Its high time to tame the market

Well, at last a regulator has had the guts to say we should rein in 'free' market financial capitalism. Not only that but he said that much of what it does is "socially useless". Of course it is perfectly possible to argue that all it does is socially useless, and unnecessary to boot. Lord Turner, head of the Financial Services Authority (FSA), had the nerve to suggest that financial transactions should be taxed. It would be better if most of those transactions were eliminated all together, and lets not forget that it was 'light touch regulation by the FSA, lauded by Gordon Brown, that lead to the economic crisis in the UK.

Of course there were predictable howls of rage from the British Bankers Association and plenty of flak from so called 'economists'. I understand that Lord Turner is a wealthy man. That's good for him because his comments amounted to a resignation letter and I don't doubt that he will soon be receiving his P45. Deputy business Editor of the Sunday Independent Simon Evans weighed in with an article entitled 'Turners anitdote would kill, not cure, the city" - lets hope so. Evans is typical of the conventional business media hacks who marvel at the market in the good times, then expect the state (i.e socialism') to ride to the rescue when the excesses of greed threaten chaos. He says that "failing to save Lehman's last year was a terrible mistake" - but why should taxpayers be expected to prop up the rich who serve no socially useful purpose. Those who live by the sword should die by it. He then goes on to say "But I don't know how to temper the City's greed" and rubbish any idea of a Tobin tax.

Well Simon, some of us do know how to temper the greed of capitalists. The intervention by the state, in the UK to the tune of £1.4 billion of taxpayers money, was the right thing to do in the short term. The rotten system of financial capitalism needed to be propped up to prevent greater harm to the people of the UK. But that was a first step. It should have been followed by the nationalisation and break up of the banks. Along with mutual societies such as credit unions, the state, subject to democratic control, should have a monopoly of credit, and banking services. The financial services sector has had a history of malpractice and ripping off the British people. Remember the mis-selling of pensions and endowment mortgages, and the ridiculous charges that they levy on ISAs and overdrafts?

We are being taken for a ride. Capitalist banks are socially irresponsible institutions who believe they should only be answerable to the market and not wider society. When they crash we suffer the consequences. Of course the imposition of any tax on financial transactions in the UK would make these money grubbers flee abroad. That is what they always threaten to do if democratically elected governments don't do as they are told. That is why we need international socialism to bring these people down. We need to assert control over our own lives by putting democracy above commercial interests, and ending the domination of the capitalist exploiters. That is what socialism is all about.

The rabid free market right is bringing America down

Is America still a superpower? In military terms it still is but can the USA continue to be a dominant force politically and economically? Much depends on what happens in the next few years after the recent crash brought about by free market financial capitalism. The US economy is in dire straits and there is no sign of where a revival is going to come from - as I described in this post.

The great irony here is that those who would make America great are largely responsible for this situation. The rot started with the election of Richard Nixon in 1968, but really got going with the election of Ronald Reagan in 1981. Reagan's election ushered in a generation of domination of US politics by the free market right. Neoliberals - that is right wing Americans who adhered to the idea of American supremacy as a global superpower and the untrammeled operation of the free market - the Washington Consensus - through globalisation and bodies like the IMF and WTO - became the dominant force in American and global politics.

Reaganomics consisted of tax cuts for the rich, privatisation and de-regulation but also involved increased military spending and budget deficits. Taxes for the rich were lowered from 70% to 28% whilst the national debt increased from $700 billion to $3trillion. This was 'trickle down economics', the 'theory' being that as the rich had more money in their pockets and businesses were freed from 'red tape' by small government, the benefits would eventually reach the bottom of society. Predictably, they didn't.

Reagan was followed by George Bush, Bill Clinton and George W Bush. Despite the election of a democrat, Clinton, in 1993, little changed. The free market right still dominated and Clinton followed suit. The Project for the New American Century was typical of right wing neoliberal American thinking and had a great infuence on the government of George W Bush, notably on the invasion of Iraq in 2003.

The election of Barak Obama last year has given Americans hope that a generation of selfishness and greed can be tempered by social justice. But many on the right refuse to accept democratic change, just as they did when Clinton was elected and they tried to bring him down over the Lewinsky affair. Now they have retreated into ever more bizarre and rabid rantings. One of the wackier manifestations of this are the 'birthers' who believe, despite the facts, that Obama isn't American and therefore can't be President. We have recently had to contend with crazy remarks and lies about the NHS because of Obama's healthcare plan.

So what has neoliberalism achieved for America? Greater intolerance, injustice, inequality, debt, and poverty for many of its people. A loss in standing for America in the eyes of the global community. But most of all economic decline. Those whom the gods wish to destroy they first make mad (ancient proverb) - maybe the birthers are just the start. Is this the beginning of the end for the USA?

As freedoms for capitalists increase we get more restrictions

The 'free' market is getting freer. With de-regulation for businesses still going full steam ahead the freedoms of citizens are narrowing. New Labour have introduced over 3000 new offences since 1997. We have ID cards and a plethora of 'ant-terrorist' legislation including more restrictions on the the right of assembly. Even peaceful greens can't get together for a summer festival.

But we are constantly being told that there are too many restrictions on business. That business is being strangled by red tape. Pity the government doesn't take the same view with its citizens (er... we're all subjects really). As the effects of de-regulation, privatisation and the banker's recession take hold we can expect more criminality. Poverty will increase as capitalists try to maintain profits. Unemployment will rise. The government will have to manage greater discontent, not least about the rotten state of our democracy.

Fortunately for the next government New Labour have put in place the restrictive apparatus to criminalise and contain dissent. Is this a co-incidence? I don't think so. With reactionary governments who feel comfortable about the filthy rich, and greater inequality we will see more discontent. The powers are in place to ensure that the discontent can be contained.