Politics is pretty depressing at the moment, as it becomes clear, the degree to which the 99% have been stitched up by the plutocrats. So in an effort to be more positive, we are reproducing a road map of how we might get to a fairer and more sustainable economic future – as proposed in the current issue of the ‘New Internationalist’.
The economy and markets are creations of human society. They exist to serve people. But deregulation and capitalist greed have allowed the banks and the finance sector to gamble with all our futures and profit from the crisis of their creation.
The past four years have shown us that governments, banks, their tame economists and unelected technocrats, cannot be trusted with our common future. Its up to us to put people first and reclaim what is ours. Its not only the economy that is at stake, but democracy itself.
Banks for People
Restrict the power of the finance sector and the size of banks so that none is ‘too big to fail’.
Socialise banks to bring them under democratic control. Make banks fully accountable public institutions that provide a public service, rather than big profit-seeking businesses.
Start a rapid and complete separation of ‘high’ street or retail banks from ‘casino’ investment banks to reduce the risk of contagion.
Force banks by law to lend to small and medium-sized businesses instead of amassing funds for non-productive speculation.
Support and encourage people’s banks, such as credit unions, mutual societies, green and ethical banks. Better that public money go here than to banks fixated on choosing big profits for their shareholders.
Re-regulate financial markets. Finance is a public asset, not just a plaything for the super-rich.
Ban dangerous financial instruments, such as credit default swaps (CDS) – think of them as economic weapons of mass destruction.
Approve no new financial products unless proved safe and socially useful.
Make the big shift away from over-reliance on the finance sector towards more sustainable and equitable activities.
Ditch the myth of ‘the wisdom of markets’ that led to ‘light touch’ deregulation and chaos.
Austerity
The current crisis was not caused by overspending in the public spending but by reckless risk-taking by the private finance sector, encouraged and permitted by government and by the reduction in real wages by corporate globalization.
The purpose of government is to meet the needs of the people – not to cut their lifelines. Austerity is a con trick, played by those with most against those with least. In many countries, austerity policies are not only failing but are actually harming economic recovery.
The Losers:
Workers – wages frozen, jobs cut, especially women in the public sector (more than three-quarters of the 327000 people who lost public sector jobs in the US between 2009 and 2011 were women).
Jobless – 200 million people around the world are unemployed, 45 million of them in the rich nations.
Young people – almost half of Spanish youth are now jobless.
Pensioners – pension age has increased in many countries and in Greece, pensions are to be cut by 20-40%.
Everyone needing health, education, or other public services.
The Winners:
The number of people with more than $1 million in cash rose by 7.2% in 2010.
The five biggest banks in Europe made profits of $36 billion in 2010.
Corporate sector profits in the US were up 25-30% since before the recession.
Tax the Rich
Recover the billions lost to the public purse each year from tax havens and loopholes – close them down.
Impose a tax on the international financial transactions (the so-called Tobin or Robin Hood tax). This could both slow down speculative activity and raise public revenue.
Increase taxes on the rich to at least pre-1980 levels. Make the overall effect of tax regimes progressive not regressive (as it is now).
Establish a maximum pay ceiling and ban bonuses. End subsidies for fossil-fuel producing industries.
Make corporations accountable to society – not just their shareholders – for actions that do harm. End the ‘fiduciary’ rule that requires shareholder companies to maximize profits no matter what social and environmental harm they cause.
Enforce transparency rules for payment between governments and corporations, and ban corporation donations to parties. Close the ‘revolving’ door and impose rules on politicians leaving office to work for corporations they used to regulate and monitor.
Expose and tackle the power of global corporations to lobby at the World Trade Organisation and skew trade rules in their favour, reinforcing trade imbalances and inequality between nations. Extend the rules of ‘fair’ trade to cover all trade.
Scrap Debt
Cancel all illegitimate (or odious) debts. Many loans were made irresponsibly: they are unsustainable, unrepayable and will have to be written off sooner or later.
Establish an independent debt workout mechanism that no longer puts creditors in charge.
Challenge the power of creditors to influence policy. They are the ones who are engaged in (and profited from) the high risk-taking that created economic chaos and are unlikely to be able to lead us out of it.
Close credit-rating agencies like Standard and Poor, or Moody (which are private companies in the pay of corporations, including banks) and replace them with independent credit-rating agencies.
Instead of bailing out banks exposed to sovereign debt, make available an equivalent amount of money in the form of grants to the people of the indebted country to stimulate economic recovery.
Grow Green and Sustainable Alternatives
Create a political and economic strategy that supports public services and a green approach to public spending. Develop green government bonds.
Make a massive investment in renewable energy and energy efficiency to end fossil fuel dependence. Help polluting industries to convert.
Embark on green ‘retrofitting’ of housing and green transport projects.
All of the above would create millions of jobs – one million in Britain alone. Already Europe’s green energy and transport industry employs 3.4 million people compared with 2.8 million in traditional polluting industries like cement, mining, iron & steel, gas and electricity.
A top priority for banks should be to lend to businesses and individuals with green projects and social enterprises that contribute to a greener, more democratic future.
Kick the addiction to ‘economic growth’ (based on debt, over-consumption and a collective failure to recognise ecological limits) and adopt economic and environmental sustainability.
Save and create Democracy.
We can learn much from the movements that have arisen out of the crisis. The Occupy, Indignants, Uncuts and trade union movements around the world are fighting for democracy as they resist austerity packages that are being pushed through without popular mandate in the interests of private capital. The same can be said of the protesters of the Arab Spring, who were spurred into action by soaring food prices, unemployment and lack of democracy.
Many around the world are striving not just to protect conventional democratic rights but to create a broader and deeper democracy through the participatory ways in which they organise. This new bottom-up and networked internationalism is offering energy, vision and alternatives to the current and ruinous system of global neoliberalism.
NI 450 March 2012
Think Left 