Showing posts with label Portugal debt crisis. Show all posts
Showing posts with label Portugal debt crisis. Show all posts

Friday, March 25, 2011

The time to move beyond resistance is now!

The right-wing leadership of the TUC sees tomorrow’s anti-cuts march as a one-off protest that merely “sends a message” to a government which has launched the most comprehensive attack on living standards, jobs and services since the 1930s. March 26 is, however, where the fight to bring down the Coalition gets under way in earnest.

TUC leaders have sat on their hands since the ConDem government took office and immediately went on the offensive. Local councils were allowed to implement cuts without any serious union-led opposition. General secretary Brendan Barber is desperate to find a compromise with the government where none exists.

He is also anxious to keep tomorrow’s turn-out under control, working closely with the police and hiring professional stewards to get people to march from A to B, listen to demagogic speeches and then go home. But this will not simply not do. The economic and political situation is far too grave for marches by themselves to have any significant impact.

That is why A World to Win supports the plans that activists have announced for, amongst other things, staying behind in Hyde Park for a day, holding a Constituent Assembly on Sunday, occupying Trafalgar Square in an echo of the take-over of Tahrir Square in Cairo, and for protests in Oxford Street against tax-dodging corporations.

Their merit is that they recognise in one way or another that challenging the authority of the government and the corporations they rule on behalf of, is necessary, even if the objectives are as yet unclear or not agreed upon.

If anyone doubts that the Cameron-Clegg-Osborne government is gripped by crisis, the budget revealed all. Their so-called Plan A of cutting the deficit to revive the economy can’t and won’t work. Ministers can’t even get fuel prices down by 1p a litre and the oil corporations have threatened to sack thousands in response to plans for a tax levy. Growth targets, which measure the health of the capitalist economy and nothing else, are looking decidedly terminal.

Inflation means the cuts will have to be larger than forecast to meet the aim of eliminating a budget deficit that arises out of the global crisis of capitalism, which is far from over (even if the TUC denies there is such a thing). Portugal’s Socialist Party-led government has collapsed over austerity measures and now faces paying 8.4% for loans (Ireland is paying 10% plus). Spain, also led by the “Socialists”, is where the next domino is scheduled to fall. As prices rise, interest rates on UK government borrowing (now 3.57%) will rise too, adding to the debt.

So the Coalition is not for turning, not least because the financial markets and the impact of the global recession say so. It is doing what capitalism demands in times of need – drive down living standards, put people out of work and declare that there is no alternative. There is certainly no alternative in Labour, which, as Ed Miliband says openly, favours a “more prosperous capitalism”, presumably achieved by cutting more slowly than the Tories.

We say “No” to the British, French and American attacks on Libya for many reasons. But an important one is the fact that the government wants to divert attention away from what’s going on in Britain. And of course, Miliband is helping out on that one too, wrapping himself and his party in the Union Jack to back the government’s illegal onslaught.

Let’s take our inspiration, instead, from the uprisings and revolutions in North Africa and the Middle East, that began in Tunisia, swept through Egypt and found their way to Yemen, Bahrain, Libya and now Syria. We have to build a movement that stretches across every sector of the community to challenge the government, to bring it down and to build a revolutionary alternative to capitalism. After March 26, the movement has to organise itself in People’s Assemblies for this purpose. The planning event on April 9 is crucial in moving beyond resistance to liberation through self-determination.

Paul Feldman

Communications editor

Wednesday, January 12, 2011

Bank bonuses the symptom not the cause

The sight and sound of Barclays CEO Bob Diamond running rings around a committee of Westminster MPs should bring an end to the ideas that bankers’ bonuses can be controlled, that the financial sector can be regulated, or that the worst excesses of capitalism can be reined in.

These are the ideas that have sustained the economic and political debate since the crisis blew up in 2007. Those tied to the for-profit economic model, which includes most parliamentarians, took their cue from rafts of self-styled “economists”, analysts, commentators. They had in various ways blamed the removal of regulation during the Thatcher/Reagan years for the gaseous, balloons of dodgy credit that enveloped the world during the globalisation decades.

Of course, the chorus of disapproval only started when the burden of mortgage and credit card debt became unsustainable and the payment defaults detonated the balloons’ volatile contents. Until then, the world was in thrall to New Labour’s friends in the City, and the Blair/Brown triumphalism that trumpeted “the end of boom and bust”.

Diamond is pretty much the apotheosis of spokespersons for the capitalist class and he wasn’t pulling any punches when he said that the time for “remorse and apology” was over. In asserting that banks should be allowed to fail, he issued a sharp slap in the face for the whole process of bailing them in the first place.

This led governments and central banks around the world to massively expand their debt and pass the responsibility for repaying it on to their unwilling and increasingly unruly populations, their children and their children’s children, if the system is allowed to continue.

And if banks should be allowed to fail, so, it seems, should the countries who’ve tried to bail them out, or have been caught up the global debt tsunami. Portugal is in line to follow Greece and Ireland.

Philip Augar, author of The Greed Merchants: How the Investment Banks Played the Free Market Game puts it as clearly as you could want

High bonus payments are a symptom of a problem, not its cause. The banking settlement was deficient because it did little to address the asymmetries in the universal banking business model. This model causes investment banks to jeopardise global financial stability in bad times whilst allowing bankers to cream off film star compensation in the good times. The global reforms have done a bit to improve financial stability but almost nothing to constrain the profitability that produces the bonuses. That profitability arises from a business model that gives banks in general and investment banks in particular the best possible view of global economies and markets. They are able to use this information advantage to load the dice and generate super-profits. This is where the bonuses come from and this is why the banking lobby worked so hard and so successfully to defend the model.

The “business model” Augar is talking about is profitability. So now is the time to ask the question of questions: why do we need to organise the whole of society around the for-profit business model? The spectacular failures of the last three years are signs of a system at the end of its days.

Rather than trying to prop it up, at an unbearable cost to billions of ordinary people, we must put it behind us, setting our minds to the future of a society that produces for the needs of everyone, not the bonus-yielding super-profits for a few. That is the agenda for a global network of People’s Assemblies.

Gerry Gold
Economics editor