Recipe for Ruin: TTIP the Transatlantic Trade and Investment Partnership

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John Hilary, Executive Director of War on Want, introduces TTIP, the free trade and investment agreement being negotiated between the EU and USA; talk given to Friends of Le Monde Diplomatique at Café Diplo, London, 4 November 2013

StopTTIP is the UK part of an international campaign to oppose the TTIP.  The following information kit, about the US/EU Transatlantic Trade and Investment Partnership (TTIP), was compiled on behalf of StopTTIP campaign by Linda Kaucher.         

Their e-list can be joined via:

StopTTIP-request@lists.riseup.net

 

 a)  The US/EU Trade and Investment partnership (TTIP), called Transatlantic Free Trade Agreement (TAFTA) in the US, is a bilateral ‘trade’ agreement between the US and the EU.  (The EU shifted from a primarily multilateral WTO focus to a bilateral agreement focus in 2005).  The TTIP goes much further than any previous EU ‘trade’ agreement in deregulating, in establishing the rights of transnational corporations and in undermining the ability of governments to control corporations.  It is set to completely change our society, and is already in process, as with the NHS.

 This agreement was formally launched at the G8 meeting in July 2013, but has been in process for much longer.  The decision to launch the agreement supposedly involved waiting for a final report from a ‘High Level Working Group on Jobs and Growth’, though it was obvious that the recommendation would be for a free trade agreement.  Although information about the ‘HLWGJG’ was not easily obtained, there was actually no membership list for this group and the ‘decisive’ report was just produced by the usual EU and US trade bureaucrats.

The WTO Doha Round ground to a halt because in the context of the World Trade Organisation, developing countries were able to join together to resist the demands of western governments and the transnational corporate agenda.

So in 2005 big business pushed the EU to change direction with its trade policy.  Peter Mandelson was Trade Commissioner and the EU Trade Commission produced the Global Europe document, mostly a copy of a business lobby document, and the EU shifted to pursuing bilateral and regional trade agreements.

The EU is now either considering, negotiating, or has completed free trade agreements with most countries of the world.

b)  In parallel to the transatlantic TTIP, there is a Trans Pacific Partnership agreement (TPP), with similar aims and inclusions to the TTIP.  The US is party to both. 

 The twelve countries in the TPP are Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico New Zealand, Singapore, Peru, Philippines, US, Vietnam.  As at December 2013, the TPP could be finalised very soon, unless any of the 12 included countries reject it.

c)  ‘Trade’ and ‘international trade agreements’ are different.  While most people would consider trade to be good thing, international trade agreements give rights to transnational corporations while reducing states’ rights to regulate them, thus reducing democracy.

Tariffs on goods between the US and the EU are already minimal, so the TTIP won’t make much difference in that regard, though this the aspect ‘trade’ deal that is often emphasised.

Trade-in-services liberalisations, talked about much less in relation to trade agreements, give corporations rights.  The services categories, as defined by the WTO, are Business, Communication, Construction and Engineering, Distribution (includes food), Education, Environment (includes water, waste, nuclear waste), Financial, Health, Tourism and Travel, Recreation, Cultural, and Sporting, Transport and ‘Other’ – so it is a comprehensive list.

The usual way of including services in trade agreements, including in WTO agreements, was by countries listing the services that wanted to include.  This is ‘positive’ listing.  However, the EU is now using ‘negative’ listing, including in the TTIP, whereby countries list the services they want excluded from the deal.  This is much more encompassing and coercive.

International trade agreements are for the benefit of transnational corporations.  For the most part, domestic firms cannot use the provisions and do not benefit from them.   In fact trade deals set the stage for domestic firms to be squeezed out by transnational firms, for instance on public procurement contracting.

d)  All free trade agreements include goods and services and intellectual property rights but the additional elements of the TTIP that are the main part of the agreement are much more far-reaching.  These are regulatory harmonisationinvestor state dispute settlement and the intention to establish global rules via these trade agreements.

e)  ‘Regulatory harmonisation’ means ‘harmonising’ regulation between the EU and US downwards to the most lax form, across all areas, to suit transnational corporations.  This will mean the degrading of regulation on health and safety, food, environment, labour standards, privacy and much more, including financial services regulation.   The NHS is now already ‘harmonised’ with the US corporate-access public health model.

As this ‘trade ‘deal is a corporate agenda, regulatory harmonisation will clearly be in a downward direction, getting rid of what are called ‘trade irritants’ such as the EU’s bans on GM food, chlorinated chicken and hormone loaded beef’ and other higher EU health and safety standards.  In another example, ‘harmonising’ our public service broadcasting model with that of the US will mean big changes to the BBC.

State-owned enterprises are a particular, named target in this agreement.

f)  TTIP and TPP will also include Investor State Dispute Settlement (ISDS), allowing transnational corporations to sue governments directly for the loss of any future profits resulting from any government action, at any level, such as new legislation.  Where ISDS is already included in ‘trade’ deals, it is shown to lead either to big pay-outs from governments to transnational corporations or to deter governments from legislating – the ‘chill’ effect.

 There are many examples around the world of where ISDS has had or is having these effects, for instance where environmental legislation has not gone through because of the threat of legal action.  Canada failed to legislate for cleaner petrol, Germany is being sued for ending its nuclear power program, as is Australia for its cigarette plain packaging legislation.

 g)  TTIP and the TPP are intended to set global ‘trade’ rules which will eventually become the norms for the multilateral WTO, but formulated outside of a structure that allows other countries to jointly resist the corporate-dominated agenda.

The WTO Doha Round collapsed because within the WTO structure developing countries are able to join up to resist the western corporate-driven agenda.  This TTIP/TPP mechanism for achieving globalised trade rules bypasses that possibility.

h)   As with all bilateral ‘trade’ agreements, TTIP and TPP negotiations and agreement texts are secret until the negotiations are completed.

 The European Parliament, the European Council, member state parliaments and the public cannot see the content of TTIP negotiations and texts so as EU citizens we are not able to know the commitments being made on our behalf, and on behalf of future generations until negotiating is finished.  Yet business has privileged access to this information and to influencing negotiators to obtain what it wants from these deals.

There is no justifiable reason for the secrecy because negotiators on both sides, as well as business, know what is on the negotiating table.  The information is kept secret from the public, which might protest commitments being made on its behalf.

i)  International trade agreements are effectively permanent.

International ‘trade’ agreements are intended to tie future governments into neoliberal deregulation whatever their political persuasion.

What makes them effectively irreversible are Dispute Settlement Mechanisms, as in the WTO, whereby states can be challenged in relation to not keeping to their commitments, but much more so by Investor Protection Dispute Settlement whereby corporations can sue states directly for financial compensation.

For ISDS, arbitration takes place in courts of the corporation’s choosing, outside of the legal framework of the host state, with arbitration panels that make decisions on the basis of ‘free trade’ rather than any other values.

 j)  Although international ‘trade’ agreements are negotiated government-to-government (by the Trade Commission for EU member states), they are promoted and driven by transnational corporations, which benefit from states being bound by international trade law.

 The Commission’s ‘competency’ to negotiate international ‘trade’ deals on behalf of Member States was strengthened in the Lisbon Treaty, though this change was not part of the public debate on the Lisbon Treaty before it was passed and came into force.

Transnational firms and industry organisations have a great deal of access to the Commission to dictate what they want from the Trade Commission’s negotiating.  These include American lobbying organisations, such as the American Chamber of Commerce and US legal firms which, because of legal confidentiality, do not have to disclose on whose behalf they are lobbying.

k)  The main corporations are the same transnational financial service corporations that caused the global financial crisis.  The City of London is the world’s main international financial services centre, with transnational banks and insurance corporations, the Big 4 accountancy firms and other financial service firms based there.  The City of London has a major influence on the EU’s international ‘trade’ agreements.

 The power of the City of London Corporation and its front group, TheCityUK, in UK policy input into both EU internal and EU external trade policy, and in the formulation of UK domestic policy to fit with those broader ambitions, is only just now starting to emerge.

The City of London Corporation has a dual role, as a Local Authority for the City square mile and also as the organisation promoting the interests of the financial services industry and channeling its demands to policymakers e.g. in  both Houses of Parliament, in Brussels and at the World Trade Organisation (WTO).

In 2010, the City of London Corporation joined with International Financial Services London (IFSL), which had been the financial services lobby organisation for a decade, to initiate ‘TheCityUK’ as the financial services lobby organisation.

At that time, according to the website, there was a third partner, UK Trade and Industry (UKTI), a government department that straddles the Departments of Business, Innovation and Skills (BIS) and International Development (DfID).  This showed government and business joined at the hip.  However the overt involvement of UKTI was quickly removed from the website.  Now, senior civil servants from the main departments of Treasury, BIS and others attend meetings as ‘observers’.

Members of the committees of TheCityUK are from the biggest financial institutions and include individuals who have been main movers in deregulation and the liberalised international ‘trade’ agenda over the last 3 decades.

Considering the power of the City, its role in dictating policy, and its £90m budget to influence policy and public perceptions, it attracts relatively little attention in the public sphere and this is even more the case for its lobby organisation, TheCityUK.

One of TheCityUK’s committees is the Liberalisation of Trade in Services (LOTIS) committee, previously a committee of IFSL.   In this committee, the existence of which was secret until uncovered by Non-Government Organisation World Development Movement, senior staff from major financial service organisations dictate UK input into EU trade policy to the UKTI bureaucrats who attend for this purpose.  These bureaucrats then take that message directly to the fortnightly EU Trade Committee meetings of trade bureaucrats from all member states and the Trade Commission.

In this process, transnational financial service firms direct UK input into EU international trade policy, bypassing the parliament, the public and potentially even the UK government.

In Brussels, the European Services Forum (ESF), representing transnational corporations including US companies and working closely with TheCityUK, has privileged access to influence and direct EU trade negotiators, and to influence the European Parliament (EP) in respect of its role in ‘trade’, especially at the important committee stage via the EP’s International Trade committee (INTA).

l)  As part of the TTIP, a framework for the ongoing ‘harmonisation’ of all future regulation is being put in place with the setting up of a Regulatory Co-operation Council.  This non-elected Council will be able to override national and EU legislating.

This will make this a ’living agreement’ as the Trade Commission calls it, continuing to dominate government regulating into the future.

It will allow for the fast completion of the TTIP because this committee will be in place to continue the regulatory harmonization process, for all existing and new regulation.     

The plan is also for business ‘stakeholders’, including from the partner country, to have a role in the preparation of all future regulation.  So e.g. US corporations will have a say in all EU regulation and UK government regulation at the draft stage.   

m)  ‘Public procurement’, that is all government spending, is a major target in the international trade agenda.

Government spending is a big part of the global economy.

‘Public Procurement’, in trade terms, means transnational corporations gaining rights to access all government spending, including public services like the NHS.

This part of the trade agenda is largely hidden.

n)  The TTIP is being rushed through, with the aim of completion by the end of 2014.

There are specified ‘rounds’ of face-to-face negotiations, with the third round in mid Dec 2013.  These are a focus for media, although the content is secret.  However negotiations are actually continuous, some involving sections of  negotiating teams and some by digital conferencing.

o)  TTIP will include provision for the movement of temporary workers across borders.  This will inevitably mean cheap labour, and the undermining of working conditions and labour rights, especially in a context of overall degraded regulation. 

Companies moving workers temporarily across borders for services work, primarily as cheap labour, is a big part of the neoliberal international trade agenda.  It is called ‘Mode 4’ in ‘tradespeak’.   The EU includes Mode 4 provision in all of its ‘trade’ agreements, and stipulates skilled workers, that is with a degree or equivalent

Most EU trade negotiations are with developing countries and its Mode 4 offers can be an important factor in getting countries to sign up to trade deals and to help them ‘sell’ the trade deals domestically.

For instance, in the EU/India free trade agreement, negotiated for 5 years but now in an apparent lull, the single demand that the Indian government is making is for any Indian firm to be able to supply workers into the EU.  Leaked documentation affirms that the UK is the main and willing target for this cheap labour supply, and WTO frameworks, which are used generally, do not allow any numerical limits or quotas on Mode 4.  David Cameron has confirmed these conditions on his several visas to India as UK Prime Minister.

Officials at the very top of the Trade Commission repeatedly lie about the EU’s Mode 4 offers, for instance pretending that the India deal is about the Intracorporate Transferee (ICT) Mode 4 category, that is workers moved across borders by transnational companies to work within the same company when the Indian government’s demand in this deal is for any Indian firm to supply skilled workers, a different Mode 4 category.  The UK and the EU already have ICT commitments from 1995 under the GATS (General Agreement on Trade in Services) on ICTs – and this system is already abused in the UK.

This secretive EU/India free trade agreement, involving almost a third of the world’s population (India + EU) still being negotiated and could be signed any time.

Mode 4 will be a part of the TTIP. The US has withheld Mode 4 offers in its trade negotiating Instead it has a visa quota system for temporary skilled worker (H1B visas), a system that India has long tried to break through.

Mode 4 offers in the TTIP will not just apply to EU and US forms supplying labour across borders, but also subsidiaries from third country firms established in either of those partner states, supplying workers into the other partner state.  So, for instance, the many Indian corporations established in the UK would be able to utilise TTIP provision to supply workers into the US, or, if established in the US, to similarly supply workers here.

Yet a main claim of the TTIP ‘spin’ is that it will create jobs on both sides of the Atlantic, as in  the overused phrase ‘jobs and growth’.

p)  The Trade Commission has set up a special unit to attempt to control public perceptions of the TTIP.

 The Commission’s strategy document on this, produced for a meeting of member states representatives, has been leaked.  Secrecy, spin and technical language are usually very effective in keeping the trade agenda out of the media and out of the public sphere.  However this document acknowledges that there is unprecedented public interest in this agreement, requiring a spin strategy that is ‘radically different’ and tailored to individual Member States.  The strategy is about trying to put across a proactive message of claimed benefits and to avoid being forced into a defensive position for instance on regulatory degradation and ISDS, and also to ‘reassure’ third countries, particularly China (indicating there must be unease about the TTIP agreement in third countries).

The point is made that the co-operation of member state government propaganda machines is essential to this.

This means we are paying even more to be targeted by ‘trade’ propaganda.

There are observable signs of this radical strategy being enacted, including in the UK. One aspect appears to be a seeming climb down from an absolute hard line ‘free trade’ agenda, with some minor concessions (e.g. the reconsideration of UK plain packaging legislation) in order to manipulate public opinion for the big prize of the agreement.

UK Trade and Industry, the government department that liaises between the Corporation of London and the EU Trade Commission to ensure that the financial services industry gets the trade agenda it demands, is also now placing large ads in newspaper, paid for from the public purse, to obliquely promote the benefits international trade.

q)  Once TTIP negotiations are completed, the European Parliament will only have the right to say yes or no to the agreement, with no amending. It will then, as with all EU ‘trade’ agreements, be provisionally implemented before it comes to member state parliaments for ratification.

 The European Parliament can hardly be an effective democratic mechanism when so few people know who their MEPs are and know even less how they vote.

Aside from that systemic failing, the European Parliament has limited powers.  And in regard to trade agreements, its power of assent on trade deals means that the Parliament can only vote for or against the deal, at that late stage.

r)  In the US, the government is seeking ‘Fast Track’ provision or Trade Promotion Authority (TPA) from the Congress.  If granted, US representatives will similarly only be allowed to pass the agreement or not, without amendment.

 The vote on this is likely to be in January 2014 and opposition to it is growing.  US trade deals have only ever gone through under Fast Track.

s)   The WTO is being used in an ongoing way to further the deregulation agenda.

It is important to recognise that the WTO is subject to the same power plays of transnational corporate forces that dominate EU external trade policy, internal EU policy and UK national policy-making.

Apart from the minimal part of the Doha Round agenda that was signed up in Bali in early December 2013, other important agreements are quietly proceeding within the WTO, without publicity.

There is a grouping of some WTO members within the multilateral WTO who are signatories to a plurilateral Trade-in-Services agreement (the TiSA) for which the intention is to gradually coerce other countries to join, towards a global services agreement, a similar strategy as that intended for the TTIP and the TPP.  There is a similar mechanism and intention for the plurilateral Global Procurement Agreement within the WTO structure.

Resources

EU Commission’s (leaked) mandate from EU Council to negotiate TTIP

http://www.s2bnetwork.org/fileadmin/dateien/downloads/EU-TTIP-Mandate-from-bfmtv-June17-2013.pdf

EU Commission’s (leaked) PR strategy “Communicating on TTIP” http://corporateeurope.org/trade/2013/11/leaked-european-commission-pr-strategy-communicating-ttip

EU Commission’s (leaked) concept paper on regulatory coherence

http://corporateeurope.org/sites/default/files/ttip-regulatory-coherence-2-12-2013.pdf

Corporate Europe Observatory’s analysis of the regulatory coherence document  http://corporateeurope.org/publications/regulation-none-our-business

George Monbiot articles on TTIP:

http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy

http://www.theguardian.com/commentisfree/2013/dec/02/transatlantic-free-trade-deal-regulation-by-lawyers-eu-us

Big business control of UK policy-making,including the UK government White Paper on Trade :  http://www.theguardian.com/business/2012/jul/10/brittan-cameron-increase-skilled-foreigner

Why the deficit myth is a useful deception

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Why the deficit myth is a useful deception

It is often difficult to understand the economic-speak into which so many expert-explanations seem to lapse.  I imagine that I am not alone so I will share a version of the explanations that make sense to me.  Unfortunately, I no longer remember everyone that I should credit.. apologies.

The deficit is the putative shortfall in government tax receipts or ‘income’ relative to its ‘spending’.   The words ‘income’ and ‘spending’ are deliberately put into inverted commas because George Osborne and his ilk would have us believe that the UK budget is like our own individual household income and spending. (To be fair so do most mainstream economists.)

This generates an extremely useful word confusion because we all know the consequences of households getting into more debt than they can afford.   In the absence of a real analogy, ordinary people are easily persuaded that government must cut ‘spending’ which of course is the ultimate ideological goal of the tea-party Tory neofeudalists.

However, government ‘spending’ and ‘income’ are nothing like household spending and income.  Furthermore, the word ‘deficit’ itself consciously, and unconsciously, invites the belief that it is a ‘bad thing’ that must be ‘sorted out’.   Again for emphasis – the term ‘deficit’ in this context does not mean the same as it would in a household.  Bill Mitchell proposes that all ambiguous macroeconomic terms have to be reframed so as to undermine the ideological metaphors of the neoclassical consensus.  He proposes that all statements be qualified as in, for example, ‘The government deficit rose and generated higher levels of wealth for households and firms.’

Screen Shot 2013-12-08 at 20.05.42

http://www.youtube.com/watch?v=w2JwUKEUdPY#t=302

The deception that arises from the deficit myth is that the government ‘spending’ more than it receives in tax is detrimental and holds back economic recovery – hence the argument for the cuts and austerity.

In order to understand why the deficit fears are just hype, it is helpful to look at how money and tax have historically been used to control and direct the behavior of populations.  For example, British Colonialism in South Africa.

Essentially, the motivation for invading and colonising a foreign country is about land – new land for settlement, agriculture and to exploit the foreign country’s natural resources.  All of these require a substantial labour force.

Obviously, the colonialists could have tried to import all the necessary workers (as the US has done) but the most practical quick solution was to use the indigenous population.

The problem was how to get the indigenous population to plough the fields or go down the mines to dig for gold.  Why would people, who had been living and surviving perfectly well for generations, want to give up their way of life to work for the colonialists?  Not only was the work demanding and uncongenial but their own self-sufficiency would be threatened.

Basically, there are three possible answers:

Offer high wages… not only would that be beside the point of colonising in the first place but (initially at least) money would only be an inducement if it could be spent on some stuff or service that the indigenous population wanted or needed.  No-one can eat bank notes.

Enslave the population and force them to work at gunpoint … but that in itself is quite labour intensive, requiring guards as gang masters, and generally incurs an inconveniently high mortality rate (as in the Belgium Congo).

The third option is much simpler…. create a currency and require the indigenous population to pay tax in that currency.

Warren Mosler has a neat routine which explains how taxing works.  He tells the audience that he is turning his business cards into a currency and that he will pay each of them, one business card, to clean the lecture theatre at the end of his talk.  The audience laugh until Warren Mosler adds that there will be armed guards at all the exits who will only allow individuals out of the lecture theatre if they pay a tax of one Mosler business card.  So now the audience has the choice of being trapped in the lecture theatre all night, or do the cleaning, get their business card ‘pay’ and be allowed to go home.

So by creating a Business card currency and enforcing ‘tax’ collection, Warren Mosler is able to control and direct the behavior of the audience.

The same system held in inducing the indigenous population to work for the colonists.  Those who failed to pay their taxes were imprisoned and could then be used as unpaid forced labour.  Either which way, the indigenous population were snookered.

Now the main point is that neither the colonists or Warren Mosler had to wait until the tax was collected before they could ‘spend’ their currencies on paying their workers.  In fact, it would have been impossible because there wasn’t a currency before they created it out of thin air. (The pound sterling became the standard currency of the Cape of Good Hope colony in 1825 … Before a unified South Africa, many authorities issued coins and banknotes in their own pound, equivalent to sterling.)

The Colonial and Mosler ‘governments’ had to ‘spend’ before the workers could pay their taxes.  Futhermore, the tax that was collected was quite irrelevant in determining how much the Colonial/Mosler ‘governments’ could spend.  If they needed more labourers, they just created more money.  The tax was not government income in the household sense.  The tax was simply part of the mechanism to get the work done and make the money flow.  In fact, after collecting, the tax receipts/business cards could just be thrown away .. the only cost would be the cost incurred in the actual manufacture of the bank notes/business cards.

Now in the Mosler currency system, the amount of tax received back would equal the amount that his ‘government’ created.. so there would be no ‘deficit’.

However, if someone wanted to ‘save’ a Mosler card memento more than they wanted to go home… there would be a ‘deficit’ of one Mosler business card collected in ‘tax’.  Nevertheless, the deficit would not be any problem to the economic system.  Warren would still have got the Lecture Theatre cleaned, he could print another set of business cards whenever he needed to, and the Mosler business card collector would have ‘saved’ his card to spend at a later date.

Essentially, the ‘deficit’ is a reflection of the total amount of saving, investment and employment that is occurring in the economy.  It is not something which has to be paid back.

Just as with the unilateral decision of the ‘saver’ of the Mosler business card:

‘It is the non-government sector deciding to save more than it invests that generates the government deficit’ (Neil Wilson cif).

Michael Burke provides the numbers to show that it is indeed the current non-government sector ‘saving’ (ie. not investing) which accounts for the ‘entirety of the prolonged crisis’.  It is estimated that private sector businesses are holding back £700+billions.  Effectively, there is an investment strike by the private sector:

The driving force of the slump remains the fall in investment, led by the fall in business investment. The fall in business investment alone more than accounts for the entirety of the prolonged crisis.

Michael Burke (and others) stress the necessity for the government to act as the ‘investor of last resort’:

Government could act to offset this by investing on its own account, if necessary drawing on the resources of the private sector to do so. Instead, the Coalition cut public sector investment by £6bn after Labour increased it modestly…. It is still the case that increased public sector investment is the only viable means of resolving the crisis that doesn’t lead to further misery for the majority of the population.

Neil Wilson writes:

Why is it so difficult for people to connect the dots… When money is injected into the economy it bounces around generating transactions and taxation. Anything left is saved by somebody and eventually ends up being swapped for Gilts.

Government spending pays for itself.  Each time every time.

It is, at least arguable, that Osborne knows that his policies on deficit reduction are a complete but ideologically useful fiction.  Generously, the Financial Times’ Martin Wolf wrote in response to the Autumn Statement:

“The government has been led astray by focusing on deficit and debt rather than the health of the economy.”

However, Professor Bill Mitchell does not mince his words and they can act as a conclusion as to why the deficit myth is a useful deception:

Structural deficits – the great con job!

… the constraints imposed by neo-liberalism are entirely ideological and came about from a concerted campaign to win the battle of ideas. There is nothing about deficits that should frighten international capital. In fact, capitalists will make higher profits in a fully employed economy than in a stagnant economy.

Update:

Important point made in comment’s thread by petermartin2001 

The question of inflation also does need to be answered. No economist, including Warren Mosler and Bill Mitchell, would say that the deficit didn’t matter. Although their argument is often deliberately misrepresented in that way. The argument at the moment should be that, as inflation isn’t the major issue at present, therefore the deficit isn’t the major issue either..

Its an argument which, as Bill Mitchell points out, doesn’t bother the more progressive of the capitalist class. They know they don’t make profits from low deficits if low deficits mean reduced business activity and higher unemployment. There’s no profit , or surplus value, to be made from an unemployed worker!

Reply:

I was trying to keep it simple. I did try working inflation into the Mosler business card model but it all got a bit surreal!

Inflation is only a problem when all the potential capacity of the economy has been reached which with our levels of unemployment/underemployment is not an immediate problem. In the words of Neil Wilson (filched from Cif):

‘five million without work that want it, education opportunities for our youth, limiting the excessive growth of house prices, and euthanising all the rentiers and oligopolists out there.’

I know that the OBR etc question that the UK has suffered a decline in capacity post 2008 but you know how iffy their predictions are.. and can’t see it being a problem when we need ‘a New green Deal’ to be zerocarbonbritain 2030!

References:

https://think-left.org/2012/08/25/why-does-the-structural-deficit-remind-me-of-libor/

http://www.youtube.com/watch?v=Z1uWVj0YJ3M

http://socialisteconomicbulletin.blogspot.co.uk/2013/11/a-milestone-reached-in-british-slump.html

http://bilbo.economicoutlook.net/blog/?p=2326

Why do politicians tell us Debt/Deficit myths which they must know to be untrue?

Welcome to Breadline Britain

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Welcome to Breadline Britain
from Gracie Samuels

With all the furore over energy prices and now water bills, it’s about time someone mentioned those who are forced to buy their energy through prepayment metering by the energy companies.

Often it is the weakest, the poorest and the most vulnerable in our society who are forced to purchase their energy like this. For example: The low-waged; the disabled; the elderly; the unemployed and single parents, those forced to live on benefits and also those “hardworking people” the prime minister talks so glibly about who are struggling with the soaring cost of living. These are the people who are existentially being hit by these price hikes much harder than people who pay directly by direct debit.

As these people have been placed on prepayment plans by their energy providers they will end paying more than the price hike for their domestic fuel bills. Prepayment means they will be asked to pay for their gas and electricity before they actually use it.

Those consumers who have been placed on prepayment metering have usually been placed on them because they cannot afford their energy bills or may have been late paying their bills on a few occasions. These consumers often have no choice and and the metre[s] will be installed by their energy providers whether the consumer wants them or not.

The energy companies take the view that they will not terminate supply for non-payment but will install a prepayment metre. Often the rate of gas or electricity consumption is set on an estimation of how much the consumer is likely to use, plus the metre is also set to recoup any debt owed to the company. So if the consumer buys £15 of electricity or gas on their card/key to top up their prepayment metre and they owe the energy company for a previous bill, the energy company will automatically take half of that payment to recover any arrears and for standing charges. The consumer may be left with as little as £7.50 for gas or electricity out of their original £15.00. This process will continue until the debt is cleared. So if the debt is around £100  it may take at least around 16 weeks to clear. That is 16 weeks of often the poorest, the disabled, the low waged, the unemployed and often some of our most vulnerable consumers of gas and electricity who are already experiencing fuel poverty being forced into even more fuel poverty while the debt is collected. Unfortunately the energy companies do not usually make adjustments for seasonal collections of debt, so the arrears could be being collected through the deepest of our winter months, exposing people to the risk of hypothermia!

Many of these metres are placed outside in awkward to reach places or inside in awkward to reach places making it very difficult for the elderly or disabled to reach. This also has hidden problems and dangers if the consumers does run out of gas for any reason it will mean relighting pilot lights on gas boilers before normal supply can be fed through to their heating systems, often people, especially the elderly and the disabled have great problems reigniting these pilot lights especially if they have back boilers as this means laying on the floor to reach the pilot light and this means they will be forced to sit in freezing cold conditions until someone can come and help them. (if indeed they have anyone that can help!)

This is not all, because these vulnerable people are on prepayment plans and metres, the energy companies say it costs more to collect their bills so people will usually pay more for their energy. if they cannot afford to buy tokens or re charge their card or keys then they will not have any energy. Also during the coldest months when people need to buy more gas and electricity to keep warm, then the more energy they purchase, the more of their money will be taken off of them to pay off their arrears.

There are also hidden costs, the nearest charging point may not be near and consumers will be faced with the additional cost of getting to their nearest charging point. If people are on both gas and electricity prepayment plans then the charging points for gas and electricity may even be located in separate locations adding to the problems.

What is the government doing about this very serious problem? ABSOLUTELY NOTHING! As usual David Cameron is standing by and allowing his friends the in the energy companies to make even more money out of our most vulnerable people.

Not only is Cameron and this hideous government doing nothing to help these people, they are actually making their situations worse by cutting their benefits, even though many of these people will actually be IN WORK!

Iain Duncan Smith at the Department for Work and Pensions has made these peoples lives intolerable in many different ways will be making it impossible for these struggling people not only to feed and clothe their families and themselves this winter, but to pay something as basic as their fuel bills will also prove impossible.The hidden costs of the Tories and Liberal Democrats welfare reforms are many and varied.

Bedroom Tax – thousands of people are now being forced to pay between £14 and £24 per week or between £56 and £96 extra per month out of their low wages or benefits for extra bedrooms if they are deemed not to be needed by the DWP. Many of these people are working on low pay or are disabled and need their bedrooms and thus far it has not created one single situation where it has actually helped anyone, there are no smaller properties for people to move into. It is one of the nastiest ill thought out, ill conceived pieces of legislation in the entire history of the British parliament. Yet still this government will not admit they have got it wrong and get rid of this ludicrous policy. (If the Labour party win the next election they have promised to repeal the bedroom tax) 96% of people affected by the Tories bedroom tax have nowhere to go, in effect they are trapped and are now falling into arrears with council for non payment of bedroom tax as well as falling into arrears with domestic fuel bills.

Housing Benefit Caps – Starting in July 2013 and earlier in some pilot areas, the government introduced a cap on the amount of housing benefit you can receive. At first, the benefit Cap will only affect those in receipt of Housing Benefit, however later, it could also affect those who are in receipt of Universal Credit. if the cap affects  you then your benefit will go down. Again this not only affects those who are entirely in receipt of benefits, it also affects those on low wages who receive help with their rent and council tax.

Working Families Tax Credit Cuts – Due to government changes the new rules on working tax credits from April 2013 will hit around 212,000 low income families according to information published in the House of Commons Library. This will reduce income on average by around £2,600 per year. This affects ALL those “hard working people” that David Cameron keeps talking about. Up until now providing one partner works at least 16 hours per week, they would be eligible for tax credits, but now couples will need to work at least 24 hours between them to apply, with one partner working at least 16 hours. It means that “hardworking families” will see their incomes fall by around 30%.

Council Tax benefit cuts – Are forcing people to stay on the side of the law or to break it in order to feed, liable for charges between 10% and 30% of the full bill.  Again many of these people are IN work earning low pay and have been forced into this position by this government. How much money are councils losing in non payment and in chasing people for payment? how much money is taking all of these people to country costing the country? How are people already struggling to live going to manage having to pay higher fuel bills and some are paying the bedroom tax and some are also now being charge council tax on top of everything else.

People Queuing outside Peterborough Magistrates Court
Answering Summonses for non payment of council tax.
It’s not they won’t pay it is because they CAN’T pay!

How will they manage to clothe their families and heat and light their homes? More than a 100,000 people have been issued with court summonses for non payment of council tax. Many people whom have never been in council tax arrears in their lives before now suddenly find themselves in debt owing large amounts and hundreds are turning up on council office doorsteps to protest, or are being forced to form queues outside Magistrates courts where they will be tried and fined EXTRA money for non payment of council tax bills. Most of the people who are being fined do NOT have the money to pay the bill in the first place which is why they are now being forced to court. An estimated 1.9 million who did not have to pay council tax before the changes now find themselves deeply in debt with their incomes cut and no way of paying for soaring food prices and soaring energy prices.

As you can see some of David Cameron’s and the Tories and Liberal Democrat government’s “hardworking families” can be clobbered at least 4 times each and the total effect on their weekly incomes will be absolutely devastating, can anyone in this absolutely ludicrous insane narcissistic government please explain how on top of all these cust, people are going to be able to pay to keep their homes warm and lit? How will all those on prepayment metres cope with the soaring costs of energy on top of all of these cuts?

Why isn’t someone doing something about the energy companies charging vulnerable people MORE per unit of energy ABOVE the price everyone else pays?

The devastating verdict is in just one year this Tory led Coalition Government has pushed a million people into absolute poverty and all the progress the previous Labour government made in tackling relative child poverty has ground to a halt. In their first year this Government have pushed a million people into poverty and it is getting worse.
Now more than 5 million people in Britain are being paid less than the minimum wage, thanks to the Tory and Lib Dem Coalition Government’s naked attack on peoples living standards and their deliberate driving down of wages.

How are these people going to afford to heat and light their homes?

A recent Oxfam report says that austerity will drive more than one million children into poverty. The Oxfam report says George Osborne’s cuts and tax rises are “massively increasing” inequality in the UK and the Government’s austerity policies will push a further 800,000 children into poverty. Oxfam warns that by 2020  there will be an additional 800,000 children – up from 2.3 million at present – and 1.9m more adults living below the breadline.

How are these people going to afford to heat and light their homes?

Food Banks – Over 350,000 people received emergency help from the Trussell Trust food banks between April and September 2013. Inquiries  for help at foodbanks has tripled this past year. The level of poverty and deprivation in the country is not acceptable, it is scandalous. Michael Gove should hang his head in shame for accusing people of not managing their money properly, they have no money to manage he and his government have seen to that! And his wife filling her fridge and cupboards with junk foods throughout the summer and writing about it is just callous and shows how out of touch this hideous government is.

The Trussell Trust has also reported that people have been giving back items that need cooking because they cannot afford the gas or electricity to cook them, this is an absolute abomination, we are the 7th richest country in the world and we are forcing the poor, unemployed, the elderly, the disabled and the vulnerable to pay for the greed of the bankers.

And what is George Osborne’s answer to this while Ed Miliband is fighting the Government and the energy conglomerates to try and get a better deal for people? George Osborne is away with the fucking fairies in the EU taking them to court to safeguard bankers mega bonuses and just to add insult to injury, Osborne is forcing the taxpayer to pay over a million pounds in bankers legal fees!

The government is grabbing money from poor people hand over fist at the same time as they have given a huge tax concessions to millionaires handing them at least a £100,000 cheque tax cut. I bet they do not have to worry about turning the heating on, or worry about having enough power to cook the food a food bank gave them!

Today it is reported that cabinet ministers have been claiming thousands of pounds for energy costs, while Tories are all in it together!

Nadhim Zahawi laughing with the PM
after the millionaire claimed £5882
back in energy costs

 Our poor and vulnerable are freezing cold and cannot cook their food, and one millionaire Tory Nadhim Zahawi claimed  £5882 off of the taxpayer in just 12 months, more than four times the average household bill! Yep those –

I am so glad they think the situation they have caused in this country to be so funny, they laugh while millions struggle in despair and the winter hasn’t even started properly yet!

Someone needs to do something and do it fast, if they do not then people are going to die of starvation and hypothermia this winter.

And why are the energy conglomerates charging people with prepayments metres MORE for their energy? It is a bloody disgrace!

Why are many of WW2 generation worried about the rise of fascism?

Quote

At a time, when those British soldiers killed in war are remembered, it is salutary to focus on why many of the WW2 generation are so nervous about the parallels between the 1930s and now.

“What no one seemed to notice,” said a colleague of mine, a philologist, “was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know it doesn’t make people close to their government to be told that this is a people’s government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing to do with knowing one is governing.

 What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could understand it, it could not be released because of national security. …

 This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter. 

 ’They Thought They Were Free: The Germans 1933-1945′ – Milton Mayer  University of Chicago Press. Reissued in paperback, April, 1981.

Does that sound familiar?

Nevertheless, David Malone updates to the current era:

‘Repression is so last century.’

Why repress when you can simply drown it out.  All it takes is for the media outlets to be owned by a few powerful and like-minded friends.  A few media moguls and corporate giants, whose plastic pundits raise their voices while the dolly bird presenters flash their thighs.  It’s all so full throttle and frantic, and charged with desire and greed.

Anyone who disagrees is a conspiracy theorist.  Anyone who breaks ranks is a whistleblower and whistleblowers are domestic terrorists, dysfunctional loners with personality problems and axes to grind.

When the truth is vilified, hunted, gagged and goaled, then the State has chosen to go to war with the nation.

http://www.golemxiv.co.uk/2013/06/secrets-and-lies/

Bernadette Meaden agrees:

When the history of this particular period is written, people will marvel at what the Conservatives have achieved. To lose an election, scramble into office, and then go on to change society so significantly in a few short years shows, it has to be said, quite some chutzpah….

It is so much easier for a government when Ministers can tell lies which go unchallenged, become accepted ‘facts’ and are repeated ad nauseam to justify ‘difficult decisions’. Perhaps the classic example of this is Grant Shapps’ widely publicised statement that almost one million disabled people had dropped their benefit claims when tests became tougher. This was completely untrue…There was an effective media blackout on this development.

http://www.ekklesia.co.uk/node/18586

David Malone adds:

Our ‘Betters’ have found Goebbels was wrong.  You don’t have to protect the people from the consequences of the lies you tell them, as long as you can blame those consequences on someone else.  On unforeseen global economic forces, on conniving foreigners who devalue their currency, or terrorists or whistleblowers.  Or even the people themselves for taking on debts they couldn’t afford or on ‘necessity’ and ‘precedent’ – the bond holders cannot be made to pay – it goes against international precedent.

http://www.golemxiv.co.uk/2013/06/secrets-and-lies/

That certainly sounds like George Osborne’s stranger-to-the-truth explanations.

On top of all this, we have the Big Brother revelations of Edward Snowden about mass surveillance.  (Goebbels eat your heart out.)  This should have been no surprise.  Zbigniew Brzezinski was writing, as long ago as the late 70s, about the problems for the power elite of controlling the masses in an age of information and communication.  David Malone again:

In a democracy rule is by consent. In a dictatorship it is by control.

Which do we have in the West?  It seems to me, it is no longer clear.  We certainly still have the rituals of rule by consent.  But behind the elected front men and women is a shadow state.  Its people ritually swear allegiance to those we elect.  They declare themselves there to serve and protect.  But when it is us they spend their time spying on, whose interests are they protecting?  Can you really serve those you do not trust?

In 2008 we discovered that behind the banking system we knew about, there was a vast shadow banking system whose size most of us never suspected.  In 2013 we have glimpsed not only the scale of the shadow state but the degree to which it, like the shadow banking system, is out of control and not working for us at all.

http://www.golemxiv.co.uk/2013/07/nsagchq-the-new-praetorians/

Chomsky of course has no illusions about our living in a Democracy.  He calls the present system RECD – really existing capitalist democracy – pronounced ‘wrecked’.  In other words, our ’democracy’ is government by the wealthy for the wealthy, a plutocracy.

In the work that’s essentially the gold standard in the field, it’s concluded that for roughly 70% of the population – the lower 70% on the wealth/income scale – they have no influence on policy whatsoever. They’re effectively disenfranchised. As you move up the wealth/income ladder, you get a little bit more influence on policy. When you get to the top, which is maybe a tenth of one percent, people essentially get what they want, i.e. they determine the policy. So the proper term for that is not democracy; it’s plutocracy….

 http://www.chomsky.info/talks/20130617.htm

 

In fact a number of analyses have identified that it is only a handful of individuals, fewer than 200, that ‘rule the world’.  Real News 24 writes:

Some people have started realizing that there are large financial groups that dominate the world. Forget the political intrigues, conflicts, revolutions and wars. It is not pure chance. Everything has been planned for a long time.

 … In short, the Federal Reserve is controlled by four large private companies: BlackRock, State Street, Vanguard and Fidelity. These companies control U.S. monetary policy (and world) without any control or “democratic” choice. These companies launched and participated in the current worldwide economic crisis and managed to become even more enriched…. The same “big four” control the vast majority of European companies counted on the stock exchange.

In addition, all these people run the large financial institutions, such as the IMF, the European Central Bank or the World Bank, and were “trained” and remain “employees” of the “big four” that formed them.

http://www.realnews24.com/the-large-families-that-rule-the-world/

Particularly focus on ‘It is not pure chance. Everything has been planned for a long time.’

The release of Margaret Thatcher’s cabinet papers from 1983, confirm that all this coalition government’s determination to dismantle and privatise the NHS/ public services, are just the end game that the Conservatives had in mind 30y ago.  We are experiencing ‘disaster capitalism’ as described by Naomi Klein.  The economic crisis caused by the banks in 2008 is being used to justify implementing IMF-style liberalization of the UK for the benefit of the transnational corporations.

In Europe, the ‘crisis’ is being similarly used to dismantle the welfare net and force through federalization.  The Brussels Business Documentary (Corporate Europe Observatory) charts the corporate capture of the EU, initially by the industrialists of the European round Table, and now by the vast body of lobbyists that rival the Washington contingent.

http://corporateeurope.org

THE BRUSSELS BUSINESS DOCUMENTARY

 

The next stage of neoliberal/neofeudal corporate supremacy is the rushing through (by 2014) of the US-EU Free Trade Deal, which will allow corporations to force governments to change any of their domestic legislation which is inconsistent with ‘liberalisation’… employment and environmental protection, banning of GM crops, and so on.

Michael Meacher writes:

‘It says a lot about democratic accountability that the most profound and far-reaching issues are not discussed in Parliament.   It was true of the decision in the UK to build the first atomic bomb.  It was true of the Multilateral Agreement on Investment in the 2000s which aimed to give the world’s rich countries the right to draft universal investment laws which would guarantee corporations unconditional rights to conduct financial transactions which could not be challenged by governments or citizens.   And it is true now of the Transatlantic Trade and Investment Partnership (TTIP) which US and EU trade negotiators are currently trying to bring to fruition.   It too, if carried through, will allow international companies to hold governments to account, rather than the other way round, if they believe that governments are introducing environmental, social or labour standards which unreasonably impinge on their commercial prospects.

Of course in selling the idea to the (gullible) public, not a word is said about this.   Instead we are told that it will increase transatlantic economic growth by 1-2% a year and that that will increase incomes by several hundred pounds a year.   What is not mentioned, even if you believe the salesman’s patter about the benefits, is that the increased incomes will accrue very largely to the holders of capital, not to ordinary folk to any noticeable degree.   But the real impact is felt on democracy.   There is a touching faith that everyone in the West accepts that democracy is the foundation stone of our society and culture and the immoveable basis of our rights for justice and redress.   But the capital holders, the corporate class, have never accepted this – and nor really have the ideological wing of the Tory party.’

http://www.michaelmeacher.info/weblog/2013/11/us-eu-trade-deal-is-next-stage-of-neoliberal-corporate-supremacy-but-not-discussed-in-parliament/

‘Fascism should more appropriately called Corporatism because it is a merger of State and corporate power’ – Benito Mussolini

Gramsci, imprisoned by Mussolini, wrote shortly before his death in 1937:

 ”The old world is dying away, and the new world struggles to come forth: now is the time of monsters.”

That was true then and is true now.

Addendum:

The academic, Lawrence Britt composed a list of 14 characteristics common to the fascist regimes of Hitler, Mussolini, Franco, Suharto and several Latin American regimes.  It is a frankly alarming list to read with the Coalition Government in mind.  http://rense.com/general37/fascism.htm

See also Think Left’s

Why should we be very concerned about the current US/EU Free Trade Agreement?