Right now there is nothing more important on this planet than making sure there's a swift transition to a new economic and political order. The Guardian has launched a campaign called 10:10 which is aimed at getting people to take climate change seriously, and to reduce their consumption of fossil fuels and their carbon emissions by 10% in 2010. However, there's no chance at all that attitudes to consumption and climate change will shift dramatically unless there's a preceding shift in the way we do politics and economics.
Can it happen? It seems pretty much in the balance, in spite of the overwhelming evidence that capitalism as we've known it, and globalisation, are busted flushes. Why might it not happen? Because America is pretty much impossible to shift in its ideology, in spite of having some very intelligent and astute people now in charge of the country, much to everyone's amazement. And because in Britain we still have New Labour, with the New Conservatives waiting in the wings to take over, and a lingering mentality that greed is good, and equality and social justice are bad or unachievable.
We also have enormous amounts of ignorance about the way in which economics and finance operate, and a tendency to switch off when these subjects come up, hoping that the clever bastards that got us into this mess will also get us out. Some hope.
Thus we have a situation whereby, having been pre-eminent in the world's financial 'markets' in the period leading up to the meltdown of 2008, America and Britain (not you and me – the people who run these things) are dancing around the issues and the need to take action because they want to ensure that whatever action is taken is not going to disturb their pre-eminence. Woe betide us if other countries, as a result of greater regulation, become more important in terms of currency markets, investment funds, insurance markets, etc.
In 2009 we have a similar situation to 1979 in that Britain's economy is fucked up, as a result of the inequities of capitalism and the stupidities of politicians, people are blaming the Labour party, and there's a Conservative party waiting to take over with a lot of right-wing radical policies they can't wait to implement in order to reduce government spending, cut back on public services and privatise everything in sight, including education and health. As in 1979 the Tories deny they'll do any such thing, or do anything that could shift wealth from the less well-off to the already wealthy and downright rich.
In a sense none of this matters, insofar as New Labour has never been nor will ever be a party of of socialism or even social democracy. Does anyone seriously see them as anything other than Tory Lite? But it matters very much if we aspire to being a better and a fairer society, and if we aspire to creating a more enlightened and more cohesive, more sustainable planet.
So as Naomi Klein says, we have to get out there and force the politicians to do what's right. We also have to do it in ways that model a non-violent, non-coercive, intelligent, moral and enlightened approach to doing things in the public and well as the private realm. I for one have no interest in working with people whose attitudes are violently aggressive and likely to remain so if they ever achievedany measure of power and influence.
The new movement has to be about all of us working together and acting together, and not about a clique or a cabal of pushy, egocentric would-be leaders. It has to be about linking arms and minds and going forward as a non-violent mass movement, not manning barricades and using weapons on the instructions of those who can shout loudest or exude the most charisma.
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This is going to be a short blog because I'd rather readers use their time to read a couple of excellent columns which have appeared in the papers in the past few days, and if necessary re-read them in order to fully appreciate and internalise what these authors have written about so well.
These pieces are so well written, so well argued, and so full of important ideas that I find it hard to extract paragraphs from them as mere summaries. They really do need to be read in full. Having said that, I can't NOT give a flavour of their main points.
First, Will Hutton's page in the Observer:
The G20 has saved us, but it's failing to rein in those who caused the crisishttp://www.guardian.co.uk/commentisfree/2009/sep/06/g20-financial-crisis-banking-bonuses
“It must rank as one of the least fair deals in economic history. Over the last 12 months, western governments have taken unprecedented and extraordinary action to avoid what undoubtedly would have been a global slump. The good news is that they have succeeded. The bad news is that what caused the crisis – the stranglehold of a new financial oligarchy upon public policy – has hardly been touched. And not only is this grossly unfair, but unless there is change, a second and more serious crisis potentially awaits.
What to do about the banking system and its bonuses, the excesses that created the credit crunch and division among the great nations? Banks are exploiting this vacuum to return to business as usual. It is hard to believe that only 12 months ago their recklessly overstretched balance sheets threatened an implosion of the western banking system.
Governments have got to reform the entire structure of western finance –bonuses, credit rating agencies, capital adequacy requirements, banks that are too big to fail, the use of offshore tax havens, the role of derivatives – from top to bottom.
Yesterday's communique was disappointingly minimalist – a lowest common denominator between Europe and the US, with Britain sitting unhappily in the middle. Too little is happening and what is being done is so slow that it is imperceptible.
The whole debate is extraordinary. Right-of-centre European politicians – President Sarkozy and his finance minister, Christine Lagarde, supported by the right-of-centre Swedish prime minister, who is currently president of the EU, and German Christian Democrats – believe that western governments should challenge the bank bonus culture head on. It is offensive, they think, that a banking system that owes its continued existence to massive government intervention should pay itself extravagant salaries and bonuses that are massively out of line with the top of business, let alone the ordinary taxpayer. They are right. France proposes a mandatory cap and the outlawing of guaranteed bonuses.
In opposition, there is allegedly left-of-centre Britain and the US – liberal politicians defending the indefensible. The bonus culture works on a London/New York axis, with financiers having a sense of entitlement to astonishing earnings that have no economic justification in terms of value creation or relation to profitability.
90% of investment bank profits is not directed to strengthen balance sheets or to shareholders in dividends, nor to customers in lower fees, nor to taxpayers – it goes as bankers' bonuses. Our role is to bail them out when things go wrong.The comments posted after Will's column are an interesting mixed bag, and largely sane and sensible, though I haven't read them all yet.
We know it is a scam . . . If G20 governments demanded limits and made continued liquidity provision dependent upon compliance, no bank could refuse. The threat of an exodus of bankers is nonsense. No bank trading outside the G20 in financial centres such as Dubai, Hong Kong or Dublin could muster the capital or scale to pay mega bonuses. The issue would be dead.
Obama and Brown are right to press for continuing the aggressive economic stimulation. They should show the same determination in confronting the powerful financial oligarchs who have so rigged the system in their favour – and their rewards. After all, they did very nearly bring the world down and could do so again.”
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In yesterday's Guardian economics correspondent Ashley Seager wrote a superb column that should be required reading for every adult with the capacity to understand words of three syllables and above.
http://www.guardian.co.uk/business/2009/sep/07/financial-crisis-happen-again
In the paper it appears under the headline, “Will Brown stop the drift back to the casino?”
On the website the headline is, “Have we learned nothing from the financial crisis?”
“Rescued banks are returning to the 'casino-style' speculation that brought us trouble in the first place”
Have we learned nothing from the financial crisis of the past two years? Very little, it appears.
The investment bankers are out there making money again, popping the champagne corks and telling themselves how clever they are – after all, they have managed to pass a good proportion of their huge losses on to us, the taxpayers, and are sitting at the roulette table again.
There is a danger that in spite of all the talk among the G20 finance ministers at their weekend summit about the need to do something about bankers' bonuses and banks' capital ratios, the drive to reform could fade as the economic crisis recedes.
Hence the recent call by Adair Turner, chairman of the Financial Services Authority, for some sort of action against the excess profits banks make on some of their casino activities, which he correctly labelled "socially useless".
Later today we will have the launch of the annual trade and development report from the analysts at the United Nations Conference on Trade and Development (Unctad). It will put the case for far-reaching reform of the world's financial system and foreign exchange markets so that they serve the people and productive economic investment, rather than the other way around.
"All these rises in markets are said to reflect economic recovery but it is just another bubble," Heiner Flassbeck, Unctad's chief economist, told the Guardian. "These markets are reflecting a recovery that is not there. Wage deflation is a huge danger everywhere and this is not being recognised.
"Banks have been rescued by the taxpayer and are just returning to casino-style speculation that brought us trouble in the first place. We need to focus banking on supporting investment in productive businesses."---------------------------------------------------
Unctad comprehensively rebuts the arguments of parties such as Boris Johnson and the British Bankers' Association that what's good for the Square Mile is good for the country.
"Financial markets in many developed countries have come to resemble giant casinos; which almost always win and when they lose they get bailed out, while everybody else loses.
"A large segment of their activities is entirely detached from real sector activities. The crisis has made it abundantly clear that more finance and more financial products are not always better, and a more sophisticated financial system does not necessarily make a greater contribution to social welfare."
The point is we are all going to pay higher taxes and see cuts to public spending for at least a decade as a result of this mess and many people may never get another job. Therefore we have a right to cut the City down to size if we want to. It's our money, remember.
[Unctad] points out that the financial services industry managed to "capture" policymaking in a number of important countries (certainly Britain) into believing the myth that what was good for the sector was good for the economy.
But Unctad is no less scornful of academic economists who, it argues, should have known better than to believe the argument for free markets.
"In view of the vast literature and rich empirical evidence on financial markets' proneness to excesses and crises, it is surprising that there was so little challenging of the popular belief in the supposedly unchallengeable wisdom of unfettered market forces."
The report lays out a prescription of how supervision of markets can be hugely improved and how the foreign exchange markets could be reformed to prevent speculative, damaging swings in exchange rates in many countries that bear no relation to the underlying economic health of a country.
We cannot let the chaos of the past two years happen again. We have to change the current system and make it work for us. Our policymakers seem too tired to do much about it. But failure to do so will leave the clock ticking down towards the next crisis.
Talking of policymakers being too tired to do anything about the system and the fat cats that run it, Jackie Ashley, also writing in yesterday's paper, said,
A Tory dystopia looms, yet ministers meekly sit and wait
http://www.guardian.co.uk/commentisfree/2009/sep/06/election-conservatives-labour-recession-brownWe're months away from a government the left will hate. But Labour, gripped by defeatism, is just going through the motions.
“Let me take you by the hand and lead you to a very different Britain, one that's perhaps not more than half a year away. It's a country convulsed over its future in the European Union, one in which welfare is being slashed and new prisons are the only public investment still growing. Bodies set up to make life fairer and safer are disappearing in a "bonfire of the quangos".The BBC is being dismantled and a Fox News-style Murdoch broadcasting agenda is ripping ahead. A rightwing Conservative parliamentary party is in power and sees little chance of opposition for a decade. Labour is a shattered shell of a party – nobody cares about who becomes its leader – and the future of opposition politics seems to lie with the Lib Dems.
The country will be seen to have taken a strong and decisive move to the right. David Cameron's period of soft-Blairite reassurance will be a half-forgotten footnote. Look at the most powerful thinking among today's Tories on the alleged iniquity of the EU, or the need to slash the size of the state.
After the failures and disappointments of recent years, many people will be pleased. Democracy requires, from time to time, a major clearout and a fresh start. What is baffling is that the Labour government itself appears to be quietly reconciled to a change that may destroy the party as a major player for 10 or 20 years – perhaps forever.
Jon Cruddas will tell the Compass pressure group tomorrow that the party seems paralysed, afraid and "meekly accepting defeat, unable to show what we believe in".
If so, things are worse for Labour now than they were for John Major's Conservatives before 1997. It should not be this way.
Where has the current government gone? Let's not talk about Brown. Let's talk about the rest of them – David and Ed Miliband, Ed Balls, Jack Straw, Alan Johnson, Andy Burnham, Douglas Alexander, Ben Bradshaw, Yvette Cooper?
It is as if ministers have gone on a collective go-slow . . . Where's the fire? The enthusiasm for the big picture? The aggression? How many of them are fighting to get onto the Today programme or Newsnight to make the case for Labour's record, and to attack the increasingly rightwing Conservative agenda? The effect will be to drive Labour's vote down to somewhere so appalling that there may be no coming back.
Even now, there is an alternative. Labour politicians do have a story to tell. It's the story of underfunded public services being built up again, of health workers being paid decently, of a big expansion in further education, public investment in transport and of success in containing terrorism. It's about the emergence of a more tolerant country. It's about relative peace in Northern Ireland and democracy in Scotland and Wales.
Even if unemployment is bad now, and house prices lower, millions did very well for a long time. It wasn't all an accident. It wasn't all wasted or meaningless just because the thunderclouds rolled back again.
For every positive one can find a negative – failures, mistaken wars, breaches of faith. But it isn't all black. A Tory government will do things people on the centre left will hate. If ministers and other Labour MPs have an ounce of spirit, or even self-interest, it's time to point these things out. They can't prevent defeat. They could halt catastrophe..................................................
I'm going to have to stop reading Jackie Ashley because she pisses me off so much. She writes quite a lot of sensible things, and then she says things that show she has no real understanding whatsoever.
The reason the bunch of twats and political pillocks she mentions can't and won't do or say anything is because they have no alternative beliefs or vision. They've fully subscribed to everything that the Blair and his Bitch project has ever said and done, everything the City Boys and the Chicago Boys wanted them to say and do, and they know full well they've been finally shown up as fucking arrogant arseholes with no economic literacy, no alternative vision and nothing else to say. They're not about to apologise for wasting huge landslides and mandates for radical change from Thatcherism, from selling off and privatising, from deregulation, from casino banking systems, etc. They're fucked, and they know it.
They can't espouse an alternative political philosophy because they don't know what one might look like. They can't embrace MPs to the left of them, and what they have to say, because they've spent so much time slagging them off and they know they're not welcome, especially as rats leaving a sinking ship and mere opportunists. They fully deserve to go down.
The big issue for the rest of us, is indeed, as Jackie Ashley says – do we deserve a Conservative government? Well perhaps most people do deserve one – for their failure to protest about what NuLabour has been up to, for their going along with the casino and bonus culture, etc. I'm talking here about the people who read the Times, the Telegraph, the Mail, the Sun and all the other shit that supports the current political consensus about unfettered capitalism and trickle-down economics. As far as those people are concerned, I say fuck the lot of them.
Unfortunately, under a Tory government, it's the poor, the ignorant, the sick and the young who will continue to suffer, to be exploited and to remain ignorant of the real causes of their suffering. That's true in this country, and it's true globally.Not that the affluent Right aren't also ignorant, in their way. Not that they aren't also poor in many ways - in spirit, in time for enjoying life, in emotional wellbeing, etc.
The world's only hope is going to lie with the likes of Obama, assuming he's able to grow stronger as well as wiser and more experienced, the new progressive government in Japan, the intelligent wing of the EU, especially Scandinavia, some of the South American countries, possibly China, and perhaps the United Nations.
As for Jackie Ashley claiming, “Millions did very well for a long time. It wasn't all an accident. It wasn't all wasted or meaningless . . .” all I can say is that the millions who did very well weren't the poor, who have got poorer, and it wasn't children, whose lives have become increasingly stressful and miserable. And these are the very people that progressive governments are supposed to support, protect and make stronger.
In a sense it was indeed all “an accident”, as Jackie says, in that NuLabour merely channeled more money to public services - they didn't care about where the money came from, or how it was generated, or whether such generation was sustainable. As it turns out it was our money all along - none of it came out of the pockets of the tax avoiders, the tax evaders, and the offshore bankers.
New Labour did nothing to restructure British industry, ensure long-term investment and long-term employment, or regulate the UK's financial system so that it served and met the needs of our people. They deprofessionalised hundreds of thousands of public sector professionals, and they messed up and distorted the quality of health care and education with their culture of targets, payment by results (akin to old-fashioned factory piecework) and league tables.
All of this, plus Iraq and Afghanistan and support for Bushism, is a shameful blot on Labour Party history that will be impossible to expunge. With any luck the little tosspots and carpet-baggers that supported “the project” will now quietly disappear and get on with making loadsamoney on the gravy train they tolerated and encouraged. Fuck all of them.
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Here's an interesting selection of readers' responses to what Will Hutton wrote about the BBC and the Murdoch empire.
The big issue | Murdoch and the media
http://www.guardian.co.uk/theobserver/2009/sep/06/big-issue-james-murdoch
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