The Old Ideologies Have Withered

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First posted on Ozzy’s Corner

Where does politics lie in 2012?

In this article I will argue that both Labour and the Conservatives both have a crisis of ideology. I also believe Labour in particular must look for a new framework to guide them, and that the answer to what shape a new Labour-led Government would take does not lie in the past.

Following World War 2, the post war consensus dominated all Governments until the 1970’s. This consensus was based on:

  • The nationalisation of key UK industries
  • A welfare state based on the Beveridge report
  • Keynesian economics

The 1970’s saw the UK economy come under pressure from the 1973 oil crisis, inflation and industrial action. The post war consensus was failing.

In 1979 Margaret Thatcher led the Conservative Party to victory. She was a protégée of Keith Joseph, with whom she created the Centre Policy Studies. The CPS promoted free-market economic and monetarism, and was influenced by the works of the Economist Milton Friedman and Friedrich Hayek.

The next 18 years saw the destruction of the post war consensus. By the time Tony Blair led Labour to victory in 1997, Labour had accepted much of this free-market model and moved to the centre of politics.

I firmly believe that the post war consensus had already failed by the time Mrs Thatcher had entered Downing Street. It was born of a nation rebuilding from the ashes of war. The UK had a different, tighter class system. The world and UK economy were a totally different shape, and less global in nature.

The new neo-liberal economy also failed, falling off the edge of a cliff during the banking crisis of 2008. Economic inequality been growing for years, but when the banks exploded the world financial system ground to a halt. The system that said that the market will always deliver what people need and is efficient simply overheated and blew up. The effect is still being felt, with years of austerity looming.

What is apparent is that as Labour looks for a new policy framework, trying recreate the past, a new 1945, is totally futile. The world of 2012 is unrecognisable from that of 1945. The world is a large, fast moving economy. Technology has made the world a small place, allowing diverse global relations to be maintained at the speed on an email. Recreating 1945 now is as impossible as recreating Victorian Britain in 1945.

New Labour’s triangulation of neo-liberalism and the post war consensus was trying pick the ‘best’ parts of two failed systems, joining them together and hoping they would work together. The result was a neo-liberal financial system, with some papering over the inequality cracks with policies such as the national minimum wage and tax credits.

A car made of the best parts of two wrecks is a ‘cut and shut’. Thus, New Labour failed – it’s ‘cut and shut’ ideology couldn’t prevent the inequality and shifting of power and wealth to a small elite that neo-liberalism always delivers.

So where does a new left go from here?

Firstly, serious reform of the financial system is needed, and on a global scale. Capital controls are required to stop global capitalists moving huge sums at the touch of a button that results in huge instability.

Secondly, the ever increasing movement of powers from the nation state to the EU, WTO and so on must be reversed. Power needs returning to the individual countries and the democratic rights of citizens enhanced.

Thirdly, consumerism must be replaced by sustainability. The world’s supply of oil and the other resources is being consumed at an unsustainable rate. Within a few decade they could run out. Global warming threatens the whole planet. We need to stop measuring growth simply in terms of the size of our latest LCD television and the model of car we own.

Fourthly, inequality must be reversed. Globally:

  • 1% of the world’s population owns 40% of global assets
  • 2% of the worlds’s population owns 51% of global assets
  • The poorest 50% own less than 1% of global assets

Nationally, inequality has also grown. Wealth needs to be shared more equally within nations and within the whole global community.

This is a difficult shopping list to deliver. It requires tenacity and standing firmly to principles in the face of vested interests. However, this is the only way. A policy of being Tory light is simply the path to electoral and moral oblivion.

Stitched Up!

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Stitched up! Why the Coalition Government has “No Clothes”.

What’s on your back today? Is it exploited children and abused women, products of a rapidly disappearing and polluting fossil fuel, or is it toxic dyes polluting our planet and our people?

What we wear really reflects the fabric of our society. It reflects power, hence shoulder pads, Roman togas and Eton ties. It leads women to starve themselves, leads children to become sexualised at young age and makes billions for the fashion industry. A close look at the fashion industry reveals how the greediest in the world shamefully make their unethical profits without thought for the environment or the workers who produce it. For the vast majority consumers who buy the cheap and poor quality, quick-to-be-discarded goods, there is little information as to how their must-have garment came to be.

© Mmulligan828

The rise of the wealth, power and influence of Britain has its seeds in the industrial revolution. Much of that began in cotton mills the North West England.

The development was mainly due to mechanization, engineering skills and inventions. Without doubt high production and profits were due to the employment of cheap labour, particularly women and children. Health and safety was appalling.

In Birmingham, that Victorian “ Brummagem workshop of the world”, it was said every pearl button in the world was made there. Metalworking and jewellery manufacture in Birmingham may have made profits for some, but working with toxic metals and with dangerous machinery shortened many lives. I have records of one relative who died when her crinoline became caught in a lathe.

People had no alternative but to take the work offered, it was that or starve or live in the workhouse – or both. The idea that women in the work place are new phenomena is grossly inaccurate – for the working classes anyway.

For power rested with the few. The squandered the earth’s resources and profited.

Our need for clothes has always been so much more than just a way of keeping warm. Decoration of the body, as with other species is part of sexual attraction and mating, of expression of personality, and as a visual sign of Power.

The native American chief was recognized by head-gear with more feathers than others. Roman senators wore togas, which included a stripe died with Tyrian purple extracted from a particular species of mollusc (Murex). It took more than ten thousand molluscs to provide enough dye to make one toga. I wonder how many people worked on their collection and the production of a single garment.

The Incas have been producing brightly-coloured cloth for hundreds of years. showing the wearer’s position in society. Gems and jewellery decorated the wealthy through history. Imitation jewellery may be just as attractive, but it is the rarity of the resource which assigns it a higher value, to be envied by many and displayed by the rich and powerful.

And it is this greed, this desire for profits, which led to the decline in clothing-trade in Britain, but it did not show a decline in the working conditions in the clothing industry, nor the effects on the environment. It simply moved it elsewhere. For in a global market, where labour is cheapest, there will be rich pickings to be made. Profits margins can be huge and tax may not be paid because of tax evasion/avoidance.

WORKING CONDITIONS

Today the clothing industry derives its profits from developing countries. Much is imported from China, South America and Africa. Bangladesh is forecast to be a major source of clothing in the next decade or so. It is predicted that exports could triple in a decade or so.

Yet, working conditions for the people, predominantly women and children are dreadful.

War on Want reports on findings of a study into the Bangladeshi garment industry. The findings are of direct relevance to British clothes retailers and customers as many high street retailers such as Asda, Primark and Tesco source their clothes from Bangladesh.

This is because the country “boasts” that their labour costs are cheaper than anywhere else in the word.

War on Want: “ Women are employed in a highly exploitative context. Women workers remain at the bottom of the supply chain, working long hours for poverty wages and denied basic maternity rights which they are legally entitled to.”

War on Want also reports that women face harassment at work and are denied access to medical staff which the law states they are entitled to. The lack of law enforcement seriously affects health and family life.”

SOS Children’s Villages reports on Child Labour in India. Millions of children in India are engaged in child labour, despite the fact that the constitution and international law offer protection against the hazardous practice.

The country’s 1950 constitution states, “no child below the age of 14 years shall be employed to work in any factory or mine or engaged in any other hazardous employment.”

Yet, some of the girls who work in the country’s cotton industry are no more than 10 or 11 years old.

ENVIRONMENT

The Ecologist reports:

A Greenpeace investigation tested clothing samples for the presence of toxic chemicals and exposed an industry-wide problem. Lab tests revealed that clothing from 14 out of 15 global brands that had been purchased in 17 different countries all contained the chemical nonylphenol ethoxylates. These NPEs, as they’re known, break down in water into toxic, persistent and hormone-disrupting nonylphenols – contaminating fish, wildlife and people – often having the greatest impacts on rivers near the factories where the clothing is produced.

70 per cent of the rivers, streams and reservoirs in China alone are contaminated.

The fashion industry is incredibly destructive to the environment. The throw-away society it encourages results in piles of waste destined for land-fill. Chemicals leach into the environment as a result of toxic dyes. The demand for man-made fibres is wasteful of energy and raw materials. Even so called “eco-friendly” natural fibres such as cotton is responsible for one quarter of pesticides used. The energy used to transport products across the globe is immensely wasteful, possibly taking longer to travel than the clothes they transport will ever be worn.

The BBC reports on a study showing “Microscopic plastic debris from washing clothes is accumulating in the marine environment and could be entering the food chain”

SUSTAINABLE WAY:

  • Garments should be labelled regarding their origin, rating on environmentally friendly production, and assurance as to fair-trading.
  • Quality monitoring of garments encouraging longer use should be encouraged.
  • There must be compliance with the law and human rights.
  • The fashion industry should be transparent as to where, how and by whom the fashion items have been produced.
  • Recycling of fibres must be actively encouraged by governments, by education.
  • Alternative renewable fabrics which are non-polluting should be developed.
  • Tax justice must be addressed.

ALL FOR PROFIT :

What motivates people to make money from such blatant exploitation? The knowledge that they can make their millions and accept no blame, as long as it cannot be traced to them. Now the fourth largest industry in the world, the fashion industry brings in $400 billion a year and includes the revenues from old established companies and a host of new clothing lines introduced by the urban market.”

The International Business Times ranked the top 10 industries with the world’s fastest growing companies and reports:

” The textiles, apparel & luxury goods industry tops our IBT1000 list featuring 7.7 percent of the fastest growing companies in the world over the past three years as the affluent shoppers loosen their purse strings. Indian companies made up more than half of the list, followed by Greater China — home to 18 of the 77 fastest growing textiles companies — and Pakistan. Based on the IBT1000 database, companies within the industry grew at an average compound annual growth rate (CAGR) of 24.6 percent.

The global textiles market had total revenue of $1,037.6 billion in 2009, representing a CAGR of 5.7 percent for the period spanning 2005-2009.

The fabrics segment proved the most lucrative for the global textiles market in 2009, with total revenues of $413.4 billion, equivalent to 39.8 percent of the market’s overall value.

The performance of the market is forecast to remain much the same, with an anticipated CAGR of 5.7 percent for the five-year period 2009-2014, which is expected to drive the market to a value of $1,369.8 billion by the end of 2014.”

Companies boast of how profits are there for the picking – unsurprisingly, some have expressed a wish not to link to their sites from here. Such profits are unethical. Obscenely excessive profit contrasts with the poverty left in its wake. Profits are made by exploiting children, from polluting water supplies, and without any responsibility acknowledged, and without anyone challenging its morality or questioning the legality.

THE EMPEROR HAS NO CLOTHES:

These injustices will continue to exist if we allow them to. We can demand ethical produce. We can educate young people about the reality of the origins of the clothes they wear and yearn for.

Hans Christian Anderson’s story of “The Emperor has no clothes” showed how only an innocent child was brave enough to speak the truth. Everyone else who went about their businesses did not dare to contradict the emperor. They did not feel they could question his power.

Like the invisible cloth woven into the emperor’s silks, this unsustainable fashion industry will inevitably finally self-destruct. There will be no resources or people to spin their yarns or weave their cloths.

No wealthy power needs an outward visual display, to convince people of their ultimate power like the Roman senators and those fore-mentioned. They operate very secretively. The off-shore companies and tax-havens can make up their own laws, because no-one knows otherwise. What happens to the massive profits derived from such abuse? No taxes paid, not compensation given paid for the lives destroyed or the polluted land.

Today, power is held not by people, not even by governments, but by the very richest in the world. They represent no nation, no country. They do not pay taxes due on their earnings, by loopholes no one understands. Globalisation of markets allows them do as they like. But it is only so because we allow it.

Like the little boy in the tale, it is time someone pointed out the governments have no clothes. And it’s true, because without the workers toil, money is nothing. Nothing at all.

References and Further Reading

Tax Havens are Harmful: Richard Murphy – Tax Research UK

Capitalism, NeoLiberalism, Plutonomy, and Neo -Feudalism Think Left

Ekklesia UK Fashion Exploits Women

War on Want: Women workers in the Bangladeshi garment sector.

Child Labour and Indian Fashion Industry

Globalisation : When Fashion Kills

The Emperor’s New Clothes

Recycled Fashion

http://www.spinningtheweb.org.uk/

The Ecologist: Making China suffer toxic pollution for Western fashion

Environment damage from washing synthetic clothes BBC

“Growing a Frock” Biotechnology and fabric production

Bangladesh exports could triple in a decade

Birmingham Buttons

Uk Government Looks to Industry to ensure sustainable future

Blog: Five Reasons why the fashion industry should go green

Eco Fashion World

The West Midlands: The workshop of the world, C 1750-1950

International Business Times Rankings

Dreamstime.com © Mmulligan828

Ebuzzing

Potter Politics

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Potter Politics

By Liam R Carr

Also published here

If there was remake of the Harry Potter films where politicians of any era could play the characters, who would play whom? Sounds like a down the pub discussion with the other geeks who attend CLP meetings. If you have any thoughts then drop me a comment below or tweet with the hashtag #potterpolitics.

The Harry Potter books have been compared to many things. But you have to be careful. Be wary of comparing Harry Potter with Twilight on twitter, people take such comparisons pretty seriously. As far as I can see Twilight is for people who have grown up with Harry Potter and now need something a bit more risqué, vampire lust clearly fits the bill.

I had intended to make a comparison between Hogwarts and Parliament, the architecture is similar, and even the colour scheme is reminiscent of Gryffindor house colours of red and gold in the house of Lords and and the Green of Slytherin in the Commons. Whitehall is like the Ministry of magic. Some MPs in the Westminster village might see themselves as part of a rarefied, wizarding world, looking down on us muggle voters. But it not that simple. Start to make comparisons between political and Harry Potter characters and you are left with a staggering number of tricky choices. For example is Dumbledore the occasionally magical Dennis Skinner or, a more obvious choice the legendary Kier Hardie. This blog post, like the film The Deathly Hallows will be done in 2 parts, mainly because I couldn’t make up my mind. In part 1 I will describe a scenario in which, like in Hogwarts, little attention to is paid to the passage of time: some people are immortal and the dead can show up at any moment in a picture frame. Part 2 will be a more up to to date analogy.

Politics and Harry Potter Part 1: A Historical approach.

The House of Gryfindor and the Order of the Pheonix are the Labour Party and the Trade Union Movement, they fight the evil forces the evil forces of Voldermort and his Slytherin Cronies (the Bankers and the Tory party). The leader of the Tolpuddle martyrs, George Loveless would play Godric Gryffindor. Godric was one of the four famous founders of Hogwarts School of Witchcraft and Wizardry, and an enlightened fighter against Muggle-discrimination1. Coincidentally they both hail from the countryside, Godrics hollow said to be somewhere in the west country2, and Tolpuddle is not too far away.

Kier Hardie would have to play Dumbledore, a true giant of both the trade union movement and the Labour Party. He still marches with us at the Durham miners gala, carried on several banners (Pictured2) casting a watchful eye over proceedings. Nye Bevan; Welshman, thinker, socialist: The architect of the NHS would play a character that only true Potter fans may be familiar with; Mungo Bonham was the founder of St. Mungo’s hospital for magical maladies and injuries, The name ‘Mungo’ is possibly derived from Welsh mwyn meaning gentle or kind 3. Couldn’t be more apt.

Thatcher is a difficult character to cast, my first thought was Bellatrix Lestrange. She is ruthless enough but more of a follower than a leader so I settled on former Minister for Magic Delores Umbridge. A strong women who punished her enemies mercilessly, notably giving out lines that had to be written in the blood of the victim. She was highly intelligent, driven and despite her evilness she always believed what she was doing was right, and showed no remorse. Thatcher is definitely Umbridge. Nancy Astor the first female MP could be Rowena Ravenclaw, as a Tory you might expect her to play a Slytherin, but she because of her role as a true pioneer it seems appropriate that she is one of the founders of Hogwarts.

Ravenclaws are famous for their intelligence, creativity and wit, qualities Nancy would have needed in abundance when she entered in the the House back in 1918. Churchill is Mad Eye Moody, a bit obvious and perhaps disrespectful, but apart from the physical similarities both were at their best in times of war. Clement Atlee who succeeded Churchill is Sirius Black, the moustache is not the only similarity. Sirius came from a noble pure-blood family, but chose to fight against elitism and was a supporter of both the order of the Phoenix and later Dumbledore’s army. Atlee was also from a privileged background, attending prep school, Haileybury boys school then graduating form University College, Oxford. He advocated policies of investment, job creation and redistribution of wealth; “Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly” Atlee’s words are still true today, maybe Phillip Green and other ‘rich men’ should take note.

The main characters are the most difficult to decide upon, Neil and Glenys Kinnock are Mr and Mrs Weasley. Mr Weasley is hardworking, has compassion and values but when it comes to a fight he will not back down. The same could be said about the former Labour Leader. Voldemort represents for me, not any one historical figure but, the break up of communities. He is the spectre of unemployment in the 80s and the the rise of a more selfish society in the early Nineties. I have not mentioned mentioned John Major in this histrorical account but he can be Kreacher, a house elf loyal to his former master. Michael Heseltine can be Fitch and the caretaker squib who wanted to cast his spells but never quite managed it. Harry Potter, the wizard who defeated Voldermort when he was just a boy is in this historical account could easily be Tony Blair. A bit of a wizard, talented and with a touch of celebrity, Tony fits the bill. There is another character however who Tony could play equally well, the dashing and popular Gilderoy Lockhart; a hit with the ladies, always on hand with a signed copy of his book about his past adventures.

Politics and Harry Potter Part 2.

The Current Cohort

The sorting hat is a hat that reads your innermost thoughts and puts you into a house based on deeply held beliefs. I wish there was a real life political one. When MPs go into the house they have to put the hat on and it would shout out which party you truly belong to. That really would be interesting… …Back to the casting call, I will start close to home. My MP Pat Glass is one of the new cohort of Labour MPs elected in 2010. She is a great constituency MP and is an asset to the Party. She comes from a background in education so she won’t mind me casting her as one of Hogwarts finest teachers: Pemona Sprout. Ms Sprout uses her considerable horticulture skills to defend Hogwarts against the relentless attacks by Voldemort’s death eaters. Pat makes every effort to defend North West Durham against the relentless attacks on the most vulnerable in our region by Cameron and his coalition partners.

Media figures do not escape: Andrew Neil is Professor Flitwick: intellegent, quick witted and probably likes a bit of polyjuice potion (or blue nun) on a Thursday night. Nick Robinson is Cornelius Fudge, subconciously succumbing to pressure from Malfoy and Voldemort, all the while trying to convince himself, and others, that he is impartial. Rita Skeeter will do anything for a story and so, is Rebekah Brooks. Murdoch could play Voldemort but instead the whole of News Interational organisation will roam the land, as soul-sucking Dementors. John Prescott is one of the most straightforward casting decisions: Mad Eye Moody. A fighter who always stuck to his principles and stayed true to the cause. He also had a softer side and would always do his best to pass on his wisdom to others.

Another deputy prime minister who gets a starring role is Margret Beckett as Professer McGonagall, highly competent, dependable, steely but at the same time, compassionate. Neville Longbottom, the unlikley hero could be played many Labour politicians, Middlesborough’s Tom Blenkinsop perhaps but I think Tom Watson fits the bill perfectly. Chris Bryant also easy to place, he is one of the Weasley twins, Fred I think, they both use humour to good effect and are brave enough to take on the Dark Forces of the Murdoch Empire. Luna Lovegood is played by Stella Creasy, tenacious in highlighting a cause, and fighting for those forgotten by the mainstream, Stella publicised the Credit Regulation Bill and continues to fight for those trapped in a viscous cycle of high interest debt.

Ed Balls would be a Quidditch player who doesn’t mind launching a bludger or two, I thought of Viktor Klum, but he sounds a bit too Marxist for Balls so I have settled on George Weasley, beater in Gryffindors Quidditch team. Which means unfortunately Yvette Cooper can’t be Hermione which is a shame. David Miliband is Cedric Diggory, popular, good looking, charming, at times heroic with exemplary manners. Hermione’s part is a difficult one. There are quite a few forthright, able women MPs on the Gryffindor side of the House but I’m sure that Rachel Reeves would play the part well.

On the opposition side, Sayeeda Warsi would have to be Bellatrix, she follows the party line with gusto and seems fiercely loyal, good traits for a party chairman.

Eric Pickles and Ken Clarke are Crabbe and Goyle; it’s a no brainier, real heavyweights who protect their leader. George Osborne is Wormtail; obedient but envious of his master. Andrew Lansley has to be Lucius Malfoy. He has a sense of entitlement, but wants to be seen as if he is a fine upstanding pillar of the community. The fact is that he strives to create an unequal world where pure-blood wizards like himself can look down (from their pay beds) on those they deem to be less worthy.

The Liberal Democrat party are not to difficult to place either. They are like Hufflepuff house; the house of tolerence, they play a bit part in the story but crave a more central role. Nick Clegg is talior made to play the part of Minister for Magic, Pius Thicknesse. We don’t get to know much about the true nature of Thicknesse because he is placed under a powerful spell called the Imperius Curse. This unforgivable piece of dark magic causes the victim of the curse to obey the spoken/unspoken commands of the caster. The experience of being controlled by this curse is described as a complete, wonderful release from any sense of responsibility or worry over his actions, at the price of his free will.4 Clegg displays all the symptoms of being under this spell. Symptoms which are all too which are common in Westminster where Lib Dems are frequently spellbound by even the whiff of the leather in a ministerial car.

Tim Farron is Professor Quirrel, making a good show of appearing free from the control of the dark forces, some even believe that he is not, but we find out in the end that he is just another puppet.

Which brings me to the two main characters: Cameron is Voldemort. I understand that it could be cast that Voldemort is the interest of big business and Cameron is just another Death Eater but that would miss the point. Voldemort co-ordinates the attack. He is the mastermind and he doesn’t care how many Muggles die on his path of destruction. Voldemort controls all the rest of his squad and there is only one person that can defeat him. Enter Ed Miliband, our Harry Potter. He steps out of the shadows of his famous wizarding father. In the early chapters you think he is too weak that he’s got no chance, but he survives everything that is thrown at him. Over the course of a few years he gains strength though twists turns and tortuous tribulations. He builds an army around him who challenge the dark forces of Voldemort wherever they show themselves. We know how the story must end. Harry can, and will defeat Voldemort.

http://en.wikipedia.org/wiki/Godric_Gryffindor#Godric_Gryffindor www.durhambanners.co.uk http://harrypotter.wikia.com/wiki/Mungo_Bonham http://en.wikipedia.org/wiki/Imperius_Curse#Imperio_.28Imperius_Curse.29

The Wikipedia articles on Hogwarts are extensive, fun and written as if it is a real place. Long live Wikipedia!

max keiser & stacy herbert REVEAL WELFARE HYPOCRISY

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The Conservatives are being allowed to set the focus of political debate, as we focus on supposed abuse at the bottom of the pile instead of that at the top.

There are wealthy individuals – maybe even cabinet millionaires – claiming more in pension tax relief than the proposed benefit cap. Higher rate tax payers for the 08/09 period cost the treasury £12 billion; and anyone contributing £39,000 to a pension will get £26,000 in relief.

Update: This telling exchange from the comments thread of Richard Murphy’s Tax Research    http://www.taxresearch.org.uk/Blog/2012/01/23/martin-wolf-endorses-progressive-taxation-as-a-solution-to-capitalisms-ills/#comments

Question to Richard Murphy: May I ask a … a question, Richard? We don’t appear to have a progressive tax system in the UK.  
As I understand it from http://www.hmrc.gov.uk/,
Income tax: Above £7k, 20%. Above £35k, 40%. Above £150k, 50%. OK.
(Personal allowance is removed at £100k adding £1.4k tax max. Minor)… 
 National Insurance: Above £7k, 12%. Above £42k, only 2%.

Combining tax & NI: Above £7k, 32%. Above £35k, 52%. Above £42k, 42%. Above £150k, 52%.

This is an almost flat tax curve. Add in capital gains tax or investment income and the effective tax rates will drop further at the high income end… Why don’t high earners pay National Insurance?  Am I wrong to regard it as a tax?  Have I got something wrong?

Richard Murphy replies: 
 

You’re bang on… 
but build in VAT and council tax and it’s actually regressive. 
That’s how bad it really is.  
And still the 1% say they’re over taxed.

Credit Rating Agencies Are Agents for the Banks

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Who are Standard and Poor’s?

By CJ Stone

also published by CJ Stone on HubPages

The credit ratings agency Standard and Poor’s has downgraded France’s debt, from a prestigious triple A rating, to a less desirable AA+.

Meanwhile Austria, Italy, Spain, Cyprus and Portugal have also had their ratings downgraded, Portugal to “junk” status.

What this means is that the cost of borrowing has gone up for all of these countries, and the Eurozone has once again been thrown into crisis.

Several things strike me at once. Firstly that Standard and Poor’s is a private company, and yet it appears to hold the economic well-being of a whole continent in its hands.

I wonder if other people are as surprised by this as I am?

At what point did the European Union – a political organisation consisting of twenty seven states and several hundred million people – give its sovereignty away to a small number of private companies operating out of Wall Street and the City of London?

Next it is the inordinate amount of power these companies seem to wield. One word from one agency, and the whole financial world is thrown into chaos and the livelihoods of millions of people put at risk.

Finally I’m struck by how little like an objective process this is. Who are Standard and Poor’s? Have they been selected by some recognised body on the basis of their independence and economic expertise? No. They are a private company whose first purpose is to make a profit and whose loyalty is to the banks they serve, not to the public.

credit rating is an opinion, not a fact. It is an assessment being made by a bunch of shady individuals, in a locked room, without oversight, on the basis of some criterion over which the rest of us have no control.

Who elected them? Who gave them their power? Who was it who decided that these companies and no other should have the right to assess the credit worthiness of whole nations? Where is the oversight? Where is the public accountability? Where is the peer review system able to judge the accuracy of their ratings? Who assesses the assessors, in other words?

It was these same agencies, remember, who gave triple A ratings to the dodgy financial packages which brought the economic system to the brink of collapse in 2008.

What this amounted to was fraud, slicing up and repackaging sub-prime mortgages that the financial institutions knew were going to default as top grade investment opportunities.

The ratings agencies were fully complicit in this process, as was noted by the Financial Crisis Inquiry Commission in the United States in its report in January 2011: “The three credit rating agencies were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.”

Parthenon for sale

Economist Joseph Stiglitz said: “I view the rating agencies as one of the key culprits…They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies.”

In other words what they were doing in 2008 is exactly what they are doing now, wreaking havoc, but this time not only amongst firms, but across whole nations.

So what happens when a nation like Greece has its credit rating downgraded to junk status? Basically it can’t borrow, which means it can’t get money to service its debts. The IMF moves in, and the country is forced to sell off its assets to pay its debts. It’s like a garage sale of public assets. Everything must go, at rock bottom prices. And who benefits from this? Well the banks, of course. The banks get to buy up the public assets, which they can then “monetise”. They get to own the Parthenon and the Lottery and the country is forced into even greater debt, having now lost its only forms of income.

It is legalised theft, and all enabled by that fictional “credit rating” provided by the ratings agencies in the first place.

It is by this process that the world is being driven into further and further indebtedness to the banks.

Credit Rating Agencies links

More on the economy by CJ Stone

The Left Must Reform Public Services Too

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The most feared word to our public services is reform.

Reform has become a by-word for cuts and privatisation. Take, for example, the NHS reforms currently going through Parliament, or the changes to DLA. Both are ideological changes designed to privatise one and simply reduce payments to the other.

However, while fighting these reforms, the left cannot rest on their laurels. Our public services do need reforms, but not the ones offered by the Coalition. They are needed to better serve the need of service users, in a way that maximises precious resources. They are needed to reaffirm to the United Kingdom that public services are the most cost effective way of delivering vital services, with the best outcomes for service users. Without changes, those forces that are pushing for privatisation will gain a stronger and stronger voice.

A major issue is the lack of intermediate community care. I have recently experienced this with a relative who is elderly suffering from early dementia and a heart condition. In the last 6 months she has been hospitalised around 10 times. Her heart condition and dementia are beyond the scope of her GP as her needs are complex. However, as there is no provision for community care, this resulted in her worsening on a number of occasions to a degree that required hospitalisation. This is invariably expensive and can result in people getting help when it is too late, so the intervention is less successful.

This is common with conditions like diabetes too. If managed in the community by more specialist community care teams, it is substantially cheaper than hospitalisation with much better patient outcomes. It would preserve hospitals for those matters that only they can handle.

We need to wean ourselves from too much concentration on hospitals. Many local hospitals provide a skeleton service, when nearby there is a larger, more equipped hospital with better specialists available. People do love their local hospital, but I believe diverting resources partially to bigger hospitals and to community services from local skeleton hospitals would result in better health care at a lower price.

Another area where co-ordination is poor is that between the NHS and social services. From September to October 2011 128,000 days delay were incurred by the NHS because of bed-blocking – when patients can’t be discharged as the services they need are not in place in the community [1] . This figure had been falling, but the impact of cuts to local social services budgets has reversed the figures. Each day in a hospital bed costs an average of £255. Therefore, the cost to the NHS of 128,000 days of delays amounts to nearly £33 million, annualised to nearly £196 million. This far exceeds the cost of providing care in the community.

In the last year or so, my Son has been going through the system for a diagnosis for a condition on the autistic spectrum. Quite frankly, no-one would believe how dreadfully poor this service is, and how badly under funded these services are. In this battle to find the required support at school, we are on our third school in year. Read any of the forums about parents battling this, and you get the same story time after time. It’s a national scandal every bit as poor as our national treatment of the elderly. The reform required here is a large increase in funding, much better training for teachers and a smoother journey between the different professionals involved.

Education services require reform too. Schools are in an excellent position to pick up problems with children who without intervention are likely to grow up into uneducated, workless adults who are at risk of getting involved with crime. Early intervention is far cheaper, as the right investment will be likely to produce a law abiding taxpayer. Without intervention the cost of benefit payments, the cost to the justice system, and most of all the personal cost, it is crazy to not intervene early. The transfer of resources from the justice system to the education system deals with the root cause and not the symptoms. The Coalition have promised to help 120,000 families at most risk, but this is not enough.

All this co-ordination and improvement is impossible with broken up and privatised services. The left should argue that these reforms are required and in the best interests of the country. Only a reformed truly public sector can deliver this.

Sources

[1] http://www.bbc.co.uk/news/health-15198431

Is the Prince of Darkness, Mandelson behind Ed Balls policy ‘gift’ to the Tories?

Quote

This article presents the evidence for a conspiracy theory.  We need to remember that even if you are paranoid, it is still possible that ‘someone’ really is ‘out to get you’.

To the palpable dismay of the left of the LP, the unions and the total astonishment of many Labour MPs … to the incredulous delight of the Conservatives, the ultra-left and the Purple-Black contingent of the LP… Ed Balls announced in his speech to the Fabians:

… however difficult this is for me, for some of my colleagues and
for our wider supporters, we cannot make any commitments now that the
next Labour government will reverse tax rises or spending cuts. And we
will not.

.. Pay restraint in the public sector in this parliament would have been
necessary whoever was in government. (1)

Ed Balls’ speech is ambiguous, open to a lot of interpretations, possible misinterpretations, and has been the focus of much spin from vested interests.

Richard Murphy offers a measured response with the caveat “I don’t have to defend Labour – I’m not a member of Labour or any other party”

… I don’t think Balls meant Labour has embraced all the cuts just because it has recognised that, like it or not, they’re happening; and that, like it or not, come 2015, we are still going to be in the economic doldrums as a direct result of Tory policy and will not therefore have the resources to immediately reverse all Tory policies, and the harm they’ve caused. It may even be realistic to say in some cases, that he would not wish to reverse cuts – 2010 after all was not a perfect example of what government should look like and any realist would recognise that.

http://www.taxresearch.org.uk/Blog/2012/01/16/how-labour-has-to-tackle-cuts/

For Michael Meacher, it crosses a red line

Why did Balls say this anyway?   He didn’t have to make any such statement at all.   The alleged reason – that it’s necessary to swallow the entire Tory scorched earth policy in order to gain credibility – is absurd.   In fact the exact opposite is true – the Labour Party will never gain credibility whilst it continues robotically to parrot the Tory line… The only plausible explanation is pressure from the Blairite majority behind him.

http://www.michaelmeacher.info/weblog/2012/01/what-is-balls-up-to/#more-3347

The Conservative responses have been completely predictable and will not be much rehearsed here.  The much, more interesting responses to the Balls/Miliband relaunch come from approving voices, such as Adam Lent, who is a co-author of ‘In The Black Labour’:

Those who welcomed the publication of In The Black Labour just over a month ago will be cautiously relieved to hear the speech Ed Miliband delivered this morning. At last, this is a leader who is placing a commitment to deficit reduction at the heart of Labour’s message.

…That doesn’t mean adopting [Government cuts] over precisely the same timescale or in the exactly the same form but it does mean, given the size of the UK’s structural deficit, acknowledging that Labour has a very similar mountain to climb on fiscal matters as the coalition.

… Further ideas about how a Labour Government would be held to those rules by an independent body such as a strengthened Office for Budget Responsibility should also be part of this policy shift.

… The reality is if Labour is serious about a major shift in spending priorities to promote jobs, growth and inherent fairness in the economy, then the party will almost certainly have to face up to the need to save money in the big spending areas of welfare, health, and pensions.

… In short, the voters need to know that if the government won’t get British business fighting fit and ultra-competitive for this new ‘Asian Century’ then Labour will have to do the job

 

In other words, Adam Lent, welcomes Ed Miliband’s speech as indicating a return to TINA, the tenets of neoclassical economics and the neoliberal capitalism of New Labour.  The priority is ultra-competitive British business, with the withdrawal of the state from public services, a real reduction in UK wages, and the handing over of control of budgets to an undemocratic, unelected body like the OBR.  The underlying assumption of the very name ‘In the Black’ is that the so-called structural deficit must be eliminated, budgets balanced and ‘fiscal constraint’.

MMT Bill Mitchell assesses the contradiction of the LP calling for ‘fiscal constraint’ :

The dominance of “fiscal constraint” is a fabricated neo-liberal agenda without any basis in an understanding of how the monetary system actually works. It is an agenda that is part of a theoretical framework that extolled the virtues of the so-called “self-regulating” market and put pressure on governments to deregulate and relax the official oversight. The very pressure that Gordon Brown admitted he caved in to.

It is the framework that created the dynamics that manifested as the crisis and is now causing the crisis to endure at great cost to various segments in the population.

It is the framework of financial market hegemony. It is hardly an appropriate framework for “the left” to be meekly accepting as the rules of the game.

http://bilbo.economicoutlook.net/blog/?p=17681

Unsurprisingly, Len McClusky, general secretary of Unite the Union, would largely agree with such an analysis, and writes ‘Ed Miliband’s leadership is threatened by this Blairite policy coup’

Ed Balls’s sudden embrace of austerity and the public-sector pay squeeze represents a victory for discredited Blairism at the expense of the party’s core supporters. It also challenges the whole course Ed Miliband has set for the party, and perhaps his leadership itself. Unions in the public sector are bound to unite to oppose the real pay cuts for public-sector workers over the next year. When we do so, it seems we will now be fighting the Labour frontbench as well as the government.

http://www.guardian.co.uk/commentisfree/2012/jan/16/ed-miliband-leadership-threatened-blairite-coup

Len McClusky concludes, ‘This confronts those of us who have supported Ed Miliband’s bold attempt to move on from Blairism with a challenge. His leadership has been undermined as he is being dragged back into the swamp of bond market orthodoxy. And this policy coup may not be the end of the matter. Having won on the measures, new Labour will likely come for the man sooner or later. And that way lies the destruction of the Labour party as constituted, as well as certain general election defeat in my view.’

 

So, it seems that any conspiracy theory would need to not only explain the apparently bizarre volte face of Ed Balls, at the very point when George Osborne’s policies are falling disastrously apart, but such a theory would also need to offer explanation as to the desirability of alienating the Unions, Public Service workers, core voters and Left-wing MPs.

So what is the basis for the conspiracy theory?

 To begin, we need to return to just before the 2010 GE, when Tribune magazine published a story which seemed to explain Labour’s lack lustre campaign organized by Peter Mandelson; a campaign almost designed to lose the re-election of Gordon Brown.  Mark Seddon wrote of this, following the LDs going into coalition with the Tories:

‘What of the New Labour project? The 2010 general election ended the first part of the dishonest construct. The second part is now stillborn. As Tribune and others reported, Peter Mandelson, Andrew Adonis and others were furtively busy behind the scenes during the election campaign, opening lines of communication with Nick Clegg. The proposed Lib-Lab coalition was supposed to bring realignment of what is loosely described as the centre left. The new construct, after electoral reform, would have been an amalgam of those who have spent the past quarter century disposing of Labour values and whose paltry vision was of a new party without the trade unions.’

http://www.tribunemagazine.co.uk/2010/05/how-to-rescue-the-labour-party/

In other words, the new New Labour project was to complete the separation from the TU’s and the left, with a view to forming a new Centrist party with the LDs; David Miliband being the leader-in-waiting.  This was scuppered by the betrayal of Nick Clegg and the Orange bookers when they went into a full coalition with the Tories; followed by the election of the wrong brother to lead the LP.

The latest incarnation of the conspiracy theory is that Mandelson undaunted, continues to lay the groundwork for the removal of Ed Miliband and a return to the New Labour project, followed by the formation of a new party with the LDs, capable  ‘of being in power in perpetuity‘. This might well be a very attractive option for the electorally decimated LDs.

The aim would be for the Left and the TUs to abandon the LP, so that the valuable real estate, data bases and infrastructure would remain with the ‘Centrist’ party thus hobbling the formation of a new party of the Left.  In this way, all the hard work and the Constituency buildings paid for by generations of Labour activists, Unions and LP supporters would be ‘stolen’ by  a party which bears little resemblance to the core values of the original worker’s party.

So what is the evidence for a conspiracy against Ed Miliband, mediated by Lord Mandelson and his think-tank, Policy network?

(1) The right wing commentator, Guido Fawkes, has no doubts of the links:

For the second time in a month Peter Mandelson’s think-tank, Policy Network, has launched a policy salvo against the direction the Labour Party is taking under Miliband. Mandelson privately is contemptuous of young Ed, these high-minded wonkish policy exhortations are the respectable manifestation of that contempt.

… They also urge Miliband to abandon his “predators and producers” rhetoric and ”put forward a more convincing strategy for private sector growth than the Conservatives”.

http://order-order.com/2011/12/29/second-policy-salvo-against-milibandmandelson-backed-think-tank-launches-another-broadside/

(2) Owen Jones reported that:

This latest surrender to the Tory cuts agenda comes after a protracted struggle at the top of the leadership. One faction argued that, once you started specifying cuts, there would be a loss of focus on their deflationary impact, and that the Tories would come back for more and more detail on Labour’s spending plans. We now know this argument has been decisively defeated.

Arch-Blairite Jim Murphy – who harbours ambitions to stand for leadership should Ed Miliband fail – began rolling out the new strategy earlier in the month by calling for Labour to avoid ‘shallow and temporary’ populism over spending cuts, setting out his own proposed cuts as an example to his colleagues. The equally devout Blairite shadow education secretary Stephen Twigg has partly endorsed Michael Gove’s attacks on the scrapped Building Schools for Future programme, and has outlined £2bn of his own cuts. And Liam Byrne has committed Labour to a renewed attack on the welfare state, currently being hacked to pieces by the Government. I bet the word ‘vindicated’ will be used liberally around the corridors of Conservative Campaign Headquarters next week. http://www.newstatesman.com/blogs/the-staggers/2012/01/labour-cuts-tories-shadow

(3) The sustained media attacks on Ed Miliband’s leadership qualities, lack of energy and even his looks.  The Guardian in particular were notable for their undermining articles.

(4) There are briefings from various unattributed sources that David Miliband is now backing his brother against the media attacks, and might consider returning to the shadow cabinet. This may be so, but it would also put the ‘Runner-up’ in poll position were Ed Miliband to ‘decide’ to stand aside.

(5) Peter Mandelson surprised Andrew Marr, in a recent television interview, by indicating that he still hoped to play a part in national politics.

(6) LD blogger, Richard Morris noted in the Staggers http://www.newstatesman.com/blogs/the-staggers/2012/01/shadow-chancellor-balls-course:

… It’s been Balls over the last few months who’s been leading the doe-eyed flirting with us Lib Dems. What better way to lay the groundwork for a future potential pact, than to accept that all that has gone before cannot be undone? It’s like the shadow chancellor is gearing himself up to come over, give us a big hug and say ‘what’s past is past’.

It is unclear, how many ‘games’ are being played out in this battle for the survival of the Labour Party… but make no doubt this is about survival of the Labour Party.

Is Ed Balls, playing the 96/97 game of promising to match Tory cuts ‘to restore economic credibility for the LP’?  Certainly, his current take is very different from his Bloomberg speech of 2010.  Is Ed Balls, wanting to further Yvette’s prospects, or is he actually playing ‘triangulating’ the Blairite rump, in concert with Ed Miliband.

Is Ed Miliband really so naïve as to believe that a compromise can be achieved with the Blairite PLP.. or has he been keeping his ‘enemies close’ by appointing so many ultra-Blairites as Shadow Cabinet ministers? Could this be intended to be Ed Miliband’s Clause IV moment?

The only specific thing that seems completely certain for the LP, is the vulnerability of Ed Miliband’s new policy direction, the grassroots and the TU link. For the UK as a whole, Michael Meacher makes the consequences clear:

What makes all this so unconscionable is the elephant in the room.   The top 1% (300,000 persons) currently have an income of £150,200 a year (£2,888 a week), but no cap is being put on either their pay, incentive schemes, stock options, dividends, or bonuses.   The top 0.1% (still as many as 30,000 people) currently get on average £1,179,900 a year (£22,690 a week), but are still laughing all the way to the bank.   The richest 1,000 Britons, according to the Sunday Times Rich List, in the last two years alone got richer by £137bn (yes, billion), enough to pay off the entire budget deficit themselves alone, yet are making virtually no payback at all for the financial crash and economic recession many of them caused.   Justice, Ed Balls, is what the Labour Party is about, not sucking up to the Tory party or their Blairite friends.

http://www.michaelmeacher.info/weblog/2012/01/what-is-balls-up-to/#more-3347

On a personal level, I am sick to death of all the double-speak and machinations that seem to have reached new levels in the past 20y of New Labour.  We need a ‘Clement Attlee’ to repeat the trick of putting Herbert Morrison’s grandson and all his ‘fellow travellers’ back in  their Box.  Its still not too late for Ed Miliband to do exactly that.

We have a Tory/LD government, that is more vicious and devastating than Margaret Thatcher’s; there is a global banking crisis, there is unaddressed climate change and the consequences of running out of oil. These are the real battles for real people, and adherence to a neoliberal ‘ framework that created the dynamics that manifested as the crisis and is now causing the crisis to endure at great cost to various segments in the population.’ is not the answerThe ongoing struggle for power by the Blairites ( and possibly others) should be firmly squashed by the democratically elected leader of the LP.

(1)  http://labourlist.org/2012/01/ed-balls-speech-to-the-fabian-society/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LabourListLatestPosts+%28LabourList%29