Friday, November 30, 2007

“Fire-storm” warning for global economy

A World to Win’s view of the capitalist economy is often pooh-poohed by those who tell us that the system is unchallengeable. We are told that we exaggerate the instability of the world economy. But over the last few days, one financial expert after another is outdoing us in predicting extreme crisis and break-down to come. Warnings are flying thick and fast as the credit crunch is conducted throughout the world economy via the global financial system.

From the high office of the Governor of the Bank of England down to broadsheet newspapers, commentators are united in saying that the damage from the financial storms to the real economy is as yet unknown and that the global economy is moving into recession. “This particular crisis is proving a more sustained fire-storm,” Jeremy Warner of The Independent said this week. “What in September was still looking as if it would be only a temporary financial storm with relatively limited consequences for the real economy has turned into something much more drawn out and potentially damaging.”

And in the run-up to what should be the annual Christmas spending spree, Mervyn King, the Governor of the Bank of England, yesterday warned parliamentarians of “rather uncomfortable” times to come. King told MPs there were was a “big risk” that the credit crunch would intensify with consequent risks to growth and inflation. He spoke of "sheer uncertainty" and that fear of what lies ahead among US banks in particular was already pushing up interest rates.

And writer Sean O’Grady, asks: “Is the roof falling in on the housing market? . . . Has the bubble burst? The signs are ominous. For some months the property market has been cooling, the bubble showing distinct signs of strain . . . How bad can things get? The worst scenario is that the UK follows trends in the US. There the bubble burst last year, with the toughest market since the Great Depression.”

“The pain has just begun,” he concludes.

As municipal housing has declined and people buy instead of renting, so much money has been ploughed into bricks and mortar that British households have accumulated more debt than any other major advanced economy.The cruel reality of so-called “home ownership” (actually home indebtedness) is that of a dream turning into a nightmare – an unattainable fantasy. Those who have managed to scramble on to the first rung of the ladder pay an unprecedented one-fifth of their income on mortgage repayments. At about £200,000, average house prices are at nine times average earnings, the highest ever. The stark reality facing mortgage payers on both sides of the Atlantic adds substance to the analysis made in A World to Win’s new book, A House of Cards. What we are seeing is the crash of almost infinite amounts of debt, based on an unsustainable house price bubble. This is combined with the creation of countless and ever-more exotic financial products leveraged on debt, secured on ever-diminishing actual values.

Will the credit melt-down and economic down-turn automatically lead to the overthrow of the capitalist system and its replacement by a co-operative, not-for-profit economy? Of course not. But what it does mean is that for billions of people around the world, the conditions of their lives are changing dramatically. Confidence in the system at all levels is being shaken to the core. Until now, many people have been affected by a feeling of powerlessness that has made them reluctant to challenge the existing economic and political structures. But now the realities underneath the glossy images of homeownership and endless consumerism are breaking through. An understanding of how the system has reached this point is crucial. This is a good time to debate and develop the ideas for composting capitalism and building up a not-for-profit economy put forward in A House of Cards.

Corinna Lotz
AWTW Secretary

Thursday, November 29, 2007

Planetary emergency appeal

In the run up to the December crisis meeting on global warming, a call has gone out to world governments meeting in Bali to make a global energy and economic transition without delay in order to save the planet and its inhabitants from disaster. Signatories to the call say a “systemic shift” is needed just to stabilise the planet’s climate.

Drawn up by leading development and climate organisations, include the International Forum on Globalisation, Focus on the Global South and the Polaris Institute, the appeal calls on governments to "begin a pathway toward new global agreements that recognise and operate within our planet’s limits and equitably share its ecological space". It rightly points out that the proposals governments are likely to discuss in Bali will "dangerously underestimate the challenges confronting us".

Instead, the signatories make the case for having "deeper binding targets to reduce greenhouse gas emissions by at the very least 80% below 1990 levels by 2050... with solutions that place the greatest burden of adjustment on the richer nations, and the richer segments within all nations". The appeal demands that developed countries "drastically reduce consumption of energy and others resources, materials, and commodities" and proposes that "...conservation and re-localising cycles of ownership, production and consumption are the fastest, cheapest most efficient means toward powering down”.

Interestingly, the appeal recognises the need to "shift power away from global and national governance, and toward local economies, especially energy and food systems..". This appears to be the beginnings of a realisation that the structures of the existing society cannot deliver a sustainable future. There is a call for new development models that "satisfying basic human rights and basic human needs for all (such as survival, sufficiency, freedom, identity)", to replace existing measurements based on economic performance.

The signatories urge the creation of global financial mechanisms to help poor nations keep their resources and see the need to "drive ecological solutions that transform today’s patterns of production and consumption, replacing long-distance trade and absentee-ownership with decentralised economic activity under community control".

There is nothing in the appeal you could disagree with, even if there is no reference to the economic system known as capitalism anywhere in the document. The real issue revolves around how these absolutely necessary changes are to be achieved. In this respect, the signatories mistakenly place their faith in existing governments and institutions to carry through the transition. For example, the appeal claims: “Just as one of the oldest global bodies, the International Labour Organisation, includes representatives from governments, labour, and business, these new negotiations must involve all of the sectors of society to be effective.”

Just how naïve this approach is was demonstrated by the New Labour government last week when it effectively gave the green light for a new runway at Heathrow Airport, despite massive opposition from local communities and environmental groups. Transport secretary Ruth Kelly said expansion was needed to keep the British economy “competitive”. Her “solution” for the extra CO2 emissions that would occur was to ensure “that every tonne of carbon that is emitted from a plane is matched by a reduction somewhere else in Europe” through carbon trading.

Kelly’s decision is just one of countless examples of how corporate power and compliant governments are locked into a mutual dance of death at the planet’s expense. They are deaf to appeals, whatever their merits and logic, and incapable of tackling the planetary emergency in the way outlined by the signatories above. Political and economic life will have to be restructured from top to bottom by the mass of the people themselves independently of their rulers’ wishes. If there was an easier option, it would have been discovered by now.

Paul Feldman
AWTW communications editor

Wednesday, November 28, 2007

Dangerous and unpredictable times

The crisis of the Brown government has a self-destructive logic, taking us into politically uncharted and dangerous waters. There is heady and unpredictable mix of a government in melt down, state administrative systems in turmoil, a deepening banking and financial crisis and senior figures in the armed services denouncing the prime minister for his indifference.

Over the last decade, the Blair/Brown project has attempted to bring the state, government and corporate power into a unified, seamless whole held together not by politics but by a managerial team, headed by a chief executive officer (formerly known as the prime minister).

Ancient processes like the rule of law have gone by the board because they get in the way of efficient government. New Labour has regarded itself if not above the law, then at least its equivalent. The acceptance of £630,000 from a property developer through third parties was clearly in breach of laws passed by the New Labour government itself. Yet no fewer than three party general secretaries stood by as the money flowed into the coffers.

New Labour’s outlook is that laws and the legal system should be subordinate to government policies. For example, the fact that the invasion of Iraq was illegal under international law is seen of no consequence (although it was of concern to army chiefs concerned about the implications for troops). Holding foreign nationals in prison without trial was considered so important that human rights were flouted until the judiciary stepped in. In terms of the donations, only after having been found out is New Labour to return the cash.

Other crises over Northern Rock and the loss of data discs with 25 million people’s identities and financial information indicate that the New Labour project is floundering. The credit crunch that has overwhelmed Northern Rock is the most graphic expression of the end of a consumer/housing boom based on fantasy finance, one that was encouraged by New Labour ministers. In a futile bid to stop the rot, the government has loaned the bank up to £25 billion – with absolutely no guarantees about getting the money back. The financial crisis is worsening by the day while millions of people are struggling to pay their mortgages and credit card debts.

In this context, the intervention last week of five former chiefs of the defence staff in a co-ordinated attack in the House of Lords is nothing if not sinister. Their warning that the Ministry of Defence was facing "blood on the floor" because of budget cuts was unprecedented. They demanded increased spending on the forces and criticised the government for breaking the “military covenant” between the country and its armed forces. Lord Boyce, attacked the government for using "smoke and mirrors" to cover cuts in defence spending. He told peers: "We are seriously endangering our people because of the lack of money being given to equip, train and properly support those in the second line preparing to rotate to the front line." Another accused Brown of indifference to the armed forces by being the only senior cabinet minister who had avoided coming to the Ministry of Defence when he was chancellor.

The next question is: what do these former service chiefs – who were undoubtedly speaking for the mass of serving officers – going to do about it all? If those in charge of the state are betraying the armed forces, as they allege, what do they propose? Do they want to become the government? It’s not such a daft question as you think. These are dangerous and unpredictable times.

Paul Feldman
AWTW communications editor

Tuesday, November 27, 2007

Two states no solution for Palestinians

Palestinian leaders meeting the Israelis in Annapolis, Maryland, today will be offered nothing. Instead, they will be asked to sacrifice the right of Palestinian refugees to return, to abandon Palestinians living inside Israel’s 1948 borders and to forget about the aspirations of the Palestinians living in Jerusalem and Gaza. Failed preliminary talks over many weeks mean that all those attending the US-sponsored conference know in advance that no genuine gains can be made.

What is not on offer is a Palestinian state. Where are its borders? Who will control its borders with other countries? Where is its capital? Who has the right to live in it? By consistently postponing the solution of these crucial questions, the Zionist state of Israel has been able to continue to create “realities on the ground” that make any viable Palestinian state impossible. The West Bank and Gaza are two separate prisons. Gaza is a hell on earth for those who live there. On the West Bank, Palestinians continue to be deprived of their land and their right to education and work.

West Bank-based Palestinian leaders have been drawn so deeply into the so-called two-state solution, that they are in danger of sacrificing their own legitimacy to try and achieve it. But 14 years on from the signing of the Oslo Accords, the peace process has become a trap from which the Palestinians must find an exit. Tony Blair’s announcement last week of a handful of meaningless economic initiatives underlined the fact that the only people to benefit from the two-state process so far are a handful of well-off Palestinian businessmen, and the group who are involved in administering and policing the enclave.

Jewish settlements continue to expand into substantial towns, sucking in resources of land and water. The borders between Gaza and the West Bank and neighbouring countries have been cleared of housing and the Israeli army has seized strips of land so that it can control access in perpetuity. The Israeli government has no intention of removing its illegal wall, and further plans include Israeli-only roads. The conditions of most Palestinians have worsened since 1993 and the conflict has claimed more than 4,000 Palestinian lives and more than 1,000 Israeli lives.

A far more significant conference than the one in Annapolis took place in London recently. Organised by the London One State Group - Palestinian and Jewish students who work together - it attracted more than 300 academics, activists and students from all over the world to discuss an alternative way forward that challenges the right of Zionism to rule over a state based on religious exclusivity.

The conference heard from many speakers that the Palestine national cause – made up of Palestinians living in the occupied West Bank and Gaza, those living as refugees in other countries and those living as second-class citizens within the borders established in 1948 – has become more and more divided as a result of the doomed two-state process.

At the same time Israeli Jews are more and more sceptical both about the possibility of a peaceful settlement of the conflict, and – after the defeat of the Israeli army in Lebanon – the chance of a military solution. The conference concluded that the time is absolutely right to revive and bring up to date the proposition that the only way forward for Palestinians and Jews is the establishment of a single, democratic, secular state from the Sea to the Jordan River, where all the people of the region can live together with equal rights.

Penny Cole

Monday, November 26, 2007

Writers' strike holds firm

Today is high-noon in the three-week long stand-off between screen writers belonging to the Writers Guild of America and the big studio conglomerates which dominate US cinema and television screens. Leaders of the WGA and the Alliance of Motion Picture and Television Producers are resuming negotiations after powerful strike action by WGA members.

Twelve thousand writers have been picketing in both Los Angeles and New York City for demands aimed at preventing loss of income as a result of Internet broadcasting and DVD sales. At present, writers receive 4 cents per DVD sale and no residuals (royalties) from iTunes sales or advertising-supported free rebroadcasts on web sites such as Writers receive no payment from material aired for free on the Internet.

The strike has received tremendous support, not only from WGA members, but also from leading members of the acting profession who have spoken out and joined picket lines. Outside the film and television industry, recording artists like 13-year old singer-song-writer Shamim have also joined the picket lines. Shamim recently founded the Protection for Artistic Rights Coalition (PARC), an organisation whose ultimate goal is to spread youth awareness of the issues that artists face in an industry changed by the Internet and digital media. "I am affected by the same things that the writers are affected by with respect to digital media. I am a struggling recording artist who has music being downloaded freely through the Internet," She said. "At the end of the day we are all creative people who are watching profits and royalties stream in from advertisers to giant companies that haven't been paying artists their fair share."

US dockers have brought food hampers to picket lines, California Nurses Association members have joined the protests and Teamsters Union members parked trucks outside studio gates in demonstrations of solidarity. In the UK, the Writers Guild and International Art Critics Association have expressed support. The writers’ strike has also been strengthened by the support of show runners – the people who work as both writers and producers - such as Marc Cherry of “Desperate Housewives” fame.

Life-time WGA member Richard Walter noted that the present dispute was different from the last WGA strike in 1998: "Way back then there was more dissent within the guild, particularly involving the show runners. This year, very much to their credit, despite financial risk, show runners have been very pro-guild. Production has been affected much more directly and quickly than anticipated by management,” Walter said. “I’ve never seen anything like this in all my years – and I’ve been through seven or eight strikes.”

The show of unity amongst everyone from writers, actors, musicians , show runners and even producers in the American entertainment industry is awesome. WGA members are showing a side of the US that is too often submerged by right-wing governments like the Bush regime. The immense strength of the strike, together with a number of anti-government films coming out of Hollywood like Rendition, indicates that a big change is taking place across the Atlantic, coinciding with an historic crisis for the American economy

Corinna Lotz
A World to Win

Friday, November 23, 2007

Crying for Argentina

In the Argentine capital of Buenos Aires, the poor – many of them street children - scurry ahead of municipal lorries collecting in well-off areas. They are searching for glass, paper, cardboard, scraps of food - anything that can be reused. They also pick through rubbish dumps in search of food. But as political tensions rise throughout the country, the city’s right-wing mayor, businessman Mauricio Macri, has decided to curb their activities.

Last May, 30,000 people marched hundreds of kilometres to the capital under the banner “Hunger is a crime” demanding an end to poverty and a better life for the country’s children. Protests held around the country revealed seething discontent with poverty, low wages and state-sponsored repression. Over the last five years, shanty towns have been growing even though the economy has expanded by more than 8%, revealing continuing deep inequalities in Argentina.

Now the ruling elites are hitting back. Buenos Aires mayor Macri, has declared: “It is as much a crime to steal garbage as it is to rob a person round the corner.” The city government has set punitive rules for those try to survive off refuse.
Alberto Morlachetti, a campaigner for Pelota de Trapo foundation, that champions the rights of street children, says angrily: “Garbage has become a sacred value. It must not be tossed away, it cannot be mixed as if it lacked categories…. It cannot be left lying around because it has proprietors. The duty not to waste our rubbish has become a civil mandate. Mayor Macri was one of the precursors of this passion for garbage and the importance of urban detritus and their transformation into merchandise. Rubbish-tip pickers are now required to wear a vest, gloves, reflective tape and have official permits in order to be able to work and feed themselves. The governor’s whip must bear down hard enough so that the crime - of those who want to eat – does not start again.”

Macri’s election as mayor last June was seen as a tough challenge to the government of Nestor Kirchner, who is being succeeded by his wife, president-elect Cristina Fernandez de Kirchner. Yesterday it emerged that Argentina’s defence minister Nilda Garré sacked Brigadier General Osvaldo Montero, head of military intelligence, after discovering that he had plotted against her appointment. Defence minister Garré is part of the government being formed by Cristina Kirchner, due to take over as president on December 10. Taped conversations revealed that the Brigadier General had told interior ministry officials that Garré, who is well-known as a former Peronist left-winger and the first woman to hold office as defence minister, had to go. The plotting by the military intelligence chief incident speaks of uneasy relations between Kirchner’s civilian government and the military, whose brutal dictatorship during the 1970s led to the “disappearance” of 30,000 people.

Kirchner’s husband-to-wife handover cannot mask deep-seated problems economic as well as political problems. Tensions are mounting between the big power suppliers and Kirchner, who plans to continue her husband’s policy of keeping prices largely frozen for residential users since the country's economic collapse in 2001-2002 which hit middle-class voters particularly hard. During that crisis, millions became involved in a variety of actions, including takeovers of factories by workers whose bosses had gone bankrupt. The downturn in the global economy driven by the credit crisis will hit Argentina hard. Cristina Kirchner’s government is in for a rough ride.

Cornna Lotz
AWTW secretary

Thursday, November 22, 2007

Put New Labour in the post

The government’s refusal to accept responsibility for the loss of personal and financial records of 25 million people is absolutely typical. Blaming some “junior official” acting alone is simply an excuse to avoid the fact that ten years of New Labour have created the conditions for what happened at Revenue and Customs (HMRC).

Infatuated by managerialism, New Labour has tried to turn the state into a mirror image of the way big business functions. Like most of its other policies, this has proved an abject failure. Endless mergers and acquisitions of government departments, stuffing ministries out with consultants and corporate advisors, on top of ruthless “efficiency savings”, have created not only widespread chaos and confusion but major policy failures in every department.

The story of Revenue & Customs is typical. In 2005, when Brown was Chancellor, he merged what had been historically two separate departments into one. The price was paid by staff after Brown demanded that the merged department shed 25,000 jobs out of 94,000 – more than a quarter. Morale inevitably plummeted and management systems floundered. The disappearance of the child benefit data discs was only one in a string of breaches of security. Yet the government has until now refused appeals by the Information Commissioner Richard Thomas to do spot checks on government departments to see whether data protection is being observed. The Institute of Chartered Accountants has been warning of a catastrophe waiting to happen at HMRC. Chief executive Michael Izza said: “We have been flagging for most of 2007 that there has been a deterioration at HMRC. It manifests itself in things like postbags being unopened for weeks. It now takes 13 weeks to register a new company for a VAT number.”

The mantra of “efficiency savings” has contributed in other ways to the data loss disaster. Apparently, officials at HMRC told the National Audit Office (NAO) that it was too expensive to select the data the NAO wanted and that it was cheaper to download the entire database onto a disc. Then there is the way the discs were transported. Not for New Labour the use of expensive, in-house services. No, TNT Logistics, a major global corporation, has the contract for HMRC. As to the idea that one, young civil servant is totally responsible for the breach of security, this is simply laughable. New evidence suggests senior officials were aware that data including addresses and bank account details of 7.5 million families, was to be provided to the NAO. Sir John Bourn, the outgoing comptroller and auditor general, told a secret session of MPs on public accounts committee that a senior business manager at Revenue & Customs had authorised the information to be released in its full form. His email approving the sharing of the data was copied to an assistant director.

So now the government is involved in a cover-up of what really happened. While it builds an oppressive, authoritarian, surveillance state, New Labour can’t even provide basic protection of the data it holds on citizens. It’s time Brown and company were packaged up and sent unregistered (preferably by TNT) to some faraway destination.

Wednesday, November 21, 2007

Climate report passes the buck

Even vetting by the US government could not prevent the Intergovernmental Panel on Climate Change (IPCC) from opening its synthesis report with the stark statement that "warming of the climate system is unequivocal". The United Nations agency has, however, once again passed on identifying the main cause and fails to come up with any solutions to climate change that might challenge the status quo.

A jump in GHG emissions has not only resulted in rising temperatures but also been responsible for the increasing number of heat waves (such as the one that caused the deaths of thousands in France in 2003) and droughts (currently causing major problems even in developed countries like Australia and in Tennessee in the United States). Rising emissions are also behind rising sea levels and has affected tropical storm systems (the cyclone which hit Bangladesh last week claimed over 10,000 lives).

IPCC scientists also warn that the consequences of allowing temperatures to rise un-checked could expose up to 250 million people to increased water stress in Africa alone, where rain-fed agriculture yields could be halved. The synthesis report admits that GHG emissions will continue to rise even with current "climate change mitigation policies" and "sustainable practices". These could result in changes to climate systems even greater than already experienced and could lead to abrupt or irreversible impacts (such as oceans rising several metres if polar ice sheets are lost). Up to a third of all the planet's animals and plants face extinction as temperatures rise.

While the IPCC report admits that adaptive capacity is unevenly distributed both "across and within societies", a recent Christian Aid report, Truly Inconvenient: Tackling poverty & climate change at once shows that for millions of the world's poor “safe” levels of climate change have already been exceeded. Christian Aid rightly points out that "industrialised nations" (aka global capitalism) have been responsible for causing the climate crisis and it is they who should start to put it right. It even recognises the need for a debate about the "very nature of development".

The IPCC report does confirm that global warming is due to the increase in greenhouse gas (GHG) emissions arising from the activities of the society we live in and that these have increased by 70% since 1970. As this is the period that has seen the rapid growth of global capitalism, it appears to leave little room for argument as to the real culprit for the climate crisis we are facing.

Yet the solutions proposed by the synthesis report, however, are firmly wedded to the status quo. The only “solutions” are market-led, with the IPCC seeing "substantial economic potential for the mitigation of global GHG emissions". It still supports the use of nuclear power for generating energy and biofuels for transport despite the dangers of radioactive pollution and increasing food prices for the world’s poor from farmers diverting to more profitable biofuel crops. The IPCC still sees industries trading in carbon as "an effective carbon-price signal” which could “realise significant mitigation potential”.

What the report fails to recognise that to truly tackle this crisis, a fundamental change in how society is organised will be needed. This is the very question that Running a Temperature addresses published by AWTW addresses, providing a clear and alternative framework for dealing with the climate crisis beyond capitalism.

Stuart Barlow

Tuesday, November 20, 2007

Sarkozy’s ‘Thatcher moment’

The outcome of the strike movement sweeping France is being monitored closely by The Economist and other voices of the market economy. “Let battle commence”, urged The Economist (15 November). “Can Nicolas Sarkozy be a French Margaret Thatcher?” asked Les Echos, a business newspaper. “Is Sarkozy ready for a long trial of strength with the unions à la Thatcher?” mused Le Parisien, in a reference to the class conflict that shook Britain between 1982 and 1986.

Previous French governments have lost their nerve in the face of strikes and demonstrations against plans to impose what is referred to as the Anglo-Saxon globalisation model by the country’s trade unions. This is viewed, correctly, as an economy based on flexible, low-cost labour, the unfettered movement of capital and a continuing reduction in social benefits and rights.

Will Nicholas Sarkozy stand firm, The Economist asks? It recalls with alarm the attempt in 1995 by the Chirac government to break up the country’s excellent public-sector pension schemes. Sarcastically, the magazine notes: “In the end, Jacques Chirac's government did what French governments do best: it backed down and dropped the whole plan.” It sees more hopeful signs this time, as Sarkozy confronts strikes by transport workers, civil servants, teachers and protests by students against plans to open universities to corporate investment.

Sarkozy wants to end what are known as “special regimes”. These allow railway, electricity and gas workers to retire on full pension after 37½ years of pension contributions, rather than 40 years in the rest of the public sector. Some 500,000 workers, and 1.1m pensioners, benefit from these regimes. Over the next four years, Sarkozy wants to lengthen the required contribution period to 40 years. The government also wants to extend to 41 years the required pension-contribution period for all workers, as well as introduce changes to the labour market and the benefit system.

The Economist is keeping its fingers crossed. By comparison with his predecessors, the magazine notes, Sarkozy has done exactly what he said he would do. And he has calculated that the leaders of the strike movement are looking for a compromise rather than building a momentum to bring down his government. The government has said it is prepared to talk about details in an effort to woo union leaders. The Economist is not completely convinced that France will enter the world of Anglo-Saxon globalisation, however, warning: “The deal he [Sarkozy] does on special regimes needs to be scrutinised to see how far he keeps his word.”

Nevertheless, the strike movement in France, along with industrial action by railway workers in Germany and nurses in Finland, indicate a rising tide of militancy just as the wheels come off the global economy. With the euro rising to new heights against the declining dollar, exports from the European Union become more expensive. This is what is driving the state and employers to reduce workers’ conditions. The events in France could presage a European-wide period more like the revolutionary year of 1968. Now that would really get The Economist worried!

Paul Feldman
AWTW communications editor

Monday, November 19, 2007

Bankers the priority for New Labour

When it comes to bailing out bankers, the New Labour government’s coffers are deep, as shown by the vast amounts of taxpayers’ money used in the futile bid to save Northern Rock. Contrast this with the treatment meted out to people claiming disability benefits and spending cuts imposed on climate change agencies as well as the body that reviews miscarriages of justice, and you get the picture about where priorities lie.

The government has loaned the failed Northern Rock anywhere between £22 and £40 billion and is not quite sure when - or even if - the state will gets its money back. There’s billions in interest due on top of the capital sum and city commentators are agreed that that this is unlikely ever to be repaid by whoever ends up buying the first British victim of the global financial crisis. Today it is revealed that potential buyers have valued the stricken mortgage bank at well below the closing price of its shares on Friday. They were selling at 132.6p each, giving the bank a valuation of £560 million. So much for the government’s soothing words about Northern Rock’s assets totalling over £100 billion.

Meanwhile, spending cuts are coming in thick and fast as the government slashes vital services in a bid to balance its books. According to leaked reports, there are plans to cut £300 million off the budgets of agencies funded through the Department of the Environment, Food and Rural Affairs (Defra). Nature England is being asked to cut 30% from its budget for new conservation work. In addition, it is being asked to repay the £12 million spent on setting it up! Another agency facing cuts is the Waste and Resources Action Programme, along with other organisations dealing with canals, national parks, forestry, fisheries, sustainable development and environmental protection. These cuts expose the sham nature of the government’s claim to be tackling climate change just as leading scientists warn of an impending catastrophe as a result of global warming.

Also facing swingeing cuts is the Criminal Case Review Commission (CCRC). Staff are not being replaced and chairman Professor Graham Zellick said that the CCRC had made “great strides” in dealing with a backlog of cases. “Now that’s all going to be reversed, I suspect.” Solicitor Campbell Malone, who helped clear the name of a man wrongly jailed for murder, was more blunt. “The philosophy of this government seems to be that miscarriages of justice don’t matter any more. The climate is changing and the thinking seems to be that, if you go on interviewing people long enough, they will eventually confess.”

Soon to join the wrongly convicted as victims are the disabled. Work and pensions secretary Peter Hain has announced that fewer sick and disabled people will qualify for disability benefits for being unable to work, after a new test is introduced from next year. Hain says the changes will end what he calls "sick-note Britain", which is fine coming from someone who is paid £136,677 a year and who is entitled to endless holidays and various allowances. At the moment more than 60% of the people who apply for incapacity benefits are successful, but only 50% of people who take the new test are likely to pass it. The moral of the story is that if you’re a banker, New Labour will see you alright. But if you doing vital public service work or have a disability, forget it.

Paul Feldman
AWTW communications editor

Friday, November 16, 2007

Co-Op FC a winner

At first sight, it might seem like an idea for a new comedy. A football website buys a controlling interest in a serious football club, promising the 20,000 fans who have each put up £35, not only joint ownership, but an equal say in team selection, player transfers and the running of the club. “Own the club and pick the team”, says the website.

A closer examination of the project reveals a wonderful experiment in democracy and co-operative decision-making, made possible by the internet. Football at the top end, of course, like everything else, has been sucked into the orbit of big business and the exceedingly rich dilettantes, oligarchs and billionaires who control it. It has been turned into a capitalist industry with the primary purpose of making money and satisfying the egos of the owners. Many fans have been excluded by soaring ticket prices from even watching their teams.

It couldn’t be more different at Ebbsfleet United (formerly Gravesend and Northfleet FC), in North Kent. Proposals from the new owners are not only designed to give the fans a voice and a share of the club, both on and off the pitch, but also to stop any possible takeover or abuse by one or more individual interests. It is open to all to pay the £35 (less than the cost of a ticket to watch many premiership matches) and become a voting member, including those living overseas (which will help the club’s scouting network, says the site), but nobody is allowed to buy more than a single share. “All profits generated by the club will be re-invested in the club, meaning members will not be paid a dividend or share of these profits… There will be no shareholders who take money out of the club.”

How will the team be picked? “The head coach will brief members online. This will include a review of the previous match, reports from the training ground and views on the forthcoming opposition. He will also give his thoughts on players, their form and fitness, as well as possible selections and tactics. Members will then submit their preferred 11, formation and tactics. A database will calculate the most popular choice. This will be handed to the Head Coach to instigate.” The manager (to be re-named head coach), the players, the full-time employees and everyone involved are all supporting the takeover of Ebbsfleet United, currently 9th in the Blue Square Premier League and only one promotion away from getting into the Football League proper.

The plan is unheard of in football; in fact it is rare outside the game. Several clubs have been formed by supporters trusts, but none of them have this level of input and control by members. Wimbledon AFC in 2002 and FC United of Manchester in 2005 were both set up as not-for-profit trusts by fans infuriated at decisions taken, with money and profit in mind, by the directors of Wimbledon and Manchester United.

Both these new teams are doing well and regularly get gates of between 2,000-3,000 at home matches, far larger than any of the other teams in their league. Soon after the takeover of Manchester United by the Glazers, one of the fans of the new club, FC United, Martin Howe, said: “The excitement is back in my football life. The banter with the fans, the quality of the football, the pricing and , best of all, the feeling of being part of something that is not funding unscrupulous men in suits, but is ours, it belongs to all of us”.

Developments like these at Wimbledon and Manchester, and now at Ebbsfleet arise from a powerful hostility to the commercialism rampant not just in football , but in all sport. And they point the way to new forms of ownership and co-operative working in the wider world beyond sport.

Peter Arkell

Thursday, November 15, 2007

Just not cricket

There’s a striking simultaneity about events in Britain and Pakistan in the last 24 hours. Yesterday in Pakistan, Imran Khan, current Chancellor of the University of Bradford, former captain of the Pakistan cricket team - one of the finest all-rounders the game has ever produced - and a graduate of Oxford University, attended a protest rally against the imposition of emergency rule by US-supported authoritarian military dictator President Musharraf. Within minutes of appearing Khan was seized by religious students and handed over to the police who charged him under anti-terrorism legislation. Penalties under the act include life imprisonment and death.

Yesterday in New Labour’s Britain, as the Governor of the Bank of England warned of increasing threats to the economyfrom the global financial crisis, Gordon Brown introduced new measures to counter the perceived threat of terrorism. These include hardening the physical protection for public buildings, offering guidance to those operating public buildings, strengthening regional counter terrorism units, and “training neighbourhood police teams to deal with radicalisation in their local communities”. In addition, a single senior judge has been nominated to manage all terrorism cases, whilst a single senior lead prosecutor will be responsible for cases relating to “inciting violent extremism”. Musharraf has cited “judicial activism” – opposition from the judiciary - amongst his reasons for locking up all political opponents. It certainly looks as through Brown is side-stepping any future judicial opposition in the UK by selecting those who can be trusted to toe the line.

A major, nationwide “hearts and minds” campaign of propaganda emphasising “our shared values” will be launched in every community through schools, colleges, mosques and sports facilities, amongst faith groups and criminalised youth, in fact anywhere where people might be influenced by “ideologues” proposing radical change. After ten years with personal responsibility for the British economy, it is clear that Brown shares his values with his financial friends in the City of London, so “updated advice for universities on how to deal with extremism on the campus” is highly likely to include the identification of students seeking changes to the status quo, and guidance on neutralising them and rooting them out.

Also yesterday contracts were issued for the intelligence infrastructure involving biometric technology and shared databases, to support the UK Border Agency which will have 25,000 staff, uniting passport control, and customs with new powers of arrest and detention. Together with a new legislative assault on the rights to privacy and confidentiality, these measures will enable a huge range of police and other agencies to share up to 90 separate pieces of information on all cross-border travellers. “Airline liaison officers” based abroad will have new powers to cancel visas.

As the global recession begins to hit hard, millions will be radicalised as they lose their jobs and homes. New Labour is in the forefront of governments preparing and implementing a wide range of authoritarian measures to deal not just with suspected terrorists, but all those opposed to the capitalist corporations and the consequences of globalisation. No wonder the government’s response to Musharraf’s suspension of the constitution and the removal of Pakistan’s top judges has been muted.

Gerry Gold

Wednesday, November 14, 2007

Lost for words in the digital age

In what may be a shock for those who believe that the digital age has made class struggle so last century, household names from TV and Hollywood are picketing and rallying in support of the Writers Guild of America (WGA) on both sides of America. Spirits are running high as rallies bring together writers and performers against the corporate studios that dominate TV, DVD, film and Internet entertainment. Over 1,000 writers - a twelfth of the Writers Guild of America membership – organised by "strike captains" - have been picketing in Los Angeles and New York since last week.

The WGA wants to renegotiate its contract with the Hollywood studios over the amount of money they receive from DVD sales. The big studios have used digital technologies to reduce the payments (called residuals) that writers receive every time a TV show they have written the script for is repeated. They know that the media corporations will not compensate them as new ways of downloading content proliferate. A video explains how studios plan to pay writers the lowest rates possible for DVD and Internet “residuals”. They fear that they will lose a large chunk of their income as television and Internet programmes are being merged.

Films posted on U-tube by the WGA demonstrate an amazing degree of solidarity from top stars who are on the picket lines in support of the screenwriters. In Los Angeles, actor Ray Romano brought bagels, fruit and orange juice for strikers outside Paramount Studios while in New York, Roseanne Barr, Holly Hunter and David Hyde Pierce joined the picket line. Actors like Tim Robbins and David Duchovny who are members of the WGA marched in solidarity. Glenn Close and Robert Redford paid tribute to writers, saying that without them, no story could be told and that actors would not be able to do their jobs.

TV personalities Seth Meyers, Tina Fey and Eva Longoria Parker offered sympathy and food when strkers protested on the "Desperate Housewives" set. On Day 5 of the strike, in New York, Rage Against the Machine singer Tom Morello, a long-time member of the US musicians union, sang a “freedom, fighting, union song” and said that the future of America would be decided “on the sidewalk outside Fox Studios”.

Tomorrow and Friday 500 writers, graphic artists, editors and producers in New York, Los Angeles, Chicago and Washington, also members of the WGA are voting whether to strike against CBS news, thereby joining their screen writer colleagues who are already on strike. Members who work in network and local TV and radio have not had a pay rise since 2004.

Observers have been surprised by the way in which different professionals and workers in of the US entertainment industry have come together to air their grievances and oppose the corporates who control the entertainment industry. Cornell University labour economist Richard Hurd comments: "Even though the topics of the two strikes are different, they're both being driven by the changing nature of the industries and the increased concentration of ownership. The view of the conglomerates is that they have to minimise costs and maximise returns, and the unions feel that they're not getting what they deserve. There are moral principles at stake for both."

One might ask what kind of “morality” is it that makes life impossible for writers who are actually unemployed half the year, due to the casual and fluctuating offers of work, to pay their mortgages and afford health insurance? The answer is to be found on the picket lines across America.

Corinna Lotz
AWTW secretary

Tuesday, November 13, 2007

The great unravelling

“Housing market faces big slowdown” reports the Financial Times, while today’s Daily Telegraph main headline is “Fastest rise in food prices for 14 years”. These are not unrelated stories but are further indications of the great unravelling that is occurring in the major capitalist economies and financial system.

In ten years, house prices in Britain have gone through the roof (pardon the pun), rising by 300-400% depending on the region. This unsustainable inflation was fuelled by low interest rates, mortgage loans five, six or more times annual income, a shortage of new affordable home both to buy and rent and, in general, a belief that the sky was the limit. In this dream-like world, vast numbers of people remortgaged against the increased “value” of their property to buy consumer goods and thus keep the global economy ticking over.

This process was an expression at a personal level of what was taking place at macro-economic level. For 30 years, global corporations have borrowed heavily to finance their expansion/mergers/takeovers. In turn, this gave rise to a new global financial system where money could apparently beget even greater sums of money by sheer electronic manipulation. It was as if the Middle Ages alchemist’s promise of turning common metals into gold had at last become possible. The “share” that fell to ordinary people came in the form of credit (meaning debt) to buy more of the goods that the corporations were turning out.

Which brings us to the Daily Telegraph story about food prices. They are increasing at their highest rate for more than a decade, according to official figures released yesterday. Food factories are having to pay 6% more for their raw ingredients than a year ago - the highest annual rate since 1993, says the government’s National Statistics office.

A survey by the website, which compares prices across online supermarket chains, found that the three biggest - Tesco, Asda and Sainsbury's - are charging their shoppers 12% more on average for a basket of 25 staple goods compared with last year. That equates to an annual increase for most families of about £750. A kilo of peas has gone up from £1.19 to £1.79 at Tesco, a dozen eggs at Sainsbury's has leapt from £1.62 to £2.35, while Asda has increased the price of its orange juice from 73p a litre to 88p. The cost of a pint of milk has reached an all-time high of 33½p and sliced bread costs a record £1.20 in big stores.

Driving food price inflation is climate change – itself a product of unsustainable capitalist growth - combined with rising fuel prices. Global warming has produced a drought in some key crop growing areas, notably in Australia and the United States. Adding to grain shortages is the turning over of crop land from growing for food to production of raw material for ethanol and other biofuels. In addition, whole areas of former farmland in China and India are being given over to manufacturing and service industries, leading to greater pressure on world supply. Fuel costs have soared as the price of oil reaches nearly $100 a barrel. This in turn is a reflection of the falling value of the dollar, in which oil is priced. The dollar’s devaluation is absolutely connected to the fact that the United States has lived on borrowed money for several decades.

The impending collapse of the housing market combined with rampant inflation will devastate millions of lives. Alternatives to the crazed world of the market economy are urgently required. A House of Cards – from fantasy finance to global crash has some viable proposals. Why don’t you check them out?

Paul Feldman
AWTW communications editor

Monday, November 12, 2007

Big business backing Democrats

Just as in the 1990s, big business in the United States is lining up behind the Democratic Party ahead of next year’s presidential elections. The Republicans under Bush are now so discredited that the corporations are looking for another horse to back. They don’t have to worry. In fact, the Democrats are queuing up to take their money, according to someone who knows all about global corporations and their influence. William Greider wrote one of the first critiques of corporate-driven globalisation in 1998, called One World Ready or Not - the manic logic of global capitalism. His best-selling book demonstrated how corporations moved their production around, seeking out cheaper labour areas and new markets. Now Greider has condemned the Democrats for helping Bush to create a variation of the North American Free Trade Agreement (NAFTA), this time with Peru.

Last week, the Democrat speaker in Congress Speaker Nancy Pelosi got 109 Democrats to vote for the Peru trade bill, which was passed with Republican with 116 Democrats and a handful of Republicans voting against. Why did Pelosi push so hard that it divided her party and bringing fierce condemnation from the trade union movement and environmentalists?

Greider cites Steven R.Weisman of the New York Times, who concluded: "Democrats from the prosperous areas of the East and West Coast have become especially responsive, many Democrats say, to the desire of Wall Street and the high technology, health, pharmaceutical and entertainment industries to expand their sales overseas. These industries have also become major Democratic contributors." She did it for the money, is Greider’s conclusion. Writing for The Nation’s blog, he says: “Pelosi chose to stand with the money guys and dismiss the political backlash against globalisation building across the country.”

The “money guys” have never had a problem with the Democrats. NAFTA was established during Bill Clinton’s tenure of the White House, as was the World Trade Organisation. The WTO has become the global enforcer of the market economy to the detriment of workers in every country. NAFTA has created misery for millions of Mexicans working in border areas for US-based global corporations, while an estimated three million manufacturing jobs have disappeared from the United States. In factories largely hidden from view, and agricultural areas close to the US/Mexican border, workers labour in appalling conditions to make commodities and produce food for the American market. NAFTA tore up decades of labour laws established by Mexican workers and the same intensive exploitation is planned in Peru.

As economic and financial conditions deteriorate inside the United States in the wake of the sub-prime housing crisis, credit crunch and a dollar in freefall, the corporations are desperate for new opportunities. Peru is seen as the first step to expanding NAFTA through South and Central America. With the likelihood of another Clinton taking the presidency in 2008, big business is sitting pretty when it comes to tying up the political ends. The social backlash against the banks, mortgage companies - and the Democrats - is only just beginning, however.

Paul Feldman
AWTW communications editor

Friday, November 09, 2007

Police above the law

The refusal of the Metropolitan Police Commissioner Sir Ian Blair to quit over the killing – or, more precisely, execution - of Jean Charles de Menezes at Stockwell Tube station in 2005 verifies one thing above all: the capitalist state and its institutions consider themselves above the rest of society and see no reason why they should be made accountable for their actions.

While ordinary workers can get fired on a pretext, or for some minor misdemeanour like stealing some paper clips or discarded materials, the police, MPs, ministers, judges, senior civil servants, MI5 and MI6 spies and the like can and do get away with almost anything. Police can kill innocent people going about their business, cover up their actions, block inquiries, while ministers break election promises, take secret decisions to go to war and authorise the infiltration and destabilisation of legal organisations.

All these actions are sanctioned because they carry the authority of a state that is there to rule over people and maintain the status quo. That, above all, means the perpetuation of private property rights. We’re not talking about people’s houses but the legal right to form companies, employ labour, sell products and services and keep the profits. What is generally known as capitalism. Try taking over a factory or office in defence or jobs and you are doing something illegal which strikes at the heart of private property. And the state will be down like a ton of bricks to restore the owner’s “rights”.

So Blair’s refusal to quit his job is no surprise. After all, no one in the Metropolitan Police has admitted responsibility for the shooting dead of a Brazilian electrician while he sat in a Tube carriage quietly reading his paper. In this sense, the police are above the law. They have a shoot-to-kill policy (nodded through in secret by the toothless, pathetic Metropolitan Police Authority) similar to the one adopted by the British army against Republicans in the north of Ireland.

So long as they think there is a danger to themselves or the public, they can kill someone – and there’s no comeback. The case of Harry Stanley, shot dead in 1999, is typical. He left a pub in Hackney carrying a chair leg in a bag. Someone phoned the police to say he had a weapon. Police arrived and minutes later Stanley was dead. No one was prosecuted. After all, police thought he had a weapon. De Menezes, despite police disinformation in the wake of his death, did not wear bulky clothes that might have concealed a bomb, did not leap over the Tube ticket barrier, behaved calmly and was given no warning before being shot. But Blair did attempt to block an independent inquiry, during which time the police involved wrote up their notes so that they told the same story.

It can only get worse as the state introduces ID cards, a national DNA database, extends the scope of what constitutes a criminal offence, monitors phone calls and e-mails and continues stop-and-search aimed at minority communities. This kind of state is beyond reform. Struggling for a new, democratic state, in which all institutions are subordinate and accountable to popular control, is the best way to remember Jean Charles de Menezes

Paul Feldman
AWTW communications editor

Thursday, November 08, 2007

Everyone's a 'suspect'

Just in case you thought New Labour’s planned new anti-terror laws were bad enough, pay attention to what the European Union is cooking up. This undemocratic, bureaucratic organisation is bringing forward a raft of measures that add to the growth of a European-wide authoritarian state.

The workings of the EU are obscure but thanks to Statewatch we can just about fathom out what’s going on. In its latest bulletin, the independent monitoring group analyses new terrorism laws planned by the European Commission. These would create three new categories of criminal offence: provocation to commit terrorism, recruitment for terrorism and training for terrorism. The "provocation" offence is extremely broad, as it does not require a direct encouragement to commit terrorist acts but applies to any statements which create a "danger" of such acts being committed. Statewatch warns:

“The wording of this definition is clearly likely to result in the criminalisation of the expression of political views (for example on the situation in Middle East or on certain conflicts within Member States) even if that expression does not in any way include the advocacy of terrorism to support those opinions. It will be enough that the authorities deem that there is a ‘danger’ that this will happen.”

Then there are the plans to fingerprint all children over six for EU passports. The commission would have included even younger children but the idea was rejected because the under-6s don’t yet have fully-identifiable fingerprints! Finally, this week the European Commission announced plans for a PNR (passenger name record) scheme to monitor all travel in and out of the EU. Similar data is already being collected under a EU-US scheme that sailed through without parliamentary approval.

All passengers, including visitors from the USA, will be “profiled” to see if they constitute a “risk”. If they are, they can be refused entry. The "profile" will be updated and held for 13 years. This will involve millions of quite innocent people being kept on record. Tony Bunyan, Statewatch editor, comments: "This is yet another measure that places everyone under surveillance and makes everyone a ‘suspect’ without any meaningful right to know how the data is used, how it is further processed and by whom. We have already got the mandatory taking of fingerprints for passports and ID cards and the mandatory storage of telecommunications data of every communication, now we are to have the mandatory logging of all travel in and out of the EU.

“The underlying rationale for each of the measures is the same - all are needed to tackle terrorism. Yet there is little evidence that the gathering of mountain upon mountain of data on the activities of every person in the EU makes a significant contribution. On the other hand, the use of this data for other purposes, now or in the future, will make the EU the most surveilled place in the world".

Bunyan says that the "profiling" of all airline passengers has “no place in a democracy”. He is right. The trouble is that behind the façade of parliamentary democracy, a terrifying authoritarian state is nearing completion. It’s an EU-wide project in which the New Labour government plays the leading role.

Paul Feldman
AWTW communications editor

Wednesday, November 07, 2007

Ten days that shook the world

Ninety years ago today, a remarkable series of events began in Russia that would change the course of the 20th century. The first anti-capitalist, workers’ revolution in history was set in motion. Immediately, the new government offered an armistice, carrying out its pledge to withdraw from the slaughter of the First World War.

At 10am on November 7, 1917, the Military Revolutionary Committee (MRC) of the Petrograd Soviet announced the disbanding of the Provisional Government which had taken power after the overthrow of the Tsar earlier in the year but which had continued the war. The MRC’s proclamation, drawn up by Lenin, leader of the Bolshevik Party, read:

“The Provisional Government has been deposed. State power has passed into the hands of the organ of the Petrograd Soviet of Workers' and Soldiers' Deputies - the Revolutionary Military Committee, which heads the Petrograd proletariat and the garrison. The cause for which the people have fought, namely, the immediate offer of a democratic peace, the abolition of landed proprietorship, workers' control over production, and the establishment of Soviet power - this cause has been secured.
Long live the revolution of workers, soldiers and peasants!”

The MRC, under the direction of the Bolshevik leader Trotsky, had carried out an insurrection in Petrograd (now St Petersburg), storming the Winter Palace and arresting the government. The next day, Lenin was elected as the Chairman of the Council of People's Commissars by the Russian Congress of Soviets which gathered in Petrograd. Soviet power then spread across Russia. Liberal and monarchist forces, “the Whites” immediately went to war against the Bolshevik’s Red Army, backed by capitalist powers around the world, including Britain.

For a period, the revolution flourished despite the deprivations of the civil war. Revolutionaries from around the world flocked to Russia to join an international movement aimed at overthrowing capitalism in each country. But the failure of the 1918-1919 German Revolution and Lenin’s untimely death in January 1924 became key factors in the rise of a reactionary bureaucracy headed by Stalin. Trotsky and the Left Opposition struggled hard for an alternative, democratic socialist course, but were defeated by the end of the 1920s. The subsequent destruction of the Bolshevik Party, the murder of its leaders in show trials and the perversion of its policies and aims were among the greatest crimes of the 20th century.

A superficial reading of the subsequent history of the 1917 revolution – promoted and perpetuated by the capitalist media and right-wing historians like Orlando Figes – frequently lumps together Bolshevism with Stalin’s reign of terror. In this way, they bury the unique achievements of the revolution and the masses and leaders who made it possible. The collapse of the Soviet Union in 1991 is often labelled the “end of communism”.

But the truth is that Stalinism was counter-revolutionary and essentially anti-communist. Lenin and Trotsky always insisted that socialism could never be built in an isolated way in a single country and the rise of the Stalinist bureaucracy, which usurped political power from the masses and created a totalitarian state, is proof of this. Gorbachev’s attempt to restore Soviet democracy and restructure the economy, heroic effort though it was, could not undo decades of backwardness or overcome the resistance of die-hard Stalinists. Their failed coup of August 1991 precipitated the collapse of the USSR later that year.

First under Yeltsin and now under Putin, Russia has reverted to a capitalism where oligarchs, who effectively stole the state assets built up during the 90 years of the USSR, hold sway. Yet while the socialist property relations established by the October Revolution have been legally abolished, the legacy of revolution lives on in other forms.

The courage and audacity of the revolutionary masses, and the ability of the Bolshevik Party to seize the time, have gone down forever as a landmark in history, proving that such a change could be made and that decisive leadership was the key. The decision to withdraw Russia from the conflict, helped to bring World War I to an end and inspired millions around the world. The Red Army’s ability to defeat the Nazi war machine in World War II – which was more significant than the fighting on the Western front - was due to the economic achievements of the revolution. The glasnost period of the 1980s opened up a new understanding of the phenomenal opposition to Stalinism.

Let American Communist John Reed, who set down the first major account of the Russian Revolution, Ten Days that Shook the World, have the last word: “It is fashionable,” he wrote in 1919 “… to speak of the Bolshevik insurrection as an ‘adventure’. Adventure it was, and one of the most marvellous mankind ever embarked upon, sweeping into history as the head of the toiling masses, and staking everything on their vast and simple desires… No matter what one thinks of Bolshevism.”

As the global economy lurches into its worst crisis since the Wall Street crash of 1929, against a background of climate chaos and military tensions, new political conditions are emerging. The need for humanity to open a new, non-capitalist chapter in history is as urgent a challenge now as it was for the Bolsheviks in 1917.

Corinna Lotz
AWTW secretary

Tuesday, November 06, 2007

New Labour plays race card

Targeting immigrant workers is becoming the number one priority for governments from Italy, to Switzerland and Britain. In Italy, Romanian and other foreign nationals have had their shanty homes in Rome torn down and been rounded up for deportation after an emergency presidential decree. The fact that the measures contravene EU laws are simply ignored by the authorities. In Britain, New Labour is announcing yet another immigration bill to add to the one already going through Parliament, while new so-called anti-terror measures also included in its legislative programme are directly aimed at the Muslim community in this country.

Playing the racist, nationalist card is a sign that governments have no policies for tackling the issues generated by the movement of people in search of work and a future and instead cynically manipulate public opinion in search of few grubby votes. The way it works is quite simple. New Labour promotes flexible, cheap labour as the basis of a “competitive” economy but turns a blind eye to the social consequences. Local authorities struggle to provide sufficient housing and education for newcomers without additional financial support from central government, which doesn’t even keep proper statistics. Racists then use the tensions that arise to stir up hatred of foreigners in general. So the government brings in another piece of anti-immigrant legislation, stoking up the atmosphere still further.

The tone was set as soon as Gordon Brown took over as prime minister. He pronounced that there would be “British jobs for British workers”, even though this is totally unworkable and is also against EU law. Then at his party’s charade of a conference, Brown used the term British or Britishness over 80 times against a backdrop of Union Jacks. So while the country’s banking system falls apart, Brown’s priority is to bring in a new measure that will require people from outside the EU to pass an English test before being allowed to live and work in Britain.

As Tara Mukherjee, president of the Confederation of Indian Organisations, said it would mean that people from English-speaking countries, which are predominantly white, would have no difficulty in passing the tests, while those from non-English speaking countries, which are predominantly non-white, will be disadvantaged. In other words, it’s a racist bill. Rhian Beynon, of the Joint Council for the Welfare of Immigrants, also attacked the new language test requirements: "It already seems bizarre and discriminatory to non-Europeans, particularly to those from countries where English is spoken, that they should meet an English language requirement to enter, work and settle here while nationals of countries such as Poland and Italy do not."
Connected to the isolation of foreign, non-white nationals is the proposal to extend the time that terror suspects can be detained without charge from 28 days to probably double that. No surprise then that the day before the announcement, up pops Jonathan Evans, the head of the spy agency MI5, to claim that there are hundreds of terror plots under way in Britain. This is part of the softening up process to force the detention plans through Parliament and make the Muslim community even more of a target than it already is. Who need the far-right British National Party when you’ve got New Labour-MI5 running the state?

Paul Feldman
AWTW communications editor

Monday, November 05, 2007

Citigroup's 'assets' bonfire

When the world’s largest bank has to ask its chief executive and chairman to go because up to $11 billion of its assets are actually not worth the paper they are printed on, you know that the global financial crisis has entered deeper into the unknown. Citigroup, whose nominal assets – and nominal is the operative word here - are larger than the annual value of the British economy’s output, parted company with Chuck Prince on a Sunday night of all things. Citigroup’s losses announced relate to just one portion of the bank’s business – the sub-prime housing market. This is a bank which grew its assets – primarily its lending – by an astonishing 48% over the past 21 months. Now questions are being asked the real worth of all these “assets”.

Prince’s departure came hot on the heels of the resignation of Merrill Lynch’s Stan O’Neal, who was in charge of the investment bank as it ran up losses of $8 billion on mortgage-related debt. These gigantic losses stem from the banks’ involvement in what is euphemistically termed the sub-prime market in the United States where people with no income, no jobs and no assets – Ninjas – were encouraged to take out a mortgage on the basis of rising house prices.

Many of these mortgages were sold by unscrupulous and little regulated mortgage brokers, who received handsome commissions for selling expensive and unsuitable products. Then mortgage companies sold the debts on as securities packaged into “collateralised debt obligations” (CDOs). These were then traded around the world as if they totally-secure government bonds and ended up in the hands of Citigroup and Merill Lynch, as well as European banks in Germany, France and the UK (where Barclays is rumoured to be in difficulties).

The trouble is, the bottom has fallen out of the US sub-prime market. There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's joint economic committee. In Cleveland, Ohio, an industrial city on the banks of Lake Erie, one in ten homes in the city is now vacant because of repossessions. The company making the most foreclosures in Cleveland is Deutsche Bank Trust.

While the German bank has loads of properties on its books that no one wants to buy, Citigroup and institutions around the world are left holding worthless CDOs – worthless because they can’t sell them on as the market for CDOs has seized up as part of the credit crunch. Or as Citigroup’s statement said, its securitised mortgage-backed debt obligations "are not subject to valuation based on observable market transactions". Overall, there are over $1 trillion worth of sub-prime mortgage-backed securities outstanding throughout the world.

Just in case you thought the global financial system was in melt-down, you can be reassured by the soothing words of Alistair Darling, the British chancellor. He appeared on radio just after dawn today to tell us that concerns should be kept "in perspective" because British banks had “very strong balance sheets”. Yet the failed Northern Rock bank has already used up £23 billion in government-backed loans – which the state will never get back. Darling added: "We have a strong economy, its momentum will carry us through." That’s alright then, except that the UK economy’s growth is largely founded on an unprecedented rise in house prices combined with easy credit. One million people are estimated to use their credit cards to pay their mortgages. This can’t go on, and Darling knows it. The crisis at Citigroup is the latest twist in the unravelling of financial system rooted in fantasy, whose collapse will take the productive economy down with it. On bonfire night in Britain, bankers are piling up assets for putting on the fire.

Paul Feldman
AWTW communications editor

Friday, November 02, 2007

Energy firms cash in on fuel poverty

As winter looms, many millions of people in Britain are preparing for a winter of shivering cold in badly insulated homes that they can’t afford to heat. And the poorer people are, the more likely they are to be penalised in terms of fuel costs and insulation. Four million UK households live in fuel poverty, says Energywatch, and pre-pay meters are a major contributing factor.

A report from Energywatch shows that customers using pre-pay meters are paying far more for their energy than other customers. More than three million people, normally those on low incomes, pay for their energy in this way. This method of payment is often pushed on people if they have had trouble paying their bills in the past, or have a poor credit record.

A league table published by the National Housing Federation shows that Npower is the worst offender, charging up to £110 per year more to its pre-pay meter customers than to standard credit customers who pay by cheque. The three next worst are Powergen, British Gas and SSE. Massive price rises since 2003 mean that average domestic gas bills have increased by 94% and average electricity bills by 60%. Taken together, these increases mean the average household energy bill broke through the £1,000 barrier in 2006. In 2003 the average was £572.

Another key factor in fuel poverty is badly-insulated homes. But National Energy Action (NEA) the campaign for warmer homes, says the amount the government gives in grant to improve energy efficiency, at £2,700 per household, falls far short of today’s cost for doing the work. Unless people have money to top up the grant, their houses remain uninsulated. But if they had money they wouldn’t qualify for a grant in the first place! An NEA report shows that 75% of households who struggle to afford heating, also live in the worst-insulated houses. Winter deaths amongst the old is higher in the UK than for countries with similar climates and living standards and a key factor affecting this is the poor standard of insulation

And at the other end of the age range, Barnardo's assistant director of policy, Neera Sharma says: "3.8 million children in the UK are growing up in poverty and many of those are living in fuel poverty. It is morally outrageous that in the fifth richest country in the world parents have to decide between 'eating' or 'heating.”

Npower’s German parent company RWE made £1.68bn profit last year. All the energy companies will rake in profits this winter while elderly people die before their time and children go off shivering to school. Bringing energy generation and distribution into co-ownership is an urgent environmental and human rights question. Local democratically-run energy boards could then develop plans that use the most locally-appropriate and environmentally-friendly methods to deliver cheap warmth to all homes, alongside a comprehensive insulation programme.

Penny Cole
AWTW environment editor

Thursday, November 01, 2007

Protecting the powerful

Campaigners are surprised and even shocked that the Competition Commission has ignored mounting evidence about how the big four supermarkets crush competitors, force local shops to close and squeeze suppliers dry. But they shouldn’t be, because the commission’s primary function is to protect the oligopoly that exists in food retailing, with Tesco’s 30% share of the market (plus £3bn in annual profits) growing by the day.

The commission chose to ignore an unprecedented level of public interest in the investigation, with over 35,000 people writing to express their concern about supermarkets. The 269-page report, the fourth major investigation into supermarket competition since 1999, said small shops had nothing to fear from Tesco and Sainbury's convenience stores. It claimed there was “no adverse effect on competition” from the arrival of hundreds of Tesco Express and Sainsbury's Local stores in neighbourhoods.

It went on to say that small shops “that provide consumers with a strong retail offer will continue to survive and prosper”. Yet statistics show that independent shops are closing at the rate of 2,000 a year and a recent report by the All-Party Parliamentary Small Shops Group estimates that by 2015 “many small shops across the UK will have ceased trading… with few independent businesses taking their place”.

Little surprise then that Tesco’s shares hit an all-time high after the market judged it to have escaped largely unscathed from the investigation. The New Labour government too will be pleased at the commission’s findings. Lord Sainsbury is a major donor to the party while Sir Terence Leahy, Tesco’s chief executive, is a government advisor.

Top of those disappointed by the commission’s report were Friends of the Earth. The two year long investigation into the grocery market was a direct result of a campaign it launched by submitting a proposal for a market study to the Office of Fair Trading, which was subsequently referred to the Competition Commission for a full inquiry. Friends of the Earth's food campaigner, Sandra Bell described yesterday’s report as “a totally inadequate response to the growing power of the big four supermarkets”, and added:

“The Competition Commission acknowledges that supermarkets bully their suppliers and reduce consumer choice, but then bizarrely recommends making it easier for them to expand. Unless urgent action is taken to curb the dominance of the big supermarkets Britain looks set to become an out of town chain store nation." Recent Friends of the Earth research highlighted how dairy farmers are struggling to break even and are unable to invest in greener farming, despite increased consumer demand for more environmentally-friendly produce. This coincided with allegations of dairy price fixing by supermarkets.

Friends of the Earth and others want yet more investigations as a way of curbing the power of the supermarkets. But these will be a complete waste of time. Supermarkets are a prime example of how corporate power has grown over the last 30 years. One of the key features of corporate-driven globalisation is the control of each sector of the economy by fewer and fewer firms. No regulator or government is capable of reversing this process, even if they wanted to, which they clearly don’t. Pressure and protest also count for little against the Tescos of this world. The solution does not lie in fruitless appeals to agencies like the Competition Commission but in campaigning for alternative, not-for-profit ways of owning and controlling food and other industries.

Paul Feldman
AWTW communications editor