Jul 012012
 

All in it together?

As the frenzy surrounding the Jubilee celebrations dies down, and the inevitable hype of the European Cup has evaporated, we are only left with the Olympics to console us as a national distraction from our economic woes. Not that the Olympics will distract us for long mind, as the enforced and coerced straightjacket of global-corporate branding will give island Britain very little opportunity to express the wide and diverse range of its authentic voices. The Olympic message is pre-packaged, pre-heated and, quite frankly, nothing but naked totalitarianism.

Under the ideology of brand-management, the individual freedom of British communities to express themselves has been squashed. The Olympic Torch passes through Melton Mowbray on 3rd July, but what difference can a small market town like Melton make when the story is tightly controlled and managed by LOCOG? The organisers of the London Olympics wont dare let anyone deflect these local events away from the centrally defined message. This is a chance for London to share in the power of global super-brands alongside global corporate organisations. These organisations claim to be on our side, but don’t play any meaningful role in our communities. Coca Cola and MacDonald’s bring us better lives, they say, but once the torch has moved on, so will the super-brands.

The power of executive management, branding and global corporate organisations have defined Britain for some time now. Small elites of super-connected individuals have been able to ‘executively manage’ Britain with impunity. Spending and wasting billions on half-baked projects that have no meaningful checks and balances in place to provide accountability and stability. Since the 1980s British political life has been about how a tightknit clique of people can get to the top of the centralised state and exert executive control over the machine of government. To make it do what they believe should be in the interests of themselves and people like them. This was the model that the Labour Party accepted with New Labour in the 1990s, and which the Tories initially struggled to re-brand in the 2000’s.

The present attempts by Britain’s governing coalition of Conservative and Liberal Democrats to maintain this model of governance are looking shaky and increasingly fragile. This particular brand of politician wants to be treated like CEO’s for some international conglomerate. A conglomerate that is recognised for its brand identity only, but which is otherwise faceless and shadowy. The decision making process they use is opaque. While the rhetoric extols the heroic nature of ‘crucial decisions’ and ‘doing whatever it takes’, these are nothing but power-plays that boost the image of each politician’s individual prowess and executive autonomy. Their aim might not be sky-high salaries while in government, but they are likely to earn millions when they leave office. Their grip on power is justified, however, along the same terms as the CEO of many international corporations, in the name of the market and of ‘talent’. There can be no independent corroboration of their abilities, and we are told that there is no way to test if the two are not mutually exclusive.

Britain has been governed since the 1980s, off-and-on, by so-called strong leaders who have sought to express themselves through simple slogans. ‘The lady is not for turning’, ‘New Labour, New Britain’, ‘Vote Blue, Go Green’, and more recently ‘We are all in it together’. As the economy hovers, however, on the edge of a meltdown even worse than the great depression of the 1930s, it would be appropriate for us to reflect on what has brought us to this place. Particularly, it is time to start thinking about our self-delusions, those things that brought us to the point of self-imposed, reckless austerity being seen as the only answer to our economic problem. When in fact, all of the evidence is suggesting that austerity is leading us nowhere. In this maelstrom of self-delusion one phrase resonates and cuts-through more than any other. ‘We are all in it together’. And yet, recent events and news about the crisis in banking practices have convinced us that this is far from the truth.

George Osborne’s empty soundbite and slogan has been found out for what it is. It is a vapid and narrow papering. A veneer over the ideological dismantling of the British state and the imposition of the rule of one class over another – in perpetuity and without a single shot being fired. George Osborne minted this sound bite in order to justify the most extreme fiscal contraction the British economy has seen for many generations. The aim was to bind the British people into a neo-liberal drive towards a smaller state that would be founded on low taxes, individual reliance and hand-bag economics that equates good governance with simple moralism. Cameron, Clegg and Osborne banged on about how the country had ‘maxed-out’ its credit card, how we were next in line to be trashed by the financial markets, and how private companies would ride to our rescue and rush in to fill the gap that was being cleared for them with the dismantling of the state.

Never has so sudden an economic turn-around been imposed with such scant evidence. As Nick Cohen argues in today’s Observer, “Although it is easy to damn David Cameron, Nick Clegg and, above all, George Osborne, as boys doing men’s jobs, it is not true that they are incapable of taking bold decisions. In 2010, they took the audacious step of stopping Gordon Brown and Alistair Darling’s Keynesian efforts to nurse Britain out of the crash.”

So what is the starting point for getting us out of this mess? Actually there is a simple approach that can make effective headway almost immediately. Adopting, turning and using the slogan ‘We are all in it together’ as the battle-cry of a coalition of patriots, progressives and radicals. Cheering this slogan back at George Osborne and his clique would drown-out the message of the neo-liberals, who so plainly don’t want us to all be in this together. Adopting this slogan to challenge the powerful elites and corporate executives jetting around the world with impunity would serve as a reminder that corporate capitalism has a single purpose, and that is to serve society, and not the other way around. ‘We are all in this together’ resonates as an ideal that is clear, heartfelt and something that can be taken up by diverse communities of different backgrounds and different expectations, but who all recognise that the extreme individualism of the past should be consigned to the past.

There are calls for a debate about how we renew social capitalism as an essential part of our social democracy, our civic society and the moral fabric of our nation. To be sustainable this re-evaluation of our economic sustainability has to find wide-based agreement and support founded on a moral and ethical democracy that is transparent and fair. If we are all in it together, then bankers will face prison for their crimes alongside rioters. The powerful will have to negotiate and agree their freedoms along with the powerless. The global will have to negotiate with the local to agree their freedom of action. The short-term needs of industry will have to be negotiated with the long-term sustainability of the eco-system. And the Olympic ideal of peaceful competition without the burden of politics, religion, or racism might be achieved – only now we might want to include ‘corporate might’ within the core of these ideals as we wake up to the dangers of executive dominance and self-serving rip-off capitalism.

Jun 282012
 
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Rogue Trading?

Barclays Bank has received a record fine after trying to fix key interest rates. According to The Independent “Investigators from the US and the UK discovered that Barclays traders routinely manipulated one of the world’s most important interest rates, affecting everything from mortgage rates to the value of complex financial derivatives, all in the hope of increasing their trading profits and their own yearly bonuses.”

The Daily Mail reports that a series of emails examined by the Financial Services Authority “show how bonus-hungry traders promised each other bottles of Bollinger champagne to fix the figures that affect millions of homeowners and small firms.”
The Telegraph highlights the record fine handed out to Barclays Bank which was “fined a record £290 million for repeatedly distorting basic financial data which are used to set interest rates on millions of loans and other transactions around the world.”

At a time when many ordinary families and business are struggling, to find that the market has been rigged in this way is appalling. It’s time for a Royal Commission into Banking Practice to get to the bottom of this shady industry.

Jun 262012
 

Does Mervyn King Have a Clue?

The world around us is facing economic upheaval and uncertainty. Major European economies are being tossed around on the choppy waters of the financial markets as if they are nothing more than fishing boats caught in an extended winter storm. Despite all the effort to prove otherwise, austerity is providing no safe harbour for these battered economies, despite the many claims. The lack of growth across Europe has always been the real problem, but the fiscal conservatives are in perpetual denial. They are locked into a form of handbag economics that pays lip-service to household moralism but which misses the bigger picture and the greater dangers.

[The Governor of the Bank of England is today reported saying he doesn’t know when the recovery will take place. According to the Daily Mail King is reported saying “I don’t think we’re halfway through it”. If King doesn’t know perhaps it is time for him to move aside and make way for someone who isn’t so out of touch and has a better sense of what is going on?]

Times are getting harder for most people. Our cities are rapidly hollowing out. Our high streets are becoming ghostly, deathly even. There is little evidence that any recovery will start soon, and even if it did there is little chance that it will have an impact soon. Money is being stuffed into the banks, but the real economy is withering and atrophying. The jobs market is getting tighter, with more people dependent on part-time work. There is little evidence that companies are investing in people. The rate of company failure is constant and seemingly inexorable, while the rate of new business ventures is sluggish and anemic. It is a sensible question to ask, but would you invest in the British economy at this time given such an uncertain outlook? The ‘animal spirits’ of business entrepreneurialism are well and truly quelled and tamed. It’s batton-down-the-hatches time.

Almost in the same instant the government seems hell-bent on alienating young people. First came the cuts in Educational Maintenance Allowance, then the hike in fees for Higher Education, now comes the proposal from the Prime Minister to take away the Housing Benefits of anyone under twenty-five. Just when support from the state is most needed, all the talk is about withdrawing help and punishing people who need it most. The one lifeline that many people have when they are trying to get established is that they can move to a new part of the country and find work, safe in the knowledge that they have a cushion in housing benefit. It’s not the fault of young people entering the housing market that rents are extortionate and that affordable social housing is restricted. The locked-up housing market is impossible to enter unless parents make significant financial investments in their offspring. Further locking-in privilege and reducing the ability of ordinary working people to stand on their own.

Lets not fool ourselves into thinking that British social benefits are generous. They are restrictive, slow and inflexible. The great bulk of spending on social benefits goes to supporting pensioners, but it is the young who are getting it in the neck and are taking the blame. Before they have even started out they are having their hands tied behind their backs. The Tories often argue that it is unreasonable to leave our children with debt. What they don’t comprehend is that there is an even worse burden. Leaving our children in poverty now for the sake of not taking on any debt. Starving people of investment now is not virtuous, it is cruel and immoral.

At the same time the British banking system trundles on as if nothing has changed. There is little indication that the banking practices of the past have been revised or moderated. The big banks are still refusing to lend to small businesses and families as they try to manage exorbitant fees and restrictive credit ratings. The banks are unchallenged and unaccountable. The City of London remains the political force that sucks the life out of the British political class. Money and privilege are concentrated in super-conglomerates that cross international boundaries and don’t answer to anyone but themselves. Much of the practices of banking are corrupt and immoral, but we have internalised the promise of extended wealth and riches and turned-off our moral compass because we wanted to make a fast-buck. As Charles Ferguson argues “the new elite has obtained much of its extreme wealth not through superior productivity, but mainly via forced transfers from the rest of the world’s population”.

It’s time for two things to happen. Firstly, the Governor of the Bank of England, Mervyn King should be sacked and removed from his job. His complicity with the Conservative Party, now and in the run-up to the election in 2010, has been breathtaking. This is not a banker with an independent, evidence-based view, but a banker with an ideological axe to grind. It’s time that he went. The second thing that needs to happen is the establishment of a Royal Commission into Banking Practices. It is a scandal that no-one has gone to prison for crimes committed in the run-up to the financial crash of 2008. Evidence gathered through the commission should lead to criminal prosecution of those shady people, hanging in the background and never answerable to the public, parliament and the courts, but who have taken this country to its knees. The stated aim of the Royal Commission should include wiping out restrictive and class-based practices that keep the banking system in the hands of small cliques and oligarchs. How we establish a new democratic structure for finance and investment in this country will determine the kind of nation that we need to be.

Competing against China, India and the emerging economies will require an ethical standard that goes beyond our immediate short-term interest. We have to be fully integrated with a modern, ethical, equitable and fair Europe. Protectionism and isolation wont save us, but ethical sustainability will. And we have to practice what we preach. Universal welfare services for all, providing support and investment for the poor rather than blame and abuse from millionaires. A fair taxation system with everyone making a contribution according to their ability to pay. We laugh at Greece with it’s embedded patronage systems, but British society is more riddled with patronage and class-based division than at any other time in our history. It’s time we started to polarise this debate and make some clear choices, before something worse comes along that we will all regret for generations.

Apr 252012
 
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George Osborne – Double Dip Chancellor

The warning signs have been clear for some time, and yet George Osborne and David Cameron have chosen to ignore them. Now, even friends on the right are in despair over the economic incompetence of this shambolick government.

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1930s vs 2008 Recessions

According to Philip Aldrick, the Daily Telegraph’s Economics Editor “George Osborne will be wincing this morning. Applauded internationally for his austerity programme, at home he’s facing brickbats. Forget the pasties and the Granny Tax, though: Britain has double-dipped. The Chancellor’s insistence that the best stimulus he could give the country was low interest rates, driven by market confidence, has self-evidently failed. The UK is in recession again.”

Here’s what Larry Elliot writing in the Guardian says:

“In the past, even during the 1930s, recoveries have been well under way by now. This time, despite the massive stimulus that has been chucked at it, four years into the deepest depression of the post-war era Britain is going backwards.”

Adding that “Output is more than 4% below its peak in early 2008, living standards are falling and there is no sign whatsoever of the much-heralded rebalancing of the economy.”

Here’s what the New Statesman’s Economics Editor David Blanchflower said about Osbourne’s emergency budget in June 2010: “I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse”.

However, Mehdi Hasan makes the point in the latest issue of the New Statesman that “the Austerians won’t give up without a fight. They seem to have two tactics. The first is to blame the lack of growth on anything other than the cuts – be it the Euro crisis, the weather, health-and-safety regulations, the family dog, etc, etc.”

It’s time for Osborne to change plan, listen to wiser heads and start dealing with the lack of growth in the economy. We can’t pay off debt if we aren’t putting people to work and generating income. The Tory handbag economics that insists that we run the country like a household budget is wrong, and will continue to do serious damage to the country.