The trillion dollar question with no answers

If nothing changes, the US government will run out of money, somewhere between October 22 and November 1 and plunge a fragile global economy into another meltdown. With the two parties in Congress locked in deadlock, time is running out.

Already, two million federal government workers are having their pay cheques delayed, and 800,000 of them might never be paid at all. The days are running into hours as the deadline approaches for Congress to award itself a further extension of its towering $16.7 trillion debt (a trillion has 12 zeros, by the way).

But with no sign of a solution to the week-old US government shutdown forced by the Tea Party wing of the Republicans, a political deal looks less – and an historic, unprecedented default by the world’s biggest national economy – more likely.  

Updated forecasts from the International Monetary Fund can only intensify the deepening political crisis. In its World Economic Outlook, the monetary hit squad now expects the global economy to grow only 2.9% this year, down from the 3.2% it estimated just six months ago, in July.

And, as everyone with half an eye to political economy knows, capitalist economies become unsustainable with anything less than 3% growth.

The figure for the US, still the world’s largest economy, sees a sharp drop from 2.8% in 2012 to 1.6% in 2013, nowhere near enough to see unemployment fall to 7%. This is the level the Federal Reserve, the US central bank, says will trigger a reduction in quantitative easing, the massive inflationary programme of money printing supposed to bring about the mythical recovery.

The interventionist wing of US capitalist interests argue that the faltering signs of recovery call for more credit to be pumped up. But the Tea Party and its friends will intensify their hijack of the government – insisting on sharper, more brutal spending cuts as the price of an agreement.

The 0.5% increase in the forecast for the UK, which triggered press demands for an apology by IMF chief Olivier Blanchard to chancellor Osborne over the former’s criticism of the latter’s austerity drive, is nothing to celebrate. Despite being the biggest increase among the developed countries, it only raises the expectation of UK growth to a dismal 1.9%.

Sainsburys operates at the sharp end of capitalist interests. Its sales are a key measure of the impact of economic conditions on people’s ability to buy food.  Its boss Justin King expects frozen wages and inflation to bring about a further 2% drop in real incomes over the next 12 months. No recovery there.

The IMF sees conditions in the euro area continuing to worsen for this year, with an overall shrinkage of 0.4%. Germany will at best make a 0.5% rate of growth. Italy will shrink by 1.8%, and Spain by 1.3%. Next week, the IMF together with its European Central Bank and European Commission partners in the “troika” will be back in Greece. The ongoing global crisis has forced its economy to contract by one quarter since the 2007 crash, and further 4% shrinkage is expected this year.

The IMF has also been busy in nearby Serbia. Lazar Krstic, the 29-year-old finance minister, pledging to stabilise government debt by 2017, yesterday launched the country’s own savage austerity and privatisation programme. This is part of the price of hoped for EU membership, and he is also seeking billions of euros in loans from the United Arab Emirates to avoid imminent bankruptcy.  

Look further afield to the “emerging and developing countries’” and the story becomes even more gloomy, with negatives across the board. China’s three-year deceleration is continuing, its growth rate shrinking towards 7%.

Xi Jinping, president of the second largest national economy, said he expected a "long and tortuous process" of world economic recovery. That’s a euphemism for further brutal assaults on living standards just about everywhere for the foreseeable future. If global capitalism was on a supermarket shelf, its “use by” label would be a long time in the past.    

Gerry Gold

Economics editor

War on migrants behind Lampedusa tragedy

How terrible, how sad, said the politicians from Italy to England. Pope Francis called the shipwreck a “disgrace” and offered prayers for the victims. Italy took the easy route saying, quite understandably, that it was a problem for Europe as a whole.

But less than a week later, the drowning of some 363 migrants off the coast of  the island of Lampedusa has already fallen out of the main news. Had the victims been white Europeans or Americans instead of Syrians, Somalis and Eritreans, no doubt there would be more soul searching.

Even in the immediate aftermath, it became clear that the deaths could have been avoided then and there. How was it that in the combined surveillance forces of the Italian coast guard (backed up by European and American security systems of all kinds) did not spot the foundering boat quickly enough?

The first on the scene were local fishermen Vito Fiorino and Francesco Colapino. They personally pulled dozens of migrants out of the water. But they said they were frustrated by the Italian coastguard. They took an hour to arrive (even though the boat sank only some 700 or so metres off the Lampedusa coast) and, by their accounts, refused to help.

This latest loss of life, however immense, adds to the already huge figure of some 20,000 people estimated to have died in similar circumstances in the Mediterranean since the mid-1990s.

“Murderous Europe”, a statement by Migregroup, a Euro-African network of campaigners for the human rights of migrants, rightly affirms the deaths were in no way inevitable or an act of fate.

The deaths in the seas between Europe and Africa, as well thousands more in the deserts of Sinai, Algeria and Mali  (not forgetting Syria) are the consequence of a war against migrants.

How else can the European Union order control mechanisms and surveillance systems bearing hideous names like Frontex and Eurosur be described?

Migregroup says that while people traffickers are denounced as the guilty parties, it is actually the states of Europe who refuse to issue visas to those seeking asylum or a new life in Europe, those pushing people into so-called illegality.

There are an estimated six million illegal migrants in Europe who are victims of the “securitarian logic” of the EU’s Shengen Agreement.

Whilst decrying the warring regimes in Syria, Ethiopia and Somalia, European states, including Britain, refuse to offer asylum to those fleeing persecution or poverty.

Instead the EU has signed agreements with Algeria, Morocco, Tunisia and Libya to make these states stem the flow of migrants.

Article 4 of the Universal Declaration of Human Rights, which asserts the right of freedom of movement and choice of domicile, clearly does not appear to be on the EU lawmakers’ horizon.

While Italian agencies and international NGOs struggle to help survivors with totally inadequate funds and against obstruction by the Italian state, the real money is of course elsewhere.

The dire situation facing millions in Africa is because as far as the global big powers are concerned, they are simply collateral damage.

While the US state is in shutdown mode, hundreds of millions of tax dollars continue to be poured into making Italy “a launching pad for the wars of today and tomorrow”.

While officially saying there are no US military bases in Italy, there are in fact 59 Pentagon-identified US bases in the country, including the Sigonella Naval Air Station near Catania in Sicily – less than 100 miles away from the African coast and even less from the island of Lampedusa.

Since 2008, the Pentagon has spent an estimated $31 million on a Global Hawk complex at Sigonella, part of its “global war on terror” programme for military operations in Africa.

The responsibility for the deaths in the seas of the Mediterranean lies on the shoulders of the European states and their co-criminals in the Pentagon.

Corinna Lotz

A World to Win secretary 

In Tory Britain, old people are like 'robots to be serviced'

Picture this graphic illustration of Two Britains. While hedge funds and big investors can choose whether to cash in on the Royal Mail sell-off, the choice for thousands of older and disabled people is whether to go thirsty or go to the toilet.

The City is eagerly buying up Royal Mail shares, which, by all accounts, have been under-priced by the ConDems to such an extent that investors can anticipate a 40% instant profit when they start trading next week. For some of the least privileged in our society, mere survival is the name of the game.

Increasing numbers of older people and many with disabilities in their own homes depend on some help with basic necessities like dressing, bathing and eating. Those with some savings can “buy-in” private care at their own expense. The majority, however, look to their local council to provide what is known as “adult social care”.

If only the name lived up to its promise. A report by the charity Leonard Cheshire Disability condemns a sharp increase in what it terms “disgraceful” short care visits lasting just 15-minutes. These are used by 60% of councils in England and they are not long enough to provide adequate care.

Chief executive Clare Pelham said visits should be at least 30 minutes long. "It is disgraceful to force disabled people to choose whether to go thirsty or to go to the toilet by providing care visits as short as 15 minutes long," she said. Most people need 40 minutes to get up, washed, dressed and have breakfast. "We are treating disabled and older people as if they are robots to be serviced, rather than real people who deserve to be treated with kindness and consideration," she added.

The proportion of visits which lasted 15 minutes or less has risen by 15% over the past five years. And some local authorities deliver more than three-quarters of their care visits in 15 minutes. As the ConDems have only been in office for under 3.5 years, this began under the previous New Labour government.

But there’s no doubt that cuts in social service budgets imposed by the coalition government since 2010 have hit the most vulnerable the hardest. In May, the Association of Directors of Adult Social Services warned a “bleak outlook” was becoming “bleaker”. Research showed that £800m was to be taken from the central budget in 2013-14, following the loss of £2 billion in the previous two years.

Naturally, the local bureaucracy and elected councillors have simply passed on the cuts. Defending the indefensible, Sandie Keene, president of Association of Directors of Adult Social Services (Adass), which represents care managers said some short visits were "fully justified and fully adequate".

Social workers and their managers had to make "horrendously difficult choices" every day to give the best possible care with limited resources. Perhaps it’s about time some of them said “No”, we can’t provide care on this basis? I’m not holding my breath for such announcement.

The other issue is who provides the 15-minutes of “care”. Much of this work is now “outsourced” to the private sector, and has been since the 1990s. A survey of social service practitioners showed that most believed the quality of adult care had deteriorated because of large-scale outsourcing. Nine out ten thought outsourcing had been driven by cost cutting.

So while older people and the disabled suffer from cuts in spending and are often dismayed by poorly-trained care workers, the wealthy elites are cashing on a fire sale state assets. If there was ever a case for turning our wretched capitalist society upside down, this is surely it.

Paul Feldman

Communications editor

Ralph got it right and his son 100% wrong

In defending him against the malicious Daily Mail, Ed Miliband tries to depict his father Ralph as a man who “loved Britain” while at the same time distancing himself from his actual views.

The assumption that everyone has to love “their” country is, of course, a patriotic, populist sentiment encouraged by the media and political elites. Its purpose is to bind the whole population together behind the state, especially in times of crisis.

"Your King and Country need you”, went the recruiting slogan of World War I. All the parties supported it, including Labour. Millions believed in it enough to volunteer to join what would be become a human slaughter house on the battlefields of Europe.

For Ed Miliband to suggest that because his father fought in World War II he “loved his country”, is plainly wrong. In the main, British soldiers fought for self-preservation, for their comrades and communities against the Nazis. It was possible to fight without “loving your country”.

Many had spent years on the dole, living in appalling housing with no health service while the political elites were oblivious to their plight. What was there, for these soldiers, to “love” about this class-divided Britain?

As for the notion that World War II was a “war for democracy” against fascism, that was simply not the case. The British ruling classes flirted with the Nazis for six years before war broke out. Rothermere’s Daily Mail found much to admire in Hitler’s Germany. A whole group favoured a separate peace with Hitler after hostilities began and they almost prevailed inside the cabinet.

For the ruling class, it was above all a war to preserve the British empire and, in line with foreign policy down the centuries, an effort to prevent one European power from dominating the continent.

It’s hard to believe that Ralph Miliband “loved his country” in an unthinking way, in the fashion that his son describes. Of course, he was grateful for being allowed in as a Jewish refugee. But as his political thinking developed, he could never espouse a concept that is embraced mainly by the right wing.

As a Marxist academic, he understood the significance of class in capitalist societies like Britain. In place of an abstract “country” there was a society divided along class lines, where interests did not coincide but were in constant conflict.

In 1983, Ralph Miliband wrote an essay called “State Power and Class Interests”. This took up the issues of the state in relation to the rule of capital, which had recently become the subject of intense debate in Marxist academic circles. He wrote:

“… The contradictions and shortcomings of capitalism, and the class pressures and social tensions this produces, require the state to assume an ever more pronounced role in the defence of the social order. The end of that process is one form or  another of ‘Bonapartism’. Meanwhile, it makes for a steady inflation of state power within the framework of a capitalist-democratic order whose democratic features are under permanent threat from the partnership of state and capital.”

This “partnership” is what his son wants to develop under the populist umbrella of "One Nation Labour". As he says in his own article in the Mail: “I want to make capitalism work for working people, not destroy it.”

But how on earth can a system that is run for profit, for the benefit of shareholders and funders, ever do what Miliband junior wants? Even if we all declared that we “loved our country”, the real world would confirm that Ralph Miliband was right and his son 100% wrong.

Paul Feldman

Communications editor

Biodiversity offsetting - a licence to trash nature

A cynic, wrote Oscar Wilde, is a man “who knows the price of everything and the value of nothing”. Climate change denier Owen Paterson, the ConDem anti-environment secretary, fits this description down to his toes. 

He is championing “biodiversity offsetting”, which puts a market price on habitat so that

developers can destroy protected wildlife and woodland areas, if they create a new habitat elsewhere.

Patterson, who earlier this week said that global warming might be a good thing, claims: "Offsetting is an exciting opportunity to look at how we can improve the environment as well as grow the economy. There is no reason why wildlife and development can't flourish side-by-side."

Driving the government’s plans is the Environment Bank which is described as the “leading trader in the UK in environmental assets”. It brokers deals between buyers (developers, corporate, investors) and sellers (landowners, farmers, conservation bodies, land management companies), according to an EU project on the concepts of “natural capital”.

Like all offsetting projects, this is a market-driven concept that creates a profit for the “broker”. As the bizarrely-named Operationalisation of Natural Capital and Ecosystem Services project acknowledges, “biodiversity offsets have recently been identified in the UK… as one of the top business opportunities related to valuing and/or protecting nature”.  

Value and sell nature. You couldn’t make it up. But that’s capitalism for you. The replacement habitat doesn’t even have to be in the same area as that which has been lost - presumably it can be on any old bit of waste land. You can be sure it'll be land the developer is happy to be rid of.

Patterson’s department seems to believe (or pretends to believe) there is some equivalence between a developed habitat and a piece of disused land. It's like saying that destroying a 1000- year old hedgerow can be offset by planting a privet hedge!

There is no recognition of the complexity of eco-systems, where species exist in a naturally occurring web of interdependence that you can't just reinvent.

As Sandra Bell, nature campaigner at Friends of the Earth, said: "Nature is unique and complex – not something that can be bulldozed in one place and recreated in another at the whim of a developer." Others have called the plan a “licence to trash nature”.

Environment Bank CEO Tom Tew claims that “when you put a value on biodiversity you are putting a financial incentive for developers not to trash it". But how does that work exactly? There is no explanation of how these benefits will accrue. And this is the whole problem with this now fashionable approach, where all of nature is classified as "environmental services" or "green capital".

"Green capitalism" was the mantra at the Rio+20 summit earlier this year, and of course governments are going to snatch at this idea. It suggests you can protect the environment whilst encouraging growth, without challenging or regulating the activities of the corporations.

But suppose they succeed in fully incorporating every molecule, every leaf and drop of clear water, into the global capitalist system - then what? Why, they do what capitalism always does, of course – you work out a way to make that capital work for you in order to generate profits. That's what's happening already as corporations buy up wholesale patents on natural products.

The reality is that the concept of building "whole earth costs" into planning for development and production can only contribute to the protection of eco-systems if it is part of a not-for-profit economic system. Instead of trying to force nature to operate according to the laws of capital, we need to regenerate and refound our human society to operate in line with the laws of nature.

As the Cochabamba declaration on Mother Earth rights states: "The creation of new market mechanisms for nature, the development of a market for environmental services, will bring us toward a collapse. We believe it is wrong to break down nature into simple environmental services subject to economic valorization and market exchange. The laws of the market, of supply and demand, are in conflict with the laws and natural cycles of the Planet Earth."

Penny Cole

Environment editor

US shutdown shows the system is cracking up

The shutdown of the US government by the right-wing Tea Party faction of the right-wing Republican party is a critical moment, one that reveals deepening cracks inside the capitalist state’s political system.

On the first day, 800,000 federal employees were affected by the absence of a government that could pay their wages. On the same day, many of the 32 million Americans not covered by insurance queued to sign up for access to affordable health care.

The new insurance marketplace websites which opened for business on the first day of trading are a key part of the president’s so-called “Obamacare” legislation. Overwhelmed by the demand, many websites crashed in the first hours. 

The Patient Protection and Affordable Care Act was adopted in 2010, in fulfilment of Obama’s election pledge, and Republicans have failed 50 times to block it. To their disappointment, the Supreme Court ruled that that legislation was constitutional.

In trying to place more rocks in the road of a long, tortuous, contradictory journey towards the universal provision of healthcare, Republicans led by the Tea Party have initiated the shutdown of government by denying approval to the federal budget.

So with services closing, government workers are being sent home on unpaid leave. It’s wish-fulfilment time, a dream come true for the super-rich corporate funders of the Tea Party who vehemently hate all forms of public spending.

Never mind that the massive expansion of the insurance market was a Republican model pragmatically adopted by Obama as a way to provide health care for the tens of millions who’ve been denied it in the world’s richest country.

The health industry, especially in the US, has been a feeding frenzy for Big Pharma, for the makers of ever more technologically advanced and expensive medical devices and highly profitable insurance companies.

Although US spending per head on health is 150% more than in the UK, life expectancy at birth is among the lowest of developed countries, while infant mortality is the highest. Potential years of life lost by people under the age of 70 are also far higher. It’s a health system that benefits the well off.

When the economy crashed in 2008, the turning point arrived. The status quo was unsustainable. Millions were thrown out of work, losing access to healthcare funded through insurance as part of their employment contract. Economically, socially and politically the game was up.

One thing is clear: having taken the first tentative steps towards universal access,  the current system of government looks unlikely to survive. Its problems are piling up fast. The two wings of the Congress of the 1%, for the 1%, by the 1% are in deadlock. 

Although the Republicans are trying to block Obamacare, the bigger issue looming ahead is the soaring federal government deficit. Unless Congress votes to raise the debt ceiling later this month, the US government could be staring at an international default as it won’t have the money to service interest payments.

The consequences of default by the world’s biggest capitalist economy are beyond imagination. Most analysts are saying it couldn’t happen, they’ll surely come to their senses. But the Republican Party is so divided in itself that anything is possible.

Who is to blame for all of this? Reflecting a generalised rejection of the political process, a Reuters/Ipsos poll showed about one-quarter of Americans would blame Republicans for a shutdown, 14% would hold Obama responsible and 5% Democrats in Congress, while a massive 44% said everyone would be to blame.

George Atkinson, an 82-year-old Coast Guard veteran of the Korean War was among those pushing past barricades to visit the National World War ll Memorial,  closed by the government shutdown. "The whole group ought to be replaced, top man down," he said.

Events around the world show that it’s not so much the people who are operating the system who are to blame. It’s the system itself. It’s in trouble wherever you look. The Greek government has arrested some of its own, elected, Golden Dawn representatives. Britain has a non-elected coalition. Berlusconi is singlehandedly trying to bring down the Italian government. The system is cracking up.

Gerry Gold

Economics editor

Why teachers have had enough

The two main teachers’ unions, representing about 500,000 teachers, today begin a series of rolling strikes culminating in an all-out national strike for one day before the end of the year. They have simply had enough and it’s easy to see why.

Nowhere is the lack of democracy that is a feature of our age more apparent than in education. Education secretary Michael Gove has shut his ears to the education experts, the teachers themselves, their unions and most parents too. 

In line with what is happening in most other workplaces, Gove wants every teacher to take on more duties, work longer for less pay and agree to lower pensions. And he plans to dismantle the national pay bargaining system which is a direct attack on the unions.

Head teachers will get more power (and money) while the teachers themselves, at the sharp end, get pay cuts. They are expected to toe the government line, swallow their principles, and carry on teaching in a set-up that they most of them think should serve all children better.

And they are not consulted or listened to. Such is the arrogance of this Tory Party. They know best.

The Labour Party’s answer? Shadow minister Stephen Twigg’s speech at the recent party conference was almost pure waffle. There was nothing on the pay and conditions of teachers, nothing on performance-related pay, so impractical and unpopular with teachers.

And, of course, there was no commitment to return the new academies and free schools to local authority control — which would restore some fairness to the system. No surprise there as New Labour introduced academies in the first place. On the role of teachers to help work out Labour policy on education, there was not a word.

“Our vision of one nation is one of high aspirations for all,” said Twigg. “The Tories will tell us that we shouldn’t aim high for all. That’s what makes them conservative. Out for the privileged few. Wrong choices, wrong priorities. But as the progressives of British politics, we reject their defeatism. One nation is about high aspiration. On childcare. On the forgotten 50%. On higher education. Opening up power wealth and opportunity....”

Blah, blah, blah.  

Labour would make a few tweaks to the education system here and there, and some small policy changes such as wrap-around-care of pupils from 8.00am to 6.00pm, but would not challenge the Tory grand plan.

Gove’s ambition is the fragmentation of state education into competing schools, some with fancy new names and extra money, and some destined to become “sink schools”. Some would be able to select their intake of new pupils, others would end up with the so-called problem children, mostly the poor, and those on free school meals.

A few would have to teach to the narrow and prescriptive national curriculum, while the new academies and free schools, like the public schools, can ignore it.

The idea of having a co-operative family of schools in a region or of providing a good community school in each catchment area, is simply not on the agenda of the three main parties. It is the “global race”, the necessity of keeping UK PLC competitive and more profitable than the next country, that drives everything, including education policy.

Private schools are the model the Tories are heading towards. They, together with high-achieving state schools, can select the future entrepreneurs and scientists that the capitalist economy needs. The rest can join the race to the bottom.

There are other models of education, of course, that can be developed through practice and discussion. In a different world, they would set out to develop the talents and aspirations of all children, not for capitalism or the nation but for themselves and humanity as a whole.  

Peter Arkell

ConDemned to climate change as profit comes first

The ConDems’ answer to the stark warnings contained in the latest scientific assessment of climate change is to put forward policies that will actually intensify the ecological crisis.       

The Intergovernmental Panel on Climate Change report shows that humans have used up between a half and two thirds of the amount of emissions possible before we dangerously overheat the planet.

But the government’s response to the 5th IPCC report on climate change can be summed up as follows:

• Chancellor George Osborne states he does not want the UK to be at the forefront of tackling climate change
• Energy minister Michael Fallon wants to end the obligation on energy companies to fund improved insulation in people's homes.
• Justice minister Chris Grayling says that fracking for shale gas is the way forward
• Climate Change minister Owen Paterson says that climate change is not all bad - fewer people will die in the winter for example.

In other words, the ConDems will do everything in their power to serve the interests of the energy corporations and the banks who finance dirty fuel. And it is the same reaction from governments right across the globe.

Since the IPCC is all about modelling trends, maybe somebody should model the trends of global government responses to their reports.

Here are statistics that could be input into a new International Panel on Capitalist Climate Chaos model:

• Since the 4th IPCC report published five years ago an additional 200 billion tonnes of CO2 have been released into the atmosphere.

• CO2 emissions are 60% higher than at the time of the first IPCC report in 1990.

• To avoid dangerous climate 60% of energy will need to come from renewables by 2030 (International Energy Agency). We are on track to achieve just 18% globally.

• An industry report predicts that world coal-fired power plant capacity will increase more than a third from 2010 to 2020.

• The role of gas in the global energy mix will increase by one third in the period from 2010 to 2018.

• The UK Treasury wants 30 new gas power stations built.

• Every climate summit has failed to achieve a global binding agreement on reducing emissions.

You might ask how is it possible for governments to go on financing the work of the IPCC and even to say they believe that climate change is happening, but at the same time to continue along this path?

It is because they exist only as functionaries of a capitalist hegemony that attempts to rule every aspect of human society at this point. Everything is predicated on production for profit. Competition for markets means costs are constantly being driven down.

And it’s got a lot worse since the recession, which coincided with publication of the  previous IPCC report. So Osborne can say that being competitive is more important than tackling climate change.

Desperate for solutions, it seems that some members of the IPCC are putting their faith in a renewed carbon market. This time, market forces will be shut out, unlike previous schemes such as the EU model that had to be bailed out and restructured recently. They believe this could enable governments, finally, to agree binding limits on emissions. It's all a pipedream.

Our present planetary social and economic system cannot make progress when global co-operation and mutual assistance are needed. No amount of pressure on governments and states is going to change this fundamental.

In the scales against this we can put modest progress towards environmentally sensitive production, recycling, pollution reduction, carbon sequestration and development of renewables.

All the efforts of scientists, researchers, businesses and foundations to find a different way of living and producing, are not wasted. They represent a road map for the future. The climate scientists who are holding up a mirror to the system are allies of fundamental change.

But they and we must stop wasting our time stirring and stirring the empty pot of international climate talks and market “solutions”. Instead we need to write a new plan based on meeting people's needs and not on generating profit, for growth in equality and fairness rather than growth in commodities, and for a democratic, bottom-up political structure where we can make this happen.

Penny Cole

Environment editor

Climate deniers losing the battle for public opinion

As the International Panel on Climate Change (IPCC) prepares to publish its latest scientific assessment tomorrow aimed at informing policy makers, the deniers are readying themselves for a new assault on the truth.

Since the previous 2007 fourth assessment report confirmed the reality of anthropogenic climate change – that is change resulting from human activity – companies like Exxon Mobil, other fossil fuel corporations and free market champions like the filthy rich Koch brothers have spent huge sums of money trying to undermine it.

They have funded fake science and personal attacks on scientists. "Big hitters", like former chancellor Nigel Lawson have been recruited to the campaign. They have repeatedly rehashed denialist nostrums for publication in the right-wing press, including the Daily Mail and Daily Telegraph.

But the result of all their efforts is that only 11% of British people believe that the climate isn’t changing as a result of human activity, according to a recent poll, and in the US, the figure is the same.

Yale University continuously tracks US public opinion and finds that Americans’ belief in the reality of global warming increased by 13% over two and a half years, from 57% in January 2010 to 70% in September 2012.

And the number of Americans who say global warming is not happening fell by almost half, from 20% to just 12%.

The reaction in Australia to the decision of new right-wing prime minister Tony Abbott (who famously called climate change "crap") to shut down the government-funded independent Climate Commission just two days after taking office, confirms that the deniers are on the wrong side of public opinion.

The commission was headed by Tim Flannery, one of the world's top climate scientists. It produced groundbreaking studies on the potential for solar power and the background to the extreme weather currently experienced in Australia.

In a matter of days Flannery and his colleagues were back in business as a publicly-funded, independent foundation. Individuals, companies and organisations from all over Australia sent in money to restart the work.

As Flannery points out, 123 heat records were broken across Australia last summer and the bushfire season has begun already, at least a month early. Australians know crap when they see it.

The IPCC has dealt as best it can with the fact that the rate of warming has slowed over the past 15 years. Scientists are still not entirely agreed on the reasons for the hiatus, though the absorption of heat by the deep oceans is a major suspect.

To accommodate this uncertainty, the report widens the predicted range of lowest and highest temperature increase scenarios from between 1.5C to 4C to between 0.9C and 5C.

And in the final analysis the science shows that humanity is on course over the next few decades to raise global temperatures by more than 2C compared with pre-industrial levels.

However, the fact that the public is increasingly immune to climate deniers' self-serving message, does not mean politicians will be galvanised by this report to act on climate change. Quite the opposite.

Here’s just one example. David Cameron's adviser preparing for next year's global climate summit in Paris is one Tara Singh, a former lobbyist for the energy corporation Centrica. I don't think she will be proposing a binding deal on emissions reductions or cuts in fossil fuel subsidies.

Just as the Australian people themselves are now having to sustain climate science so we will all, as a global population, have to find ways to act on it through a renewal of democracy, legal protection for our natural home and a co-operative, sustainable energy economy based on insulation and renewables.

Penny Cole

Environment editor

Move over Ukip, One Nation Labour is the real deal

Move over Nigel Farage and your eurosceptic-patriotic Ukip outfit. If you want real social populism (as opposed to social-ism), Ed Miliband and his One Nation Labour are the better brand, or so he would like you to believe.

If you think that “Britain can do better than this”, Miliband will lead the way. In fact, he used the phrase no fewer than 17 times during his speech yesterday.

One Nation Labour is to become a party of small business and angry consumers, raging at the energy corporations (while leaving them in control), threatening land owners and praising the armed forces.

Above all, it’s British. So the Scots have to join in, and forget dreams of independence which, if achieved, would prevent Britain from “doing better than this”.

After setting out to overturn the roots of the party of labour by severing its formal connections with the trades unions, Miliband is on a rebranding exercise which must have his Marxist father turning in his grave.

And - we must presume from the rapturous standing ovation greeting his confident, hour long speech - he has the agreement and support of the majority if not all of the delegates present.

The emphatic turn to nationalism was already evident way back in 2007 in the days of Gordon “British jobs for British workers” Brown. But Miliband’s One Nation Labour is frankly breathtaking. The word xenophobia comes to mind.

Just so we all know where his allegiances lie, Miliband opened with a heartfelt tribute to “our troops” and “our brave police”. Hundreds of thousands of former miners who battled the police in 1984 in defence of jobs will take note.  

Now the new “mass membership” party stands up for 1.5 million small businesses (good) against the strong, vested interests identified as Rupert Murdoch, and the six big suppliers of gas and electricity (bad).

Miliband’s view is as narrow and blinkered as it is possible to be. The world outside the United Kingdom consists only of the unmentioned, unidentified “others” who are to be defeated in the “race to the top”, plus cheap labour shipped in by recruitment agencies and gangmasters. Does he mean China? The US? Germany?

How the race to the top victory is to be achieved without driving wage levels to the global minimum must remain a mystery. All that’s proposed is a mandatory charitable donation from big to small businesses and a form of barter, trading apprenticeships for immigrant labour.

Somehow, exports will increase and Britain will become great. Again. Rule Britannia.

The One Nation populist appeal is clearly designed to outflank Ukip – way out on the right wing. It’s a real mystery why some are attempting to label Ed as “red”. Just for proposing to regulate the energy market?

What was missing from the speech was much more interesting than what we actually heard.

Apart from the slow pace of “recovery”, no mention of the global crisis, no mention of Europe, the US, China, Africa, the Middle East, anywhere at all. And no mention of capitalism, naturally.

Nothing about the majority of non-tax paying global corporations who laugh in the face of national governments, of which Amazon and Google are just the most famous.

And, bizarrely missing from the demagogic message, was anything bar a passing favourable mention of the banks, some of whom it seems pay a living wage!

Nationalism? Support for the little man, the small business? As the Financial Times noted in assessing Miliband’s speech: “There is whiff of Poujadiste populism about all this.” Pierre Poujade led a briefly successful right-wing populist movement of small traders and peasants against the Paris elite in the 1950s.

One Nation Labour is in a naked bidding war for votes, playing the nationalist card to rally a disillusioned public, in a shameless effort to win the 2015 election with policies snatched out of the air.

With the electorate’s disdain for Westminster, big business and the rich growing at a rate of knots, Miliband wants to cash in on widespread discontent. Be warned: One Nation Labour populism is a dangerous road to go down.   

Gerry Gold

Egypt's military ratchets up the misery in Gaza

The military-led Egyptian regime, which yesterday banned the Muslim Brotherhood as well as its political wing which won last year’s elections, is also ensuring that Palestinians cannot escape from the biggest prison camp in the world.

We are talking about Gaza, where 1.6 million people – most of them UN-registered refugees - live in a tiny enclave, with its borders controlled by Egypt and Israel. It’s never been easy getting in and out but things have taken a turn for the worse since the Egyptian army deposed Mohammed Morsi as president and then butchered thousands of his supporters.

The military regime accused the Hamas government in Gaza of being in league with the Muslim Brotherhood government. This slender allegation has been used as a pretext to impose draconian controls on the Rafah crossing between Gaza and Egypt. Tunnels formerly used to bring goods into Gaza – they have been a lifeline – have been collapsing on top of the smugglers.

The United Nations’ Office for the Coordination of Humanitarian Affairs (OCHA) says only an average of 150 people per day have been allowed to cross into Egypt after its authorities closed the Rafah crossing following the July coup. This was just 15% of the number of people allowed to cross in June.

One of the consequences of the Egyptian-imposed blockade is that money is running short in Gaza and, as a result, importing goods from Israel has also slowed to a trickle. Gazans requiring medical treatment in Egypt have also been affected by the closure.

The Egyptian crackdown has sent the Islamic-inspired Hamas government into a tailspin. It is desperately trying to avoid a confrontation with the Egyptian military. Initially, Hamas condemned the “terrible massacres” in Egypt following the overthrow of Morsi.

Since then, backtracking has been the order of the day. Earlier this month, Gaza's prime minister Ismail Haniya condemned "attempts to draw the resistance into sideline battles away from the [real] enemy [Israel]". He added: "The government is not steering the people towards fighting Egypt or towards aggression against any state, regardless of the unprecedented pressure and circumstances the Palestinian people are under."

Adnan Abu Amr of Umma University in Gaza, said: "Hamas faces a crisis and strangulation that is forcing it to step back and minimise the chances of a clash with Egypt. (They hope) this will stop any unexpected Egyptian moves.. The situation "requires that Hamas appear flexible. Standing up to the Egyptian army is not in their interest."

For ordinary Gazans, the situation remains bleak. As students all round the world settle down for their new year, spare a thought for Manar Alzray, 23, an honours graduate in English language and education. She had planned to continue her education in Canada, where a foundation generously granted her $62,000 to take up a place at Trent University.

But the closing of the Rafah crossing prevented her from completing all the formalities at the Canadian embassy in Cairo. Her online application hit some technical problems and the term has started without her.

“Yet, I have not lost hope,” says Alzray, who has received some of the best grades and test scores in Gaza. “My application to Edinburgh has been pushed to next year, and I am currently applying to Oxford University and the University of Cambridge as well. Next year, I am determined to be in Britain. I will have a pocket full of money and I will hold my head up high. I will be happy, and so will my parents. In 10 years, I will be telling my children this story and laugh at the hard times.”

Let’s hope she’s right. But with the Israeli government continuing to block any movement towards an independent Palestine with its settlement programme and the US-backed and financed Egyptian military regime engaged in its own crackdown, optimism is in short supply.

Paul Feldman

Communications editor

Labour in race to the bottom over immigration

Ed Miliband says he wants to halt the “race to the bottom” in wages, jobs and employment rights. Fine sentiments, except that when it comes down to policies, Labour is in its very own race to the bottom over immigration.

On Friday, Nigel Farage, the leader of the nationalist-populist Ukip, blamed migrant workers from Eastern Europe for many of Britain’s woes. He ludicrously claimed that “Romanian crime gangs” were at the centre of a London crime wave. Farage demanded action to prevent the free movement of Romanian workers into Britain from January 1 under European Union rules.

Less than 48 hours later, Miliband and his immigrant spokesperson Chris Bryant were at it. Trailed in the media as a policy that offered “a Brit job for each foreign worker hired”, Miliband was quoted as saying: “Any firm that wants to bring in a foreign worker from outside the EU will also have to train up someone who is a local worker."

In a rambling interview with Andrew Marr, the Labour leader added: "I do want to get low skill immigration down and therefore overall immigration down, yes. In our first year in office we will legislate for an immigration bill which has secure control of our borders, cracks down on exploitation of workers coming here undercutting workers already here.” For good measure, Bryant in an article for the Huffington Post, warned about the dangers of a “growing reliance on overseas workers”.

All this is pandering to the most reactionary point of view, that workers’ wages have been driven down by cheap labour from other countries. This is nationalism pure and simple, looking for a scapegoat when the causes are to be found in the economic system itself.

Miliband – first generation British, by the way from a family that fled Nazi persecution – implies that if low skilled workers are blocked off, wages would rise in proportion. Nothing, of course, could be further from the truth. How, for example, does Labour explain that in earlier periods of mass immigration to Britain, in the 1950s and 60s, wages did not fall and unemployment was relatively low?

The movement of workers is an expression of the globalisation of the capitalist economy that has happened largely at the expense of wages, conditions and jobs in every country, including the United States. Here, average weekly earnings are still 14% below their peak achieved in 1972, having fallen 40 years in a row.

In Britain, as the power of globalised capital to dictate to governments and trade unions grew, so the share of wealth going to workers actually fell. The wage share of annual national income (GDP) reached a high of 64.5% in 1975, falling to a record post-war low of 51.7% in 1996 and was 53.2% in 2008 – close to where it was more than a decade before

As the 2009 TUC report Unfair to Middling explained: “The declining wage share has been driven by the introduction of flexible labour markets since the 1980s (with the paring back of employment protection rules); economic liberalisation (including privatisation); the increasing constraints on collective bargaining; a reduction in the demand for unskilled labour resulting from technical change; and the global transfer of jobs triggered by globalisation.”

And in another report, The Great Wages Grab, the TUC found that by 2010 the average full time person in work would be paid £7,000 more than they actually were if wages had kept up with economic growth and “if the best paid had not increased their wages at the expense of everyone else”.

And this was after 13 years of New Labour governments!

Miliband’s shameful race to the bottom over race and immigration is already suffering internal contradictions. The original policy of getting employers to offer an apprenticeship to a local person for every “foreign worker” hired has fallen foul of the requirement to make jobs available to workers from all European Union member states.

With living standards for most falling away rapidly – a situation certain to worsen when fuel and transport costs rise sharply in the next few months – Miliband and Labour are looking for anyone but capitalism to blame. One Nation Labour is as reactionary as its new name would suggest.

Paul Feldman

Communications editor

   

One Nation Labour is Blairism Mark II

Over the weekend, rebranded One Nation Labour will almost certainly vote for proposals to end the historic relationship between the trade unions and the party they founded over a century ago.

When One Nation Labour assembles in Brighton for its annual conference, they will have before them a slim document from former general secretary Ray Collins. Vaguely worded, it calls for a consultation on changes that are essentially already on their way.

Dubbed as an interim report, Building A One Nation Labour Party is designed to get the trade unions to act like turkeys and vote for Christmas. Behind the bland words about Ed Miliband wanting to “mend not end” the relations with trade unionists, there is another agenda.

The Labour leader can’t be a One Nation politician – he has borrowed the idea from the 19th century Tory prime minister Benjamin Disraeli who claimed he was representing all classes – until he distances himself from “special interest” groups.

These are now seen as including the trade unions, who represent six million working men and women in Britain and their families. Up until now, those in unions affiliated to Labour have had part of their subs transferred to the party, giving them a nominal membership.

Responding to Tory jibes about “being in the pocket of the unions” – in reality, nothing could be further from the truth – Miliband wants to replace this arrangement. In future, trade unionists will have to personally join Labour. No matter that the party will lose up to £9 million a year in subs this way – this is One Nation Labour in practice.

Some unions like the GMB and Unison have expressed their opposition. But what’s the betting they endorse the Collins’ report on Sunday, paving the way for a special conference next March to ratify concrete rule changes?

After all, that’s what they did in 1995, when the then leader Tony Blair and his deputy Gordon Brown told the unions that dropping the commitment to socialism in the party’s constitution would help them to win the general election. Miliband is saying the same thing.

Tellingly, Collins sees the change in the relationship with the trade unions as part of the process that the Blairites began, with his report saying: “Importantly, these proposals go with the grain of the last big reforms of the Labour [Party] 20 years ago.”

In fact, what’s the difference between Miliband and Blair in their approach to politics? Not much in essence. At the 2004 Labour conference, Blair pledged to put “power, wealth and opportunity in the hands of the many, not the few”. For good measure, he added: “It is New Labour that now wears the one nation mantle.”

So when Miliband told the Trades Union Congress that “change must happen” and that this was “only way to build a truly One Nation party so we can build a One Nation country", he was telling us nothing new. He wears a hollow crown.

Either as New Labour or One Nation Labour, it’s the same grand deception. Miliband, like Blair and Brown before him, believes that ordinary people can somehow benefit from a ruthless market capitalism, with a few adjustments made here and there.

Miliband’s One Nation nonsense is founded on his vision of a “responsible capitalism” which will pay higher wages because it’s somehow good for the economy. Yet there are many Britains, many nations: the stinking rich living in luxury homes and ordinary people falling behind with their rent because of the bedroom tax; global corporations and their shareholders on the one side and those on zero hours contracts on the other; the wealthy with their hold on the political process and an electorate whose votes count for little.

None of this will change while we continue to live in a class-divided society.

As Labour gathers, some polls put the hated Tories on level pegging. In the end, you need a microscope to spot the difference between the original One Nation party and the pretenders to the throne.

Paul Feldman

Communications editor

Naomi Klein also relies on corporations to deliver on climate change

An unseemly row is raging between author Naomi Klein and some big environmental groups  Klein made the shocking claim that they are more damaging to the fight against climate change than climate change deniers, because of links with the corporations and their dependence on the market.

Ian Pooley, vice-President of the Environmental Defence Fund, has hit back, accusing Klein of publicity-seeking and of "waging ideological warfare instead of tackling climate change". He points to his own organisation's success in campaigning for the US Clean Air Act as an example of how partnership with business can work.

In reality, the Clean Air Act was passed in the teeth of opposition from coal burners and was then watered down by George W. Bush. Now President Obama has reneged on a promise to reverse that, because of the need to reduce regulatory burdens on business during the "recovery".

In other words the drive for growth and profits will always trump environmental benefit, and gains can always be reversed.

So what is Klein's alternative view? She believes that climate change is "potentially the biggest disaster-capitalism free-for-all that we've seen yet". "Disaster capitalism", is Klein's term for corporations making huge profits out of crises.

In Shock Doctrine she even suggested that the corporations organised crises to provide fresh opportunities or as a cover for forcing through unpopular policies. But surely capitalism is not just one big conspiracy and on the whole prefers consumers who are alive and waged?

In any case, Klein suggests that corporations and governments have a real grip on the situation, and can manipulate situations at will. In fact, as the crash of 2007-8 demonstrated, they often have no idea what is really going on within their own system and cannot control the outcomes of market forces at will.

So how should people fight back against this allegedly clever and manipulative system? Klein says that in responding to climate change we can "rebuild the public sphere, strengthen our communities, have work with dignity and address the financial crisis and the ecological crisis at the same time. But I think it’s by building coalitions with people, not with corporations, that you are going to get those wins."

Klein highlights as an example the coalition of 100 environmental groups who are calling on the EU to scrap the failed carbon trading system and "start really talking about cutting emissions at home instead of doing this shell game".

But how is that different from what Poole and the EDF advocate? It still leaves us dependent on corporations and governments that serve them. In the one case the goal is to achieve it through regulation and in the other through pressure from below. But both these approaches leave the capitalist system, the cause of the eco-social crisis, untouched.

As former Bolivian ambassador to the UN Pablo Solon writes: "The preservation of nature and the rights of Mother Earth cannot be based on the expectation that the capitalist world will pay for it based on their environmental debt or that the payment will come without conditions and strings attached.

"Yes, it is the right and just thing to demand as they have historical responsibility and the polluter needs to pay. The reality though is that we will never be able to make the capitalists pay until we defeat and replace the capitalist system."

In the end the row between Klein and Poole is a fight in an empty house, where two almost identical visions argue over marginal differences.

At least the EDF recognises that we need to fundamentally change our economy, industry and mode of production. Of course their efforts to do this within the system cannot succeed, but then endless protest and activism cannot do it either.

As Solon says: "Defending the rights of nature cannot be based on the promise of compensation. Nature, in the first place, is not a bargaining chip. Nature is not only our home, we belong to nature."

We must aim for a revolutionary transformation in the way we relate to nature, and to do that we must end the capitalism system of unfettered exploitation, once and for all.

Penny Cole

Environment editor

Double, double toil and trouble

There are plans afoot in the United States to block the construction of new coal-fired plants – except for those that capture and store greenhouse gas emissions. China, meanwhile, wants to block new coal-fired installations near major cities to curb air pollution.

But do the expected announcements stack up in terms of halting runaway climate change? In the last 25 years, China’s annual consumption of coal quadrupled. It leapt from 1 billion tons in 1988 to 4 billion now. Despite the target of reducing coal’s 70% contribution to energy production to 65% by 2017,  the continuous pursuit of growth will see total consumption increase further.

Close to 40% of US electricity came from coal in the first half of 2013, so the Environmental Protection Agency proposal is certain to be legally challenged by the hugely profitable coal companies who are arguing that carbon capture technology is unproven.

The US proposal is made possible by two developments. Firstly, fracking for gas has reduced the domestic price of oil to about a quarter of the price of what it was when the world’s richest country was dependent on supplies from the Middle East.

As a result, US coal companies have started exporting coal to Europe where consumption has been growing for the last three years.

The second, even less reliable, factor is this month’s test of a commercial-scale carbon capture coal plant in Kemper County, Mississippi.  Development of the plant has been long and difficult. Mississippi taxpayers are being obliged to stump up at least $2.4 billion of the final cost – subsidising the for-profit Southern Company.

But there’s disappointment for those hoping that the end of carbon emissions is in sight. The madness continues. The business model of the new plant depends on recovering part of the cost by pumping the captured carbon dioxide into a nearby oilfield, enabling more of the liquid black gold to be pushed to the surface. Doh! 

So these two announcements don’t add up to much when it comes to cutting carbon emissions. The scale that’s required to halt and reverse global warming requires a whole new set of production and social circumstances that are way beyond capitalism’s growth-driven system to deliver.

We can also draw on Shakespeare to help us break the eco-social logjam. According to the cultural blogger Wilsonian, Shakespeare dramatised the reversal of human nature in Macbeth as a tragedy of climate change.  

 “The character arc of Macbeth is a synecdoche [a figure of speech in which a part is made to represent the whole or vice versa] for humanity under capitalism. Macbeth's temptation toward power and sovereignty is the same temptation that lurks in the dark center of capitalism, and it is that temptation that desecrates the earth.”

Ending the rule of capital is within our grasp. As the Wilsonian explains: “The irony of Macbeth is the irony of capitalism in that his rampant will to power sows his own ruin. Anticipating Marx' famous likening of the capitalist bourgeoisie to a ‘sorcerer, who is no longer able to control the powers of the nether world whom he has called up’, Shakespeare dramatizes Macbeth's temptation, ascension, and eventual dissolution through the witches' demonic prophecy.

“Shakespeare's witches further resonate with Marx' diagnosis of capitalism – ‘all that is solid melts into air’ - when they too ‘melt / as breath into the wind”. 

We can’t promise a performance of Macbeth at our third “Communicating the Revolution” weekend event on November 16-17. But we can assure you that a presentation by an eminent astrophysicist on evolution and revolution in nature, and what it means in social terms, will be worth listening to. Join us to discuss the eco-social crisis, and what we need to do to turn it around.

Gerry Gold

Economics editor

Americans find their anti-war voice and throw Obama into disarray

President Obama’s volte face on launching an attack on Syria has little to do with his desire for a peaceful solution to the country’s civil war and everything to do with the ongoing crisis of his administration, which is marked by a lack of public support for military action.

Obama must have thought he had appointed a seasoned veteran as secretary of state when John Kerry, a former presidential candidate and a fluent French speaker, succeeded the experienced Hillary Clinton. But Kerry’s bungling last week saw Obama’s war plans unravel at a rate of knots.

Support in Congress for military action was already in doubt when Kerry said in London that a strike would be “unbelievably small” by comparison with Iraq’s “shock and awe” onslaught in 2003. Republicans prepared to give Obama the benefit of the doubt on Syria, rapidly backed away from lending him their votes in the Senate on the grounds that such an attack would make America look weak and stupid.

Before that, the House of Representatives was showing an overwhelming majority against an attack, driven on by opinion polls showing over 60% of the public against military action. By all accounts, Kerry bungled a second time when he suggested that if Syria destroyed its chemical weapons stocks, a deal could be reached with the Assad regime.

While the State Department and the warlike UN ambassador Helen Rice – she was for “regime change” in Syria – desperately tried to dismiss Kerry’s remarks, Obama breathed a sigh of relief. He quickly took up Russia’s support for the idea and, as we know, a deal of sorts has been struck and the vote in Congress abandoned.

The fact that the autocrat Putin, who runs a ruthless regime in a Russia dominated by oligarchs, where opponents often find themselves jailed, could embarrass Obama politically by writing an opinion piece in the New York Times about the need for “consensus” and referring to the Founding Fathers of the US constitution, only rubbed salt in the wound.

More about that later. Just to say, however, that the latest poll shows that just 36% say they approve of Obama’s handling of the Syria situation, while 53% disapprove. There is overwhelming support for the US-Russia deal, however.

Meanwhile, the sense of crisis surrounding the administration deepened when Obama accepted former US Treasury Secretary Larry Summers' withdrawal from the race to be head of the US central bank. He was among the front-runners to succeed Ben Bernanke as head of the Federal Reserve.

Summers was known as Mr Deregulation under president Clinton, with some now holding him responsible in part for the financial collapse of 2007-8. He was also in favour of switching off the Fed’s printing of money sooner rather than later, which sent markets into a spin. Democrats also opposed his nomination because in 2005 he suggested that women had less innate ability in maths and science than men. Ironic, then, that the job looks likely to go to current Federal Reserve vice-chairman Janet Yellen. She would be the first woman in the role.

Back to Syria. The Putin-Obama deal is intended to reinforce the status quo while putting any political solution to a destructive civil war on the back burner. Russia can keep its ally Assad in power, ridiculing any suggestion that the regime would use chemcial weapons when it is quite capable of doing so and the UN report suggests it did. Moscow can keep selling arms to Syria and retain its naval base, while maintaining its historic sphere of influence in the region which dates back to Tsarist times. Obama is relieved that he didn’t suffer defeat in Congress for a military adventure that could have easily sparked a wider Middle East war.

In all this, the right of the Syrian people to self-determination, free from the malign influence of Russia, the United States, Saudi Arabia and other states with their own agendas, is never mentioned. Major power politics has prevailed once again over the interests of ordinary people. However, as the events in Washington show, the American people have found their anti-war voice which makes you optimistic that the old order can be challenged.

Paul Feldman

Communications editor

Weapons of financial mass destruction threaten new meltdown

On the fifth anniversary of the great global financial meltdown, set in motion by the collapse of Lehman Brothers on Wall Street, the government’s narrative about the state of the economy is odds with those in the know.

On the one side, the ConDems are talking up indicators that could indicate that things are on the up and up. They hail accelerating economic growth, rising house prices, official figures about falling unemployment, record profits for the banks and continuing low interest rates.

But sober financial experts on both sides of the Atlantic warn that none of the causes of the biggest crash in history have been removed. Indeed, quite the opposite.

Chief among the indicators that another meltdown is looming is what some term “the financialisation” of the economy. This is a renewed and massive increase in the power and size of the banks and the global money markets. Alongside this are huge rises in government debts.

At the same time, the oversight that governments, financial experts and international institutions insisted was needed to prevent a repeat has not happened. Putting in rules and regulations in place – with powers to enforce them – has proved to be impossible.

Daily Telegraph financial writer Jeremy Warner has warned that “the underlying fault lines that created the crisis in the first place” have worsened. And his concern about the absence of serious financial reform is amply reinforced by Time magazine’s cover story, “How Wall Street Won, the myth of financial reform”.

Rana Foroohar writes that the “financialisation of the American economy, a process by which the nation has become inexorably embedded in Wall Street” just keeps rolling on. She notes:

“US financial institutions remain free to gamble billions on risky derivatives around the world. A crisis in Europe, for instance could still potentially devastate a US institution that made a bad bet and in turn, send shockwaves through the $2.7 trillion held in US money market funds, much of which is owned by Main Street investors.”

Faroohar’s recommendations point to the scale of the problem. She says that what is needed is to fix the too-big-to-fail problem; limit leverage; expose “weapons of mass financial destruction”; bring shadow banking into the light and “reboot the culture of finance”.

In her dreams!

Her argument is reinforced by the top US Federal Reserve official responsible for oversight, Daniel Tarullo.  He says that regulators should force the biggest banks to reduce their borrowings and improve their liquidity. Post-financial crisis rules were inadequate and left too much “too-big-to-fail risk”.

Despite new financial rules introduced by president Obama, the reality is that regulation has proved impossible. An extraordinary investigation by journalist Massimo Calabresi demonstrates how the privatisation of banking oversight has turned financial regulation into a massively profitable  - and politically incestuous – industry.

Under new US laws, private accounting firms have taken over from publicly- accountable examiners. The complexity of global banking and the legal attempt to “control” them have become so complex that it appears that only outside consultants can actually fathom them.

But this “insider knowledge” comes at a deeply compromising price. The reality is that the “the revolving door between Washington and Wall Street [is] still spinning like a top”, Calabresi concludes.

Julie Williams was disgraced in her role as primary regulator for the Office of the Comptroller of the Currency. But this did not prevent her from becoming gamekeeper-turned-poacher. Earlier this year she was hired by the giant accounting firm Promontory as managing director. And, you’ve guessed it, Promontory helps banks self-regulate and find a route round government oversight. Promontory raked in nearly half the £1 billion consultancy fees paid by the banks to private consultants.

The story of Promontory and the US regulators is only the proverbial tip of the iceberg and that independent – or any other - regulation is a pipe dream. The last five years are proof if proof be needed that the financial markets are an out-of-control beast.

The global capitalist economy remains debt driven while the financial sector still resembles the house of cards that fell apart in 2007. Stand by for Meltdown II.

Corinna Lotz

A World to Win secretary

Mail sell-off is market state's 'wild experiment'

The privatisation of the Royal Mail after centuries in state hands is not simply a carve-up of a public service for the benefit of big business and shareholders. It’s also another step down the road towards a fully-fledged market state.

A market state’s task is to provide opportunities for capitalism within the formerly public realm. That can mean everything from taking over parts of the NHS, running prisons, operating trains and – now – delivering letters and parcels.

This vision of the contemporary capitalist state is shared by all the mainstream parties. Royal Mail can be privatised quickly because the previous New Labour government created the conditions for this to happen.

In 2006, the Royal Mail lost its 350-year old monopoly and the British postal market became fully open to competition. A bid to privatise the service failed after a revolt by backbench Labour MPs.

But last year, legislation was passed which created the conditions for next month’s sell-off. The mail service will be sold on the stock market and quickly fall into the hands of equity funds, pension funds and global investors. It will be run for profit which means a ruthless rationalisation of services, especially outside the major towns and cities.

Naturally, the sale of Royal Mail has been brought forward to try and beat the programme of strikes planned by the Communication Workers Union.  The CWU is pinning its hopes on a Labour government renationalising the service. That’s not going to happen, as Ed Miliband’s party is committed to the present government’s spending plans. And that doesn’t include spending £3 billion or so in taking the royal mail back into public ownership.

Labour’s policies are being shaped around Miliband’s idea of “pre-distribution” and “responsible capitalism”. The role of the state here is to encourage and “incentivise” the private sector to pay better wages and treat their workers better. Old-style state control it isn’t.

As for Miliband’s would-be partners in a future coalition government, it is significant that the privatisation of the mail service is being pushed through with enthusiasm by Vince Cable, the business secretary. Once touted as a Liberal Democrat that Labour could work with, Cable is totally pro-business.

Billy Hayes, general secretary of the CWU, points out the overwhelming hostility among the public to privatisation, with 70% opposed according to one poll. But that cuts little ice with a government responsible for a national debt that is increasing at a rate of £3,200 a second. The sale of the Royal Mail won’t make a huge difference, but every little helps.

Hayes is confident that his members – 96% of  who say they are against privatisation, despite being offered a bribe in the form of shares –  will vote for a programme of rolling strikes. “Privatisation will destroy a national public service and lead to a race to the bottom on jobs, pay and conditions. It is vandalism, and must be stopped.”

But how? The British capitalist market state is the most advanced in its ambitions to divest itself of its former role as custodian of public assets and will sell them to whoever wants to buy them.  Railways, airports, water, nuclear power stations and much more are owned by global corporations and banks whereas the American state jealously guards national assets from foreign control.

Even when it comes to the mail, only a handful of countries have privatised their services. In Argentina, it was such a disaster that it had to be renationalised. A taste of what British postal workers can expect is shown by the experiences in the Netherlands . PostNL, formerly a subsidiary of TNT, is driving down wages and conditions and is planning to restrict deliveries to three days a week.

So Hayes is partly right when he says the ConDems’ plans amount to a “wild experiment”. But that’s the nature of the beast. Rather than relying on Labour, the CWU would be better off joining with the teachers, firefighters and other sections coming into conflict with the coalition this autumn.

Their aim should be to develop support for action to oust the government and launch a discussion on what kind of new, democratic economic and political system should replace the discredited market state. That’s the way to protect and develop public services.

Paul Feldman
Communications editor