Chancellor Darling is not wrong to increase government debt in this recession in an attempt to increase the money supply and demand in the British economy because today unprecedented levels of private debt, secured against collapsing asset prices, threatens wide scale bankruptcy and destitution for working people interlinked with mass insolvency for companies.
However Darling also threatens to reboot the economy with the same virus which inflicted the recession in the first place, namely private debt for consumer spending. Would you advise a vulnerable, but still solvent, neighbour in the present climate to spend to the hilt or save for the stormy days ahead? Yet Darling’s VAT reduction prompts such people to spend.
Instead, Darling should consider two steps. One is to be far bolder in promoting immediate direct government investment in the economy for which we need a National Enterprise Board. Second, he must consider a huge devaluation in sterling (and yes some inflation) to lessen the amount of debt.
26 November 2008
25 November 2008
21 November 2008
The BNP membership list
The online publication of the full membership list of the BNP with addresses, comments and other contact details provides an unaccustomed level of precision in politics. Behind the lists of bland English surnames on the spreadsheet, we have a precise cartography of the purveyors of hate dotted across the country. Now in our hands is concrete proof of the small, yet significant, hold of organised fascism throughout Britain.
I did what everyone else did: I scoured the list for the places where I had lived in England and where my family and friends live. Though necessary - the left needs to know the identity of these people - there is something unpleasant in this kind of voyeurism. The snooping resembles the searches in Eastern Europe to discover which neighbours, colleagues and acquaintances were informers. Vile though the ideas and purposes of these British fascists certainly are, we are nonetheless invading the privacy of neighbours who have personally done us no harm.
The key issue, though, is clear. The information is now in the public domain and the left needs it in the struggle against fascism.
I did what everyone else did: I scoured the list for the places where I had lived in England and where my family and friends live. Though necessary - the left needs to know the identity of these people - there is something unpleasant in this kind of voyeurism. The snooping resembles the searches in Eastern Europe to discover which neighbours, colleagues and acquaintances were informers. Vile though the ideas and purposes of these British fascists certainly are, we are nonetheless invading the privacy of neighbours who have personally done us no harm.
The key issue, though, is clear. The information is now in the public domain and the left needs it in the struggle against fascism.
18 November 2008
Economic Crisis in Britain
Newspaper commentators make a good job of explaining the current economic crisis, but they fail, naturally enough, to connect their explanations into a class analysis.
Even a reduction of ten percent of UK output would not of itself cause very much hardship in Britain if income and wealth were not so unequally distributed. Only by understanding working class debt can the dimensions of socio-economic crisis can be grasped.
New Labour presided over a regime in which capital flowed into Britain, bolstering the value of sterling, to fund working class spending. The houses, cars, etc. were paid for only in part through wages, but, thanks to credit, the disposable income was much higher. One effect of this high expenditure was to drive up house prices leading many to re-mortgage in order to fund further expenditure, which in turn drove up house prices further.
The boom ended when finance capital saw the value of its security (the house, earning potential of the worker) could not guarantee the credit advanced. By the autumn of 2008 the withdrawal of credit (its sterling value secured by the tax payer through bank bailouts) led to a Britain characterised by recession, growing unemployment and falling house prices. Workers face mortgages and other credit bills they can’t pay as their income and assets decline. The end of the road is re-possession and destitution.
Let us be clear: today and in the coming years many working people have, and will continue to have, absolutely nothing, or less than nothing. How is any of this the outcome of Blair’s stakeholder society?
Credit for consumption makes little sense unless you believe that your income will keep on rising. The myth of eternal economic growth was peddled by New Labour in the 90s and early 2000s who argued that a flexible workforce and low wages were boosting the economy. What in fact was boosting Britain just as much was the inflow of capital to finance consumer credit. Two illusions of wealth were rising house prices and cheap holidays; Mediterranean holidays paid for by an overvalued pound caused by the purchase of sterling to lend to consumers. (Buying property at home and abroad along with foreign holiday were the topics of endless TV programmes ‘Brits abroad’ and the like)
Blair pulled it off for a while. Profits rose and capital had the additional ability to secure interest from workers as they bought their houses and partied on credit. For all but the poorest in Britain it seemed as if the country were booming. Everything could be had on the ‘never-never’ housing, education, holidays and through PFI even hospitals and the London Underground.
Even a reduction of ten percent of UK output would not of itself cause very much hardship in Britain if income and wealth were not so unequally distributed. Only by understanding working class debt can the dimensions of socio-economic crisis can be grasped.
New Labour presided over a regime in which capital flowed into Britain, bolstering the value of sterling, to fund working class spending. The houses, cars, etc. were paid for only in part through wages, but, thanks to credit, the disposable income was much higher. One effect of this high expenditure was to drive up house prices leading many to re-mortgage in order to fund further expenditure, which in turn drove up house prices further.
The boom ended when finance capital saw the value of its security (the house, earning potential of the worker) could not guarantee the credit advanced. By the autumn of 2008 the withdrawal of credit (its sterling value secured by the tax payer through bank bailouts) led to a Britain characterised by recession, growing unemployment and falling house prices. Workers face mortgages and other credit bills they can’t pay as their income and assets decline. The end of the road is re-possession and destitution.
Let us be clear: today and in the coming years many working people have, and will continue to have, absolutely nothing, or less than nothing. How is any of this the outcome of Blair’s stakeholder society?
Credit for consumption makes little sense unless you believe that your income will keep on rising. The myth of eternal economic growth was peddled by New Labour in the 90s and early 2000s who argued that a flexible workforce and low wages were boosting the economy. What in fact was boosting Britain just as much was the inflow of capital to finance consumer credit. Two illusions of wealth were rising house prices and cheap holidays; Mediterranean holidays paid for by an overvalued pound caused by the purchase of sterling to lend to consumers. (Buying property at home and abroad along with foreign holiday were the topics of endless TV programmes ‘Brits abroad’ and the like)
Blair pulled it off for a while. Profits rose and capital had the additional ability to secure interest from workers as they bought their houses and partied on credit. For all but the poorest in Britain it seemed as if the country were booming. Everything could be had on the ‘never-never’ housing, education, holidays and through PFI even hospitals and the London Underground.
7 November 2008
The Glenrothes by-election in Scotland
Labour’s success in the Glenrothes by-election signals a profound change in the configuration of British politics.
The summer of 2008 marked the nadir of the collapse of the New Labour coalition which came to office in 1997. I earlier analysed the death of that coalition in the following piece:
http://docs.google.com/Doc?docid=d88xqxn_141dgqxtxhh&hl=en_GB
By the summer of 2008 Labour had relinquished much of its working class support, not simply on account of Brown’s continued focus on the concerns of Middle England, but because of hostile economic measures which directly impacted on the working class: removal of the ten pence tax band and inaction in the face of rising fuel bills and corporate profits. Across the working class the question was posed: what does New Labour stand for? Labour support plummeted and votes dissipated in all directions. The low point was another Scottish by-election, Glasgow East, lost in July to the SNP.
The financial crisis of October 2008, ushering in recession, altered the pieces on the chessboard. Brown after his habitual dithering rose to the occasion and used public money to nationalise banking debt and reliquidify finance capital in order to prevent a financial meltdown, an act taken to bolster capitalism and in the immediate interest of all social classes.
Two consequences result. First, in the face of recession, rising unemployment and repossessions, the working class is moving in a pro-Labour direction for self-protection, though whether Labour will offer more than cold comfort is debatable. For vulnerable working people gambling with dandy Cameron in England or Salmond in Scotland is now less of an option. Hence Brown’s success in the Glenrothes election.
Second, the perception that the London government could ‘solve’ the banking crisis undercut the nationalism of the SNP. In the ongoing identification battle of Scotland whether a nation in its own right or a sub-unit of a greater Britain, it was the latter that was strengthen against the former. Hence Brown’s success in the Glenrothes election.
That Brown prevented a meltdown of support in the working class does not mean that he has yet convinced Middle England to vote for him over Cameron in 2010. Much depends on how Cameron re-orients his propaganda in the next two years of recession.
The summer of 2008 marked the nadir of the collapse of the New Labour coalition which came to office in 1997. I earlier analysed the death of that coalition in the following piece:
http://docs.google.com/Doc?docid=d88xqxn_141dgqxtxhh&hl=en_GB
By the summer of 2008 Labour had relinquished much of its working class support, not simply on account of Brown’s continued focus on the concerns of Middle England, but because of hostile economic measures which directly impacted on the working class: removal of the ten pence tax band and inaction in the face of rising fuel bills and corporate profits. Across the working class the question was posed: what does New Labour stand for? Labour support plummeted and votes dissipated in all directions. The low point was another Scottish by-election, Glasgow East, lost in July to the SNP.
The financial crisis of October 2008, ushering in recession, altered the pieces on the chessboard. Brown after his habitual dithering rose to the occasion and used public money to nationalise banking debt and reliquidify finance capital in order to prevent a financial meltdown, an act taken to bolster capitalism and in the immediate interest of all social classes.
Two consequences result. First, in the face of recession, rising unemployment and repossessions, the working class is moving in a pro-Labour direction for self-protection, though whether Labour will offer more than cold comfort is debatable. For vulnerable working people gambling with dandy Cameron in England or Salmond in Scotland is now less of an option. Hence Brown’s success in the Glenrothes election.
Second, the perception that the London government could ‘solve’ the banking crisis undercut the nationalism of the SNP. In the ongoing identification battle of Scotland whether a nation in its own right or a sub-unit of a greater Britain, it was the latter that was strengthen against the former. Hence Brown’s success in the Glenrothes election.
That Brown prevented a meltdown of support in the working class does not mean that he has yet convinced Middle England to vote for him over Cameron in 2010. Much depends on how Cameron re-orients his propaganda in the next two years of recession.
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