There is a real alternative plan for the economy and RBS

Today I came across two news items which struck me as absurd. In the first David Cameron was making a speech in which he defended the government's economic 'policy of deficit reduction', which is better known as austerity. In his speech he came out with all the usual stuff, including the fact that reducing government spending was the only way to cut the deficit, and that there was no alternative. But clearly he is wrong. As others, including even Vince Cable have stated, there are very real alternatives. In a shrinking or stagnant economy its more difficult to reduce a deficit, and that, after three years of austerity is where we are now. 

The problem in our economy is lack of demand caused by high levels of unemployment, and falling living standards for the 99%. In those conditions people can't afford to buy, and tax revenues fall, especially when commodity prices are rising. If governments increase spending on much needed infrastructure projects such as social housing that stimulus creates jobs, raises tax revenues and revives the economy. You don't have to be a Keynesian to subscribe to this view. The key point though, is that it has never been cheaper to borrow money, so this is the time for governments to spend. Furthermore, there is really no need for our government to borrow, it can create money through quantitative easing (QE). The Bank of England (BoE) has created £375 billion of dosh through QE without any beneficial outcome because it has been wasted on buying bonds. In effect all this has done is benefit the very banks which caused the crisis in the first place by increasing their profits! What we really need is green QE, which means spending money created by the BoE on building environmentally friendly homes, investing in renewables and creating a million green jobs. This will revive our economy, help end the misery of unemployment, create the renewable energy we so desperately need, and move us towards  a green economy for the future.

The second bit of news was as priceless as Cameron's failed analysis of the 'need' for austerity; Mervyn King who is still governor of the BoE today put forward a cunning plan to sell off the infamous Royal Bank of Scotland (RBS). This consisted of splitting RBS into a 'good bank', with all the profitable bits, and a 'bad bank' containing loads of nasty debt. There is a huge problem with this plan because the private sector gets the good bits and we, i.e. muggins the taxpayer, gets to pick up the bill for all the nasty stuff, which we will no doubt be paying off for the next generation or so. But there is a much better plan. Split RBS and give the 'good' parts to the taxpayer to create a green national investment bank, and give the 'bad' bits back to the people who created the problem in the first place -  the bankers and their shareholders.

These two news items speak volumes about the people who run our country. They live in the past. They have no idea of what is good for the UK and the people who live here. They serve the interests of a narrow and privileged elite. These are the real benefit scroungers - to use their own terminology. They leach off the state to the tune of £billions whilst seeking to deny the poorest and most disadvantaged people in our country the tiny amounts of money needed to keep them going. They also haven't a clue about the restructuring our economy needs to undergo if we are going to create a green economy to deal with climate change. We deserve much better than his, and the only way to achieve real change is to campaign, agitate, and ultimately vote for a positive alternative. That alternative is the Green Party. Join us and help make that change happen. There is no time to lose.

David Cameron is a charlatan

I was intending to do a post about the climate conference in Durban but I have been sidetracked by the phenomenon which is David Cameron. He is a phenomenon because he has phenomenal brass neck - he has no sense of shame - he also has no real sense of what is right and what is wrong. The brass neck  isn't surprising because his background has given him something very precious - confidence - the sort of confidence which comes from having a privileged upbringing, without need or want of any kind. That is something which only money can buy.

I'm typing this because on Friday Cameron chose to play the religious card. He chose to do what he has no right to do - stand on the moral high ground. In his comments, on the 400th anniversary of the King James bible he said:

 ".... what I am saying is that the Bible has helped to give Britain a set of values and morals which make Britain what it is today."

He was saying that Christian morals, something which he supposedly subscribes to, could mend our broken society. He also said that Christianity is a guarantee of freedom for other religious faiths. History shows that this is nonsense. Its only because Christianity is so feeble in our society that other faiths can breathe. The best guarantee of religious freedom, David, is a secular society.

Of course, morality is something that right-wing politicians like to bang on about, and continue to bang on about even when they are found to have had their hands in the till, or are caught sleeping with other mens' wives, or things that are much, much worse, like causing the deaths of one million Iraqis in a war which was fought on a false prospectus. In this sense Cameron is no different. His is a moralising government which favours marriage over co-habitation, and faith schools over secular. The right love religion, not because it teaches people right from wrong, but because it teaches people to know their place in the grand scheme of things. Because free thought and secularism can pose a threat to the established order.

David Cameron has presided over a government which has done more real harm to the British people than any in living memory. Billions have been cut from health and welfare, cuts which have fallen mainly on the poorest and most disadvantaged people in this country. All in all, 700,000 jobs in the public sector are to go and working families are also being hit hard. And for what? To save the necks of his class and the bankers and bondholders. And not only were those cuts unfair and unnecessary, they were, as I said in my last post, also profoundly immoral.

So how does Cameron get away with this? He was obviously chosen as leader to detoxify the Tory party after 13 years in the political wilderness. The party desperately needed a front-man to sell them and their 'free' market fanaticism to the public and he fitted the bill. He is now the acceptable face of the nasty party, but he is still very much in the mould of the nasty party. People seem to like him because they think he tells it straight - if only he did. He is a charlatan and a hypocrite for the reasons given above and one of the reasons why he has got away it so far, is because the British people don't like class war. You might wonder how that works because Cameron and co. are clearly waging class war on the British people. But oddly the British people, over centuries, seem to have been conditioned to accept that fighting back against class war is just not cricket. So its OK for them to dump on us but not OK for us to dump on them, because that would cause social conflict, which the British people don't like. That is one of the most depressing aspects of living in this country, not that I want social conflict myself, but I want people to understand what is happening, and to get up off their knees and fight back through trade unions and the ballot box.

So, for the time being, Cameron continues to lecture us on morality with impunity, but not everyone is fooled by any means.  Many hundred of thousands of people can see right through him. But not enough people, yet. Before Cameron was elected he lectured us about broken Britain. What is for sure is that Britain is going to be a good deal more broken by the time his Prime Ministership is over. I'd just like to finish with a quote from a blog by a disability campaigner Sue Marsh, called 'Diary of a Benefit Scrounger":

"I have severe Crohn's disease. Probably one of the most severe cases in the country. I have had 7 major life saving operations to remove over 30 obstructions (blockages) from my bowel.

I take chemo-shots every two weeks that suppress my immune system, ensuring that I regularly have to fight infections. Exhaustion, pain and nausea plague every single day of my life.I have osteoprosis and malnutrition. I have had major seizures and a stroke.

Nonetheless, I have just heard from my own Disability Living Allowance application, that it has been rejected. Completely. I will receive no support at all from DLA. Despite claiming successfully in the past, despite only getting weaker and more frail and less able to live independently, my reconsideration was rejected." [my italics]

David Cameron is directly responsible for the plight of this person, and he and George Osborne knew the consequences when they made the cuts that are causing harm to millions of British people.

Make no mistake about it, Cameron and Osborne are evil

Why would a left-wing blogger and a ecosocialist make such a statement? Socialists aren't really supposed to deal in such terminology. Whilst most people would accept that 'leaders' in the past such as Hitler, Stalin and Gaddafi were evil individuals, surely describing our Prime Minister and Chancellor in such terms is way over the top? In addition to this, many socialists are atheists who prefer to deal with the hard-headed facts of history, economics and politics, rather than deal with issues in terms of morality.

Firstly lets deal with definitions. According to my Mac 'evil' means:

• profoundly immoral and malevolent; and
• harmful or tending to harm

If we accept these definitions lets examine the case of Messrs Cameron and Osborne. There can be no doubt that they are the ruling minds of a government which claims that we 'are all in this together', and then proceeds to dump the staggering costs of unregulated failure by wealthy, greed driven bankers onto the poorest and most vulnerable people in our society, and are behaving in a profoundly immoral way. Not only has the country had to deal with savage cuts of £81 billion in Osborne's first budget, but now, in the autumn statement we have further savage cuts and job losses which will hit the poorest people in this country hardest, and all that to save the necks of bankers and financial capitalism.

Both David Cameron and George Osborne are 'well educated" millionaires who are supposed to have been brought up in the best way this country can manage. They have had every advantage and opportunity, yet what they are doing is deeply reprehensible and dishonest. Its dishonest because they claim to be acting in the 'national interest' when they are clearly acting in the narrow interests of their class and against the interests of the vast majority of British people. Osborne claimed that savage cuts were necessary about two years before the 2010 election. He was swiftly slapped down by Cameron. Did either of them mention these 'savage cuts' in the election campaign? No, they kept silent because it was clear that this would damage their election hopes. Of course, its not just Cameron and Osborne who are to blame for the governments actions. There are 20 millionaires in the cabinet, and many MPs in Parliament who are playing the role of Auschwitz camp guards to Cameron's Hitler. You don't have to kill people to be evil, although it seems that at least 10 people have been killed by the cuts so far, you just need to cause them deliberate harm. That is what this government is doing with its class war cuts, knowing full well the consequences.

Morality matters. Morality is something that people on the left are profoundly concerned about. Not in the way the political right are, which is all about imposing your prejudices and beliefs on others, but in championing fairness and behaviour which treats all people equally. We have made great strides on that front over the past thirty years or so, everywhere in society but in the economy. Its essential that we champion the return of decent behaviour to our rotten democracy, which has become so scarred by the appalling behavior of government ministers.

A Tory driven ideological class war attack on British workers won't promote growth

It was bound to happen here, as it did in Wisconsin and other American states. First the capitalist class, or 1% if you prefer,  creates a crisis, a crisis of financial capitalism which nearly brings down the world economy. It does so through its ideology, neoliberalism; which means destruction of public services by privatisation; letting the banks and corporations run riot through deregulation; and the looting of natural assets by corporations through globalisation. Then, using their tame politicians in the UK, USA and Europe, it makes the middle and working classes and unemployed, the 99%, pay to bailout the banks and save the skins of the bankers. This is privatising the gains and nationalising the losses. Socialism for the rich, capitalism for the rest of us.

So the banks get saved but there is still a big problem because much of that debt incurred by the banks has now been transferred to governments and taxpayers leading inevitably to a sovereign debt crisis, which is where we are now. The Eurozone crisis has been triggered by the sovereign debt crisis brought about by the banking crisis. Still with me? We are nearly there.

In response to the sovereign debt crisis governments in the UK and Europe implement austerity programmes, ostensibly to bailout government debt, particularly in Greece and Ireland. But its not the poor old Irish and Greek taxpayers who are being bailed out, the money is being used, once again, to bailout French, German, Spanish and Greek banks. So taxpayers have been shafted twice, first in the bank bailout and secondly by austerity - which is just another bank bailout.

To top all this the right wing politicians who are the friends of the bankers and the 1%, are now using the crisis to try and smash workers rights. In the USA, in Wisconsin, the Tea Party backed Governor Scott Walker has used the deficit to not only slash services but to try to deny unions their collective bargaining rights. Now in the UK today we hear that the government is contemplating undermining workers rights by making them easier to sack and limiting further their already limited rights to an Employment Tribunal. This crude, class war attack on workers is being carried out in the pretence that it will encourage growth.

The real irony is that the rising unemployment, increasing poverty and lack of growth in the UK are a direct result of this government's austerity programme. Economically, this government is already a complete failure and its only to be expected that it should dishonestly try to pin the blame for that failure on working people and the unemployed, that, after all, is what class war is all about.

Cameron is wrong about the riots

Since last week, when the UK riots came to a halt, apart from the universal condemnation of the looters, there have been two responses: one from the political right; and another from the left. The right have sought to paint the riots as being all about criminality, and about individual bad behaviour. David Cameron has re-iterated this theme a number of times in the past week, also calling for the rioters to be hammered by the courts. Its typical of the right that they should portray the riots in such simplistic terms. Firstly, most right wingers don't want the riots to be viewed by people in a wider context - the context of poverty, joblessness, exclusion and social despair. That's understandable because if people were to see the wider context they would appreciate how damaging and destructive the right's neoliberal ideology is; Secondly, they know that such a response panders to the prejudices of many of our citizens; Thirdly, its crucial for Cameron and the political right that individuals be blamed because the government might not survive if it was widely believed that it was responsible for the troubles. At the very least re-election would be a remote possibility. So, its hardly surprising that Cameron has been seeking to monopolise the media with calls for 'tough' sentencing which amount to revenge, not justice, as two men in Cheshire discovered recently.

Unlike David Cameron, the left have looked for the causes of the rioting. This is not to excuse the behaviour of the rioters, just simply a recognition the we don't live in a vacuum, and that people's behaviour can be affected by the environment they live in. Part of that environment is that people see our society's leaders, including politicians and businessmen, with their fingers in the till, and getting away with it. Cameron himself was implicated in the expenses scandal as were other cabinet ministers. The phone hacking scandal has implicated the police and other senior people in the media, and then we have the bankers who crashed our economy and carried off big bonuses as a result. Naomi Klein has written a perceptive article about the wider global political context of the riots. Its not just here in the UK that people perceive that the rich elites are robbing us and getting away with it. She said:

"Of course London's riots weren't a political protest. But the people committing night-time robbery sure as hell know that their elites have been committing daytime robbery. "

As said in a previous post, there is nothing new about the recent riots and academic research has shown that austerity measures of the kind we have seen in the UK, with £81 billion worth of ideological cuts imposed by George Osbourne on our society, can cause rioting. The researchers, Jacopo Ponticelli and Hans-Joachim Voth, concluded:

"Nobody knows where and when social unrest is going to happen again, nor the scale it will take. However, history suggests we should not underestimate the consequences of social chaos. Germans to the present day remember Heinrich Brüning, known as the "hunger chancellor", who led the country from 1929 to 1932. He presided over an unprecedented austerity programme. At the same time, the Weimar Republic, Germany's first attempt at democracy, disintegrated amid a wave of social unrest and political violence."

The fact is that David Cameron is wrong about the causes of the riots and wrong with his views on sentencing. Far from being squeaky clean Cameron has soiled hands. He has also flipped on this issue. Do you remember the infamous 'hug a hoodie' speech where Cameron said we should be understanding about young people who commit crime? If not read this. Cameron is the Tory's version of a Blairite poster boy who is not much more than a front for an extremist Tory Party whose favourites include Thatcherite monsters from the crypt like William Hague and Eric Pickles.

If you want to, you can choose to believe that the austerity measures in the UK have nothing whatsoever to do with the riots, or you can choose to say that despite austerity and poverty no one should ever be involved in looting and causing wanton damage to life and property, and that the people who have done this should have acted responsibly instead. So why didn't the bankers, politicians, phone hackers and corrupt cops, who are supposed to know better than the 'feral rats' who rioted, measure up to being responsible? Why didn't they set an example? Is it simply that they are too greedy or is it that they knew they would never properly be held to account and face the consequences of their actions? And don't forget, who was it who sought to excuse the actions of the bankers? Why non other than Mr David Cameron himself at the Tory Party conference.

We can win the economic argument - so lets do it!

"Its the economy stupid!" - it sure is. The economy is just about all we hear about these days, and its no wonder, because we are going through the biggest economic crisis of capitalism since the Great Depression. But the problem we have is that the neoliberal right are in the ascendancy, they have the power. This means that the response to the economic crisis is the same as it was during the Great Depression. Does this mean we have learnt nothing in the past 80 years? To some extent yes, but the real problem is that the same kind of people are in control now as were in control in the late 1920s - capitalist corporations and the politicians who support them. The Great Depression lead to immense hardship and deprivation for people around the world. In America, the slump, despite the uplift given by Roosevelt with the New Deal, lasted over a decade until the end of World War II. It was the massive US spending during the war economy that lifted the whole world out of the Great Depression. Without that lift the world economy would probably  have remained stagnant for many more years, possibly decades.

In the mid 1930s  the economist John Maynard Keynes explained that in a economic slump governments needed to take counter-cyclical measures to revive the economy. In other words, you don't cut spending in a recession - you increase it. But Keynes's ideas were ignored then - just as they are being ignored now. Then as now, for reasons of class, politicians preferred to cuts jobs and welfare rather than increase spending or increase taxes on the rich - who could have afforded to pay more. Belt tightening was, as usual, forced on the poorest in society.

So where does that leave us? The sovereign debt crisis which is now engulfing Europe and the USA is a direct result of the banking crisis known in the UK as the 'credit crunch'.  This crisis would have brought down the world economy, if it had not been for the fact that the state intervention, both here and abroad, propped up the faltering world private banking system. The resulting losses (costs) were nationalised and the gains (profits) remained in private hands. The people who caused the crisis got away free whilst ordinary people picked up the tab, bailing out the banks, and paying by losing their jobs, homes and pensions.

But that was only round one. The debt form the economic crisis didn't just  disappear - it became the sovereign debt which is crippling Ireland, Greece, Spain and Portugal, and which now threatens the USA itself with debt default. So, the people are  being made to pay for the crisis a second time around. The name of the game now is austerity. Yet more cuts in welfare and more jobs losses - all to protect the same people  - the private sector, the banks and bondholders - financial capitalism. But as Keynes showed more cuts and austerity won't fix the problem - it will make it worse. That means the best we can hope for in the UK and Europe is economic stagnation, continuing high unemployment, and increasing hardship and poverty. The result is that your children will inevitably be poorer than you are and your grandchildren will be poorer still, in a society blighted by homelessness and inequality.

In the UK we have our own austerity crisis. The Chancellor of the Exchequer,  George Osborne, has taken a reckless ideological and political gamble with our economy by instituting savage austerity cuts of £81 billion. His aim is to use the debt crisis as cover to slash the welfare state - which is something the right have always hated. He is hoping that the economy will recover enough so that he can announce tax cuts before the next election. he believes this will win the next election for the Tories. That is why the Tories wanted a fixed term five year parliament - because they need at least 5 years for this ideological economic gamble to have a chance to work.

So, if the economic policies being followed by the EU, in Greek debt crisis for example, and in the UK government aren't working, why are they being followed? The answer is simple - neoliberal ideology. This is class war politics. The lesson of the past thirty years is that the capitalist class and their politicians have allowed a world economic crisis to develop by following neoliberal 'free' market dogma, by deregulating financial capitalism (the banking and shadow banking system). Now they are exploiting the outcome of that crisis, and using it to roll back all the democratic gains made by working people in the last century. 

So what does the left do about this? Well, we have to win the economic argument. That is essential. We have to explain to people how the failed 'economic' policies of the neoliberalism got us here. We have to explain how the crisis has been exploited to benefit the people who caused it. We have to debunk the myths about the benefits of the unregulated 'free' market. But most of all, we have to show that we have an alternative which can create jobs and prosperity. That is what the Green Party did in its 2010 election manifesto. We showed that  by investing in creating one million green jobs, and by building housing, by improving public transport, by controlling the banks, and by growing our economy in a sustainable way, we could lift the UK out of the economic crisis it is in.

The reality is that Osborne's reckless ideological gamble with our economy won't work, and when it fails, we have to be ready to strike. The next UK quarter figures are due soon. All the indicators are that they will be very poor - either very low growth, or no growth at all. That is the time we must put the boot it - and hard. People in the UK are beginning to waver in their support for cuts. In the past year support for the cuts has fallen from 69% to 55%, with 45% now against Osborne's savage cuts. Once the British people realise that Osborne's economic 'policy' isn't working the Tories economic competency will be finished. It is then that the Coalition will be in real danger. The Coalition government is a weak and divided government which has only survived because the British people have been conned into believing that it was acting in the national interest, to tackle the economic crisis. Cameron has already been severely wounded by the phone hacking scandal. Its hard to see how the government could survive similar damage to Osborne.

The reality is this; pensions and the welfare state aren't unaffordable; low taxes only benefit the rich; the state is not inherently a bad thing - governments can and should intervene to create jobs, build houses and protect the vulnerable; we can only have a better health service if it is provided by the public sector; privatisation means that you pay more for less; banks can be nationalised and brought under democratic control; co-operation is much more important than competition.

These are the messages that all those who oppose this government; UK-uncut, the Coalition of Resistance; trade unionists, and all the other anti-cuts groups need to get across, and get across soon. The only way we can slay this neoliberal system and get rid of this government is by winning the economic argument. Until we get on with the task of doing that we won't have the power to change things for the better and we won't be able to stop the deliberate destruction by this government of all the things which make this a society worth living in.

Cheshire West Against the Cuts: J30

On Thursday June 30th striking public sector workers and their supporters came together for a rally at the Town Hall in Chester. We had a  turnout of about 350 people and some very good speeches from trade unionists and CWAC supporters. All in all a very good day for the fightback against Cameron's class war government's attempt to make us pay for the failures of financial capitalism.



There is a lot more work to do but we are building resistance in an area which is hardly renowned for left or trade union activism. Long may it continue.

The Coalition deficit cuts will increase the deficit

On March 26th half a million people marched in London against the savage £81 billion worth of cuts introduced by George Osborne in the 'emergency' budget last year. More recently an impressive (sic!) estimated 350 people attended a 'Rally against debt' on the 14th of May. Not hard to see where the British peoples' sympathies lie then - and the vast majority have got it right because the Coalition government's cuts are not only going to cause great social harm but they are more likely to increase the deficit than reduce it.

How can that be right? How can cuts in expenditure increase a deficit? Well, you only have to look at Greece and Ireland to see how. Both countries are in deeper debt now than they were when they began their austerity programmes. If you slash spending you increase unemployment which increases costs and reduces your income in the form of taxes. The best way to pay off debt is to earn more. Governments earn more if they increase taxes and if the economy grows. As the economy grows government income, in the form of taxes, increases. But the cuts here have lead to a stagnant economy with no growth. There is further bad news to come in the form of increasing unemployment as the cuts bite further. Government borrowing last month was the highest ever recorded for April because tax receipts fell. Osborne has clearly shown his economic illiteracy in the last budget, which did nothing to address the problems caused by these savage, unnecessary, ideological cuts. What our economy needs is a stimulus with investment in jobs through a Green New Deal, not savage cuts.

The same failed course of action is leading to an even greater crisis in the Eurozone where Greece is unable to repay its debt and will have to default at some stage. The effects of this could be even greater than the collapse of Lehmans in 2008. In addition, Ireland, Portugal and Spain are all in trouble. The truth is that none of the bailouts of the Eurozone countries were made to help the people of those countries. They were made to bail out the bondholders and the banks - the money lenders . As with the bailout in the USA and UK, taxpayers are being asked to bear the pain and bail out the market. It is clear where the real power lies, and that's not in your democratically elected government, which exists to serve the market, whatever the cost to you and your family. And if your economy is ruined in the process its just tough luck.

There is an alternative

On March 26th 400,000 - 500,000 people marched in London for an alternative to the government's cuts programme. In the aftermath, political pundits sniped at the marchers claiming that protests don't work and that the marchers had no coherent alternative.

This blog is about the alternative. In over 200 posts I've laid out how we can create a different kind of economy which will create jobs, wealth and greater economic equality for people in the UK. I'm not a lone voice. The Green Party laid out such an economic plan in its election manifesto. Working with the New Economics Foundation, Green Party leader Caroline Lucas proposed a Green New Deal which would have revitalised our economy in the face the current economic crisis caused by financial capitalism.

This is the kind of fresh economic thinking that we need. It replaces the tired old neoliberal paradigm which has produced the economic stagnation and failure of the past thirty years. If you want economic progress, jobs and greater social equality you can't depend on the unfettered market to provide it. The market is an engine of inequality, producing extremes of wealth and poverty. This has been well demonstrated in the USA in the past thirty years where the rich have become the super-rich whilst the incomes of ordinary people have stagnated. Nobel Prize winning economist Joseph Stiglitz wrote about this recently in Vanity fair and its worth quoting from his article - Of the 1%, by the 1%, for the 1%:

"Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret."

Neoliberalism has allowed the rich to grab an ever greater share of the economic cake, at the direct expense of the rest of us. Our politicians have cravenly submitted to the demands of capitalists and their huge corporations. We need an economics that is for everyone, not a tiny minority, and this is what the Green New Deal is about. Its time to put aside the failures of the past, but this can only happen when people wake up, realise what is being done to them and vote for genuinely progressive alternatives espoused by parties like the Green Party.