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Osborne to up the war on the people

Today’s autumn statement from chancellor George Osborne will extend the predicted period of the recession and pile more pressure on the 99% of the people in Britain who are struggling to meet rising bills as real incomes fall.

The financial crisis has been as economically devastating as a world war and may still be a burden on our grandchildren according to Andy Haldane, the Bank of England’s executive director for financial stability. 

Things are certain to get a whole lot worse.

In 2007, the cost of servicing the post-war ballooning of debt shot past the declining ability of people and businesses to make their interest payments and the crisis struck.  Credit-funded growth had reached its limits.

Five years later and the UK economy is still 3% smaller than at its peak and set to shrink further as the global depression deepens.

Haldane warned that the banks were still hiding risky assets – bad debts just the same as those that led to the crash in 2007/8. These will have to be admitted, exposed – and written off – before there is any prospect of a recovery.

So Haldane’s comparison of the impact of a world war should be seen as a warning of something much worse to come.

The global depression is spreading, and its path determines the actions of governments whatever their subjective intentions.

Nothing can stand in its path, if the system is to survive.

In Ireland, amongst the first to suffer the effects of the crash, the government is today introducing a sixth round of cuts and tax increases amounting to €3.5 billion. This will be added to the €25 billion euros taken out of the economy since 2008 which has resulted in a 15% fall in total output or GDP.

After months of attempts to avoid the inevitable, the Spanish government was yesterday forced to ask for help for the country’s banks and Eurozone finance ministers approved €39.5bn in initially low-interest loans.

But many analysts believe that the amount is less than one-third of what will be needed. And though the government remains in denial, even the full amount of €100 billion being made available is unlikely to prevent the bankruptcy of the country itself.

Spain, like Greece has seen months of protest, nationwide actions, strikes and demonstrations on a scale never seen before. The conditions attached to the new loans are certain to trigger more violent uprising.

Whatever the outcome of newly re-elected President Obama’s negotiations with the Republicans to avert the fiscal cliff – the triggering in four weeks’ time of a predetermined $500bn programme in annual tax increases and spending cuts which would push the country back into recession – reining in the unsustainable debt is certain to see trillions of dollars cut from federal spending.

The unfolding of events in Ireland, Greece, Egypt and Syria show that the costs of keeping the for-profit system of production and finance in place are driving millions across the globe over a different cliff. The limits of tolerance have been reached.

Haldane’s comparison with a war is more than symbolic. This is a war – a class war. It is being fought between the majority and the small group who own and control economic and financial resources. In a war there is a winner and a loser.

So we must set off on new path – rejecting the destructive demands of the capitalist economy and replacing it with a system of social relations that sets out to satisfy rather than deny the needs of the 99%. New kinds of democratic decision-making carried out in popular assemblies can and must give rise to the replacement of profit as the determining criteria of society.

Gerry Gold
Economics editor
5 December 2012

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Your Say


David Payne says:

Just square up to the actuality that those for whom life is a veritable marinade of privilege, like a child pulling the legs of a spider just can’t help themselves but poke a stick at the poor, then you see with 20 : 20 vision the mutant hideousness of class advantage (and its vicious valet, neo-liberal capitalism).

At base level it reflects I am sure, the primaeval thrust in male nature to dominate, which in the jungle means slaughtering any potential competitor and in “The City” where the law is a constraint against ‘murder’, bullying even where there is already defeat. Belonging to a different age, still it is an irrepressible instinct now finding expression as the ugly face of greed, a grim visage beyond cosmetic remedy. Alas, unlike Frankenstein’s monster it does not know its own deformity, perfectly deluded by the Power & Influence which comes in the form of wealth, the control of which it does in fact revert to the jungle to protect via modern military means. In the day-to-day, perhaps it is the very denial of spontaneous, feral killing determines that validation of the victors' superiority requires they inflict the exquisite, relentless torment of humiliation on those they are restrained just to dominate – for sure it makes my flesh creep with fascination to watch it on the modern stage, an utterly macabre spectacle, those suited charlatans, Saville Row silks just not able to contain the writhing slipperiness and stench of primitive biology.

And we take it, wretched folk The British Public, our cultural conditioning every bit the equal of the indoctrination that shackles the Indian continent to its Caste System (think John Cleese and the Two Ronnies – “I know my place…”). We have a class-consciousness wherein, small cog in the grandfather clock of Establishment, a true marvel of social-engineering, the un-rich majority are locked into a whir of cruel co-operation, their part essential to the functioning of the whole, robbed not only of their Rightful prosperity, but any motivated sense that worse than theft, it is financial rape, that criminal class bringing their public school buggery into all our homes.

Wake up Britain, be brave enough to take that shameful look over your shoulder, see finally that you are being egregiously shafted and get off those compliant knees - all you have to do is find a common voice and say “ENOUGH” and it will stop.

People Power!


Joe Taylor says:

Can't see many people arguing with what you say here Gerry

Most of us, who've had similar life experiences and read similar books, would come to similar conclusions.

You say that a class war is being fought between the majority and the small group who own and control economic and financial resources.

"Both political and economic power existed long before attempts were made to subject them to democracy and the market; and neither of these can be said to have predominated in human history, which has mainly been the story of the domination and exploitation of the many by the powerful few." (Colin Crouch - see here)

Until capitalism came along, historically recently, domination by the powerful few was via the big stick/gun/army/atom bomb. Now it's done more by the control of economic and financial resources.

The question is, how do the powerful few control our economic and financial resources?

Henry George reckoned it was though the private ownership of what he called 'land' - the Earth's natural resources (more here). Marx saw it as the 'control of the means of production'. Some believe control by the few is fine (Hayek?). But few of the classical economic theorists, Keynes included, could foresee the emergence of computer/information technology, digital money, deregulation, globalisation, the take-over of nation governments, media and the political process by trans-national corporations... we all know the story, we are living with the consequences.

If we delve into the world of modern economics, we soon get lost in a quagmire of un-decipherable, specialised language and eventually learn that economics itself is based on entirely false premises (see here).

I've come to the conclusion that 'the powerful few' are able to control 'the many' these days because they are legally allowed to create digital money as debt. The power this ability gives them is all pervading - it's almost the equivalent of having the monopoly on fresh air! Because they 'create' 97% of all the 'money' in circulation, they are able to dictate what money is used for - which is virtually everything. And the rest of us have to 'borrow' the money we need to exist from them as 'debt', at interest.

Osborne said yesterday that due to his austerity measures we, the UK, are able to 'borrow' at less interest.

We wouldn't have to 'borrow' anything if 'we' created the 'money' we need for the real economy to function and didn't borrow it, as debt at interest, from the 'powerful few'.

The powerful few are able to dominate and exploit the many because we, the many, through the governments we elect, allow them to create, out of fresh air, our money supply, as debt at interest.

That power needs to be taken away from them.

Wouldn't that level-out the playing field? It would change the rules of the game too, eh?


Matt Scott says:
agree with Joe; several thoughts - one: for most people the basics of finance and capitlaism is inpenetrable so we need to find ways of talking and engaging with it that everyone can get - hence the power of occupy and the 99%. Two: money is fictional; it is made up hence quantitative easing etc and Joe raises and interesting point which is if it is largely made up (fiduciary etc) then we can make up soemthing better and more equal Three: I wholly agree that we, as in people concerend about the inequity of the current system, should move on this in a more organised way Four: the concern is if we don't do point 3, then we end up as a society scapegoating people - we saw the rise of fascism in the 1930s feed off this Five: I'm struck by how capitalism has always generated exactly these **** ups; from the Italian city states, the Dutch tulip bubble, to enron etc - this is in fact situation normal for high finance - hence the need to press for radical reform, closing down of offshore facilities, money laundering, shady connections of drugs, guns and intelligence agencies - which has been the basis for a lot of state making - from the Opium wars to numerous examples more recently; our secret history is underpinned by hot money flows of illegal plunder adn yet the message we get from mainstream political parties is that market knows best: not so

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