Friday, October 22, 2010

Layer 365 . . . Anger, Protests, Solidarity, Debt, Austerity, Economic Illiteracy and the Defence Review

Les Evenements de 2010

There was an excellent comment on CiF on the article by Mark Weisbrot about the events in France:


Message of Solidarity with the workers and students of France from the exploited masses of the United States

We, in the United States, know better than any people in the world that the neo-liberal model is in equal measure: 1. exploitative 2. an abject failure.

Do not be fooled by The Economist, The Wall Street Journal, and The Financial Times, which for decades have heralded the American economy and free markets as the greatest engine for growth and prosperity. For the wealthiest, perhaps, as their accountants steal all they can - but for the rest it's nothing but a death trap The workers, the poor, and the middle class lead lives of steep decline, unbearable debt loads, isolation. 60 to 80 hour work weeks, wages so low that room and board become a luxury, no health care, no education, starvation by obesity. And no voice for the average man or woman.

And yet we know the score - the bankers and the wealthy broke the rules then stole the wealth - and then you're asked to give them two more years of your life, to cover the costs of their uncontrolled avarice. Two years now, schools for prisons later. Say Never!

Here, we didn't take the streets and were routed - and now the anger of the masses is being directed against themselves - the morbid stench of fascism rising.

The revolt in France, in contrast, represents unified humanity, the hope of a decent world, of prosperity, shared wisdom, true solidarity.

Neo-liberalism cannot tolerate people who demand control over their lives - yet people who do not control their lives are slaves. Do not become pliant and defeated like the American working class, slaving away at Wal Mart for sub-poverty wages. Heed our warning, raising the retirement age is just the beginning. They will take everything they can – your union, pension, education, home, and life.

The streets of France are again the beach-head for humanity's resistance. Here's where we turn the tide against the unrelenting offensive of global capital.

People of France do not give in, you are standing up for 99.9% of the people in the world. We need you to win. Defeat Sarkozy! Defeat Greed!

Please spread the message of solidarity to the workers and students of France from the people of the United States as far and wide as possible!!!

Here's a link to the article:


Tariq Ali wrote this in G2:

Why can't we protest against cuts like the French?

Many thousands have protested in France against cuts; we have a proud history of dissent in Britain, so why aren't we on the streets?

The French – students and workers, men and women, citizens all – are out on the streets again. A rise in the pension age? Impossible. The barricades are up, oil supplies running out, trains and planes on a skeleton schedule and the protests are still escalating. More than three million people a week ago. Hundreds of thousands out this week and more expected this weekend. And what a joyous sight: school students marching in defence of old people's rights. Were there a Michelin Great Protest guide, France would still be top with three stars, with Greece a close second with two stars.

What a contrast with the miserable, measly actions being planned by the lily-livered English trade unions. There is growing anger and bitterness here too, but it is being recuperated by a petrified bureaucracy. A ritual protest has been planned, largely to demonstrate that they are doing something. But is this something better than nothing?

Perhaps. I'm not totally sure. But even these mild attempts to rally support against the austerity measures are too much for dear leader Ed Miliband. He won't be seen at them. The rot of Blairism goes deep in the Labour party. A crushing defeat last year might have produced something a bit better than the shower that constitutes the front bench. Balls the bulldog might have gone for the jugular but he has been neutered. Instead, the new front bench is desperate to prove that it could easily be part of the coalition and not just on Afghanistan.

There is growing bitterness and growing anger in England, too, but not much else so far. It could change. The French epidemic could spread, but nothing will happen from above. Young and old fought against Thatcher and lost. Her New Labour successors made sure that the defeats she inflicted were institutionalised.

This is a country without an official opposition. An extra-parliamentary upheaval is not simply necessary to combat the cuts, but also to enhance democracy that at the moment is designed to further corporate interests and little more. Bailouts for bankers and the rich, an obscene level of defence expenditure to fight Washington's wars, and cuts for the less well off and the poor. A topsy-turvy world produces its own priorities. They need to be contested. These islands have a radical past, after all, that is not being taught in the history modules on offer. Given the inability of the official parliament to meet real needs why not the convocation of regional and national assemblies with a social charter that can be fought for and defended just as Shelley advised just under two centuries ago:

Ye who suffer woes untold

Or to feel or to behold

Your lost country bought and sold

With a price of blood and gold.

[. . .]

Rise like Lions after slumber

In unvanquishable number,

Shake your chains to earth like dew

Which in sleep had fallen on you.

Ye are many, they are few.


Jonathan Freedland writes about the root causes of the national debt, and a more enlightened economic strategy for dealing with it:

Osborne will escape public wrath if Labour lets him win the blame game

The myth needs nailing that Brown, not bankers, caused our economic woes. Then the case against cuts can be made

In France, they are already rioting on the streets. An estimated 3.5 million of them, according to one trade union estimate, from Lyon to Paris to Nanterre, either striking, marching or taking direct action in fury at changes to their pensions. Within hours, they had closed down schools, disrupted the travel network and prompted alarm about the nation's fuel supplies.

Contrast that with the scene that played out in London at the same time. Here, a demonstration against the cuts to be announced in full by George Osborne tomorrow brought a few thousand activists to wave their banners and chant their chants in Parliament Square. The closest they got to a threat was when Unison's Dave Prentis warned: "If the government doesn't listen to us today, they won't have heard the last of us." Storming the Bastille, it wasn't.

Why the difference? You could write a learned thesis on the contrasting political traditions of the two countries, how the French take to the streets at the merest tweak to their welfare arrangements. But there is another explanation that goes beyond British habits of passivity. Right now, even those people who fear and loathe the government's cuts don't blame the government.

If Labour's spending was so wildly out of control, why did the Tories promise to match their plans, pound for pound, all the way until November 2008? Why didn't Osborne and Cameron howl in protest at the time?

Could it be because things were not actually that bad? A quick look at the figures confirms that, until the crash hit in September 2008, the levels of red ink were manageably low. The budget of 2007 estimated Britain's structural deficit – that chunk of the debt that won't be mopped up by growth – at 3% of gross domestic product. At the time, the revered Institute for Fiscal Studies accepted that two-thirds of that sum comprised borrowing for investment, leaving a black hole of just 1% of GDP. If the structural deficit today has rocketed close to 8%, all that proves is that most of it was racked up dealing with the banking crisis and subsequent slump . . .

This is why Ed Balls was right to declare in his summer Bloomberg lecture – which remains Labour's most robust effort yet to redirect the finger of blame away from itself – that "it is a question of fact that we entered this financial crisis with low inflation, low interest rates, low unemployment and the lowest net debt of any large G7 country".

In other words, the position was relatively sound until the crash struck. The coalition would prefer voters forgot about that event; they mention it only rarely. But in this era of collective short-term memory loss, it is worth reminding people that the financial crisis was not limited to those territories ruled by Gordon Brown: it was global, it was systemic and it was caused by the larcenous greed of bankers.

Some will say that Labour, nevertheless, bore some particular responsibility – if not for the crisis itself then for Britain's exposure to it, not least through Brown's indulgence of the City and light-touch regulation of finance. Some can say that – but not the Tories. The only problem they had with Brown's deregulation is that there wasn't more of it.

The real source of the deficit: the colossal borrowing Labour had to undertake in order to prevent the crash of 2008 engulfing the entire economy. It had to pump money into the economy to prevent a recession turning into a depression, to prevent the spiralling unemployment, house repossessions and bankruptcies that had accompanied previous downturns, to stop the banks collapsing.

It will require great boldness for Labour to make this case. It amounts to rehabilitating the deficit itself, asking voters not to see it as some evil monster that has to be slayed immediately – but rather as the price that had to be paid to prevent unemployment tripling, interest rates galloping and the economy falling off a cliff. Lots of countries, from the US to Japan, have paid it with deficits of their own – or does the coalition think those are all Labour's fault too?

Only once this case is made can Labour go on to make its wider critique of the coalition: arguing that the government's response to the deficit is panicked and hysterical, that the surest way to enlarge, not reduce, the deficit is to cut in the midst of a downturn, that growth and jobs have to come first, that serious spending cuts are wise only once the economy is back to health.

This is the argument Labour has to win.


Joseph Stiglitz, past recipient of the Nobel prize for economics. wrote this:

To choose austerity is to bet it all on the confidence fairy

The mystical belief is that a smaller deficit will lead to an investment boom. What Britain really needs now is another stimulus

The Keynesian policies in the aftermath of the Lehman brothers bankruptcy were a triumph of economic theory. In Europe, the US and Asia, the stimulus packages worked. Those countries that had the largest (relative to the size of their economy) and best-designed packages did best. China, for instance, maintained growth at a rate in excess of 8%, despite a massive decline in exports.

We should be clear. Most of the increase is not due to the stimulus but to the downturns and the bank bailouts. Those in the financial market are egging on politicians to ask whether we can afford another stimulus. I argue that Britain, and the world, cannot afford not to have another stimulus. We cannot afford austerity. In a better world, we might rightfully debate the size of the public sector. Even now there should be a debate about how government spends its money. But today cutbacks in spending will weaken Britain, and even worsen its long-term fiscal position relative to well-designed government spending.

Thanks to the IMF, multiple experiments have been conducted – for instance, in east Asia in 1997-98 and a little later in Argentina – and almost all come to the same conclusion: the Keynesian prescription works. Austerity converts downturns into recessions, recessions into depressions. The confidence fairy that the austerity advocates claim will appear never does . . .

Austerity is a gamble which Britain can ill afford.


Simon Jenkins, as ever, is excellent on excessive defence spending:

Defence review: So, the RAF is going to target cyber-nerds with drones?

Years of capitulation to the defence industry has led to this absurd review, where 'threats' and solutions do not match

Sit down gently. Read Monday's list of "threats" facing modern Britain, and then read yesterday's list of how the coalition proposes to meet them. Next you should walk to the nearest wall and bang your head against it, hard, until you have counted to £45 billion.

The two lists simply do not match. The first so-called tier one threat is "attacks on cyberspace and cybercrime". The second is "international terrorism". The third is a foreign crisis "drawing in Britain", and the fourth is a natural hazard – "such as severe coastal flooding or an influenza pandemic". None of these constitute a military threat to the security of the realm.

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