Sometimes it takes a comedian to tell it as it is. Rory Bremner just about summed up the real state of affairs as he mused in the columns of the Financial Times.
“I heard of a country where they are capping benefit payments and charging single parents for access to the Child Support Agency," observes. "And, there is also a country which plans to spend around £100bn on transport and the Olympics. I wonder, are these two countries related?”
He could have also pointed to the just-under £1m bonus payment offered to largely-state owned Royal Bank of Scotland head Stephen Hester. And while Hester has now turned it down, he won’t be short of money. He still has his salary of £1.2 million to look forward to. So he’s not likely to have to give up his chalet in Verbier, Switzerland or his 350-acre estate in Oxfordshire.
Bremner is right. There is the Britain inhabited by bankers, financiers, hedge fund owners and grandees of all kinds – and there is the rest. And as the dust settles, the only bleeping Labour can summon up is to claim credit for adding its voice to the complaints.
The reality is that the economy is deteriorating and that the issue of bankers’ bonuses will pale in comparison to what is coming up. Britain’s debt has now reached the £1 trillion and the UK economy shrank by 0.2 % at the end of 2011. Unemployment is rising fast, with one million 16-24 year-olds (22%) now out of work in the UK.
School leavers, students and other youth in the UK are joining the 23 million unemployed in the European Union, and some 200 million world wide. Spain has 50% youth unemployment while in the United States the figure stands at 23 %.
At the World Economic Forum meeting which has just ended in Davos, Switzerland, economic elites described youth unemployment as “a cancer in society”. The world is “sitting on a social and economic time bomb.... not a crisis but a disaster”, they said.
They are right. As around 40 million young people globally enter the workforce each year, it doesn’t take rocket science to work out that massive, long-term unemployment amongst young people will have explosive political results. Most people are aware knows that it was the lack of a real future – combined with years of political repression - which sparked the Arab Spring and the downfall of tyrants in Tunisia, Egypt and elsewhere during 2011. The lack of a future for an entire generation, globally is what is at stake.
For all their wealth and power, the bankers, company bosses and politicians, the truth is that the so-called masters of the global capitalist economy remain at a loss and are deeply divided. While the IMF is calls for austerity, financier George Soros said that the fiscal cuts, which Germany supports, could even lead to a "lost decade" of economic stagnation in Europe.
"This German insistence on austerity could destroy the European Union," he said. "This is reality, this is the harsh reality that we need to face. It is not written in stone, the future is not predetermined. We determine the future, so it would be well within the possibilities of the authorities to change it."
We have to agree, at least partly, with Soros. Austerity and cuts are not the answer and we can determine the future (albeit in a different way to what Soros imagines would happen if policy makers followed his ideas for reviving capitalism).
The top 1% rely on the rest to remain in their places and accept that the system is what it is and can never be transformed in a fundamental way. So developing an alternative outlook to that which views Britain’s class-based, class-divided society as impregnable is absolutely vital.
Corinna Lotz
A World to Win secretary
For revolutionary solutions to create a sustainable, not-for-profit economy in place of global capital alongside a real democracy based on People’s Assemblies. Visit our web site at www.aworldtowin.net
Showing posts with label George Soros. Show all posts
Showing posts with label George Soros. Show all posts
Monday, January 30, 2012
Wednesday, April 13, 2011
An epitaph for Bretton Woods
More than 300 economists, policymakers and academics, and a smattering of the politicians who presided over the events leading to the great crash of 2007-8, met up over the weekend at an historic location.
The conference was sponsored by the Institute for New Economic Thinking, which was set up in 2009, by George Soros one of the world’s most notorious speculators.
In 1944, at the same Mount Washington Resort in Bretton Woods, the world’s financial leaders thrashed out the architecture of a new order for the world economy to replace the one shattered by the Great Depression and World War II.
They succeeded in creating monetary agreements between nations and organisational arrangements to handle emergency funding that would enable capitalism to set out on the growth path once again.
Last weekend’s aim was to consider whether the international order remained fit for purpose ahead of the annual spring meetings of the International Monetary Fund (IMF) – one of the world level agencies set up following the 1944 gathering.
In summing up the results, Prof Justin O’Brien, director of the Centre for Law, Markets and Regulation at the University of New South Wales, asked the key question, and answered it:
“Following the catastrophic losses associated with the global financial crisis, do policymakers have either the vision or the tools to manage the politics of austerity? The unambiguous answer was no.”
The problem is that in those 67 years since Bretton Woods, capitalist corporations and a global web of financial institutions have outgrown the system of nation-states that came into existence as the result of earlier phases of social, economic and political evolution.
In O’Brien’s wordy assessment:
Gordon Brown, who, as British chancellor was amongst the greatest enthusiasts for the financiers’ rise to power, claims that "we didn't understand just how entangled things were". This is nonsense. Many warned about the consequences of creating a financial system driven by investment banks and exotic “products”. New Labour was just happy to rake in the tax proceeds to finance its social programmes.
Like fish in the sea, unaware of the water they live in, these academics and policy-makers breathe the air of capitalism. They have had their day. The 2011 version of Bretton Woods was effectively an epitaph for a global capitalist system founded on debt. It falls to the mass of people to create a new “architecture” in the shape of an economic system based on need and not profit
Gerry Gold
Economics editor
The conference was sponsored by the Institute for New Economic Thinking, which was set up in 2009, by George Soros one of the world’s most notorious speculators.
In 1944, at the same Mount Washington Resort in Bretton Woods, the world’s financial leaders thrashed out the architecture of a new order for the world economy to replace the one shattered by the Great Depression and World War II.
They succeeded in creating monetary agreements between nations and organisational arrangements to handle emergency funding that would enable capitalism to set out on the growth path once again.
Last weekend’s aim was to consider whether the international order remained fit for purpose ahead of the annual spring meetings of the International Monetary Fund (IMF) – one of the world level agencies set up following the 1944 gathering.
In summing up the results, Prof Justin O’Brien, director of the Centre for Law, Markets and Regulation at the University of New South Wales, asked the key question, and answered it:
“Following the catastrophic losses associated with the global financial crisis, do policymakers have either the vision or the tools to manage the politics of austerity? The unambiguous answer was no.”
The problem is that in those 67 years since Bretton Woods, capitalist corporations and a global web of financial institutions have outgrown the system of nation-states that came into existence as the result of earlier phases of social, economic and political evolution.
In O’Brien’s wordy assessment:
The crisis, speaker after speaker confirmed, was the outworking of hubris, delusion, commitment to flawed ideological constructs and inattention to history. Moreover, the policy response has legitimated socialised losses on a scale unimagined by the architects of the Bretton Woods system. It has amplified the moral hazard associated with protecting a banking industry addicted to unsustainable and undesirable leverage.
Deemed too big, too interconnected and too complex to unravel without causing systemic failure, banking has emerged as the sole winner from a crisis its funding model helped to cause. Somewhat paradoxically the banking sector has become even more concentrated, making it all but impossible for regulators to control. More perniciously, the sector has a vested interest in curtailing the co-ordination necessary to engineer meaningful change, particularly in the United States but also in Europe, now the epicentre of the financial crisis.
The complexity of the deeply integrated European and North American banks demonstrates the failure of regional and global institutions of power, flawed harmonisation agendas and weaknesses of national regulation. Wariness in advocating radical restructuring risks privileging the symbolic over the substantive. As Andrew Sheng, a senior adviser to the China Banking Regulatory Commission put it, advocating piecemeal ad hoc reform overseen by a fragmented system of national regulators is ‘like asking pygmies to hold down giants’.
Gordon Brown, who, as British chancellor was amongst the greatest enthusiasts for the financiers’ rise to power, claims that "we didn't understand just how entangled things were". This is nonsense. Many warned about the consequences of creating a financial system driven by investment banks and exotic “products”. New Labour was just happy to rake in the tax proceeds to finance its social programmes.
Like fish in the sea, unaware of the water they live in, these academics and policy-makers breathe the air of capitalism. They have had their day. The 2011 version of Bretton Woods was effectively an epitaph for a global capitalist system founded on debt. It falls to the mass of people to create a new “architecture” in the shape of an economic system based on need and not profit
Gerry Gold
Economics editor
Thursday, June 17, 2010
Europe in the eye of the storm
With Europe firmly at the epicentre of a new stage of the global financial crisis, the heads of government meeting in Brussels today is hoping for the best but undoubtedly preparing for the worst. As events spiral out of control, there are warnings of dire political consequences from predicted social unrest as governments slash and burn spending on public services and jobs.
The European Union itself is now under severe strain as an economic and political entity. Inter-bank lending is virtually frozen and the single currency severely weakened since the financial meltdown in Greece and the emergency intervention of the Intenational Monetary Fund.
Spain, in particular, is in dire trouble and we’re not talking about the country’s shock defeat by the Swiss at the World Cup. Unemployment is already a catastrophic 20% - twice that level among young people – and the Socialist Party government’s cuts programme has provoked plans for a General Strike.
As the crisis moves from banks to nation states, Spain is being talked about as the Lehman Brothers of the 2010 crash,. Many foreign banks are holding Spanish government debt that is no longer worth what it was bought for. With their own balance sheets looking decidedly unhealthy, the banks are on strike. Francisco Gonzalez, chairman of the BBVA financial services group, admitted: "Financial markets have withdrawn their confidence in our country. For most Spanish companies and entities, international capital markets are closed."
The comparison with Lehman Brothers is as serious as it can get. Lehman’s collapse in the autumn of 2008 plunged the world economy into recession. A collapse of the Spanish economy would usher in a deep, unparalleled slump. In the United States, top fund manager John Hussman, in his latest weekly market commentary, believes that the country is already in recession. Spain going belly up and asking for €250 billion to shore up its finances could prove the last straw.
The is what made billionaire philanthropist and investor George Soros issue a stark warning of how the deepening economic and financial crisis will strain political systems come to their limits. He told a conference: "If there is no exit, (it) is liable to give rise to social unrest and, if you follow the line, social unrest can give rise to demand for law and order and (sow the) seeds of what happened in the inter-war period.” This was a hardly disguised reference to the rise of Nazi Germany in the wake of the Wall Street crash and the onset of the Great Depression.
Soros is concerned that he “fiscal discipline” – cutting budget deficits – is a big policy mistake and that the thing to do is to maintain public spending along the lines advocated by John Maynard Keynes in the 1930s. That presupposes that a) this will lift capitalist economies out of recession and b) governments are free to adopt this course.
A year or so of central banks in America and Europe printing money à la Keynes in a bid to “restore growth” has failed. This is because the economic crisis is a combination of over-producton and mountains of debt which have wrecked the financial system and not one of under-consumption. In fact, much of the new money printed simply leaked out of national economies into global financial markets.
Of course, Soros is right in that cutting budget deficit will only worsen the crisis, leading to higher unemployment and severely reduced living standards. But with capitalist governments competing with each other for decreasing amounts of available credit, there is little choice in the matter. Spain and Greece have put the frighteners on the Clegg-Cameron coalition and tightening the regulation of the financial system is a little like bolting the stable door after the horse has fled.
The threat of dictatorship raised by Soros is not outlandish. Any idea that day-to-day politics is possible as this crisis unfolds should be put to one side, along with notions that the budget cuts can be thwarted with protest and pressure alone. Revolutionary economic and political solutions along the lines suggested in our Manifesto are more to the point.
Paul Feldman
Communications editor
Wednesday, May 13, 2009
'Green shoots' fantasy world
From international speculator George Soros, to the Organisation for Economic Co-operation and Development (OECD), to global stock markets, there is a concerted attempt to declare that the worst of the economic crisis is over. That’ll be no comfort for 244,000 in the UK who have joined the ranks of the unemployed and the thousands of school and university leavers this summer, whose job prospects are the worst for a generation.
The unemployment rate reached 7.1% by the end of March, rising from 6.3% at the end of December, the Office of National Statistics has reported. Unemployment in the first quarter of 2009 rose by the biggest amount since 1981 and the total of 2.22 million without work is the highest since 1996, the year before Labour came to power and will pass 3 million within a year.
One in six 18- to 24-year-olds is now out of work. At 676,000 (16.1% ) the level of youth unemployment is as high as in the mid-1990s. It is up almost one-third on last year; 227,000 under-25s have been without work for over six months. Professor John Philpott, the chief economist at the Chartered Institute of Personnel and Development (CIPD), described the data as "truly appalling". He said: "Youth employment prospects are crumbling. With the toll of job losses falling most heavily on the under-25s it will be a bleak summer and autumn for this year's crop of young talent."
So what is this “green shoots of recovery” nonsense all about? Actually, says the OECD, “the pace of the deterioration is easing” and “severe declines in economic output across the world are moderating”. In plain English, the crisis in the major economies is deepening – but at a slower pace!
Not in China, the world’s third largest economy, however. Exports continue to collapse, while imports of raw materials are in steep decline. Hao Daming, analyst at Galaxy Securities in Beijing weighed in with this: “The trade figures are worse than we expected. We will see exports dropping by at least 20% for the rest of 2009 as uncertain world demand will remain a drag.”
The slump in exports and imports, which has been mirrored across Asia, underscores the dramatic downturn in Western consumer demand. Chinese officials estimate 23 million migrant workers have lost their jobs because of the closure of thousands of export-oriented factories, undermining the hope that domestic demand can reverse the downward trend.
The real story is that the global capitalist economy is on a state-funded life support system. Central Banks in the United States, Europe and Britain are printing money like there is no tomorrow in a desperate bid to keep the financial system alive. With untold sums in toxic, worthless assets still overhanging the financial system, there is still no sign of an end to the credit freeze, however.
Only last week, the Bank of England announced another £50 billion injection in freshly printed money, leading some analysts to suggest that a third wave of bank crashes was on the horizon. A number of mutual building societies are also said to be in trouble because of falling house prices and repossessions.
Meanwhile, large sections of industrial capacity are being wiped out throughout the world, from the Corus steelworks on Teesside to car factories in Detroit as demand melts away. All talk of the “green shoots of recovery” is strictly for the birds and a further indication that capitalist policy makers and politicians inhabit a fantasy world all of their own.
Gerry Gold
Economics editor
The unemployment rate reached 7.1% by the end of March, rising from 6.3% at the end of December, the Office of National Statistics has reported. Unemployment in the first quarter of 2009 rose by the biggest amount since 1981 and the total of 2.22 million without work is the highest since 1996, the year before Labour came to power and will pass 3 million within a year.
One in six 18- to 24-year-olds is now out of work. At 676,000 (16.1% ) the level of youth unemployment is as high as in the mid-1990s. It is up almost one-third on last year; 227,000 under-25s have been without work for over six months. Professor John Philpott, the chief economist at the Chartered Institute of Personnel and Development (CIPD), described the data as "truly appalling". He said: "Youth employment prospects are crumbling. With the toll of job losses falling most heavily on the under-25s it will be a bleak summer and autumn for this year's crop of young talent."
So what is this “green shoots of recovery” nonsense all about? Actually, says the OECD, “the pace of the deterioration is easing” and “severe declines in economic output across the world are moderating”. In plain English, the crisis in the major economies is deepening – but at a slower pace!
Not in China, the world’s third largest economy, however. Exports continue to collapse, while imports of raw materials are in steep decline. Hao Daming, analyst at Galaxy Securities in Beijing weighed in with this: “The trade figures are worse than we expected. We will see exports dropping by at least 20% for the rest of 2009 as uncertain world demand will remain a drag.”
The slump in exports and imports, which has been mirrored across Asia, underscores the dramatic downturn in Western consumer demand. Chinese officials estimate 23 million migrant workers have lost their jobs because of the closure of thousands of export-oriented factories, undermining the hope that domestic demand can reverse the downward trend.
The real story is that the global capitalist economy is on a state-funded life support system. Central Banks in the United States, Europe and Britain are printing money like there is no tomorrow in a desperate bid to keep the financial system alive. With untold sums in toxic, worthless assets still overhanging the financial system, there is still no sign of an end to the credit freeze, however.
Only last week, the Bank of England announced another £50 billion injection in freshly printed money, leading some analysts to suggest that a third wave of bank crashes was on the horizon. A number of mutual building societies are also said to be in trouble because of falling house prices and repossessions.
Meanwhile, large sections of industrial capacity are being wiped out throughout the world, from the Corus steelworks on Teesside to car factories in Detroit as demand melts away. All talk of the “green shoots of recovery” is strictly for the birds and a further indication that capitalist policy makers and politicians inhabit a fantasy world all of their own.
Gerry Gold
Economics editor
Tuesday, September 25, 2007
One Nation, One Party under Our Leader
A serious question: What do you get if you put together a nationalist-patriotic, socially conservative, free market, business-worshipping, authoritarian, religious political leader? Answer: a highly dangerous, heady political cocktail with echoes in 20th century history. Who needs the Tory Party, or even the far-right British National Party when you have the Brown movement? Who needs political opposition of any kind when you have The Party that represents The Nation as well as everyone and everything? Who needs discussion and debate, or the casting and counting of votes when The Leader has already decided everything?
Welcome to New Labour 2007, the movement that has Tories, big business and military gentlemen as members of the government. Celebrate with The Party as it puts an end to nasty, “adversarial”, “divisive” conference politics in the name of Unity and the interests of the British People. Hear its Leader refer to Britain or Britishness no fewer than 71 times in an hour-long speech to The Nation. Stand up and cheer when Our Leader says: “I reach out to all those who work hard and play by the rules, who believe in strong families and a patriotic Britain, who may have supported other parties but who, like me, want to defend and advance British values and our way of life." Feel proud when you are told that in future there will be “British jobs for British workers” and that nasty foreigners who don’t behave will be shown the door (after being sent to detention camps first). Know that those who oppose Our Leader also reject the British Way and face the wrath of The State.
Thankfully, the Bournemouth Rally saw it that way too. How thrilling that those present voted in Stalinist fashion by 85% to put an end to conference resolutions and votes. Why, even the trade unions endorsed a motion to abolish their own role in the conference in exchange for zero, zilch, de nada. Lest we forget, their predecessors had actually set up The Party, then known as Labour, over a century ago. Few dared oppose the move, so important is Unity at this time for Our Nation. One brave soul, John McDonnell MP, rejected the move to create a monolithic Party, suggesting that the last person leaving the hall “turn off the lights please, they will be the lights of democracy”. The only dissenting voice on the floor came from Michael Meacher, who asked: “What is the point of conference if it is merely a talking shop and there is no way we can seriously influence the party leadership and the government into changing course?” There is no point, Michael. So let us hear no more rubbish from the left about reclaiming the party. There is no social democratic, reformist party to reclaim. It has been incorporated lock, stock and barrel into the process of corporate-driven globalisation.
The financier-philanthropist George Soros once said: “Perhaps the greatest threat to freedom and democracy in the world today comes from the formation of unholy alliances between government and business. This is not a new phenomenon. It used to be called fascism…The outward appearances of the democratic process are preserved, but the powers of the state are diverted to the benefit of private interests.” Brown did not quite get round to promising to make the trains run on the time, but the logic is there for all to see. Globalisation has dissolved the old, bourgeois-democratic parliamentary state and with it the parties that subscribed to that process. The alternative to the Brown nightmare has to come through extending democracy beyond the limitations of the decayed parliamentary state. A democratic choice would put people in charge of their workplaces and communities, giving them ownership of economic and financial resources presently misused and abused by the ruling elites. There is no time to lose in building a movement that can realise these aims and objectives.
Paul Feldman
AWTW communications editor
Welcome to New Labour 2007, the movement that has Tories, big business and military gentlemen as members of the government. Celebrate with The Party as it puts an end to nasty, “adversarial”, “divisive” conference politics in the name of Unity and the interests of the British People. Hear its Leader refer to Britain or Britishness no fewer than 71 times in an hour-long speech to The Nation. Stand up and cheer when Our Leader says: “I reach out to all those who work hard and play by the rules, who believe in strong families and a patriotic Britain, who may have supported other parties but who, like me, want to defend and advance British values and our way of life." Feel proud when you are told that in future there will be “British jobs for British workers” and that nasty foreigners who don’t behave will be shown the door (after being sent to detention camps first). Know that those who oppose Our Leader also reject the British Way and face the wrath of The State.
Thankfully, the Bournemouth Rally saw it that way too. How thrilling that those present voted in Stalinist fashion by 85% to put an end to conference resolutions and votes. Why, even the trade unions endorsed a motion to abolish their own role in the conference in exchange for zero, zilch, de nada. Lest we forget, their predecessors had actually set up The Party, then known as Labour, over a century ago. Few dared oppose the move, so important is Unity at this time for Our Nation. One brave soul, John McDonnell MP, rejected the move to create a monolithic Party, suggesting that the last person leaving the hall “turn off the lights please, they will be the lights of democracy”. The only dissenting voice on the floor came from Michael Meacher, who asked: “What is the point of conference if it is merely a talking shop and there is no way we can seriously influence the party leadership and the government into changing course?” There is no point, Michael. So let us hear no more rubbish from the left about reclaiming the party. There is no social democratic, reformist party to reclaim. It has been incorporated lock, stock and barrel into the process of corporate-driven globalisation.
The financier-philanthropist George Soros once said: “Perhaps the greatest threat to freedom and democracy in the world today comes from the formation of unholy alliances between government and business. This is not a new phenomenon. It used to be called fascism…The outward appearances of the democratic process are preserved, but the powers of the state are diverted to the benefit of private interests.” Brown did not quite get round to promising to make the trains run on the time, but the logic is there for all to see. Globalisation has dissolved the old, bourgeois-democratic parliamentary state and with it the parties that subscribed to that process. The alternative to the Brown nightmare has to come through extending democracy beyond the limitations of the decayed parliamentary state. A democratic choice would put people in charge of their workplaces and communities, giving them ownership of economic and financial resources presently misused and abused by the ruling elites. There is no time to lose in building a movement that can realise these aims and objectives.
Paul Feldman
AWTW communications editor
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