Saturday, 30 June 2012

Talking about a revolution!

Did you know there was a revolution going on? If you had been watching and reading the corporate media you might have got some inkling but hardly the full picture. But lets look at some of the examples; the Arab Spring; Libya, Egypt, Tunisia, Syria, Bahrain, and even Saudi Arabia; Occupy in the USA; Protests in Russia; in Greece with SYRIZA; and in Spain, Italy, Ireland and the UK; Massive student protests in Chile and Canada. Many of these protests have been ignored by the media but this is a real revolution, and it is happening before our eyes if we care to look for it.

There is a revolution going on!

Why is this happening? - it is because the mass of ordinary people globally are sick and tired of  poverty, unemployment, and the cosy neoliberal stitch-up between commercial interests and tame 'free' market fundamentalist politicians and economists, which is destroying our economies and the planet. In our own small way, as individuals, we are all part of this revolution, but we need to come together as part of a wider international movement which can throw-off the sham democracies we live in, and bring about real and lasting change.That change must include democratic control of our economies and decent housing, healthcare, jobs and education for all.

In the UK, we have the "let them eat cake" politics of David Cameron, his banker friends, and his rotten, discredited Coalition government. In the USA, we have a battle between Obama and Romney, the former is marginally less bad than the latter but both are corporate creatures, dependent on big money to get elected. In Europe, we have Merkel and the sterile dead end of austerity, designed to protect the banks at the expense of the European taxpayers. People have had enough!

It is time for radical democratic change,  and the only way that change can happen is for people to channel their anger and throw off their apathy with the 'system', take to the streets, protest, and vote for parties that can bring about that change. The people of Egypt have shown us the way. In the UK, the Green Party is the only mainstream party which opposes the neoliberal paradigm and has the policies to make the breakthrough that people want. But the Party can only do that if it maintains its radical edge, engages with and works with the wider movement, and campaigns hard for change. Simply seeking electoral success is not enough. To make that breakthrough, we need to demonstrate that we are serious about the changes people want, and we must be able to take them with us. In Romayne Phoenix and Will Duckworth I think we have two leadership candidates for the Green Party who can accomplish that task.

Footnote: I will give my detailed views about the Green Party leadership contest in a later post.

Thursday, 28 June 2012

Now the banks must be brought under democratic control

Its not that long ago that UK taxpayers bailed-out UK banks to the tune of £1.2 trillion. This, in the UK alone, is a sum which dwarfs the amounts being spent on the bailouts of five Eurozone countries - Greece, Ireland, Portugal, Spain and now Cyprus. It was a scandal that this happened and banks such as Northern Rock, RBS and HBOS (which was merged with Lloyds TSB) were allowed to remain under private management and the senior managers continued to award themselves, and traders, vast bonuses. Nobody was really held to account. Nobody went to gaol, despite the damage done to the UK economy, which has lead to savage cuts in jobs and benefits, affecting the very taxpayers who funded the bailout - though Tory chancellor George Osborne couldn't find £81 billion to help them. As I have said before, this is pretty much the biggest heist in history.

But now we find out that Barclays Bank has been fined £290 million by the FSA for fiddling the LIBOR interbank lending rate. Not just Barclays though, apparently they were in cahoots with other banks. This kind of stuff, coming on top of the bailout, beggars belief. Barclays boss Bob Diamond earned £20.9 million in 2011 as chief executive. Did he know what was going on? One thing we have learned from the News International scandal is that top people just can't remember whether they knew anything or not, so perhaps Bob won't.

Bob Diamond: earned £20.9 million in 2011

This is an unfolding scandal so we don't know what the outcome will be but it seems incredible that nobody will face criminal charges. It has to be some sort of fraudulent activity surely? Those affected, and there are bound to be many companies and individuals who lost money, will be asking these questions and expecting compensation. And all this comes on top of the recent RBS IT debacle.

For me, the case for breaking up and nationalising the banks has become unanswerable. There will never be a better opportunity because most of them are bust anyway. For a start, RBS and Lloyds must be brought under national democratic control. They should be broken up. We need smaller, regionally-based banks which can help to grow jobs by investing in local communities, and we need mutuals and credit unions to support and democratise finance in our economy. Finally, can anyone really understand that a UK government can give such support to the banks but can't find £69 million to bailout a hospital trust?

Thursday, 21 June 2012

We must Occupy the economy

The roller coaster ride of the world economic crisis continues. Elections in Greece and France have shifted the political ground slightly to the left, with a Socialist majority in France, and the spectacular result obtained by SYRIZA in coming second in Greece with about 27% of the vote. But the Eurozone crisis stumbles on and the 'free' market fundamentalists, the architects of the broken economic system, are still in the driving seat. Banks are bust and, under the current system, there is nothing to look forward to apart from years of economic stagnation at best. Meanwhile in the UK, millions are being pushed below the breadline by the governments cuts in benefits, tax credits, and increases in rents.

In 1966, the Marxist economist Paul Sweezy wrote a book, with Paul Baran, called Monopoly Capital, in which he said that the natural tendency of monopoly capitalism was economic stagnation, as capitalists struggled to use the surpluses of capital accumulation, and that they could only achieve this by increases in spend on marketing and defence spending, and increasing debt. Was Sweezy right? Its certainly true that US defence spending in WWII ended the Great Depression, and that a mountain of debt has been used to keep capitalism going in the past 30 years or so.

So what do we do? The market fundamentalists have no answer. They are like the mad person who repeats the same actions over again in Einsteins famous quote:
"Insanity is doing the same thing, over and over again, but expecting different results"
Einstein: described the madness of market fundamentalists
So we need an economic alternative. But what is that alternative? Neoliberalism, over the past 30 years has put commercial interests above democratic sovereignty. This has happened globally through organisations like the WTO and the European Union. We need to reverse this process and re-assert democratic control of our economy. This economic change must put governments in charge, actively planning and managing economic development, allow local decision making and create a mixed economy based on  genuine sustainable development to deal with ecological crises and halt endless growth. In the longer term the only answer to the domination of private commercial interests is to put the economy in the hands of the 99%. How can we do all that?

Firstly, we need to nationalise the bust banks that are hoovering up resources which need to be spent on creating jobs. Its a scandal that the UK's bust banks have been bailed out but are still in private hands. This must end, some banks must fold, and we need banks to be broken up to provide finance to small businesses, and local and regional banks which can focus on reviving local economies;

Secondly, we need to take the creation of credit out of private hands and put it under democratic control. Debt creation is too great a power to be left in the hands of private enterprise - this is what caused the current crash;

Thirdly, we need to take control of the big utilities such the energy and water companies, and sectors which rely on massive public subsidy to continue such as the railways;

Fourth, we must institute a programme of investment in our economy to create jobs through green quantitative easing and a Green New Deal;

Finally, and most importantly, we must break the power of the corporations by mutualising the economy, providing the finance to set up co-operatives and giving employees the power to buy-out the companies they work for and control them. This latter measure is crucial in putting economic power into the hands of ordinary people. We need to create a new culture of doing business in which people work together to create successful mutuals which are focused on local communities. Co-operatives have a better success rate than companies and they don't outsource downsize, or export jobs overseas.

Its a little known fact but there was an expansion of mutuals in the USA during the last Great Depression and there are many successful co-operatives both in the USA and here. It is a sector that is already growing. 130 million (yes that is million) people in the USA are now involved in mutuals and if you want to find out more detail read this previous post. You should also take a look at Gar Alperovitz's excellent book 'America beyond Capitalism' which gives practical examples of how the 99% in America are taking control of their economy from the bottom up by creating co-operatives. This is economic democracy in action and something we should celebrate.

Think it can't happen? Well, we have to make it happen. Its likely that the failure of the global banking system is going to mean that states are going to have to take a much bigger role in managing the economy now that the failures of the market have been exposed, and that people are going to be much more willing to trust democratic control and planning after they have experienced the privations of neoliberal austerity. If we want to really cure the malaise of neoliberalism and avoid the stagnation of monopoly capitalism we need to participate in the most important occupation of all, we need to Occupy the economy.

Friday, 15 June 2012

While Cameron schmoozes Murdoch, Greeks and Spaniards are fighting austerity

There are thousands of Spanish and Greek workers fighting to defend their jobs against the dead hand of austerity which is threatening to wreck Europe's economies. You would hardly know about this if you followed the mainstream media, which is instead fascinated by David Cameron's schmoozing of the Murdoch empire, and Simon Cowell's string of girlfriends.

Meanwhile, in Spain thousands of miners have been on strike since the end of May, defending their jobs and communities. In time-honoured fashion the Spanish government have unleashed the police who have been given a free hand to break up the strikes and protests leading to violent clashes. In Greece, striking steelworkers have stopped work for 228 days in their fight to protect their jobs.

So why doesn't this make the headlines? Because it doesn't fit with the media agenda which is the modern equivalent of bread and circuses, designed to distract and manipulate us, whilst pandering to the 'free' market neoliberalism of the corporations and their tame politicians. Its OK to report such clashes in the middle east, in places like Egypt,  because that is considered safe, but in Europe such events are not considered to be "newsworthy".

The big event this weekend is the Greek election and its looking like the Eurocrats have managed to turn the screws enough on the electorate to ensure a government which will support the 'memorandum' which is killing the Greek economy, and causing great pain to the Greek people. If New Democracy and its pro-bailout allies can form a government the Greeks will be ground down even further to protect the banks and the Euro vanity project. We can only hope that SYRIZA and its allies can gain enough votes to prevent this from happening. Since the bailout cannot work, a victory for the pro-bailout parties would be based on fear and ultimately fruitless. Either the terms of the bailout must be renegotiated and the debts written off or Greece will have to default anyway. Whatever happens the European Union has been badly damaged by this attempt to make its people pay for the blunders of the ruling 'free' market elite, who are wholly responsible for the current crisis.

Sunday, 10 June 2012

Zombie capitalism

Ever since the crash of 2008, when Lehman Bros. bank went under, politicians in the EU and USA have been battling to restore the status quo, which is often described as 'business as usual'. But it wasn't the collapse of Lehman's which brought the capitalist economy to its knees, it was the accumulation of a huge bubble of toxic debt in the world banking system. Rather than a crash, it has been more of a slow motion collapse, as the house of cards comes down.

The banking bailouts which followed, where governments injected capital into a bust banking system, was supposed to solve the problem, but it hasn't and it never could have done because the debt is still there, it hasn't just disappeared. In the shorter term the debt problem has become a sovereign debt crisis which is threatening to break up the Eurozone. European banks have been propped up by short term loans from the ECB, and this still hasn't solved the problem, but what if it can't, what if there is simply too much debt for the system to pay off?

I have blogged before about how I suspected that there were lots of insolvent banks which were hiding their insolvency with the collusion of governments. For any other kind of business this activity would be illegal, but as we have seen, there is one law for the banks and another for everyone else. Now the Telegraph has revealed the state of hidden debts in the UK banking system. The article, by Liam Halligan, shows that UK banks are sitting on £40 billion of undeclared losses, and that is just what we now know about.

Britain's banking black hole

My guess is that taxpayers patience is exhausted. Are we really going to be expected to bailout a bust system yet again? Not a chance in my view. The reality is that there can be no return to 'business as usual'. Neoliberal capitalism, through privatisation and deregulation, has broken the world economic system. The emperor has no clothes. There isn't going to be a recovery, not in the short to medium term, probably not ever. In a recent post I explained why I thought capitalism had reached the end of the road. In essence falling profits have lead to a class-war attack on the 99%, cannibalisation of the public sector, mass unemployment and an unsustainable property and financial bubble. Now there is nowhere left to go. We urgently need a radical alternative economic strategy which has to involve the state taking responsibility for control of the economy, nationalisation of the banks, a Green New Deal, and a move to a low carbon economy. The alternative could just be a collapse into the kind of barbarism we saw in the 1930s. Oh, and don't forget the fact that we have to deal with climate change, and we saw a graphic illustration of that in the UK this weekend.