole”…. It’s quoted as a “compulsory work or lose benefits” policy; as Labour moving “to protect itself from the politically damaging charge that it is soft on welfare claimants”.

…. The whole debate over welfare has become toxic because of a systematic campaign by Tory politicians and their allies in the media to demonise those in receipt of benefits: unemployed people, disabled people, and so on….

Unless Labour forcefully launch a counter-offensive on welfare, focusing on human stories – after all, they resonate with [people] better than statistics – they will always lose the argument. They will never credibly out-do the Tories on a “tough” approach on welfare and – if they did – they might as well call it a day and pack up.

Labour have been moving in the right direction – notably taking on the 1% welfare cap which will hit both the working poor and the unemployed – but it is only effective if they stick relentlessly to the same message.

http://labourlist.org/2013/01/labour-will-never-credibly-out-do-the-tories-on-a-tough-approach-on-welfare/

 

lightacandle replies to those who think that Ed Balls has made a good call in countering the Tory line that Labour is ‘soft on skivvers’:

Yes.. can agree with that side, but you should never have to use the threat of sending someone into destitution to coerce anyone into doing anything. That way lies all sorts of problems, and once you start using that as a tool and it becomes acceptable, we lose something very precious. There are other ways of helping and incentivising people – blackmail is not one of them and throwing people to the wolves, neither another.

[Ed Balls] just needs to be careful – as I said before, by making benefit withdrawal.. albeit on this initial small scale… part of Labour party policy, he has taken away his right to condemn this government, and the Tories in general, when they use it for their own warped purposes. That is the mistake being made here. Along with the fact that he assumes there will be work for all. Something we know not to be true, and again a lie this government is happy to push forward as it takes away or reduces benefits from those of the population who will not be able to find a job, or those they want to push into slave labour. There is something not right with it all – and it is a dark road to take because it means by accepting it we are being compliant in a tactic that I believe is wrong and inhumane.

 

Meanwhile Michael Meacher MP argues that:

Osborne’s ‘trap’ of forcing vote on cutting benefits should be turned against him

Labour will rightly vote against the bill which is deeply unfair, but it has also given the party a perfect opportunity to argue the profound injustice of making the poorest sections of the population bear the overwhelming burden of cutting the deficit caused by the bankers’ recklessness whilst the rich who did cause it get off virtually scot-free.   And Labour has also devised an alternative proposal to rebut any charge that it’s soft on the workshy…  Labour’s scheme not only offers an effective political rebuttal to the mischievous propaganda of Osborne and IDS, but points to a much better way of resolving the deficit – by reducing benefit expenditure and providing opportunities for work.   Some might think the 3-6 month suspension of benefits unduly draconian, but the scheme should allow for suitability of the work, intensive support where necessary to assist the return to work, and some training to ensure that participants are not permanently stuck in dead-end jobs.   The Tory plan however falls foul on at least two counts: two-thirds of those on tax credits are in work already, and cutting both benefits and tax credits undermines aggregate demand which the economy needs now like a hole in the head.

But the real case against Osborne is that the super-rich should be made to pay, not the poor. 

 

Alittleecon thinks Labour’s proposal is timid, lacks ambition, scope and retains the nasty undertones of the current climate – not wanting to appear to be soft on ‘scroungers’.  Alittleecon says:

So what would a job guarantee worthy of the name look like?  Here’s some features it might have:

  • Job offer at 3 months or less
  • Jobs last for an indefinite period
  • All jobs come with training
  • Paid at a living wage
  • Genuinely full time work available, but with flexible and part time hours for single mothers, those with health issues etc.
  • Optional, i.e. the person can choose to remain on benefits and seek their own job (subject to Jobseeker’s agreements as now)

 

Syzygysue says:

I agree that Labour ‘will never credibly out-do the Tories on a “tough” approach on welfare’ and it is profoundly depressing to see yet another triangulating tactic which I’d hoped was a redundant  strategy.  I agree with lightacandle that it will confirm for many that the LP leadership are just Tory-lite… and to be honest that is the outcome that Ed Balls wants because it is supposed to confound George Osborne’s accusation that the LP are ‘soft on skivvers’.

Nevertheless, Michael Meacher is right to be hopeful that the debate will offer Labour an opportunity to oppose ‘the profound injustice of making the poorest sections of the population  bear the overwhelming burden of cutting the deficit caused by the bankers’ recklessness’, and let’s hope that they do so effectively.

However, like alittleecon, the part of the Ed Balls’ announcement that concerns me most, is that the policy is so timid.  It would not kick in until someone had been unemployed for 2 years and would only be for 6 months.  Furthermore, as I understand it, Ed Balls will not commit to any funding which is not fiscally neutral (ie. he knows how he’ll raise the money). This is economically illiterate and accepts the Tory nostrum that the UK has ‘no money left’.

This is lunacy.  We do not operate under a gold-standard, and even Mervyn King accepts that the UK is not revenue-constrained.  Indeed, how could he, when he authorises the £375 Bn Quantitative Easing to buy back government issued gilts.  In addition,  let me quote Richard Murphy who runs the top UK economics blog, Tax Research UK ( I recommend reading the entire post):

‘I argue that quantitative easing is actually about writing off government debt whilst the Tories say they have to impose cuts, and that fact has dramatic implications for economic and social policy in this country…. ‘

In other words, the national debt has effectively been reduced to about 45% GDP... about the same as it was throughout Margaret Thatcher’s tenure.  So there is not a debt crisis. The UK is in absolutely no danger of becoming another Greece.  The UK is not subject to the whims of the Bond markets and given that the best way to reduce the deficit is to get people back into work, the Labour focus should be on using a job guarantee of the sort suggested by alittleecon.

After all there is no shortage of jobs to be done.. for example, in mitigating climate change and the impact of peak oil.

So what I want to know is why are Labour not confronting the failed economic theories which George Osborne uses to justify his austerity policies?  The mythologies of the Laffer curve, NAIRU, Expansionary Fiscal Contraction, exporting our way out of recession etc etc… Why don’t the Labour Party attack the fundamental lie that the UK has ‘run out’ of money and cannot afford to pay proper benefits to the disabled, the long-term sick and the unemployed?  

Why doesn’t Ed Balls say Austerity begets Austerity?

George Osborne says we’re running out of money ..

When is a Job Guarantee not a Job Guarantee?

Simon says: QE is the biggest confidence trick of all time.

http://www.michaelmeacher.info/weblog/2013/01/osbornes-trap-of-forcing-vote-on-cutting-benefits-should-be-turned-against-him/

http://www.taxresearch.org.uk/Blog/2012/09/21/the-real-potential-of-qe-how-we-could-turn-our-economy-round-now/

 See also:  

Dear Ed Balls WorkFare doesn’t Work!

 

Dear Ed Balls WorkFare doesn’t Work!

Quote

First posted on January 4, 2013

Dear Ed Balls WorkFare doesn’t Work!

by Jayne Linney

Dear Ed Balls MP

Following your announcement of Labour’s plan to tackle unemployment, I’m asking you to think!

I’m not an economist, a Politician, a journalist  & nor do I belong to any ‘thinktank’, I’m someone who has worked within and around various WorkFare schemes since the 80′s, and that I believe qualifies me an opinion.

The basic problem with most of these scheme was they were time limited Government subsidised projects with the real recipients being the Companies, who benefited from cheap labour. The ‘employees’ generally only received basic pay and training for their role, little or no support once placed, and rarely anything more that enabled them to do something other than return to the Job Centre to sign on,  again, once their time is up.

I can see no difference with this and your plans other than Labour has this time adopted the Conservative ideology of Mandating attendance, thus buying into the toxic rhetoric that somehow it is the fault of the jobless people for being unemployed and not the responsibility of Government to create Jobs!

As a Labour member I am appalled that the Party has decided to perpetuate myth that unemployment is the problem of the unemployed; NO, it’s the problem of the Government and Labour would serve it’s members better by acting in opposition to the vile, immoral tactics of the Coalition, rather than merely repackaging Failing and Failed Policies.

So before you go ahead with this please ask yourself How does demonising Millions of People and depriving them of gainful employment fit into One Nation?

Yours without anticipation of a reply