Why we must fight the Tories on every front – Reason #1 The Economy

Why we must fight the Tories on every front – Reason #1 The Economy

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.

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Marchers protest the Tory Party conference in Manchester on 4 October 2015

Globalisation

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.

TTIP

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!

TTIP Share image Im saying NO to TTIP

 

Action Now:

Sign the petition to stop the TTIP trade deal

Join thee Positive Money campaign

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The Flailing, Failing Radical Right

Better Nature: books and commentary by Geoff Davies

The current disarray of the Abbott Government may mark the end of a decades-long experiment in radical social engineering. The experiment has yielded deepening social divisions, an antiquated, colonial-style economy and little capacity to deal with the dramatic challenges of the near future.

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They’re people, not just migrants

By Jon Crooks

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A crisis has escalated in recent months in which thousands of people, displaced from countries including Syria, Afghanistan, Sudan, Eritrea, Somalia and Nigeria have attempted to get to Europe. They risk their lives, and in many cases, have lost their lives crossing the Mediterranean. But Cameron has largely turned a blind eye. Not his problem.

Well now it has become his problem. Migrants have set up camp near the port of Calais where around 3,000 people are currently living. Last night around 1500 people tried to enter the UK on mass via the channel tunnel and one man died.

Cameron blamed what he called:

…“the cancer of corruption at the heart of low economic growth in poorer countries”

The fact that he has to twist such an awful situation like this into being about this government’s favorite obsession with ”economic growth” is appalling, but at least he acknowledges that something needs to be done to address the cause of the problem rather than solely focusing on the symptoms.

Building bigger fences won’t do anything to stop people risking their lives to cross, it will just make it further for them to fall.

The government also likes to point the finger at the gangs of people smugglers, who are making a profit out of the ”human misery”. Fair enough. But let’s be clear – they aren’t creating the misery and the fact that people are turning to these gangs and paying them huge sums of money (their life savings) only goes to emphasize how desperate they are.

On a recent trip to Africa I passed through Turkey and read some interesting facts and arguments in an English language Turkish paper called Daily News. Apparently, according to the UNHCR, in 2015 two in every three migrants have been asylum seekers.

As asylum seekers, rather than economic migrants, Europe has a duty to protect them. The 1951 Geneva Convention protects…

“any person owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion.”

Europe also quite rightly protects (this principle is called “subsidiary” or “temporary” protection) those who would be at serious risk if they decide to return to their home country.

So here’s the problem: As long as those people fleeing their own countries have not received refugee or protected person status – or at the very least an asylum visa – they cannot present themselves at airport check-in counters. This despite the fact that a flight would be less expensive and much less risky. The common sense solution, proposed by French journalist François Dufour in the Daily News, was to grant them refugee or protected person status before entering Europe in the first place.

One option could be a UNHCR center in Tripoli, Algeria, Morocco, or elsewhere on the African coast, with the power to grant refugee / protected person status on behalf of European countries.

A further option could be a European Union embassy, with the same power, in a few safe countries (which have flights to at least one European country), such as Sudan, Ethiopia, Djibouti, Kenya or Lebanon. Countries that are safer than the ones from which people are fleeing, but also easy to get to.

It wouldn’t matter where they were processed or which European country they then landed in as long as we had an EU-wide strategy that then required the placement of the total number of refugees fairly. In this respect, each country would get a share of refugees depending on the size and population of the country, and of course taking into consideration the foreign languages spoken by the refugees and whether they have any family already based in an EU country.

The obvious counter argument to this system is that it would act as a ‘pull’ to those wishing to seek a better life in a wealthier nation such as Britain. Maybe it would, but if the assessment process is rigorous, this would be largely negated. Also, another advantage of this “on the spot” solution is that it would reduce the large number of rejected asylum seekers who currently stay on illegally (around three out of four) and who currently live in poverty in the EU.

We must consider the fact that migrants are often refugees who have endured great suffering and are first and foremost people – like you an me – fellow human beings. They are people who, in desperation, have left their own countries to travel to Europe, often having been tortured or raped. Many, in doing so, have drowned. Isn’t it time we started treating migrants as the vulnerable people in need of help that they are and acting with some compassion towards them rather than simply blaming their government and erecting bigger walls?

Let them starve in the name of ‘fairness’

By Jon Crooks

Britain is stalked by hunger caused by low pay, growing inequality, a harsh benefits sanctions regime and social breakdown. Yet failed Labour candidate, Will Straw, in an open letter along with 7 other Labour Party candidates who failed to win their seats at the election, is today quoted as saying…

“Despite Labour’s vocal campaigning, people rarely wanted to talk about the bedroom tax unless they were directly affected. Instead, they wanted to know what Labour would do about the family down the street on benefits who’d ‘never done an honest day’s work in their life’ or why some families jumped up the housing ladder. It might make us feel uncomfortable and it might be unfair, but the public thought that we were on the side of people who don’t work.”

This is what we’re up against. Some families can’t afford decent food and others are so poor they can’t afford to switch on the gas. Many families don’t even have the ability to make their own food because the kitchen of their private rented flat contains only a microwave. That’s before we even consider how the number of people living on the streets is on the increase.

The government needs to be confronted over the prevalence of homelessness, food banks and the scale of deep poverty in the UK, but because of the diversive rhetoric that has turned people against the poor of this country, with lots of help from our poisonous right wing press, we’re facing an uphill battle.

Our government and the corporate press rattle on about getting people into work, but they ignore the fact that for some, this just isn’t possible no matter how hard they try. Yet they are punished rather than helped.

Benefit-related problems are the single biggest reason for reference to food banks. From April 2000 to June 2014, a total of 3,063,098 people received an average of 2.04 sanctions each. Furthermore, the cost of food, fuel and rent has increased since 2003, in a trend unprecedented in post-war Britain. These fundamental changes in the relative prices in budgets of food, utilities and rent have blown sky-high the comfortable post-war assumption that our wages system and our benefit system guarantees a minimum which most of us would regard as tolerable.

The stats available from The Trussell Trust are staggering and yet Food Banks now go largely unreported.

We also have more working poor than at any other period of history. Welfare isn’t just for the unemployed. And The Tories are making the working poor worse off too by reducing working tax credits.

It’s time to look again at the state of our country and to review the fundamental values that led to the creation of our welfare state. As a G7 country, there is no excuse. We should be moving towards a hunger-free Britain. Why doesn’t the state take over distribution of free food to those who need it? Why can’t we provide accomodation for all those who need it? It can be done, if there was the political will. 

It isn’t like we can’t afford it, despite what Cameron and Osborne will have you believe. How about we make some large reductions in the £93 billion of corporate tax relief and subsidies instead of making £12 billion of cuts to welfare.

As Jeremy Corbyn recently put it:

“Austerity is a political choice not an economic necessity. There is money available – after all, the government has just given tax breaks to the richest 4% of households.”

At least one of our elected representatives can see the truth for what it is.

This article was edited with a correction on 1st August 2015.

There is no economy on a dead planet

  

Published on 30th April 2015 on The News Hub

Our current economic model, commonly referred to as neo-liberalism, now dominates every corner of the earth. Thatcher and Reagan won. They sold us on an ideology of competition in every aspect of life. They began the process of removing as many barriers to competition as possible. They crushed unions, stripped away regulation there to protect workers, consumers and the environment we live in, all in the name of increasing competition. This ethos of competition now drives a large part of our human behaviour. We don’t think like communities or even as a unified nation of people any more. It’s dog eat dog, survival of the fittest. The real tragedy is that unfettered competition is supposed to benefit us by increasing choice and cutting bureaucracy, but in reality it has done the opposite. Big business is getting bigger and more powerful at the expense of small independent traders that provide real choice and originality. Real choice has been replaced by the monotony of large chain stores, restaurants and coffee shops and personal service has been replaced by call centres and self service via the internet as businesses get bigger by cutting costs.

Our transport, communications and energy infrastructure has been sold off to big business, so now our governments are left impotent when it comes to tackling global problems like climate change. In short, they’re no longer in charge. Our democracy is a sham. So much power has been handed over to the private sector that our politicians are powerless to act. Or so it seems. 

Unwilling to interfere with the market to install the infrastructure necessary to quickly switch our energy supply to clean renewable sources. Unwilling to interfere with the free market to put in the infrastructure to pave the way for a switch to electric cars. But hang on, don’t we provide millions in subsidies to the fossil fuel industry every year? And what about the deal with Eon to build and run the new Hinkley nuclear power station? Huge subsidies proposed, which has now led to a legal challenge by one of our fellow EU members.

It’s clear therefore that it isn’t just about ideology and an unwillingness to interfere with the ‘free market’, our problems are amplified by greed, power and vested interests. How many government ministers have links to the fossil fuel industry and the big energy companies? How many of their friends and supporters are wealthy landowners who benefit from agricultural subsidies? Those in power support privatisation because it is a transfer of public money to private interests. From the 99% to the 1%. They do this because they believe in a ruling elite and they want to maintain this status quo. Growing inequality? They simply don’t care.

Globalisation and neo-libralism are not compatible with securing a safe and stable planet for the future. The pursuit of continuous economic growth at the expense of all else can’t continue indefinitely. We can’t continue to base our economic system on competition at a time when we need collaboration to deliver a safe and secure future for ourselves. Tell me, how can we expect over 200 nation states to agree on a way to limit CO2 emissions whilst simultaneously competing with each other for business; the same business that is producing the CO2 in the first place based on a competitive market economy that only services to drive up consumption? We can’t. 

Is change possible?

There is certainly a growing number calling for a change to the economic system. It probably started with the Occupy movement, which has now been joined by a growing grassroots environmental movement. The problem is that whilst we know what we want, we don’t know how to get there. Politically, many on the left will vote Green this time around, but will that be enough? The best we can hope for is a few seats in parliament and perhaps a little more influence on the Labour Party if they form a minority government with the support of the Left. 

The problems with UK politics run deep. Most people can’t think outside of the existing political orthodoxy that is represented by the three main parties and the corporate media because it’s not debated and reported on in mainstream channels, and most people vote how they’ve always voted anyway. That’s if they vote at all. Only 65% voted in the 2010 General Election and most of those votes were meaningless in our First Past the Post system, where only people in ‘marginal seats’ affect the outcome. It’s a dire thing to admit, but our democracy is not democratic enough to be relied upon to drive the real change we need. 

After this election and its aftermath is over there are 3 things that need addressing: 1) we need constitutional reform – a new voting system based on proportional representation, regional devolution and an elected 2nd chamber of parliament; 2) we need to free the press and media from corporate ownership and vested interests; and 3) reform party funding to make it fair and equitable and out of the grasp of corporate power.

We might then finally begin the journey that closes the gap between the country we have now and the country and world that most people would surely prefer.

Cameron, Clegg or Miliband – whoever you vote for you’ll get further cuts

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Published on The News Hub on 31st March 2015 & Campaign for the North on 1st April 2015

There’s a cross-party acceptance of the need for strong austerity measures among the so-called main parties. It’s not an election issue like it was in Greece and other countries in the EU. Why is that? Why have we accepted government austerity measures so easily in the UK without a proper debate and without giving other solutions full consideration?

Austerity is an attempt to address the government’s fiscal imbalance: the difference between the present value of the government’s commitments to cover its outgoings (such as state pensions and running the NHS) and the present value of its tax revenues. This difference is undoubtedly significant, at close to six times our national income.

Contrary to popular belief though, there are several options available to deal with this imbalance. The deficit isn’t caused by immigrants stealing our jobs and claiming our benefits as UKIP would have you believe or by lazy people on Benefit Street as Ian Duncan Smith clearly suggests. It’s a consequence of public spending pressures that we face as the baby boom generation reaches retirement age and life expectancy continues its upward trend. Many other countries are facing similar problems, although the UK deficit is high relative to our US and European counterparts.

Despite the cause being largely linked to changes in demographics, we can probably dismiss the idea of increasing the retirement age again and increasing immigration of young people in order to increase the number of workers paying tax. Both of these options would be deeply unpopular and come with their own issues – not least being the lack of available job vacancies. However, this still leaves two clear choices. On the one hand, we could increase income taxes, National Insurance contributions or consumption taxes such as VAT and fuel duty. On the other, we can take the currently favored option of cutting public spending.

What this really comes down to therefore is which groups in society should bear most of the burden – low-paid workers and the unemployed who rely most on the welfare state, the NHS and other support services provided by any decent modern society, or should the wealthy bear more of the cost by paying a little more tax, or at least by paying some tax. Let’s face it, we lose billions in revenue from tax dodging corporations and high net worth individuals every year.

The problem here is the cost of enforcing tax collection. If enforcement could be improved significantly at relatively low cost, the government could take more in tax revenue, but if enforcement is very costly then the extra tax revenue collected might fall short of the cost of enforcement, leaving the government finances in a worse state. You would expect HMRC to conduct a cost-benefit analysis to decide how much of its resources it should put into enforcement, but one wonders.

The other thing that those of the right of the political spectrum like to remind us is that movements towards higher corporation tax or tougher enforcement would likely deter investment in the UK, even by those corporations who are willing to pay their fair share, as it might be interpreted as a signal that further regulations will follow in the future, making it more difficult to do business in the UK.

So government takes the easy option of cutting spending instead, though this doesn’t explain the level and pace of cuts in public spending. Why try and balance the books in just 5 years as Osborne set out to do? How quickly we reduce the deficit is a trade-off between current and future generations. The fast pace of fiscal adjustment that George Osborne has instigated (and Ed Balls doesn’t oppose) doesn’t aim to spread increases in taxes and reductions in spending over a long period of time and therefore spread the pain. They want instant results, or at least within a 5-year term of office, because that’s how politics works. It’s short-termism. How else can you take credit for re-balancing the books? The result is that the burden per person is much larger, and the economic pain for individuals correspondingly greater.

But does it work?

It hasn’t worked in Greece where austerity policies have led to unemployment rates of 28% nationally, without reducing the debt or providing the economic growth it promised.

So, what should be done?

At the very least we need to have a public debate about how to deal with this issue, rather than simply accepting the path chosen by the three main political parties. The Green Party at least have a different approach. They want to see about 45% of GDP being spent on government services; the same as Germany. They don’t want to roll over for big business or give up because it’s too hard. Instead, they want to see rich individuals and multinational companies paying their fair share of taxes.

Thomas Picketty suggests that a tax on capital instead, or as well as, income could not only provide fiscal returns, and hence reduce the fiscal imbalance, but would have other benefits also. The tax burden would fall heaviest on the “super rich” – those most able to afford the tax and who, some could say, are the sector of the populace that has benefitted most from the economy. The tax, depending on what tax rate is selected, would also go some way towards reversing the polarity of wealth which has been such a feature of recent decades.

The concept of taxing capital fills the richest 1% with horror and has prompted an outpouring of misleading arguments against Picketty, and regrettably these arguments hold sway to our political leaders who are under the control of the 1% by virtue of their control of the media and the lobbying groups.

But as well as reducing inequality we need to live sustainably and our current requirement of needing the resources of three planet Earths is already causing massive disruptions that will rapidly reach catastrophic proportions. If we really want to talk about fairness, the truth is that we need to take a look at what our fair share of the Earth’s natural resources is and set ourselves on course to really live within our means. The deficit exists because we’ve had more than our fair share of the spoils already. We need to recognize the need to live within our own resources at a lower level of consumption and stop worrying about GDP and growth.

Let’s stop feeling guilty and confront those in power

We need to rise up and demand real change if we want a better world. Big business can’t be trusted to save us from a crisis created by capitalism

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By Jon Crooks, published on The News Hub on 13 March 2015.

My wife will tell you, I’m a tortured soul. If you know me you’ll know that I can’t help wrestling with large-scale social and environmental dilemmas like inequality, the degradation of the natural world and climate change. I feel profound guilt over what humans are doing to each other and to the planet. And I know I’m not alone. As individuals, the primary way people like me deal with this guilt is as consumers – buying organic, locally-produced seasonal food or signing up to Green Energy. But, in the end, whilst these are important choices to make as individuals, for our own peace of mind, a minority of us making ethical consumer choices won’t change anything. What we really need to change is the system.

We need to target the architects and governors of the current system. We already do this quite well, but in my opinion too much of this is focussed on the private sector; we focus too much on the big corporations in particular. We’ve made the oil companies enemy number one in the war on climate change and big food producers, agribusiness, logging companies, big fishing corporations etc. the focus of our attentions.

Don’t get me wrong, they are the culprits and we must continue to pressure them and shame them, but in the same way that consumer choices won’t bring about real change, neither will pressuring big business alone be enough to stop all their harmful practices. We can’t expect a multimillion pound fossil fuel industry to simply wake up one day and decide “hey, all those trillions of dollars worth of fossil fuels on our balance sheet that we keep being told can’t be burned…why don’t we just leave them in the ground and go and do something else”. Clearly that’s not going to happen.

This is because there are obvious limitations to targeting the big corporations. In simple terms, these companies exist to make a profit for their shareholders. Indeed, to maximise profits through continued growth. Whilst they engage in corporate sustainability programmes (some more than others), this is not usually through a desire to do good, or do the right thing, even if this is one of the companies stated values. Corporate social responsibility only exists in order to project an image or a suggestion that they are doing the right thing, in order to be able to continue to attract customers, deflect government regulation, and in order to continue to make money.

The idea that capitalism can save the world from a crises created by capitalism is a ridiculous notion. The change required from private corporations won’t happen on a voluntary basis. Even those who work in the fossil fuel industry acknowledge this.

Our governments are the problem. They act like they are powerless to act; almost bystanders. And that’s exactly what they are most of the time. Calls for action on climate change for example are growing among societies around the world, but government actions are still restricted to those that will not hamper existing business or potentially act as a drag on the growth-obsessed economic system.

The alternative ‘green’ approach is still considered too progressive, too left-wing. A green future is equated with returning to living in caves. It’s a very entrenched mentality and a huge challenge to promoting change. But is it true? Of course not. All the green movement are saying is let’s stop the obsession with growth and GDP and think about how we can develop a new green economy in a sustainable way and stop working in individual silos as nation states and start thinking more cooperatively. We need a narrative of positive change, in which our adaptation to climate changes does not just protect what’s already here, but also creates a more just and equitable world.

The time has come to demand real change.