By Jon Crooks
It’s the economy stupid!
We need an end to austerity. No more cuts! It’s time to look at alternative ways of clearing the deficit whilst investing in public services and infrastructure, in a way that doesn’t punish disabled people, the unemployed and the low paid. The Tories have controlled the debate up to now. Making out that it’s all about cuts in public spending vs. higher taxes. But that’s all built on lies. To begin with we need to expose the truth about money!
The money supply
Virtually all money today is created as bank debt. As painful as it is, everybody needs to understand this. Go to the Positive Money website and start by watching one of their videos then read a bit. It’s fundamental to everything. And the problem with this method of creating money is that we can no longer take on more debt. The money supply has shrunk along with our inability to borrow new money into existence. Quantitative Easing (QE) attempted to re-inflate the money supply by giving money to banks to create more debt, but that policy failed.
What’s the solution?
It’s time to try injecting some debt-free money – central bank-created money – directly into the real economy. The Government can issue new money outright to cover the budget deficit or spend it into existence by investing in new housing, energy, transport and digital projects. Corbyn’s team call it “quantitative easing for people instead of banks” (PQE). The investments in the real economy would be made through a National Investment Bank set up to invest in new infrastructure and in the hi-tech innovative industries of the future. The Greens too have been advocating this approach for some time.
So why won’t the Tories consider this option?
As Ellen Brown, author of ‘Web of Debt’ explains:
“This is a taboo concept in mainstream economics because it cuts out the private sector bond traders from their dose of corporate welfare, which unlike other forms of welfare like sickness and unemployment benefits etc. has made the recipients rich in the extreme.” Also, “it takes away the ‘debt monkey’ that is used to clobber governments [such as Greece] that seek to run larger fiscal deficits.”
In other words, it’s about power. Controlling the money supply through debt, the elite are able to control the whole global economic system. The financial sector is at the heart of everything. Hedge funds fund The Tory Party directly. The big corporations who benefit from this system pay millions through lobbying firms to protect their interests: an environment of low corporate tax (we have one off the lowest thresholds in the world) and minimal labour and environmental regulation.
And so the financial sector, the big corporations, the Tory politicians and the media moguls conspire together, all getting richer and richer together, dining out on their power, whilst laughing at the rest of us who are paying for it. It stinks!
An alternative economy that doesn’t put profit before people
We need to re-balance our economy, which under the Tories and previous Labour governments, has been increasingly built on debt and the financial services sector. Someone needs to stand up to Osborne’s chums in the City of London who have had it their own way for two long. Instead of an economy that works for the richest in society, built on debt, foreign investment and the import of goods, making us vulnerable to the ups and downs of the global financial system, our economy needs to work for us all. A new monetary system and a national investment bank that will invest in productive economic activity to rebuild our manufacturing industries and make us more self-reliant. We need to invest in public services, new technology and renewable energy to provide decent jobs for everybody.
Trade doesn’t have to be a bad thing, but unregulated, unrestricted global trade is very damaging and this form of untamed global market approach may have had it’s time anyway. There is an argument emerging that we have reached peak globalisation.
Whilst globalisation has led to cheaper goods, it has been at a huge cost to the environment and workers rights. Whilst we have introduced protections for workers and the environment in Britain in the past, we have since outsourced our manufacturing industries to Asia where more limited protections exist. In doing so, we have outsourced the damage we cause. Things are cheaper for a reason! I’d like to see a British government brave enough to introduce restrictions on trade (at least from outside the EU) whilst at the same time investing in British industry in order to rebuild our manufacturing industry and develop new modern technologies, to give better balance to our economy. We need to develop a culture that encourages everyone to buy local or at least buy British and we need a government that will support that.
The problem we have is that the Tories represent big business and so when we taken on the Tories we have to take on corporate power. And the biggest challenge facing us right now on that score is TTIP – a massive trade agreement currently being negotiated between the EU and the US – and it’s a threat to our climate, health and democracy.
Despite all the consultations on this huge trade deal being secret, we know that 92 per cent of those involved have been corporate lobbyists.
In their quest for profit at any cost, corporations strive for two things, new markets and deregulation. In reality, regulation is what keeps corporations, some of whom are richer and more powerful than countries, in check. The move in the US and the UK to deregulate financial markets was one of the main causal factors of the global financial crash. Regulation, however inconvenient to big businesses, has a crucial role in democracy and economic stability. It provides safeguards against exploitation and protects hard earned rights of the most vulnerable in society.
Of particular concern is the investor protection clause, known as ISDS. This allows corporations to potentially sue governments. For example, a US health care provider could secure a contract to run an NHS hospital, but if the public objected and the government intervened on our behalf, they could be sued for the company’s loss of earnings. Running a hospital on the cheap will make more profit but cost more lives. Under TTIP, it’s the profit, not safety, that matters. There are legitimate concerns that this deal could make NHS privatisation irreversible.
Also, this wouldn’t take place in a traditional court. There is no judge. Instead the decision would be taken by three well-paid lawyers sitting behind closed doors.
Companies have successfully used ISDS to challenge environmental protection in past trade agreements. For example, in 2009 a Swedish energy company sued Germany for €1.4 billion because Hamburg tried to stop it from polluting the River Elbe. The case was only settled after Germany backed down.
If TTIP goes ahead, the reach of ISDS will increase tenfold. This must be stopped!