In light of yesterday’s outlandish provocation in the Black Sea, when British Navy destroyer, HMS Defender, weapons loaded and with a BBC correspondent conveniently aboard, quite deliberately sailed into Crimean territorial waters close to the Russian base at Sevastopol, Craig Murray posted two articles which I have reprinted unabridged below – in the second, Murray explains in detail how the UK action was in clear breach of the UN Convention on the Law of the Sea.
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Sometimes it is worth stating the obvious. The United Kingdom does not have a coast in the Black Sea. British warships are not infesting the Black Sea out of a peaceful intent, and there is no cause for them to be entering disputed waters close to anybody’s coast. This is not a question of freedom of navigation under the UN Convention of the Law of the Sea. There is nowhere that a British warship can be heading from the UK under the right of innocent passage that would require it to pass through coastal waters by Crimea. The Black Sea is famously a cul-de-sac.
There is certainly a right to pass to the Ukrainian port of Odessa – but that in now way requires passing close to Crimea. This is therefore not “innocent passage”. There is a right of passage through the Kerch strait, which Russia has to date respected. Russia has not just a right but a duty to enforce sea lanes for safe navigation through the strait, exactly as the UK does off Dover.
I expect we will now be in for a mad frenzy of Russophobia, yet again. I shall comment further once I have more details of why and exactly where Russia was firing warning shots. But just remember this, it was not Russian warships near the British coast, it was British warships in an area where they had no business other than ludicrous, British nationalist, sabre-rattling.
The UK needs to lose its imperial delusions. Sending gunboats to the Crimea is as mad as – well, sailing an aircraft carrier expressly to threaten the Chinese. There are those who see this activity as evidence of the UK’s continued great power status. I see it as evidence of lunacy.
Click here to read the original article entitled “Black Ops in the Black Sea” published yesterday by Craig Murray.
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The pre-positioning of the BBC correspondent on HMS Defender shatters the pretence that the BBC is something different to a state propaganda broadcaster. It also makes plain that this propaganda exercise to provoke the Russian military was calculated and deliberate. Indeed that was confirmed by that BBC correspondent’s TV news report last night when he broadcast that the Defender’s route “had been approved at the very highest levels of the British government.”
The Prime Minister does not normally look at the precise positions of British ships. This was a deliberate act of dangerous belligerence.
The presence of a BBC correspondent is more than a political point. In fact it has important legal consequences. One thing that is plain is that the Defender cannot possible claim it was engaged in “innocent passage” through territorial waters, between Odessa and Georgia. Let me for now leave aside the fact that there is absolutely no necessity to pass within 12 miles of Cape Fiolent on such passage, and the designated sea lane (originally designated by Ukraine) stays just out of the territorial sea. Look at the definition of innocent passage in Article 19 of the UN Convention on the Law of the Sea:
Very plainly this was not innocent passage. It was certainly 2 (d) an act of propaganda, and equally certainly 2 (c), an exercise in collecting information on military defences. I would argue it is also 2 (a), a threat of force.
So far as I can establish, the British are not claiming they were engaged in innocent passage, which is plainly nonsense, but that they were entering territorial waters off Crimea at the invitation of the government of Ukraine, and that they regard Crimea as the territory of Ukraine and Crimean territorial waters as Ukrainian territorial waters.
I want to impress on you how mad this is. The whole point of “territorial sea” is that, legally, it is an integral part of the state and that the state’s full domestic law applies within the territorial sea. That is not the case with the much larger 200 mile exclusive economic zone or sometimes even larger continental shelf, where the coastal state’s legal jurisdiction only applies to specific marine or mineral resources rights.
Let me put it this way. If somebody is murdered on a ship within twelve nautical miles of the coast, the coastal state has jurisdiction and its law applies. If somebody is murdered on a ship more than twelve miles off the coast, the jurisdiction and law of the flag state of the ship applies, not the law of any coastal state in whose exclusive economic zone the ship is.
In international law, the twelve mile territorial sea is as much part of the state as its land. So to sail a warship into Crimean territorial seas is exactly the same act as to land a regiment of paratroops in the Crimea and declare you are doing so at the invitation of the Government of Ukraine.
There is no dispute that Russia is in de facto control of the Crimea, irrespective of British support for the government of Ukraine’s claim to the region. It is also true that Russian annexation of the Crimea was not carried out in an accordance with international law. However, it is not, in practice, likely to be reversed and the situation needs to be resolved by treaty or by the International Court of Justice. In the interim, the UK government legal position can only be that Russia is an “occupying power”. It is impossible that the UK government legal position is that Ukraine is in “effective control” of the territory.
We need to see the legal advice provided by FCO legal advisers. It is simply not the practice in international law to ignore the existence of an occupying power which is a recognised state, and act with armed forces on the authority of a government not in effective control. The difference in British attitude towards Russia as an occupying power and towards Israel is tellingly different.
The legality of the British action is, at very best, moot. In realpolitik, it is an act of brinkmanship with a nuclear power and further effort to ramp up the new Cold War with Russia, to the benefit of the military, security services and armaments companies and the disbenefit of those who need more socially useful government spending. It is further an act of jingoist populism for the neo-liberal elite to distract the masses, as the billionaires’ incredible wealth continues to boom.
NATO will shortly commence a naval exercise in the Black Sea. As not all the member states of NATO are quite as unhinged as Johnson, it is to be hoped it will refrain from this kind of extra layer of provocation. There is a large part of me that says they cannot possibly be mad enough to attempt to intervene in Ukraine with military force, or at least its threat. But then I look at Johnson and Biden, and worry. This can all go horribly wrong.
Click here to read the same post entitled “Warmongering British Actions in the Black Sea” as it originally appeared today on Craig Murray’s official website.
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To mark ten year’s blogging, this is the fifth of my re-uploads from the WoC archive. Originally posted on April 22nd 2014, never let a good Ukrainian crisis go to waste… was one of a number of articles in which I reported on how the Ukrainian crisis had been deliberately provoked on behalf of western corporate interests, leading us into what the late Stephen Cohen, Professor Emeritus of Russian Studies and Politics, warned was already becoming a “New Cold War”.
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On Thursday [April 17th] Democracy Now! welcomed back Stephen Cohen, Professor Emeritus of Russian Studies and Politics at New York University and Princeton University, to discuss the deepening crisis in Ukraine. Cohen, a specialist on Russia and the Soviet Union, is the author of numerous books on the subject including his latest Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War. He was asked “Are we seeing the beginning of a new Cold War?” and “what exactly is happening right now in Ukraine?” Cohen’s response began as follows:
Those are big questions. We are not at the beginning of the Cold War, a new one; we are well into it—which alerts us to the fact, just watching what you showed up there, that hot war is imaginable now, for the first time in my lifetime, my adult lifetime, since the Cuban missile crisis, hot war with Russia. It’s unlikely, but it’s conceivable. And if it’s conceivable, something has to be done about it.
You did two things on your introduction which were very important. Almost alone among American media, you actually allowed Putin to speak for himself. He’s being filtered through the interpretation of the mass media here, allegedly, what he said, and it’s not representative. The second thing is, let us look just what’s happening at this moment, or at least yesterday. The political head of NATO just announced a major escalation of NATO forces in Europe. He did a Churchillian riff: “We will increase our power in the air, in the sea, on the land.” Meanwhile, as negotiations today begin in Geneva, we’re demanding that Russians de-escalate. And yet, we, NATO, are escalating as these negotiations begin.
So, if you were to say what is going on in Ukraine today—and, unfortunately, the focus is entirely on eastern Ukraine. We don’t have any Western media—in eastern Ukraine. We don’t have any Western—any Western media in western Ukraine, the other half of the country. We’re not clear what’s going on there. But clearly, things are getting worse and worse. Each side has a story that totally conflicts with the other side’s story. There seems to be no middle ground. And if there’s no middle ground in the public discourse, in the Russian media or the American media, it’s not clear what middle ground they can find in these negotiations, though personally, I think—and people will say, “Oh, Cohen’s a Putin apologist”—but it seemed to me that the proposals the Russians made a month ago for resolving the conflict are at least a good starting point. But it’s not clear the United States is >going to accept them.
I will come back to some of Cohen’s further points in a moment, but first I’d like to just try to understand why, as Cohen points out, there is such a lack of media coverage across Ukraine and in particular in the western half of the country.
Below is a video (I can’t find a still frame) recorded in mid-March featuring a statement by Vitali Klitschko as he warned of an impending catastrophe in Crimea should it vote to join Russia in the recent referendum. Klitschko has since been sidelined, of course, but what strikes me as odd is that he was standing in front of a board much like the kind of sponsorship boards we see behind interviews of Premier League footballers. Similar except that the ex-sportsman here was backed by just one logo. You can see that it reads “Ukraine Crisis Media Center”:
Now if you type “Ukraine Crisis Media Center” into the Google image search you will find many other Ukrainian political figures giving statements in front of that same logo board. So just who are the “Ukraine Crisis Media Center”?
Well, they have a website and you can search for details there, but in fact you will find very few and none at all about their own sponsors. Instead, what you will read is this:
Ukrainian Crisis Media Center is launched to provide the international community with objective information about events in Ukraine and threats to national security, particularly in the military, political, economic, energy and humanitarian spheres. During this crisis period, the Center on a 24/7 basis will provide support to all the media who cover events in Ukraine.
Having failed to find further information on their website, I decided to email the organisation [on Thursday April 3rd] and asked the following:
I cannot find any information on your site about where financial support for the media center comes from. Without information on who is backing the venture how can we be sure that your coverage is wholly impartial?
I have not received a reply.
In the meantime, I also searched the web for insight from other places – and came across a glowing report published in Kyiv Post which began as follows:
Much like the EuroMaidan Revolution itself, the Ukraine Crisis Media Center sprang to life with speed, spontaneity, creativity, competence – and a strong sense of mission.
Although the center has been open only since March 4, its third floor headquarters in the Hotel Ukraine on 4 Institutska St. is already a required daily stop for dozens of Ukrainian and foreign journalists.
Continuing:
The group came together at Razumkov Center in Kyiv on March 2.
Nataliya Popovych, the president of Kyiv’s PRP Group, an affiliate of the global Webber Shandwick company, is among the founders.
Popovych said that the Kremlin is fast on its feet in spreading lies about Ukraine, whose government is often slow to respond to allegations and counter untruths.
Well, here’s one of the details I was searching for – so who is Nataliya Popovych?
Nataliya started career in Leo Burnett, one of the leading advertising agencies in the world, and continued in Romyr & Associates, Canadian government and public relations firm. After getting Master degree and probation in USA, Nataliya has become a head of PRP Ukraine, a Weber Shandwick Affiliate Company in Ukraine, and in a year became the President of PRP Group, Weber Shandwick partner on CIS markets.
And PRP? You probably won’t be surprised to learn that they are a PR company:
PRP is more than an integrated solutions agency. It is a creative concept. It is a strategy. It is the management of reputations in a new era. It is the ability to communicate and create goodwill. It is integrated solutions which engage audiences into the lives of companies and brands.
She [Nataliya Popovych] considers Ukrainians to be loving, peaceful and tolerant people and, while she didn’t consider herself a follower of iconic and controversial nationalist hero Stepan Bandera (1909-1959), she is now “proud to be called a Banderite.”1
And for those who don’t know who Stepan Bandera was, then here are a few extracts taken from a detailed and rather generous biography written by Professor of History at Yale University, Timothy Snyder, and published by The New York Review of Books around the time Viktor Yushchenko (President after the “Orange Revolution”) was voted out of office in 2010:
The incoming Ukrainian president will have to turn some attention to history, because the outgoing one has just made a hero of a long-dead Ukrainian fascist. By conferring the highest state honor of “Hero of Ukraine” upon Stepan Bandera (1909-1959) on January 22, Viktor Yushchenko provoked protests from the chief rabbi of Ukraine, the president of Poland, and many of his own citizens. It is no wonder. Bandera aimed to make of Ukraine a one-party fascist dictatorship without national minorities. During World War II, his followers killed many Poles and Jews. Why would President Yushchenko, the leader of the democratic Orange Revolution, wish to rehabilitate such a figure? Bandera, who spent years in Polish and Nazi confinement, and died at the hands of the Soviet KGB, is for some Ukrainians a symbol of the struggle for independence during the twentieth century. […]
Consistent as the rehabilitation of Bandera might be with the ideological competition of the mid-twentieth century, it makes little ethical sense today. Yushchenko, who praised the recent Kiev court verdict condemning Stalin for genocide, regards as a hero a man whose political program called for ethnic purity and whose followers took part in the ethnic cleansing of Poles and, in some cases, in the Holocaust. Bandera opposed Stalin, but that does not mean that the two men were entirely different. In their struggle for Ukraine, we see the triumph of the principle, common to fascists and communists, that political transformation sanctifies violence. It was precisely this legacy that east European revolutionaries seemed to have overcome in the past thirty years, from the Solidarity movement in Poland of 1980 through the Ukrainian presidential elections of 2005. It was then, during the Orange Revolution, that peaceful demonstrations for free and fair elections brought Yushchenko the presidency. In embracing Bandera as he leaves office, Yushchenko has cast a shadow over his own political legacy.2
All of which helps to explain something else that has been puzzling me… why every other story about what’s happening in Ukraine is entitled “Ukraine Crisis: something or other” – the reason being that “Ukraine Crisis” is more or less the brand name that Nataliya Popovych and other “Ukrainian nationalists” have adopted — a list of the founders of the “Ukraine Crisis Media Center” is available at the end of the same Kyiv Post article.3
So what is this new political brand promoting?
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The “war on terror” is dead, long live the new cold war!
Returning to Stephen Cohen, here is what he had to say about the rise of this new cold war:
As a historian, I would say that this conflict began 300 years ago, but we can’t do that. As a contemporary observer, it certainly began in November 2013 when the European Union issued an ultimatum, really, to the then-president, elected president, of Ukraine, Viktor Yanukovych, that “Sign an agreement with us, but you can’t have one with Russia, too.” In my mind, that precipitated this crisis, because why give a country that has been profoundly divided for centuries, and certainly in recent decades, an ultimatum—an elected president: “Choose, and divide your country further”? So when we say today Putin initiated this chaos, this danger of war, this confrontation, the answer is, no, that narrative is wrong from the beginning. It was triggered by the European Union’s unwise ultimatum.
Now flash forward to just one month ago, about the time I was with you before. Remember that the European foreign ministers—three of them, I think—went to Kiev and negotiated with Yanukovych, who was still the president, an agreement. Now, the Russians were present at the negotiation, but they didn’t sign it. But they signed off on it. They said, “OK.” What did that agreement call for? Yanukovych would remain president until December—not May, when elections are now scheduled, but December of this year. Then there would be a presidential election. He could run in them, or not. Meanwhile, there would be a kind of government of national accord trying to pull the government together. And, importantly, Russia would chip in, in trying to save the Ukrainian economy. But there would also be parliamentary elections. That made a lot of sense. And it lasted six hours.
The next day, the street, which was now a mob—let’s—it was no longer peaceful protesters as it had been in November. It now becomes something else, controlled by very ultra-nationalist forces; overthrew Yanukovych, who fled to Russia; burned up the agreement. So who initiated the next stage of the crisis? It wasn’t Russia. They wanted that agreement of February, a month ago, to hold. And they’re still saying, “Why don’t we go back to it?” You can’t go back to it, though there is a report this morning that Yanukovych, who is in exile in Russia, may fly to eastern Ukraine today or tomorrow, which will be a whole new dimension.
But the point of it is, is that Putin didn’t want—and this is reality, this is not pro-Putin or pro-Washington, this is just a fact—Putin did not want this crisis. He didn’t initiate it. But with Putin, once you get something like that, you get Mr. Pushback. And that’s what you’re now seeing. And the reality is, as even the Americans admit, he holds all the good options. We have none. That’s not good policymaking, is it?
Click here to read a full transcript or watch the latest interview with Stephen Cohen on the Democracy Now! website.
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The United States spent over a decade hunting down Osama Bin Laden at financial a cost running into multiple trillions and a human cost of more than a million lives, yet since his demise the jihadist cause that Bin Laden once spearheaded is stronger than ever. Forces of al-Qaeda and other near identical jihadist factions now hold control of a large region of Iraq and Syria that exceeds the area of Britain, whilst other Islamist gangs run amok throughout Libya. Thus, after a decade of dirty wars executed by means of “shock and awe” air strikes, the perpetual overhead threat of drones and the knock at the door that ends with secret rendition to faraway torture sites, the “war on terror” has been lost. “Terror” reigns supreme as the victor: terror from all sides that is.
But then, it is hard to imagine any foreign policy that could have manufactured and spread terrorism more effectively than the policies enacted during this decade-long “war on terror”. Blowback? Up to a point. But, we must not forget that all of the many al-Qaeda factions that have gained so much territory could never have done so without our help. Whether indirectly, with the establishment of the power vacuum in Iraq, or more purposefully, with Nato bombers opening the way for the Islamist insurgency in Libya. But mostly, the gains of al-Qaeda are thanks to the very generous funding of one of America and Britain’s closest allies, that bastion of freedom and democracy, Saudi Arabia. Saudi Arabia, the birthplace of Bin Laden, and the nation known to have the closest ties to those accused of the 9/11 attacks. Attacks that provided the very springboard from which the “war on terror” was launched all those years ago. These are the facts and none can be refuted, so make of them what you will – if it was a plot for a film it would seem ludicrously far-fetched.
Of course, the “war on terror” lost a great deal of its public appeal with the bludgeoning of Iraq, and so under Obama we’ve had “humanitarian interventions”. But this new gloss has also flaked away, with the majority of people in the West absolutely sick of war. That said, the wars go on regardless – wreaking havoc but still satisfying the insatiable thirst for blood demanded by our military-industrial-financial complex.
None of these wars have had anything to do with stamping out terrorism or, surely more laughably, the West’s desire to bring “freedom and democracy”. The United States’ covert backing of al-Qaeda is nothing new and neither is the West’s more brazen support of al-Qaeda’s primary sponsor Saudi Arabia? If the wars were about either terrorism or “freedom and democracy”, then the Saudi regime would surely have topped the charts of “the axis of evil”.
In truth, the game never changed. And sadly it is a game (at least to those currently holding power) – as Zbigniew Brzezinski, one of America’s leading geopolitical strategists, makes clear not least with the title of his notorious book on Eurasian geostrategy, “The Grand Chessboard”. In it he wrote:
In brief, for the United States, Eurasian geostrategy involves the purposeful management of geostrategically dynamic states and the careful handling of geopolitically catalytic states, in keeping with the twin interests of America in the short-term: preservation of its unique global power and in the long-run transformation of it into increasingly institutionalized global cooperation. To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.4
This neo-imperialist game is much the same as the older imperialist game, in which only the strategies have been updated. It is about control of territory, of energy resources, of financial systems, and it has (and always did) amount to a series of proxy wars against the competing interests of competing powers. Traditionally Russia have been the great adversary, but now there is China too. So the Cold War that officially concluded with the fall of the Berlin Wall in October 1989… ended only in name. With the Ukrainian crisis (or should that be “Ukraine Crisis”) the chill that remained has become considerably icier. Treacherously so. But our military-industrial-financial complex needs perpetual war just to keep the racket going, or, when that ceases to be an option (as it now has), to maintain the illusion of an imminent threat against us. Bin Laden is dead, so a new Cold War is just the ticket. On top of which, as Brzezinski also explained in his book:
“Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.”
Here’s Stephen Cohen again:
The real debate going on in NATO—the real debate, because this is a distraction—is what Rasmussen said in your earlier clip—he’s the political head of NATO—that we’re building up, as we talk, our forces in eastern Europe. Now, understand what’s going on here. When we took in—”we” meaning the United States and NATO—all these countries in eastern Europe into NATO, we did not—we agreed with the Russians we would not put forward military installations there. We built some infrastructure—air strips, there’s some barracks, stuff like that. But we didn’t station troops that could march toward Russia there. Now what NATO is saying, it is time to do that. Now, Russia already felt encircled by NATO member states on its borders. The Baltics are on its borders. If we move the forces, NATO forces, including American troops, to—toward Russia’s borders, where will we be then? I mean, it’s obviously going to militarize the situation, and therefore raise the danger of war.
And I think it’s important to emphasize, though I regret saying this, Russia will not back off. This is existential. Too much has happened. Putin—and it’s not just Putin. We seem to think Putin runs the whole of the universe. He has a political class. That political class has opinions. Public support is running overwhelmingly in favor of Russian policy. Putin will compromise at these negotiations, but he will not back off if confronted militarily. He will not.
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A trade war opens the way for new trade deals
The new cold war isn’t only a military escalation, it also potentially marks the beginning of a new trade war. But due to reliance on Russia imports (especially when it comes to energy) EU sanctions on Russia will be difficult, and so one way forward could involve loosening trade restrictions between the EU and the US.
The following passages are taken from a press release by the European Council following the recent EU-US Summit in Brussels. It begins:
Recent events in Ukraine have confirmed that strong cooperation between the European Union and the United States on peace and security is of critical importance.
Continuing under the next heading “Economy and global challenges” as follows:
Reinforcing economic growth and job creation remains central on both sides of the Atlantic. The EU and the United States have taken important steps to stabilise financial conditions and overcome the crisis. The EU remains committed to building a deep and genuine economic and monetary union, including a banking union. […]
The EU and US leaders renewed their commitment to a strong Transatlantic Trade and Investment Partnership (TTIP). this should go beyond a free trade agreement and reaffirm Europe and the United States’ shared values of democracy, individual freedom, the rule of law and human rights, and a common commitment to open societies and economies. [bold highlights maintained from original source]
And what is TTIP? Here are additional notes at the end of the same press release:
The EU and US have decided to take their economic relationship to a higher level by agreeing to launch negotiations on a comprehensive trade and investment agreement. It aims to remove trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.
In fact, I have already touched on the subject of the Transatlantic Trade and Investment Partnership (TTIP) as well as its sister treaty the Trans-Pacific Partnership (TPP) . Both of these “free-trade agreements” appear to have alternative and conflicting names and acronyms and in the case of TTIP it is also known as the Transatlantic Free Trade Area, abbreviated as TAFTA, which is how it appeared in that earlier post. Why trade agreements need to have multiple names becomes more apparent when you realise what this commitment to “freeing up regulations” will mean. Here are a few extracts from a detailed analysis published by Der Spiegel International and entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?”:
Lori Wallach had but 10 minutes to speak when she stepped up to podium inside Room 405 at George Washington University, located not too far away from the White House. Her audience was made up of delegates currently negotiating the trans-Atlantic free trade agreement between the United States and the European Union.
They had already spent hours listening to presentations by every possible lobbying group — duty bound to hear myriad opinions. But when Wallach, a trade expert for the consumer protection group Public Citizen, took the stage, people suddenly started paying attention. The 49-year-old Harvard lawyer, after all, is a key figure in international trade debates.
“The planned deal will transfer power from elected governments and civil society to private corporations,” she said, warning that the project presents a threat of entirely new dimensions. [bold emphasis added]
How will TTIP help to transfer even more power out of democratic control and into the hands of the major corporations? Well, let us count the ways:
After the third round of negotiations, an unusually broad alliance of anti-globalization groups, NGOs, environmental and consumer protection groups, civil rights groups and organized labor is joining forces to campaign against TTIP.
These critics have numerous concerns about the treaty – including their collective fear that the convergence of standards will destroy important gains made over the years in health and nutrition policy, environmental protection and employee rights. They argue the treaty will make it easier for corporations to turn profits at the public’s expense in areas like water supply, health or education. It would also clear the path for controversial technologies like fracking or for undesired food products like growth hormone-treated meat to make their way to Europe. Broadly worded copyrights would also restrict access to culture, education and science. They also believe it could open the door to comprehensive surveillance.5
Click here to read the full article in Der Spiegel.
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Fracking for freedom (and digging for victory)
I have already highlighted at the end of an earlier and rather more extended post how energy giants Chevron and Exxon Mobil have been getting ready to move their operations to Ukraine with the intention of exploring both conventional and “unconventional” resources (otherwise known as “fracking”). On Saturday’s Keiser Report, Max Keiser spoke to freelance journalist JP Sottile of Newsvandal.com, who also occasionally writes for the Guardian, about not only how Big Oil, but also Big Agra, have their eyes fixed on Ukraine. Sottile names the people and corporations hoping to take advantage of Ukraine’s exceptional fertile lands. Here are some excerpts of what he had to say [from about 13 mins in]:
“One of the bones of contention with Russia, Europe, and its transit point Ukraine, is Russia’s domination of the natural gas market in Europe. So I thought it was very interesting when the deal was announced that Chevron was involved in developing shale gas in Ukraine. Now that would have been with the previous government of Yanukovych – and I believe that that led to a lot of the pressure coming out of Moscow for Yanukovych to reject the economic deal between Ukraine and Europe, and that then of course led to a cascading number of events, which led to the deposing of Yanukovych and the ‘crisis in Ukraine’ as it is now called.”
Beyond the oil and gas, Sottile has also looked closely into the interests of agricultural giants Cargill and Monsanto, who are keen to exploit Ukraine’s riches closer to the surface:
US-Ukraine Business Council is an investor in the US-Ukraine Foundation where Ms [Victoria] Nuland was speaking on December 13th [about how the US had already spent $5 billion helping Ukraine realise its “European aspirations”] and also on December 13th, that was the day that Cargill invested in a Black Sea port to help open the Russian market to its agriculture. Well, Cargill is also heavily invested in Ukraine in a company called Ukrlandfarming. The just bought a two hundred thousand dollar stake in Ukrlandfarming. In fact they bought that stake – or it was announced – on the very day, January 12th of this year, that fifty thousand Ukrainians flooded Kiev to protest the government of Yanukovych.
They are all connected through Freedom House – a guy there who worked with Ms Nuland, who is Assistant Secretary of State for European and Eurasian Affairs, she had a Deputy Assistant Secretary of State for European and Eurasian Affairs, a guy named David Kramer. David Kramer serves on – he’s actually head of Freedom House – Freedom House is one of the organisations that the United States uses to stoke democracy movements around the world. It is actually responsible, along with the National Endowment for Democracy, for funding many of the opposition forces there in Ukraine. And David Kramer also serves on the US-Ukraine Business Council. If you go the US-Ukraine Business Council – which is a very interesting organisation – on the executive board of the US-Ukraine Business Council you’ll find Cargill, Monsanto, John Deere, CNH International (which is a farming equipment and tractor-making company), Eli Lilly and DuPont Pioneer – DuPont Pioneer being the genetically modified organisms and agricultural wing of DuPont. And they all serve together under the guidance of a guy named Morgan Williams. Morgan Williams is CEO and President of US-Ukraine Business Council, and he has been a fixer for Archer Daniels Midland, Cargill, [and] other big agricultural companies in Ukraine for the last fifteen to twenty years.
There is an expression from my part of the world that goes: “where there’s muck, there’s brass”. Well, as Sottile’s investigations reveal, there’s loads of muck in Ukraine and not just in oil and gas deposits. Perhaps, as he suspects, the bigger prize is the land itself. Either way, the vultures are already circling. Except that they are more predatory than the much maligned vulture. Rather than waiting for a crisis to happen they have been directly involved in fomenting one, and now, as their “Ukraine Crisis” escalates, they won’t be planning to let it to go to waste.
Click here to read more about this in JP Sottile’s article entitled “Ukraine, Chevron, Condi Rice and Shale Gas… join the dots” published by The Ecologist magazine on March 18th.
This is what Donald Trump has said in a Twitter stream† today:
With Universal Mail-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRAUDULENT Election in history. It will be a great embarrassment to the USA. Delay the Election until people can properly, securely and safely vote???
Mail-In Voting is already proving to be a catastrophic disaster. Even testing areas are way off. The Dems talk of foreign influence in voting, but they know that Mail-In Voting is an easy way for foreign countries to enter the race. Even beyond that, there’s no accurate count!
New York Mail-In voting is in a disastrous state of condition. Votes from many weeks ago are missing – a total mess. They have no idea what is going on. Rigged Election. I told you so. Same thing would happen, but on massive scale, with USA. Fake News refuses to report!
Investigative journalist Greg Palast is a specialist in election fraud who actually reported for the BBC on the US elections during the Bush years. He has also written for the Guardian and Rolling Stone magazine. This is what Palast told Between The Lines’ presenter Scott Harris during an interview back in April this year:
According to an MIT-Caltech study, which is the gold standard for reviewing absentee ballots, they conservatively calculated 22 percent of mail-in ballots are never counted. Twenty-two percent — well over one out of five. Now, if it were random, it obviously wouldn’t affect the election. But it’s overwhelmingly young voters, voters of color. That means we’ll have 25 million votes lost in November. Twenty-five million ballots will be lost. You’re gonna have millions and millions and millions of people who will never get their ballot, or there’ll be sent the card “Do you want an absentee ballot?” They’ll never get that card. If you’re a student, you moved from one dorm room to the next. If you’re Hispanic, you’ll get a card in English, that looks like junk mail and you throw it away and you’re gonna lose your vote.
It’s overwhelmingly young people, voters of color, and low-income people‚ in other words, Democrats who will be losing their votes by the millions with mail-in ballots. And it’s especially true in the swing states where the GOP has control of the system, how people vote, etc. We just saw this in the extreme in Wisconsin where the GOP legislature refused to delay the election to June 9 as requested by the (Democratic) governor and requested by the governor’s order. And the U.S. Supreme Court has basically said, “Yeah, if you don’t send in your ballot or show up to vote – and how do you do that? Your vote doesn’t count.” But that’s a dry run for November. So if we go to all-in for mail-in balloting, unless we do something to fix this system, it’s as good as over.
Click here to listen to the broadcast or read a full transcript of the interview on Greg Palast’s official website.
The seminal MIT study, Losing Votes by Mail, warns that 22% – more than one in five ballots – never get counted. https://t.co/64xTBSh6WC
And here is Palast last week offering an updated review of the ‘seminal MIT study’, Losing Votes by Mail:
According to the MIT study, most of the millions of absentee ballot lost are because one in nine voters never receive their ballot or it is received too late. Again, the “late” ballots are overwhelmingly slow-mailed to voters of color.
I spoke to an African-American voter who requested ballots for her family 45 days before the Georgia primary—and her husband’s ballot arrived on June 10. The Georgia Primary was June 9. Unsophisticated voter who screwed up? Hardly, this is Andrea Young, voting rights attorney and Executive Director of the ACLU of Georgia.
If they can shaft voting rights attorneys out of their vote, others don’t stand a chance.
One of the main reasons voters don’t get their ballots is that, in the past two years, 16.7 million voters have been purged, erased from the voter rolls and most don’t know it. It could be you. I can tell you it was me: I looked up Greg Palast on my Secretary of State’s website (you should all do that) and it said, “No such voter.”
And that’s how Trump Stole 2020—and 2016. The big swing state of Ohio, from 2012 to 2016, swung from a big Obama victory …to Trump. WTF?
One secret of the Ohio’s flip to red is that the Republican Secretary of State in the month before the 2016 presidential election, simply refused to send absentee ballot application cards to 1,035,795 voters, those on the absurdly, inaccurately named “inactive” or “mover” lists. Voters lost their rights—without notice. The purge list was 2-to-1 Democrat.
With 16.7 million voters erased from the registration rolls in the past two years, millions will say, Where the hell is my ballot? Sorry: they’ll be S.O.L. (Google that.)
The Palast Investigations team went through several purge lists and we found that one in seven African-Americans and one in eight LatinXand Asian-American voters in these states were on the hit lists.
You can call it a “flawed” system, but it’s a fraud system, American Apartheid.
Click here to read the full article on Greg Palast’s official website.
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Additional:
On August 15th, Greg Palast was invited on RT’s Keiser Report. He talked to Max Keiser and Stacy Herbert about how vote suppression schemes are pushed by both parties, especially Republicans who have knocked millions of people off the voter rolls in the past few years – black American males being the most likely to be challenged for ID at the voting booth, while many new residency requirements deliberately target students. They also discussed related issues covered in his new book, How Trump Stole 2020, including meme warfare, hanging chads, banana republics’ and failed voting apps, and finally look at ways to ‘steal the election back’:
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Update: The SECRET Purpose of Trump’s Threat to Delay the Vote
In response to Trump’s tweets, Greg Palast and Zach D. Roberts wrote the following:
In America, elections aren’t stolen like they’re stolen in some right-wing fever dream of a movie. There’s no military junta marching down Pennsylvania Avenue, no back alley assassinations like in an episode of House of Cards, no Russians needed.
They’re stolen in the back rooms of power by men in Brooks Brother suits, they’re stolen using Excel spreadsheets, they’re stolen by votes simply not being counted. […]
Now three months away from the next Presidential election, Donald Trump is sending out missives to his base: He’s whipping up his army of Boogaloo bozos in Hawaiian shirts into a frenzy over fraudulent mail-in votes. No, we won’t get a million bogus ballots from Bolivia, but the facts don’t matter.
So what’s the point? The point is not to intimidate voters; no one’s scared of these Trumpito pinheads. Rather, the point is to place “poll watchers” who will challenge every single mail-in vote. This is what they did in Michigan (See Michigan Michigass) to prevent the counting of 75,355 ballots in Detroit—and that gave Trump a “victory margin” of 10,000 to take Michigan and the White House.
Michigan 2016 will be USA 2020 unless we take back our ballots.
Click here to read the full article also published on July 30th
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Further update: The ‘Friday night massacre’ of US postal service
On August 10thDemocracy Now! ran a report asking whether Trump is sabotaging the US postal service ahead of the election to derail mail-in voting:
Democratic lawmakers in Washington are accusing the Trump administration of sabotaging the United States Postal Service ahead of November’s election, when a record number of votes are expected to be cast by mail. On Friday, the nation’s new Postmaster General Louis DeJoy shook up the leadership of the agency in a move that critics say will give DeJoy more power. Twenty-three Postal Service executives were reassigned or fired in the restructuring.
Prior to becoming postmaster general, DeJoy was a top Republican donor. He had donated more than $1.2 million to the Trump Victory Fund and had been in charge of fundraising for the 2020 Republican National Convention.
Since taking office, DeJoy has instituted a number of cost-cutting measures that have slowed down the delivery of the mail. There’s now a days-long backlog of mail across the United States. This comes as President Trump continues to attack mail-in voting, claiming the post office can’t handle an increase in ballots. Democratic Congressmember Gerry Connolly of Virginia accused DeJoy of engaging in, quote, “deliberate sabotage to disrupt mail service on the eve of the election.” Democratic Congressman Peter DeFazio of Oregon criticized restructuring of the agency.
Rep. PeterDefazio: Today we had the Friday night massacre. He fired all the senior service postal executives, the people who have run the day-to-day operations of the post office. This is nothing less than Donald Trump and his political cronies trying to steal the election by blocking or delaying vote-by-mail. Trump has sued states to try and block vote-by-mail. That won’t work. But he’s going to try and stop the mail from being delivered. This is outrageous.
Amy Goodman spoke with Mark Dimondstein, president of the American Postal Workers Union, who told her:
First, let me just say this: Anything, any policy that slows down the mail runs counter to everything a postal worker stands for, and we’re completely opposed to these policies that are delaying mail. And we’ve let this new postmaster general know that, and we’ve done it with vehemence. […]
Now, the Friday night or the Friday massacre, I’m more focused on the policies than who’s running what and who’s assigned to what. And I think that’s where we have to look. The most significant thing, Amy, on Friday, in my opinion, was the new postmaster general was absolutely silent on the most pressing issue facing the public U.S. Postal Service, and that is Congress coming through with stimulus financial relief due to the impact of the pandemic on the Postal Service. So, the House of Representatives has passed $25 billion of COVID-related relief to get us through this emergency. Normally there’s no taxpayer dollars. This is one exception. It’s now in the hands of the Senate and this administration. It’s an ask of the Postal Board of Governors, a unanimous ask. In March, Congress and this administration took care of the private side to the tune of over $500 billion. It’s about time that Congress took care of the public side, including the United States Postal Service. And there was absolute silence on that key question facing the people this country right now in terms of what’s going to happen to their public postal services.
Asked whether he thought President Trump was “trying to sabotage the U.S. Postal Service in the lead-up to the election”, Mark Dimondstein replied:
Well, I think we can let President Donald Trump speak for himself on this question. On June 28th, Amy, the Office of Management Budget of the White House put out, in writing, a proposal to privatize — i.e. break up — the Postal Service and sell it to private corporations, where they can then make private profit. And, of course, whether people get postal services at all will then depend on who they are, where they live, and how much it would cost, if they can even get services at all, because somebody would have to then be able to make or want to make a quick buck. So, it’s in writing. It is their plan.
So we’re very concerned that any policies that undermine and degrade service to the people of this country have a goal of undermining the public support for the Postal Service. You can’t privatize a public Postal Service that people trust, people love. Ninety-one percent of the people of the country, in a recent Pew Research poll, rated the post office favorably, at 91%. It’s the most popular brand, the number one brand, during this COVID pandemic. That’s an indication of how much people appreciate the role of postal workers, how much people trust it. So, the only way you can get to privatization is if you undermine people’s confidence and support in the institution. And anything that slows down the mail does that.
Click here to read the full transcript on the Democracy Now! website.
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Update:
On September 11th, author and former political advisor to Al Gore and Bill Clinton, Dr Naomi Wolf spoke with Daniel G Newman (author of “Unrig”) and Greg Palast (“The Best Democracy Money Can Buy” and “How Trump Stole 2020”) about the challenges voters —and the very institution of U.S. democracy — face in the upcoming election:
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†The contents of Trump’s Twitter stream can also be read below:
With Universal Mail-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRAUDULENT Election in history. It will be a great embarrassment to the USA. Delay the Election until people can properly, securely and safely vote???
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Mail-In Voting is already proving to be a catastrophic disaster. Even testing areas are way off. The Dems talk of foreign influence in voting, but they know that Mail-In Voting is an easy way for foreign countries to enter the race. Even beyond that, there’s no accurate count!
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New York Mail-In voting is in a disastrous state of condition. Votes from many weeks ago are missing – a total mess. They have no idea what is going on. Rigged Election. I told you so. Same thing would happen, but on massive scale, with USA. Fake News refuses to report!
The bailout package that US Congress just passed represents a $500 Billion+ transfer of wealth from the public sphere into the coffers of the corporations. Arguably, it is the largest theft in US history.
The following extract from an article written by Pam and Russ Martens examines the small print to reveal how this latest bailout – one of the largest corporate bailouts in US history – has been deliberately crafted to dodge oversight:
The U.S. Senate voted 96-0 late yesterday [March 25th] on a massive bailout of Wall Street banks versus a short-term survival plan for American workers thrown out of their jobs – and potentially their homes. The text of the final bill was breathtaking in the breadth of new powers it bestowed on the Federal Reserve, including the Fed’s ability to conduct secret meetings with no minutes provided to the American people. The House of Representatives has yet to vote on the bill.
The bill provides specific sums that can be made as loans or loan guarantees to passenger airlines ($25 billion), cargo airlines ($4 billion), and loans and loan guarantees to businesses necessary to national security ($17 billion). But when it comes to the money going to the Federal Reserve and then out the door to Wall Street, the legislation says only this:
“Not more than the sum of $454,000,000,000…shall be available to make loans and loan guarantees to, and other investments in, programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system….”
Why does the Federal Reserve need $454 billion from the U.S. taxpayer to bail out Wall Street when it has the power to create money out of thin air and has already dumped more than $9 trillion cumulatively in revolving loans to prop up Wall Street’s trading houses since September 17, 2019 – long before there was any diagnosis of coronavirus anywhere in the world.
The Fed needs that money to create more Special Purpose Vehicles (SPVs) — the same device used by Enron to hide its toxic debt off its balance sheet before it went belly up. With the taxpayers’ money taking a 10 percent stake in the various Wall Street bailout programs offered by the Fed, structured as SPVs, the Fed can keep these dark pools off its balance sheet while levering them up 10-fold. […]
The US economy used mountains of debt to manage ever-more low-pay, low-benefit, and insecure jobs. The results were growing inequality and instability.
Almost any big shock could collapse such a lethal capitalism.
Adding to the suspicions that the Fed doesn’t want to have to battle Freedom of Information Act (FOIA) requests (sunshine law requests) again in court, as it did and lost during the last financial crisis to keep its outrageous $29 trillion bailout program to Wall Street a secret from the public, the Senate-approved stimulus bill repeals the sunshine law for the Fed’s meetings until the President says the coronavirus threat is over or the end of this year. That could make any FOIA lawsuits to unleash details of what’s going on next to impossible since it has been codified in a federal law. The bill states the following:
SEC. 4009. TEMPORARY GOVERNMENT IN THE SUNSHINE ACT RELIEF. (a) IN GENERAL.—Except as provided in subsection 8 (b), notwithstanding any other provision of law, if the Chairman of the Board of Governors of the Federal Reserve System determines, in writing, that unusual and exigent circumstances exist, the Board may conduct meetings without regard to the requirements of section 552b of title 5, United States Code, during the period beginning on the date of enactment of this Act and ending on the earlier of— (1) the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 20 U.S.C. 1601 et seq.) terminates; or (2) December 31, 2020.
This could mean that the American taxpayer may never learn why it went into debt to the tune of $454 billion if no records are being maintained.
Click here to read the full article by Pam Martens and Russ Martens, published by Wall Street on Parade.
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Meanwhile Rob Urie asks: where is the bailout of the people?
Most readers probably don’t know this, but the Federal Reserve began re-bailing out Wall Street early last Fall, well before the coronavirus hit. Why this matters is that it indicates that nothing was fundamentally fixed through earlier bailouts. Hedge funds of the sort that pay their executives tens of millions of dollars created the market dislocations they claim to be able to exploit. In 2007 these strategies were derided as ‘picking up pennies in front of a steamroller’ for their tendency to earn regular profits until they give them all back plus some when they blow up.
The socially and economically rational solution to these types of blow-ups is to unwind the trades — the bailout, and then shut the hedge funds down and make their managers find honest work in other industries. However, what the Federal Reserve has been doing, following from the Obama administration’s decision to keep insolvent banks on life support in perpetuity, is to manage markets so that losing trades don’t result in loses.
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WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!
With Donald Trump’s threat to ‘get America working again’ by Easter (April 12th), the same tactic that turned Italy’s pandemic from tragedy to catastrophe is being repeated on a much larger scale here. And for what? In an economy where the richest 1% takes all the gains while the poor and working class haven’t seen a raise in four decades, it is the rich who will reap the benefits while workers get sick and die. It is finance capitalism that is being bailed out when it should have suffocated under its own weight in 2009.
Where are the bailouts for the people? $1,200 checks against $30,000 bills for being treated for coronavirus? Why isn’t providing healthcare for all of the people the primary objective of the bailouts? Mr. Trump says he will send workers back to work while Democrats leave them no alternative but to work or starve. Without providing them the means— assured by meager bailouts, Democrats are every bit as guilty as Donald Trump of sending working people to die in a pandemic to add a few more dollars to the bank accounts of the rich.
What just passed the senate: Grand Theft Bailout: Stimulus Bill Is Corporate Oligarchy (TMBS 132) https://t.co/1zqEuLYtcL
More to the point, where are the virus test kits, ventilators and protective equipment for health care workers and the rest of us? Nick Turse of The Intercept puts a lie to the claim that the need for these couldn’t have been foreseen. For decades epidemiologists and health care professionals have been shouting from the rooftops about the need to prepare for a pandemic caused by a respiratory virus. Successive neoliberal governments dismissed the warnings and here we are to suffer the consequences.
When Mr. Trump uttered ‘our country wasn’t built to be shut down,’ one could be forgiven for asking whose country he was talking about and why it can’t be shut down? The country that most of us inhabit has been in the process of being shut down for some four decades through outsourcing, privatization, austerity and cuts to the social safety net. The region I live in was completely shut down in 2008 and stayed closed until just recently. That’s how long it took the last round of bailouts to land here.
Implied in the statement is that we, the people, must comport ourselves with the dictates of ‘the economy’ rather than the other way around. For all of the talk of freedom and democracy, the economy is theorized to exist in a realm where human needs are secondary, a mere matter of opinion. The coronavirus pandemic can’t in any meaningful sense be said to have been chosen. Neither are the marginal existences many of us live. In this way, deference to the economic system is cover for power relations, not a natural order.
Click here to read the full article written by Rob Urie, published in Counterpunch.
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The alternative: Economist Michael Hudson calls for a corona debt jubilee
America’s 2008 bank crash offered a great opportunity to write down the often fraudulent junk mortgages that burdened many lower-income families, especially minorities. But this was not done, and millions of American families were evicted. The way to restore normalcy today is a debt write-down. The debts in deepest arrears and most likely to default are student debts, medical debts, general consumer debts and purely speculative debts. They block spending on goods and services, shrinking the “real” economy. A write-down would be pragmatic, not merely moral sympathy with the less affluent.
In fact, it could create what the Germans called an “Economic Miracle” — their own modern debt jubilee in 1948, the currency reform administered by the Allied Powers. When the Deutsche Mark was introduced, replacing the Reichsmark, 90 percent of government and private debt was wiped out. Germany emerged as an almost debt-free country, with low costs of production that jump-started its modern economy.
Critics warn of a creditor collapse and ruinous costs to government. But if the U.S. government can finance $4.5 trillion in quantitative easing, it can absorb the cost of forgoing student and other debt. And for private lenders, only bad loans need be wiped out. Much of what would be written off are accruals, late charges and penalties on loans gone bad. It actually subsidizes bad lending to leave them in place.
In the past, the politically powerful financial sector has blocked a write-down. Until now, the basic ethic of most of us has been that debts must be repaid. But it is time to recognize that most debts now cannot be paid — through no real fault of the debtors in the face of today’s economic disaster.
The coronavirus outbreak is serving as a mind-expansion exercise, making hitherto unthinkable solutions thinkable. Debts that can’t be paid won’t be. A debt jubilee may be the best way out.
Click here to read Michael Hudson’s full article calling for a “Corona Debt Jubilee”.
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On Episode 1278 of the Keiser Report [September 11th, 2018], Michael Hudson discussed the historical precedents for a debt jubilee:
On the latest leg of his whistle-stop European tour, Greek Finance Minister, Yanis Varoufakis, today met with his German counterpart, Wolfgang Schäuble, in Berlin to continue talks on Greece’s debt. This was an extraordinary occasion and the press conference that followed their historic meeting can be watched on the video embedded below.
Varoufakis begins his main statement at 23:30 mins. In it, he outlines the forgotten reasons why Greece has been in an economic crisis for the last five years and highlights the serious implications were his government to fail in bringing about the urgent and radical economic reforms that are necessary to save the nation. But his tone throughout is very much one of reconciliation and so, for instance, he explains at some length why Tsipras’ decision to visit the war memorial immediately following his victory should not be misconstrued in petty nationalist terms (as so many in the media were quick to do) but understood correctly as “an act of defiance against the resurgence of Nazism” in Greece:
Here is my own transcript of Yanis Varoufakis’ full statement:
Ladies and gentlemen,
This morning – earlier today – I had the opportunity, the pleasure and the joy to outline to Minister Schäuble our government’s priorities for a functioning Greece in a prospering democratic European economic and monetary union. As Doctor Schäuble said, we didn’t reach an agreement, it was never on the cards that we would. We didn’t even agree to disagree from where I’m standing – from where I’m standing we agreed to enter into deliberations as partners with a joint orientation towards a European solution for European problems. A solution that is going to put, first and foremost, the interests of Europe at the helm. We didn’t discuss Greece’s debt schedule for repayments. We didn’t discuss a haircut. We set the scene for deliberations that will lead an approach that will put an end to this never-ending – seemingly never-ending – crisis that began in Greece then unfortunately spread out to the rest of the Eurozone.
Greece’s economic woes have been occupying the headlines for far too long. They have been begetting indignity in my nation, and frustration in this country as well as across Europe. It is time to draw a line. To put an end to it. My fellow Greeks wish nothing more than to end the gross indignity, and I’m sure that the people of Germany too would like to get on with concerns other than how to negotiate the latest twists and turns of the Greek saga. Some in Europe are tempted to imagine that the solution lies in separation. Thankfully, today I did not just visit the Finance Minister of Europe’s powerhouse economy, above all else I visited a European statesman for whom European unity is a lifelong project, and whose work and efforts to unify Europe I have been following with great interest since the 1980s.
Today my message to Minister Schäuble was that in our government – in this government – he has a potential partner in the search for European solutions to a variety of problems afflicting not only Greece, but the Union more broadly. Starting at home where one ought to start, our government will stop at nothing to combat not only corruption, tax evasion, tax immunity, inefficiency and waste, but also a whole political economy underpinning the ethos and the conventions of crippling rent seeking. In this endeavour, I told the minister, we need our partners’ technical, moral, political and institutional support.
Over the last five years, since Greece’s flimsy business model broke down, too much time, and too many hopes, lives even, have tragically been wasted. In 2010, Greece and Europe missed the splendid opportunity to come to terms with the facts. Instead, we treated an insolvency issue as if it were a problem of illiquidity. Therefore, the largest loan in history was granted to the most insolvent of European nations on condition that it shrinks its income. And to sell this grand error to voters in Greece, to voters in this country, in every corner of Europe, a list of reforms was announced that was just a fig leaf for in the end reforming very little that mattered. This could not end well. It is the reason we are here. It is the reason why the Greek people swept over the dominant parties in Greece and elected us. It is why we have been on the road in the last few days deliberating with our partners for the purpose of forging a common and European plan for putting things first – for putting things right.
My message to my German counterpart and to the people of Germany is simple. From our government you can expect a frenzy of reasonableness. You can expect proposals that are aimed, not at promoting the interests of the average Greek, but of promoting the interests of the average European: the average German, Slovak, Finn, Spaniard, Italian and so on. You can expect from us an unwavering commitment to telling it as it is, without any tactical stratagems or subterfuge. You can expect from us sound macroeconomic analysis and a readiness to implement efficient microeconomic reforms that work. These are our commitments. We are a government that hasn’t even been sworn in yet. What we request at this stage is perhaps the most precious of commodities: time. A short space of time during which our government can present to our partners, to the International Monetary Fund, to European Central Bank, to the European Commission, comprehensive proposals as well as a roadmap for the very short term – we call this “a bridging programme” – for the medium term, and indeed for the long term.
Europe is I believe at a crossroads. Europe must strike a balance between continuity and a need for respecting European agreements, and the necessity of evolving the rules. We must respect established treaties, agreements and processes, without crushing the fragile flower of democracy with a sledgehammer that takes the form of statements such as “elections do not change anything”.
When I visited Paris the other day I said that we were returning to one of Greece’s spiritual homes. Today we returned to another one of our spiritual homes. For almost two centuries the land of Goethe, Beethoven, Hegel, Kant has been a source of inspiration to Greeks whether they are rightists, leftists, centrists or simply intellectually curious Greeks. But there is more than that to the bonds binding our nations. As finance minister in a government facing, from day one, emergency circumstances caused by a savage debt deflationary crisis, I feel that the German nation is the one nation in Europe that can understand us better than anyone else. No-one understands better than the people of this land how a severely depressed economy combined with a ritual national humiliation and unending hopelessness can hatch the serpent’s egg within its society. When I return home tonight I shall find myself in a parliament in which the third largest party is not a neo-Nazi party, it is a Nazi party.
When our Prime Minister laid the wreath at the iconic memorial site immediately after his swearing in, that was an act of defiance against the resurgence of Nazism. German must and can be proud of the fact that Nazism has been eradicated here. But it is one of history’s most cruel ironies that Nazism is rearing its ugly head in Greece, a country which put up such fine struggle against it. We need the people of German on our side. We need the people of Germany to help us in the struggle against misanthropy. We need our friends in this country to remain steadfast in Europe’s post-war project that is: never again to allow a 1930s-like depression to divide proud European nations. We shall do our duty in this regard, and I am convinced that so will our European partners. Thank you.
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Additional:
Back in 2011, Yanis Varoufakis presented a very interesting TEDx talk entitled “A Modest Proposal for Transforming Europe” in which he outlined his own vision for a new kind of decentralized system that will be needed to transform the European Union before it crashes altogether:
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On February 7th, the Keiser Report returned to the victory of Syriza, warning Greece to beware bureaucrats and bankers bearing bailouts. In the second half, Max Keiser spoke with Kerry-Anne Mendoza about her new best-selling book, Austerity: The demolition of the welfare state and the rise of the zombie economy:
Victory for Syriza means the election of the first anti-austerity party in the western world. Our heartfelt congratulations and best wishes should go to everyone in Greece. The cradle of civilisation and birthplace of democracy have pointed the way forward once again.
Following the financial crisis (which was actually a banking crisis, as I have pointed out many times before), it was Greece that was unfortunate enough to be singled out and placed at the head of the queue for dose after dose of neo-liberal economic shock therapy. The so-called “Troika” of the IMF, ECB and EU being quick to impose a strict austerity programme, backed up with further ‘Washington Consensus’-style ‘conditionalities’ — the enforced privatisation of public services and other types of ‘deregulation’.
More than half a decade later, and instead of prosperity, “austerity” (i.e., savage cuts – I always apply apostrophes) has created a vicious spiral of debt, with mass unemployment and reduced incomes leading inexorably to reduced demand, stifled economic growth and, no less importantly, lost tax revenues that would otherwise have been available for government investment. Along the way, money has been deliberately siphoned from the poorest in society to the wealthiest. But then “austerity” provides a wonderful excuse for this theft and always did.
The main message to be taken from Sunday’s dramatic election result – a landslide victory for one of the newest parties in Europe – was perfectly loud and clear, though certainly not the one that the news media will want you to focus on. It is that ‘austerity’ simply does NOT work! (except for a tiny elite who, some twenty fours prior to the Greek election, were flying home to their mansions from that annual obscenity known as the World Economic Forum in Davos in about seven hundred separate private jets.)
Click here to see a full breakdown of the election results region by region.
Of course, and especially in light of the vapid insincerity of Barack Obama’s 2008 “Hope and Change” campaign, it is understandably difficult for many people to grasp that any kind of meaningful political change can be delivered through the ballot box (or achieved in any other way). Duped over and over again in election after election, we have all been conditioned to believe in our own helplessness. And Obama, more than perhaps anyone else, has been responsible for undermining hope, causing us to feel that to dream of a better future is forlorn and that whatever sociopolitical change comes, invariably turns out for the worst. But we must remind ourselves that Obama was an out-and-out phoney. An insider, Wall Street crony, who was astutely repackaged as a messianic saviour for a naive and race-divided American public. Alexis Tspiras and Syriza are a different kettle of fish altogether. They offer a genuine grassroots opposition which, unlike Obama, came into office despite the efforts of a hostile media, and still remain free from corporate strings. They also bring to the table a set of carefully deliberated economic and other policy demands – something else that was conspicuously absent from Obama’s intentionally vague “Hope and Change” campaign.
Whether or not Alexis Tsipras and Syriza will now deliver on all their promises we must wait and see. Meanwhile, the people of Greece and elsewhere might help if only by continuing to loudly voice support for those same demands. This is a time for everyone of goodwill to put aside lesser ideological differences – just as Syriza have already done by forming a coalition with a party of the right – to join the Greeks in solidarity, supporting their struggle for self-determination and basic democratic control against the oppressive outside forces of “the Troika”.
What the Greek people achieved on Sunday also presents us with a solid foundation for our own fight against “austerity”. They have opened up a window of opportunity (perhaps a narrow one) for establishing a movement that demands real change across the whole continent. For this victory was not about Syriza as such, but about a principle. That lives of ordinary people matter far more than a plethora of inanimate market indices and corporate balance sheets. The greater hope being that a spark from Syriza’s extraordinary election victory will be enough to ignite a chain reaction through Spain (with Podemos), Portugal, Italy and on and on, to ultimately force a total cessation of the callous insanity of the imposed “austerity” regime. And our hopes ought not to end with mere ‘change’ per se, which may of course be good or bad, but for a lasting improvement in our societies, beginning at the economic level, and bringing about a more prosperous future for all nations.
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Here in Britain, the closest group we have to Syriza is Left Unity, who have already formed a loose alliance with both Syriza and Podemos:
Somewhat belatedly (in my opinion), Left Unity recently launched their own election campaign. They are now asking for support:
Austerity has wrecked Britain. We are far worse off now than we were in 2010 – and all we are promised is more hard times. Today the richest 1% in Britain own as much wealth as the poorest half of the population put together.
The 2015 general election will be an opportunity for millions of people across the country to have their say over the austerity programme of the Con-Dem government. The propaganda machine has already sprung into action, with George Osborne claiming to be tackling the national debt and to have the economy back on track. In reality, real wages are falling, prices are soaring – and the deficit has actually grown under his austerity regime.
And yet the opposition from Labour has been appalling. They have given ground on almost every key issue. Labour has promised to keep to the Tory spending plans if they are elected in May. They won’t roll back any of the changes to education. They claim they will repeal the Health and Social Care Bill, but they won’t scrap PFI, which is bankrupting hospital trusts.
We will be standing candidates in different constituencies across the country. Our plan is not to stand hundreds of candidates, but to get organised in selected key seats to get Left Unity’s message out to potential voters.
We need your support now to help organise election campaigns on the ground. Left Unity’s national council has issued an appeal for £20,000 to fund this work.
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Additional:
Yanis Varoufakis, who is professor of economic theory at the University of Athens, has been appointed as the new Greek Finance Minister. Here is an interview he gave that was broadcast on Russia Today’s “Boom Bust” back on January 12th (a fortnight prior to the election):
And this is Varoufakis speaking two years ago in an address that was presented to the founding assembly of the United Front Against Austerity (UFAA) on October 27, 2012 in New York City:
On February 2nd, the Keiser Report was devoted to analysis of the Greece situation. Reminding us that Greece is insolvent in much the way the banks were and remain insolvent, Max Keiser and Stacy Herbert also highlighted the vital role that Goldman Sachs had played in an earlier deception to hide Greek debt. A scheme which enabled the Greek government of the time to meet the criteria necessary to join the Eurozone:
On Thursday [April 17th] Democracy Now! welcomed back Stephen Cohen, Professor Emeritus of Russian Studies and Politics at New York University and Princeton University, to discuss the deepening crisis in Ukraine. Cohen, a specialist on Russia and the Soviet Union, is the author of numerous books on the subject including his latest Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War. He was asked “Are we seeing the beginning of a new Cold War?” and “what exactly is happening right now in Ukraine?” Cohen’s response began as follows:
Those are big questions. We are not at the beginning of the Cold War, a new one; we are well into it—which alerts us to the fact, just watching what you showed up there, that hot war is imaginable now, for the first time in my lifetime, my adult lifetime, since the Cuban missile crisis, hot war with Russia. It’s unlikely, but it’s conceivable. And if it’s conceivable, something has to be done about it.
You did two things on your introduction which were very important. Almost alone among American media, you actually allowed Putin to speak for himself. He’s being filtered through the interpretation of the mass media here, allegedly, what he said, and it’s not representative. The second thing is, let us look just what’s happening at this moment, or at least yesterday. The political head of NATO just announced a major escalation of NATO forces in Europe. He did a Churchillian riff: “We will increase our power in the air, in the sea, on the land.” Meanwhile, as negotiations today begin in Geneva, we’re demanding that Russians de-escalate. And yet, we, NATO, are escalating as these negotiations begin.
So, if you were to say what is going on in Ukraine today—and, unfortunately, the focus is entirely on eastern Ukraine. We don’t have any Western media—in eastern Ukraine. We don’t have any Western—any Western media in western Ukraine, the other half of the country. We’re not clear what’s going on there. But clearly, things are getting worse and worse. Each side has a story that totally conflicts with the other side’s story. There seems to be no middle ground. And if there’s no middle ground in the public discourse, in the Russian media or the American media, it’s not clear what middle ground they can find in these negotiations, though personally, I think—and people will say, “Oh, Cohen’s a Putin apologist”—but it seemed to me that the proposals the Russians made a month ago for resolving the conflict are at least a good starting point. But it’s not clear the United States is going to accept them.
I will come back to some of Cohen’s further points in a moment, but first I’d like to just try to understand why, as Cohen points out, there is such a lack of media coverage across Ukraine and in particular in the western half of the country.
Below is a video (I can’t find a still frame) recorded in mid-March featuring a statement by Vitali Klitschko as he warned of an impending catastrophe in Crimea should it vote to join Russia in the recent referendum. Klitschko has since been sidelined, of course, but what strikes me as odd is that he was standing in front of a board much like the kind of sponsorship boards we see behind interviews of Premier League footballers. Similar except that the ex-sportsman here was backed by just one logo. You can see that it reads “Ukraine Crisis Media Center”:
Now if you type “Ukraine Crisis Media Center” into the Google image search you will find many other Ukrainian political figures giving statements in front of that same logo board. So just who are the “Ukraine Crisis Media Center”?
Well, they have a website and you can search for details there, but in fact you will find very few and none at all about their own sponsors. Instead, what you will read is this:
Ukrainian Crisis Media Center is launched to provide the international community with objective information about events in Ukraine and threats to national security, particularly in the military, political, economic, energy and humanitarian spheres. During this crisis period, the Center on a 24/7 basis will provide support to all the media who cover events in Ukraine.
Having failed to find further information on their website, I decided to email the organisation [on Thursday April 3rd] and asked the following:
I cannot find any information on your site about where financial support for the media center comes from. Without information on who is backing the venture how can we be sure that your coverage is wholly impartial?
I have not received a reply.
In the meantime, I also searched the web for insight from other places – and came across a glowing report published in Kyiv Post which began as follows:
Much like the EuroMaidan Revolution itself, the Ukraine Crisis Media Center sprang to life with speed, spontaneity, creativity, competence – and a strong sense of mission.
Although the center has been open only since March 4, its third floor headquarters in the Hotel Ukraine on 4 Institutska St. is already a required daily stop for dozens of Ukrainian and foreign journalists.
Continuing:
The group came together at Razumkov Center in Kyiv on March 2.
Nataliya Popovych, the president of Kyiv’s PRP Group, an affiliate of the global Webber Shandwick company, is among the founders.
Popovych said that the Kremlin is fast on its feet in spreading lies about Ukraine, whose government is often slow to respond to allegations and counter untruths.
Well, here’s one of the details I was searching for – so who is Nataliya Popovych?
Nataliya started career in Leo Burnett, one of the leading advertising agencies in the world, and continued in Romyr & Associates, Canadian government and public relations firm. After getting Master degree and probation in USA, Nataliya has become a head of PRP Ukraine, a Weber Shandwick Affiliate Company in Ukraine, and in a year became the President of PRP Group, Weber Shandwick partner on CIS markets.
And PRP? You probably won’t be surprised to learn that they are a PR company:
PRP is more than an integrated solutions agency. It is a creative concept. It is a strategy. It is the management of reputations in a new era. It is the ability to communicate and create goodwill. It is integrated solutions which engage audiences into the lives of companies and brands.
She [Nataliya Popovych] considers Ukrainians to be loving, peaceful and tolerant people and, while she didn’t consider herself a follower of iconic and controversial nationalist hero Stepan Bandera (1909-1959), she is now “proud to be called a Banderite.”1
And for those who don’t know who Stepan Bandera was, then here are a few extracts taken from a detailed and rather generous biography written by Professor of History at Yale University,Timothy Snyder, and published by The New York Review of Books around the time Viktor Yushchenko (President after the “Orange Revolution”) was voted out of office in 2010:
The incoming Ukrainian president will have to turn some attention to history, because the outgoing one has just made a hero of a long-dead Ukrainian fascist. By conferring the highest state honor of “Hero of Ukraine” upon Stepan Bandera (1909-1959) on January 22, Viktor Yushchenko provoked protests from the chief rabbi of Ukraine, the president of Poland, and many of his own citizens. It is no wonder. Bandera aimed to make of Ukraine a one-party fascist dictatorship without national minorities. During World War II, his followers killed many Poles and Jews. Why would President Yushchenko, the leader of the democratic Orange Revolution, wish to rehabilitate such a figure? Bandera, who spent years in Polish and Nazi confinement, and died at the hands of the Soviet KGB, is for some Ukrainians a symbol of the struggle for independence during the twentieth century. […]
Consistent as the rehabilitation of Bandera might be with the ideological competition of the mid-twentieth century, it makes little ethical sense today. Yushchenko, who praised the recent Kiev court verdict condemning Stalin for genocide, regards as a hero a man whose political program called for ethnic purity and whose followers took part in the ethnic cleansing of Poles and, in some cases, in the Holocaust. Bandera opposed Stalin, but that does not mean that the two men were entirely different. In their struggle for Ukraine, we see the triumph of the principle, common to fascists and communists, that political transformation sanctifies violence. It was precisely this legacy that east European revolutionaries seemed to have overcome in the past thirty years, from the Solidarity movement in Poland of 1980 through the Ukrainian presidential elections of 2005. It was then, during the Orange Revolution, that peaceful demonstrations for free and fair elections brought Yushchenko the presidency. In embracing Bandera as he leaves office, Yushchenko has cast a shadow over his own political legacy.2
All of which helps to explain something else that has been puzzling me… why every other story about what’s happening in Ukraine is entitled “Ukraine Crisis: something or other” – the reason being that “Ukraine Crisis” is more or less the brand name that Nataliya Popovych and other “Ukrainian nationalists” have adopted — a list of the founders of the “Ukraine Crisis Media Center” is available at the end of the same Kyiv Post article.3
So what is this new political brand promoting?
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The “war on terror” is dead, long live the new cold war!
Returning to Stephen Cohen, here is what he had to say about the rise of this new cold war:
As a historian, I would say that this conflict began 300 years ago, but we can’t do that. As a contemporary observer, it certainly began in November 2013 when the European Union issued an ultimatum, really, to the then-president, elected president, of Ukraine, Viktor Yanukovych, that “Sign an agreement with us, but you can’t have one with Russia, too.” In my mind, that precipitated this crisis, because why give a country that has been profoundly divided for centuries, and certainly in recent decades, an ultimatum—an elected president: “Choose, and divide your country further”? So when we say today Putin initiated this chaos, this danger of war, this confrontation, the answer is, no, that narrative is wrong from the beginning. It was triggered by the European Union’s unwise ultimatum.
Now flash forward to just one month ago, about the time I was with you before. Remember that the European foreign ministers—three of them, I think—went to Kiev and negotiated with Yanukovych, who was still the president, an agreement. Now, the Russians were present at the negotiation, but they didn’t sign it. But they signed off on it. They said, “OK.” What did that agreement call for? Yanukovych would remain president until December—not May, when elections are now scheduled, but December of this year. Then there would be a presidential election. He could run in them, or not. Meanwhile, there would be a kind of government of national accord trying to pull the government together. And, importantly, Russia would chip in, in trying to save the Ukrainian economy. But there would also be parliamentary elections. That made a lot of sense. And it lasted six hours.
The next day, the street, which was now a mob—let’s—it was no longer peaceful protesters as it had been in November. It now becomes something else, controlled by very ultra-nationalist forces; overthrew Yanukovych, who fled to Russia; burned up the agreement. So who initiated the next stage of the crisis? It wasn’t Russia. They wanted that agreement of February, a month ago, to hold. And they’re still saying, “Why don’t we go back to it?” You can’t go back to it, though there is a report this morning that Yanukovych, who is in exile in Russia, may fly to eastern Ukraine today or tomorrow, which will be a whole new dimension.
But the point of it is, is that Putin didn’t want—and this is reality, this is not pro-Putin or pro-Washington, this is just a fact—Putin did not want this crisis. He didn’t initiate it. But with Putin, once you get something like that, you get Mr. Pushback. And that’s what you’re now seeing. And the reality is, as even the Americans admit, he holds all the good options. We have none. That’s not good policymaking, is it?
Click here to read a full transcript or watch the latest interview with Stephen Cohen on the Democracy Now! website.
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The United States spent over a decade hunting down Osama Bin Laden at financial a cost running into multiple trillions and a human cost of more than a million lives, yet since his demise the jihadist cause that Bin Laden once spearheaded is stronger than ever. Forces of al-Qaeda and other near identical jihadist factions now hold control of a large region of Iraq and Syria that exceeds the area of Britain, whilst other Islamist gangs run amok throughout Libya. Thus, after a decade of dirty wars executed by means of “shock and awe” air strikes, the perpetual overhead threat of drones and the knock at the door that ends with secret rendition to faraway torture sites, the “war on terror” has been lost. “Terror” reigns supreme as the victor: terror from all sides that is.
But then, it is hard to imagine any foreign policy that could have manufactured and spread terrorism more effectively than the policies enacted during this decade-long “war on terror”. Blowback? Up to a point. But, we must not forget that all of the many al-Qaeda factions that have gained so much territory could never have done so without our help. Whether indirectly, with the establishment of the power vacuum in Iraq, or more purposefully, with Nato bombers opening the way for the Islamist insurgency in Libya. But mostly, the gains of al-Qaeda are thanks to the very generous funding of one of America and Britain’s closest allies, that bastion of freedom and democracy, Saudi Arabia. Saudi Arabia, the birthplace of Bin Laden, and the nation known to have the closest ties to those accused of the 9/11 attacks. Attacks that provided the very springboard from which the “war on terror” was launched all those years ago. These are the facts and none can be refuted, so make of them what you will – if it was a plot for a film it would seem ludicrously far-fetched.
Of course, the “war on terror” lost a great deal of its public appeal with the bludgeoning of Iraq, and so under Obama we’ve had “humanitarian interventions”. But this new gloss has also flaked away, with the majority of people in the West absolutely sick of war. That said, the wars go on regardless – wreaking havoc but still satisfying the insatiable thirst for blood demanded by our military-industrial-financial complex.
None of these wars have had anything to do with stamping out terrorism or, surely more laughably, the West’s desire to bring “freedom and democracy”. The United States’ covert backing of al-Qaeda is nothing new and neither is the West’s more brazen support of al-Qaeda’s primary sponsor Saudi Arabia? If the wars were about either terrorism or “freedom and democracy”, then the Saudi regime would surely have topped the charts of “the axis of evil”.
In truth, the game never changed. And sadly it is a game (at least to those currently holding power) – as Zbigniew Brzezinski, one of America’s leading geopolitical strategists, makes clear not least with the title of his notorious book on Eurasian geostrategy, “The Grand Chessboard”. In it he wrote:
In brief, for the United States, Eurasian geostrategy involves the purposeful management of geostrategically dynamic states and the careful handling of geopolitically catalytic states, in keeping with the twin interests of America in the short-term: preservation of its unique global power and in the long-run transformation of it into increasingly institutionalized global cooperation. To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.4
This neo-imperialist game is much the same as the older imperialist game, in which only the strategies have been updated. It is about control of territory, of energy resources, of financial systems, and it has (and always did) amount to a series of proxy wars against the competing interests of competing powers. Traditionally Russia have been the great adversary, but now there is China too. So the Cold War that officially concluded with the fall of the Berlin Wall in October 1989… ended only in name. With the Ukrainian crisis (or should that be “Ukraine Crisis”) the chill that remained has become considerably icier. Treacherously so. But our military-industrial-financial complex needs perpetual war just to keep the racket going, or, when that ceases to be an option (as it now has), to maintain the illusion of an imminent threat against us. Bin Laden is dead, so a new Cold War is just the ticket. On top of which, as Brzezinski also explained in his book:
“Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.”
Here’s Stephen Cohen again:
The real debate going on in NATO—the real debate, because this is a distraction—is what Rasmussen said in your earlier clip—he’s the political head of NATO—that we’re building up, as we talk, our forces in eastern Europe. Now, understand what’s going on here. When we took in—”we” meaning the United States and NATO—all these countries in eastern Europe into NATO, we did not—we agreed with the Russians we would not put forward military installations there. We built some infrastructure—air strips, there’s some barracks, stuff like that. But we didn’t station troops that could march toward Russia there. Now what NATO is saying, it is time to do that. Now, Russia already felt encircled by NATO member states on its borders. The Baltics are on its borders. If we move the forces, NATO forces, including American troops, to—toward Russia’s borders, where will we be then? I mean, it’s obviously going to militarize the situation, and therefore raise the danger of war.
And I think it’s important to emphasize, though I regret saying this, Russia will not back off. This is existential. Too much has happened. Putin—and it’s not just Putin. We seem to think Putin runs the whole of the universe. He has a political class. That political class has opinions. Public support is running overwhelmingly in favor of Russian policy. Putin will compromise at these negotiations, but he will not back off if confronted militarily. He will not.
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A trade war opens the way for new trade deals
The new cold war isn’t only a military escalation, it also potentially marks the beginning of a new trade war. But due to reliance on Russia imports (especially when it comes to energy) EU sanctions on Russia will be difficult, and so one way forward could involve loosening trade restrictions between the EU and the US.
The following passages are taken from a press release by the European Council following the recent EU-US Summit in Brussels. It begins:
Recent events in Ukraine have confirmed that strong cooperation between the European Union and the United States on peace and security is of critical importance.
Continuing under the next heading “Economy and global challenges” as follows:
Reinforcing economic growth and job creation remains central on both sides of the Atlantic. The EU and the United States have taken important steps to stabilise financial conditions and overcome the crisis. The EU remains committed to building a deep and genuine economic and monetary union, including a banking union. […]
The EU and US leaders renewed their commitment to a strong Transatlantic Trade and Investment Partnership (TTIP). this should go beyond a free trade agreement and reaffirm Europe and the United States’ shared values of democracy, individual freedom, the rule of law and human rights, and a common commitment to open societies and economies. [bold highlights maintained from original source]
And what is TTIP? Here are additional notes at the end of the same press release:
The EU and US have decided to take their economic relationship to a higher level by agreeing to launch negotiations on a comprehensive trade and investment agreement. It aims to remove trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.
In fact, I have already touched on the subject of the Transatlantic Trade and Investment Partnership (TTIP) as well as its sister treaty the Trans-Pacific Partnership (TPP) . Both of these “free-trade agreements” appear to have alternative and conflicting names and acronyms and in the case of TTIP it is also known as the Transatlantic Free Trade Area, abbreviated as TAFTA, which is how it appeared in that earlier post. Why trade agreements need to have multiple names becomes more apparent when you realise what this commitment to “freeing up regulations” will mean. Here are a few extracts from a detailed analysis published by Der Spiegel International and entitled “Corporation Carte Blanche: Will US-EU Trade Become Too Free?”:
Lori Wallach had but 10 minutes to speak when she stepped up to podium inside Room 405 at George Washington University, located not too far away from the White House. Her audience was made up of delegates currently negotiating the trans-Atlantic free trade agreement between the United States and the European Union.
They had already spent hours listening to presentations by every possible lobbying group — duty bound to hear myriad opinions. But when Wallach, a trade expert for the consumer protection group Public Citizen, took the stage, people suddenly started paying attention. The 49-year-old Harvard lawyer, after all, is a key figure in international trade debates.
“The planned deal will transfer power from elected governments and civil society to private corporations,” she said, warning that the project presents a threat of entirely new dimensions. [bold emphasis added]
How will TTIP help to transfer even more power out of democratic control and into the hands of the major corporations? Well, let us count the ways:
After the third round of negotiations, an unusually broad alliance of anti-globalization groups, NGOs, environmental and consumer protection groups, civil rights groups and organized labor is joining forces to campaign against TTIP.
These critics have numerous concerns about the treaty – including their collective fear that the convergence of standards will destroy important gains made over the years in health and nutrition policy, environmental protection and employee rights. They argue the treaty will make it easier for corporations to turn profits at the public’s expense in areas like water supply, health or education. It would also clear the path for controversial technologies like fracking or for undesired food products like growth hormone-treated meat to make their way to Europe. Broadly worded copyrights would also restrict access to culture, education and science. They also believe it could open the door to comprehensive surveillance.5
Click here to read the full article in Der Spiegel.
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Fracking for freedom (and digging for victory)
I have already highlighted at the end of an earlier and rather more extended post how energy giants Chevron and Exxon Mobil have been getting ready to move their operations to Ukraine with the intention of exploring both conventional and “unconventional” resources (otherwise known as “fracking”). On Saturday’s Keiser Report, Max Keiser spoke to freelance journalist JP Sottile of Newsvandal.com, who also occasionally writes for the Guardian, about not only how Big Oil, but also Big Agra, have their eyes fixed on Ukraine. Sottile names the people and corporations hoping to take advantage of Ukraine’s exceptional fertile lands. Here are some excerpts of what he had to say [from about 13 mins in]:
“One of the bones of contention with Russia, Europe, and its transit point Ukraine, is Russia’s domination of the natural gas market in Europe. So I thought it was very interesting when the deal was announced that Chevron was involved in developing shale gas in Ukraine. Now that would have been with the previous government of Yanukovych – and I believe that that led to a lot of the pressure coming out of Moscow for Yanukovych to reject the economic deal between Ukraine and Europe, and that then of course led to a cascading number of events, which led to the deposing of Yanukovych and the ‘crisis in Ukraine’ as it is now called.”
Beyond the oil and gas, Sottile has also looked closely into the interests of agricultural giants Cargill and Monsanto, who are keen to exploit Ukraine’s riches closer to the surface:
US-Ukraine Business Council is an investor in the US-Ukraine Foundation where Ms [Victoria] Nuland was speaking on December 13th [about how the US had already spent $5 billion helping Ukraine realise its “European aspirations”] and also on December 13th, that was the day that Cargill invested in a Black Sea port to help open the Russian market to its agriculture. Well, Cargill is also heavily invested in Ukraine in a company called Ukrlandfarming. The just bought a two hundred thousand dollar stake in Ukrlandfarming. In fact they bought that stake – or it was announced – on the very day, January 12th of this year, that fifty thousand Ukrainians flooded Kiev to protest the government of Yanukovych.
They are all connected through Freedom House – a guy there who worked with Ms Nuland, who is Assistant Secretary of State for European and Eurasian Affairs, she had a Deputy Assistant Secretary of State for European and Eurasian Affairs, a guy named David Kramer. David Kramer serves on – he’s actually head of Freedom House – Freedom House is one of the organisations that the United States uses to stoke democracy movements around the world. It is actually responsible, along with the National Endowment for Democracy, for funding many of the opposition forces there in Ukraine. And David Kramer also serves on the US-Ukraine Business Council. If you go the US-Ukraine Business Council – which is a very interesting organisation – on the executive board of the US-Ukraine Business Council you’ll find Cargill, Monsanto, John Deere, CNH International (which is a farming equipment and tractor-making company), Eli Lilly and DuPont Pioneer – DuPont Pioneer being the genetically modified organisms and agricultural wing of DuPont. And they all serve together under the guidance of a guy named Morgan Williams. Morgan Williams is CEO and President of US-Ukraine Business Council, and he has been a fixer for Archer Daniels Midland, Cargill, [and] other big agricultural companies in Ukraine for the last fifteen to twenty years.
There is an expression from my part of the world that goes: “where there’s muck, there’s brass”. Well, as Sottile’s investigations reveal, there’s loads of muck in Ukraine and not just in oil and gas deposits. Perhaps, as he suspects, the bigger prize is the land itself. Either way, the vultures are already circling. Except that they are more predatory than the much maligned vulture. Rather than waiting for a crisis to happen they have been directly involved in fomenting one, and now, as their “Ukraine Crisis” escalates, they won’t be planning to let it to go to waste.
Click here to read more about this in JP Sottile’s article entitled “Ukraine, Chevron, Condi Rice and Shale Gas… join the dots” published by The Ecologist magazine on March 18th.
Valeriy Chaly, Razumkov Centre, deputy foreign minister of Ukraine (2009-2010) Ivanna Klympush-Tsyntsadze, Yalta European Strategy, director Nataliya Popovych, PRP, president Natalia Olbert-Sinko, PRP in Ukraine, executive director Yaryna Klyuchkovska, independent communications consultant Gennadiy Kurochka, CFC, founder and managing partner Vasyl Myroshnychenko, CFC, partner Alina Frolova, R.A.M. 360, CEO Volodymyr Degtyaryov, NewsFront PR agency, director Ivetta Delikatnaya, AGL, director of development Maxim Savanevskyi, PlusOne DA, managing partner Andriy Zagorodskiy, Newsplot, director
The following article is Chapter Nine of a book entitled Finishing The Rat Race which I am posting chapter by chapter throughout this year. Since blog posts are stacked in a reverse time sequence (always with the latest at the top), I have decided that the best approach is to post the chapters in reverse order.
All previously uploaded chapters are available (in sequence) by following the link above or from category link in the main menu, where you will also find a brief introductory article about the book itself and why I started writing it.
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“When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease…”
Have you ever wondered what it’s like to be rich? Here I don’t just mean well-off, with a paltry few tens of millions in the bank, I mean proper rich – megabucks! So much money that, as I heard one comedian put it (aiming his joke squarely at the world’s richest entrepreneur), if Bill Gates were to stuff all his cash under the mattress, then due to interest alone, if he fell out of bed he’d never hit the ground!
I suppose what I’m wondering is this – and perhaps you’ve found yourself thinking along similar lines – why are these super-rich guys always so intent on accruing ever greater wealth when they already possess more than enough funds to guarantee the needs of a small country. Think about it this way: Gates and the others are, barring a few very necessary legal constraints, completely at liberty to do whatever they choose at every moment of every day. They can eat the best food, drink the most delicious vintage wines, smoke the finest cigars, play golf morning, noon, and evening, and then after the sun goes down, and if it is their wont, have liaison with the most voluptuous women (or men) available. Quite literally, they have means to go anywhere and do everything to their heart’s content and all at a moment’s notice. Just imagine that. So why be bothering about sales at all? I mean wouldn’t you eventually get bored of simply accumulating more and more money when you’ve already got so much – and let’s face it, money itself is pretty boring stuff. So just what is it that keeps them all going after it? After all, there are only so many swimming pools, grand pianos, swimming pools in the shape of grand pianos, Aston Martins, Lear Jets, and acreages of real estate that one man (or woman) can profitably use (in the non-profit-making sense obviously). Economists would call this the law of diminishing marginal utility, although in this instance it is basic common sense.2
Presented with evidence of this kind, some will say that here is further proof of the essential greediness of human beings. That, as a species, we are simply never satisfied until we have the lot. Fine then, let us take on this modern variant of original sin, since it certainly holds more than a grain of truth. For the sake of argument, we might presume that all men and women are greedy to an almost limitless extent. That this is truly the natural order, from our conception having been evolutionarily programmed to grab as much as we can for ourselves – our most primeval reflex being to snatch.
So I shall not waste too much time here. Only to say that I do not find such unrestrained cupidity within the circles of people with whom I have chosen to associate, most being happy enough to share out the peanuts and fork out for the next round of beers, quite oblivious to outcomes in terms of commensurate returns. What comes around goes around… There is, of course, no doubting that most folks will, very naturally, if opportunity arises, take good advantage to feather their own nests. Making life a little more comfortable for themselves, and reserving the ample share of their fortune for their immediate family and closest friends. But then, why not…? Charity begins at home, right?
What most don’t do (at least in the circles I know best) is devote their whole lives to the narrow utilitarian project outlined above. And why? Because, though quite understandably, money and property are greatly prized assets, they offer lesser rewards than companionship and love. And, in any case, pure generosity is its own reward – and I do mean “is”, and not “has” or “brings” – the reward being an inseparable part of the act itself: a something received as it was given, like a hug, like a kiss. That said, if you still prefer to believe that we are all to a man, woman and child, innately and incurably selfish and greedy, then next time you take a look into the mirror, do consider those all-too beady eyes staring back. It’s very easy to generalise about mankind when you forget to count yourself in.
But if not intractably a part of human nature, then we must find other reasons to account for how our world is nevertheless so horribly disfigured by rampant and greedy exploitation. For if greed is not an inherently human trait, and here I mean greed with a capital Grrr, then this monomaniacal obsession is all too frequently acquired, especially in those who approach the top of the greasy pole. There is an obvious circularity in this, of course. That those whose progress has depended upon making a buck, very often become addicted. As money-junkies, they, like other addicts, then prioritise their own fix above all else. Whether or not these types are congenitally predisposed to becoming excessively greedy, we have no way of knowing. What we can be certain of is this: that by virtue of having acquired such great wealth, they disproportionately shape the environment they and we live in. So they are not merely money-junkies, but also money-pushers. If you’re not a money-junkie then you don’t know what you’re missing. There’s nothing new in this. This is the way the world has been for many centuries, and perhaps ever since money was first invented.
So here’s Oscar Wilde addressing the same questions about money and our unhealthy relationship to it; his thoughts leaping more than a century, during which time very little has apparently changed:
“In a community like ours, where property confers immense distinction, social position, honour, respect, titles, and other pleasant things of this kind, man, being naturally ambitious, makes it his aim to accumulate this property, and goes on wearily and tediously accumulating it long after he has got far more than he wants, or can use, or enjoy, or perhaps even know of. Man will kill himself by overwork in order to secure property, and really, considering the enormous advantages that property brings, one is hardly surprised. One’s regret is that society should be constructed on such a basis that man has been forced into a groove in which he cannot freely develop what is wonderful, and fascinating, and delightful in him – in which, in fact, he misses the true pleasure of joy and living.”3
Embedded below is a recent interview [from December 2013] Pulitzer Prize-winning journalist Chris Hedges gave on “The Real News” in which he talked about – based to a large extent on his own personal experience – how the super rich are isolated and disconnected from the rest of society. He explains how this creates a deluded sense of entitlement and a pathological callousness:
*
Isn’t money funny stuff! Funny peculiar, I mean. We just take it so much for granted, almost as though it were a natural substance (disappointingly, of course, it doesn’t actually grow on trees). But when we do think about it, money has far stranger properties than anything in the natural world. And our relationship to it is more peculiar than our relationship to almost anything else.
Money, that’s what I want… sang the Beatles on one of their less celebrated tracks. But the truth will out. So just why did the Beatles want money, and, for that matter, why do I, and why do you? It doesn’t work, you can’t eat it, and it’s not, of a rule, a thing of special beauty. Money is absolutely useless in fact, right until you decide to swap it for what you actually want.
Money can’t buy me love, true again, but it might buy me a chocolate bar. Because money is really just a tool, a technology: a highly specialised kind of lubricant, that enables people to exchange their goods and services with greater ease and flexibility. The adoption of a money system enabling levels of parity for otherwise complex exchanges to be quickly agreed and settled. The great thing about money being, to provide a concrete illustration, that although £1 of tinned herring is probably equivalent to about thirty seconds of emergency plumbing (if you’re lucky), you won’t require crates of herring to pay for the call-out. So far so simple.
Except wait. We all know how the price of herring can go up as well as down, and likewise for the price of emergency plumbers. So why such a dynamic relationship? Well, there’s “the market”, a price-fixing system that arises spontaneously, regulating the rates of exchange between goods and services on the basis of supply adjusting to match demand. Thus by a stroke of good fortune, we find that money is not merely a lubricant for exchange, but also regulatory of useful production and services. This, at least, is the (widely accepted) theory.
Prices rise and fall in accordance with demand. Things that are in short supply become expensive, things that are abundant are cheaper. This is basic economic theory and it means, amongst other things, that in every transaction the “real value” of your money is actually relative, for the simple reason that the amount required depends not only on what you’re after, but also upon whether or not other people are after the same kind of thing. Money then, in terms of its “real value” to any individual or group, is something that is constantly varying. We might call this “the relativity of money”.
One consequence of the relative nature of money, is that the useful value of money overall can also rise and fall. It is possible that wholesale, retail and labour costs can all more or less rise or fall together, although the general tendency, as we all know from experience, is for overall rising costs. Indeed such “inflation” is regarded as normal and expected, and, as a consequence, it comes to seem just as natural as money itself. Yet since you always need more and more money to buy the same things then the value of your money must, in some important way, be constantly falling. But just why does money as a whole lose its value in this way? What makes yesterday’s money worth less than today’s? Well it turns out that this is a huge question and one that economists have argued long and hard about.
One partial account of inflation goes as follows: businesses and people in business are constantly looking for a little bit more. For how else can they maximise profits? In direct consequence, we, as customers, necessarily require more dosh to pay for the same goods or services. But to enlarge our budget, this automatically requires a commensurate increase in income, which means successfully negotiating for a larger salary. In the bigger picture then, the businesses supplying our wants and needs, are now needing to cover their larger wage-bills, which means higher prices to compensate. So prices and incomes rise together, with money becoming worth less and less precisely because everyone is trying to accumulate more and more of it. This endless tail-chasing escalation, which is given the fancy title of “the price/wage spiral”, serves as an excellent example of why money is really very odd stuff indeed.
And what is money in any case? The first traders most likely exchanged shells, precious stones, or other baubles to aid in bartering, but then naturally enough, over time these exchanges would have been formalised, agreements arising with regards to which objects and materials were most acceptable as currency. The material that became most widely accepted was eventually, of course, gold. But why gold? Well, no one actually knows but we can make some educated guesses.
Firstly, gold is scarce, and it is also rare in other ways – for instance, having a unique and unusual colour, which just happens to correspond to the colour of the Sun. The fact that it is almost chemically inert and so doesn’t tarnish, means that it also shines eternally, and so again is like the Sun. Indeed, Aldous Huxley, in Heaven and Hell (his sequel to The Doors of Perception) points out that almost every substance that humans have ever regarded as valuable shares this property of shininess. To Huxley this is evidence that even money owes it origins, in part at least, to a common spiritual longing. Our wish to own a precious piece of paradise.
But back to more mundane matters, if gold (or any other substance) is chosen as your currency, then there arises another problem. How to guarantee the quantity and quality of the gold in circulation? For if gold is worth faking or adulterating then it’s certain that somebody will try cheating.
Well, one answer could be the adoption of some kind of official seal, a hallmark, and this solution leads, naturally enough, to the earliest forms of coinage. But then, if the coins are difficult to counterfeit, why bother to make them out of gold in the first place? Just the official seal would be enough to ensure authenticity. And why bother with metal, which is bulky and heavy. So again it’s an obvious and logical leap to begin producing paper banknotes. The value of these coins and banknotes, although far less intrinsically valuable in material terms than the gold they represent, is still backed by the promise that they are redeemable into gold. But hang on, what’s so special about the gold anyway (aside from its shininess). And doesn’t the gold, which is now locked up in bullion reserves, in fact have real uses of its own? And doesn’t this mean that the gold also has a monetary value? So why not cut loose from the circularity and admit that the value of money can exist entirely independent from the gold or from any other common standard. Indeed, why couldn’t the issuing authority, which might be a government but is more often a central bank, simply make up a “legal tender”4 with no intrinsic or directly correlated value whatsoever and issue that? Not that the money issued need even correspond to the amount of real coins or paper banknotes in circulation – most of the world’s money being bits and bytes, ones and zeroes, orbiting out in cyber-space. Which brings us to just how funny money has now become.
The Pound Sterling, the various dollars, the Euro and every major currency on Earth are, to apply the correct terminology, “fiat currencies”5 With fiat currencies there is no parity to the value of any other commodities and so they are, if you like, new forms of gold. As such, and given their shifting relative values, these new fiat currencies can also be traded as another kind of commodity. Money, in the form of currency, becoming an investment in itself. Money is strange stuff indeed.
Yet money also remains as an instrument. And we use this instrument to measure just about everything. To establish the value of raw materials and manufactured items. The value of land and, by extension, the value of the space it occupies. The value of labour, and thus a value on the time used. And, since works of art are also bought and sold, money is even applied as a measure of such absolutely intangible qualities as beauty.
So money is basically a universally adaptable gauge, and this is its great strength. It is perhaps the big reason why its invention gradually caught on in such a fundamental way. From humble trading token, money has risen to become a primary measure of all things. But remember, remember… Money, whether fiat currency or gold standard, can never be real in the same way as tins of herring and plumbers are real, and neither is “monetary value” an absolute and intrinsic property, but only ever relative and acquired. Money, we ought to constantly remind ourselves (since we clearly need reminding) is nothing without us or without our highly structured civilisation – intrinsically, it is worthless. It is very strange stuff.
Perhaps the future benchmark for money will no longer be gold but ‘virtual gold’ in the form of cryptocurrencies – bitcoin being currently the most well-known of these. One advocate of these alternatives to traditional forms of money is financial expert Max Keiser. On February 3rd 2014, he spoke with coder, hacker and cryptocurrency specialist Andreas Antonopoulos about the regulation of bitcoin transactions; the advent of bitcoin derivatives, which he believes these are less of a threat than ordinary derivatives (a subject I’m coming to next); the fact that unlike gold, cryptocurrencies can be ‘teleported’; and a future in which bitcoin is used widely by businesses as much as by individuals. He says that a time is coming when the prevalent misgivings and doubts about bitcoin and other cryptos have long since been forgotten. Is he right? I don’t know and remain highly skeptical, but I find the debate an interesting one:
Incidentally, there are less radical and more tangible alternatives to the currencies we now have in circulation. “Treasury notes” are one such alternative and these have historical precedence in the form of both the American “greenback” and the UK’s Bradbury Pound. To read more about this and also for links to campaigns to reintroduce them please read the addendum at the end of the chapter.
*
Little more than a century ago, and even in the richest corners of the world, there were no dependable mechanisms to safeguard against the vicissitudes of fortune. If you weren’t already poor and hungry (as most were), then you could rest assured that potential poverty and hunger were waiting just around the corner. Anyone with aspirations to scale the ladder to secure prosperity faced the almost insurmountable barriers of class and (a generally corresponding) lack of education. A lower class person of such ambitions would be very well aware that if they could step onto the ladder at all, there was very little in the way of protection to save them in the event of falling; errors of judgement or sheer misfortune resulting in almost certain and unmitigated personal disaster. This was the sorry situation for people at all levels of society aside from the highest echelons.
One tremendous advantage then, of living in a modern society, is that, aside from having slightly less restricted social mobility (not that we now live in the classless society we are told to believe in), there are basic safety nets in place, with additional protection that is optionally available. For those languishing at the bottom of the heap, there are the reliable though meagre alms provided through a welfare system, whilst for the ever-expanding middle classes there is plenty of extra cover in the form of saving schemes, pension schemes, and, in the event of the most capricious and/or calamitous of misfortunes, the ever-expanding option of insurance policies. If the Merchant of Venice had been set in today’s world then the audience would feel little sympathy for his predicament. Why had he ventured on such a risk in the first place, casting his fortune adrift on dangerous waters? Why hadn’t he protected his assets by seeking independent financial advice and taking out some preferential cover? It’s a duller story altogether.
Systems for insurance are essential in any progressive civilisation. Protection against theft, against damage caused by floods, fires and other agents of destruction, and against loss of life and earnings. Having insurance means that we can all relax a bit, quite a lot, in fact. But it also means that, alongside the usual commodities, there’s another less tangible factor to be costed and valued. That risk itself needs to be given a price, and that necessarily means speculating about the future.
Indeed, speculations about the future have become very much to the forefront of financial trading. As a consequence of this, at least in part, today’s financial traders have become accustomed to dealing in “commodities” that have no intrinsic use or value whatsoever. They might, for example, exchange government bonds for promises of debt repayment. Or, feeling a little more adventurous, they might speculate on the basis of future rates of foreign exchange, or in interest rates, or share prices, or rates of inflation, or in a multitude of other kinds of “underlying assets” (including that most changeable of underlying variables: the weather) by exchange of promissory notes known most commonly as “derivatives”, since they derive their value entirely on the basis of the future value of something else. And derivatives can be “structured” in any myriad of ways. Here are a just few you may have heard of :–
futures (or forwards) are contracts to buy or sell the “underlying asset” up until a future date on the basis of today’s price.
options allow the holder the right, without obligation (hence “option”), to buy (a “call option”) or to sell (a “put option”) the “underlying asset.”
swaps are contracts agreeing to exchange money up until a specified future date, based on the underlying value of exchange rates, interest rates, commodity prices, stocks, bonds, etc.
You name it: there are now paper promises for paper promises of every conceivable kind. Now the thing is that because you don’t need to own the “underlying asset” itself, there is no limit to the amounts of these paper promises that can be traded. Not that this is as novel as it may first appear.
Anyone who’s ever bought a lottery ticket has in effect speculated on a derivative, its value in this case being entirely dependent upon the random motion of coloured balls in a large transparent tumbler at an allocated future time. All betting works this way, and so all bets are familiar forms of derivatives. And then there are, if you like, negative bets. Bets you’d rather lose. For instance, £200 says my house will burn down this year, is presumably a bet you’d rather lose, but it is still a bet that many of us annually make with an insurance company. And general insurance policies are indeed another form of familiar derivative – they are in effect “put options”.
However there is one extremely important difference here between an ordinary insurance policy and a “put option” – in the case of the “put option”, you don’t actually need to own the “underlying asset”, which means, to draw an obvious comparison, you might take out house insurance on your neighbour’s property rather than your own. And if their house burns down, ah hum accidentally, of course, then good for you. Cash in your paper promise and buy a few more – who knows, perhaps your neighbour is also a terrible driver. There are almost numberless opportunities for insuring other people’s assets and with only the law preventing you, then why not change the law. Which is exactly what has happened, with some kinds of derivatives circumventing the law in precisely this way, and permitting profitable speculation on the basis of third party failures. When it comes to derivatives then, someone can always be making a profit come rain or shine, come boom or total financial meltdown.
But, why stop there? Especially when the next step is so obvious that it almost seems inevitable. Yes, why not trade in speculations on the future value of the derivatives themselves? After all, treating the derivative itself as an “underlying asset” opens the way for multiple higher order derivatives, creating with it, the opportunity for still more financial “products” to be traded. Sure, these “exotic financial instruments” quickly become so complex and convoluted that you literally need a degree in mathematics in order to begin to decipher them. Indeed those on the inside make use of what are called “the Greeks”, and “the Higher Order Greeks”, since valuation requires the application of complex mathematical formulas comprised of strings of Greek letters, the traders here fully aware, of course, that it’s all Greek to the rest of us. Never mind – ever more financial “products” means ever more trade, and that’s to the benefit of all, right…?
Deregulation of the markets – kicked off in Britain by the Thatcher government’s so-called “Big Bang” and simultaneously across the Atlantic through the laissez-faire of “Reagonomics”6 – both enabled and encouraged this giddying maelstrom, allowing in the process the banking and insurance firms, the stockbrokerage and hedge funds that make up today’s “finance industry” to become the single most important “wealth creator” in the Anglo-American world. Meanwhile, declines in manufacturing output in Britain and America meant both nations were becoming increasingly dependent on a sustained growth in the financial sector – with “derivatives” satisfying that requirement for growth by virtue of their seemingly unbound potential. Indeed, having risen to become by far the largest business sector simply in terms of profit-making, many of the largest banks and insurance groups had become “too big to fail”7. Failure leading potentially to national, if not international, economic ruin. Which is how the very systems that were supposedly designed to protect us, systems of insurance, have, whether by accident or design, left us more vulnerable than ever.
And then came the bombshell, as we learnt that the banks themselves were becoming bankrupt, having gambled their investments in the frenzy of deregulated speculation. Turns out that some of the money-men didn’t fully understand the complexity of their own systems; a few admitting with hindsight that they’d little more knowledge of what they were buying into than the rest of us. They’d “invested” because their competitors “invested”, and, given the ever-growing buoyancy of the markets at the time, not following suit would have left them at a competitive disadvantage. A desperate but strangely appropriate response to the demands of free market capitalism gone wild.
*
It is currently estimated that somewhere in the order of a quadrillion US dollars (yes, that’s with a qu-) has been staked on derivations of various kinds. Believe it or not, the precise figure is actually uncertain because many deals are brokered in private. In the jargon of the trade these are called “over the counter” derivatives, which is an odd choice of jargon when the only thing the average customer buys over the counter are drugs. Could it be that they’re unconsciously trying to tell us something again?
So just how big is one quadrillion dollars? Well, let’s begin with quadrillion. Quadrillion means a thousand trillion. Written at length it is one with a string of fifteen zeros. A number so humungous that it’s humanly impossible to properly comprehend: all comparisons fail. I read somewhere that if you took a quadrillion pound coins and put them side by side then they would stretch further than the edge of the solar system. The Voyager space programme was, of course, a much cheaper alternative. Or how about this: counting a number every second, it would take 32 million years to count up to a quadrillion… Now obviously that’s simply impossible – I mean just try saying “nine hundred and ninety-nine trillion, nine hundred and ninety-nine billion, nine hundred and ninety-nine million, nine hundred and ninety-nine thousand, nine hundred and ninety-nine” in the space of one second! You see it really doesn’t help to try to imagine any number as big as a quadrillion.
However, there are still useful ways to compare a quadrillion dollars. For instance, we can compare it against the entire world GDP which turns out to be a mere 60 trillion US dollars8. One quadrillion being nearly twenty times larger. Or we might compare it against the estimated monetary wealth of the whole world: about $75 trillion in real estate, and a further $100 trillion in world stock and bonds. So one quadrillion is a number far exceeding even the total monetary value of the entire world – material and immaterial! A little freaky to say the least! Especially when we discover that many of these derivatives are now considered to be “toxic assets”, which is a characteristically misleading way of saying they are worth nothing – yes, worthless assets! – whatever the hell that means!
So just like the Sorcerer’s Apprentice, it seems that the spell has gone out of control, and instead of these mysterious engines making new money out of old money, the system has created instead an enormous black hole of debt. A debt that we, the people, are now in the process of bailing out, with extremely painful consequences. Efforts to save us from a greater catastrophe having already forced the British and US governments to pump multiple hundreds of billions of public money into the coffers of the private banks. Yet the banks and the economy remain broken of course, because how is any debt larger than the monetary value of the entire world ever to be repaid?
Another tactic to halt descent into a full-blown economic meltdown has involved the issuance of additional fiat currency in both Britain and America; a “quantitative easing” designed to increase the supply of money by simply conjuring it up (a trick that fiat currency happily permits). Money may not grow on trees but it can most certainly be produced out of thin air. But here’s the rub. For in accordance with the most basic tenets of economic theory, whenever extra banknotes are introduced into circulation, the currency is correspondingly devalued. So you may be able to conjure money from thin air, but all economists will readily agree that you cannot conjure “real value”, meaning real purchasing power. Indeed this common mistake of confusing “nominal value” (i.e., the number of pounds written on the banknote) with “real value”, is actually given a name by economists. They call it: “the money illusion”. And it’s useful to remind ourselves again that money has only relative value.
To understand this, we might again consider money to be a commodity (which in part it is, traded on the currency markets). As such, and as with all other commodities, relative scarcity or abundance will alter its market value, and, in obedience to the law of supply and demand, more will automatically mean less. This is just as true for the value of money as it is for tins of herring, plumbers, scotch eggs and diamonds. So it seems that if too much of our quantitative is eased, then we’d better be prepared for a drastic rise in inflation, or much worse again, for hyperinflation. Printing too much money is how hyperinflation has always been caused.
Our future is bleak, they tell us. Our future is in the red. So much for security, so much for insurance. We’d apparently forgotten to beware of “the Greeks” and of the “higher order Greeks” when they’d first proffered gifts.
*
I said earlier, just in passing, that money is actually pretty boring stuff, and it is… Truly, madly and deeply boring! So when I hear on the news how “the markets” are hoping that the latest round of “quantitative easing” will enable governments to provide the necessary “fiscal stimulus”, I am barely even titillated. Whilst explanations, both in the popular press and supposedly more serious media, that like to describe such injections of new money as in some way analogous to filling up my car with imaginary petrol provide me only with a far, far more entertaining distraction: to wit, a magical car that runs on air.
But then, of course, money isn’t really stuff at all! More properly considered, money is perhaps a sort of proto-derivative, since its worth is evidently dependent upon something other than the paper it’s (increasingly not) written on. So what is it that money’s worth depends upon? What underlies money? Well, the accepted answer to this question is apparently that money is a “store of value”. Although this leads immediately to the obvious follow-up question: in this context, what precisely is the meaning of “value”? But, here again there is a problem, since “value”, although a keystone to economic thinking, has remained something of an enigma. Economists unable to agree upon any single definitive meaning.
Is “value” a determinant of usefulness? Or is it generated by the amount of effort required in the production of things? Or perhaps there is some other kind of innate economic worth? For instance in a thing’s scarcity. And can this worth be attributed at the individual level or only socially imputed?
There are a wide variety of definitions and explanations of “value”, that, being so foundational, have then encouraged the various branches of economic theory to diverge. And here is another important reason why economics is in no way equivalent to the physical sciences. Ask any physicist what energy is, and they will provide both an unambiguous definition and, no less importantly, offer established methods for measurement. Because of this, if ever one physicist talks to another physicist about energy (or any other physical quantity) they can be absolutely certain that they are talking about the same thing. Which is very certainly not the case when economists talk about “value”.
“A cynic is a man who knows the price of everything and the value of nothing,” said Oscar Wilde, distinguishing with playful wisdom the difference in human terms between “price” and “value”. The great pity is that the overwhelming majority of today’s economists have become so cynical – but then perhaps they always were.
*
As part of his on-going assault against religion, Richard Dawkins recently published a book called The God Delusion. It’s the old hobby-horse again; one that he shares with a great many millions of other broadly liberal, literate and intelligent people. That religion is an evil of which humanity must rid ourselves totally. And yes, much of religion has been dumb and dangerous, this I will very readily concede (and already have conceded in earlier chapters). But really and truly, is it “the God delusion” that we should be most concerned about in these torrid times? For regardless of Dawkins claims, it is quite evident that religion is a wounded animal, and for good or ill, the secular world is most certainly in the ascendant. Right throughout the world, aside from a few retreating pockets of resistance, faith in the old gods has been gravely shaken. It is not that human faith, by which I mean merely a belief and/or worship of something greater, is extinguished, for it never can be, but that it has been reattached to new idol-ologies. And in those parts of the world where the old religions have been most effectively disarmed or expelled, namely the West, one idol-ology above all others has gathered strength from Religion’s demise.
Richard Dawkins has said many times that instructing young children in religious obedience is a form of psychological child abuse and on this point I wholeheartedly support him. Children’s minds are naturally pliable for very sound developmental reasons. But is it less pernicious to fill their precious minds with boundless affection for let’s say Ronald McDonald? For this is merely one stark but obvious illustration of how a new fundamentalism has been inculcated in the young. Devotion to the brand. Love of corporations. Worship of the dollar and the pound.
This new kind of fundamentalism has long since swept across the world, but it is unusual, although not unique, in that it denies its own inherent religiosity whilst claiming to have no idols. This is the fundamentalism of free market neoliberal economics. The Father, Son and Holy Ghost having been forsaken, only to have been usurped by the IMF, the World Bank and the WTO. If you think I’m joking, or that this is mere hyperbole, then think again. When things are tough we no longer turn to the heavens, but instead ask what sacrifices can be made to “reassure the markets”. Sacrifices to make it rain money again.
By far and above, here is the most pernicious delusion of our age. And it has next to nothing to do with God, or Yahweh, or Allah, or even the Buddha. The prophets of our times talk of nothing besides profits or losses. They turn their eyes to the Dow Jones Index, trusting not in God, but only in money. So I call for Dawkins to leave aside his God delusion, for a moment, and pay a little attention to the rise and rise of “the money delusion”. If future historians reflect on our times, this is what they will see, and given the mess this “money delusion” is creating they will scratch their heads in disbelief and disgust.
*
I have already discussed the so-called “money illusion” – of mistaking nominal banknote value for real purchasing value – but this is merely one of many nested and interrelated illusions that make up “the money delusion”. Illusions that have become so ingrained within our permitted economic thinking that they are completely taken for granted.
Foundational is the belief that individuals always make rational choices. According to the definition of making rational choices, this requires that we all choose with consistency and always with the aim of choosing more over less. That a huge advertising industry now exists to tempt us into irrationality is never factored in. Nor are the other corrosive influences that so obviously deflect our rational intentions: the coercion of peer pressure, our widespread obsession with celebrities and celebrity endorsement, and that never-ending pseudo-scientific babble that fills up many of the remaining column inches and broadcast hours of our commercial media. We are always eager for the latest fashionable fads, and perhaps we always were. Yet this glaring fact, that people make wholly irrational choices time and again, whether due to innate human irrationality or by deliberate design, is of little concern to most economists. It is overlooked and omitted.
Likewise, a shared opinion has arisen under the name of neoliberalism that economics can itself be neutral, usefully shaping the world without the nuisance of having to rely on value judgements or needing any broader social agenda. If only individuals were left to make rational choices, as of course they do by definition, or so the idea goes, and the market could also be unshackled, then at last the people will be free to choose. Thus, goes the claim, individual freedom can only be guaranteed by having freedom within the marketplace. Freedom trickling down with the money it brings. “Wealth creation” alone must solve our problems by virtue of it being an unmitigated good.
Of course, back in the real world, one man’s timber very often involves the destruction of another man’s forest. Making profits from the sale of drugs, tobacco and alcohol has social consequences. Factories pollute. Wealth creation has its costs, which are very often hidden. There is, in other words, and more often than not, some direct negative impact on a third party, known to economists as “spillover” or “externalities”, that is difficult to quantify. Or we might say that “wealth creation” for some is rather likely therefore to lead to “illth creation” for others.
Illth creation? This was the term coined by romantic artist, critic and social reformer, John Ruskin, and first used in his influential critique of nineteenth century capitalism entitled Unto This Last. Ruskin had presumably never heard of “the trickle-down effect”:
“The whole question, therefore, respecting not only the advantage, but even the quantity, of national wealth, resolves itself finally into one of abstract justice. It is impossible to conclude, of any given mass of acquired wealth, merely by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as sternly as that of a mathematical quantity depends on the algebraical sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, and productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicane.”9
*
We are in the habit of regarding all money as equal. Presuming that the pounds and pence which make up my own meagre savings are equivalent in some directly proportional manner to the billions owned by let’s say George Soros. A cursory consideration shows how this is laughable.
For instance, we might recall that on “Black Wednesday” in 1992, Soros single-handedly shook the British economy (although, the then-Chancellor of the Exchequer Norman Lamont was left to shoulder the blame)10. But to illustrate this point a little further, let me tell you about my own small venture into the property market.
Lucky enough to have been bequeathed a tidy though not considerable fortune, I recently decided to purchase a house to live in. The amount, although not inconsiderable by everyday standards (if compared say with the income and savings of Mr and Mrs Average), and very gratefully received, was barely sufficient to cover local house prices, except that I had one enormous advantage: I had cash, and cash is king.
For reasons of convenience, cash is worth significantly more than nominally equivalent amounts of borrowed money. In this instance I can estimate that it was probably worth a further 20–30%. Enough to buy a far nicer house than if I’d needed to see my bank manager. A bird in the hand…
Having more money also has other advantages. One very obvious example being that it enables bulk purchases, which being cheaper, again inflates its relative value. The rule in fact is perfectly straightforward: when it comes to money, more is always more, and in sufficient quantities, it is much, much more than that.
But then, of course, we have the market itself. The market that is supposedly free and thus equal. The reality being, however, that since money accumulates by virtue of attracting its own likeness, the leading players in the market, whether wealthy individuals or giant corporations, by wielding larger capital resources, can operate with an unassailable competitive advantage. These financial giants can and do stack the odds even higher in their favour by more indirect means, such as buying political influence with donations to campaign funds and by other insidious means such as lobbying – all of which is simply legally permitted bribery. The flaunted notion of a free market is therefore the biggest nonsense of all. There is no such thing as a free market: never has been and never will be.
The most ardent supporters of free market neoliberalism say that it is a non-normative system, which permits us finally to rid ourselves of disagreements over pesky value judgements. The truth, however, is very much simpler. By ignoring values, it becomes a system devoid of all moral underpinning. Being morally bankrupt, it is unscrupulous in the truest sense of the word.
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If I had enough money and a whim, I might choose to buy all the plumbers and tins of herrings in Britain. Then, since money is (in part) a measure of scarcity, I could sell them back later with a sizeable mark-up. Too far-fetched? Well, perhaps, but only in my choice of commodity. The market in other commodities has without any question been cornered many times in the past. For instance, by the end of the 1970s, two brothers, Nelson Bunker and William Herbert Hunt, had accumulated and held what was then estimated to be one third of all the world’s silver. This led to serious problems both for high-street jewellers11 and for the economy more generally12, and as it happened, when the bubble burst on what became know as “Silver Thursday”, it also spelt trouble for the brothers’ own fortune. Fortunately for them, however, the situation was considered so serious that a consortium of banks came forward to help to bail them out13. They had lost, their fortune diminished, although by no means wiped out. As relatively small players they’d played too rough; meanwhile much larger players ensure that the markets are routinely rigged through such manufacture of scarcity. Going back as early as 1860, John Ruskin had already pointed out a different but closely-related deficiency in any market-driven capitalist system of trade:
“Take another example, more consistent with the ordinary course of affairs of trade. Suppose that three men, instead of two, formed the little isolated republic, and found themselves obliged to separate, in order to farm different pieces of land at some distance from each other along the coast: each estate furnishing a distinct kind of produce, and each more or less in need of the material raised on the other. Suppose that the third man, in order to save the time of all three, undertakes simply to superintend the transference of commodities from one farm to the other; on condition of receiving some sufficiently remunerative share of every parcel of goods conveyed, or of some other parcel received in exchange for it.
“If this carrier or messenger always brings to each estate, from the other, what is chiefly wanted, at the right time, the operations of the two farmers will go on prosperously, and the largest possible result in produce, or wealth, will be attained by the little community. But suppose no intercourse between the landowners is possible, except through the travelling agent; and that, after a time, this agent, watching the course of each man’s agriculture, keeps back the articles with which he has been entrusted until there comes a period of extreme necessity for them, on one side or other, and then exacts in exchange for them all that the distressed farmer can spare of other kinds of produce: it is easy to see that by ingeniously watching his opportunities, he might possess himself regularly of the greater part of the superfluous produce of the two estates, and at last, in some year of severest trial or scarcity, purchase both for himself and maintain the former proprietors thenceforward as his labourers or servants.”14
By restricting the choices of others, one’s power over them is increased, and it this that brings us to the real reason why money becomes such addiction, especially for those who already have more than they know what to do with. For truly the absolute bottom line is this: that money and power become almost inseparable unless somehow a separation can be enforced. And whilst wealth, especially when excessive, accumulates, as it almost invariably does, then along with it goes the accumulation of power. This is underlying and centralising mechanism has perhaps always operated at the heart of all civilisation. But even the power of money has its limits, as Ruskin points out:
“It has been shown that the chief value and virtue of money consists in its having power over human beings; that, without this power, large material possessions are useless, and to any person possessing such power, comparatively unnecessary. But power over human beings is attainable by other means than by money. As I said a few pages back, the money power is always imperfect and doubtful; there are many things which cannot be reached with it, others which cannot be retained by it. Many joys may be given to men which cannot be bought for gold, and many fidelities found in them which cannot be rewarded with it.
“Trite enough, – the reader thinks. Yes: but it is not so trite, – I wish it were, – that in this moral power, quite inscrutable and immeasurable though it be, there is a monetary value just as real as that represented by more ponderous currencies. A man’s hand may be full of invisible gold, and the wave of it, or the grasp, shall do more than another’s with a shower of bullion. This invisible gold, also, does not necessarily diminish in spending. Political economists will do well some day to take heed of it, though they cannot take measure.”15
Until such a time, every action and probable outcome must continue to be evaluated on the basis of strict cost and benefit estimates. Our “ponderous currencies” literally enabling a figure to be set against each human life – an application fraught with the most serious moral dilemmas and objections – and beyond even this, we have price tags for protecting (or else ruining) the natural environment all our lives depend upon. For only the market can secure our futures, optimally delivering us from evil, though inevitably it moves in mysterious ways. Which is how the whole world – land, water, air and every living organism – came to be priced and costed. Everything set against a notional scale that judges exclusively in terms of usefulness and availability, such is the madness of our money delusion.
We are reaching a crisis point. A thoroughgoing reappraisal of our financial systems, our economic orthodoxes, and our attitudes to money per se is desperately required. Our survival as a species may depend on it. Money ought to be our useful servant, but instead remains, at least for the vast majority, a terrible master. As a consequence, our real wealth has been too long overlooked. Time then for this genii called money to be forced back tight inside its bottle. Ceaselessly chasing its golden behind, and mistaking its tight fist for the judicious hand of God, is leading us ever further down the garden path. Further and further away from the land it promises.
Back in April 2012, I forwarded a draft of this chapter to friends in Spain (a nation already suffering under imposed “austerity measures”). They sent an extended reply which raised two interesting and important questions. Both questions along with my replies are offered below:
Q1: You seem to be saying that printing money (as the US and UK, who are in control of their own currency, are doing ) is as bad as dealing with the debt problem by means of austerity (the “Merkozy” approach). But the latter is surely definitely worse.
A. I think these are simply two sides of the same scam. The bankers create an enormous unpayable debt and then get governments to create new money to bail them out. This is sold to us as a way of bailing out a few chosen victims (Greece, Spain, Portugal, Ireland) although it simply means a huge transfer of wealth from public into private hands. To make that money useful to the bankers (and the rest of the ruling elite) ‘austerity measures’ are put in place which not only steal money off the average person but also permit the fire sale of national assets. Meanwhile, in Britain and America, the governments are helping to pay for these bailouts by creating money out of thin air, which means the real value of our money is reduced through inflation (effectively a hidden tax). If the money were invested in infrastructure or education or whatever, then this could potentially be a good thing (even though it still creates inflation), so certainly QE could have been beneficial but not when you use the money only to keep afloat a huge Ponzi scheme. But then you ask later…
Q2: ‘but how come the pound is high now and the euro low’
A. That’s a very good question and I won’t pretend that I understand this completely, but I gather there are plenty of ways for keeping currencies higher than they ought to be by manipulating the markets [incidentally, the Forex Scandal to manipulate and rig the daily foreign exchange rates did not come to light until Summer 2013]. The market is rigged in any case by virtue of the fact that the dollar remains the world’s reserve currency and that oil is traded entirely in dollars. But essentially what’s going on here is a huge currency war, and the euro is constantly under attack from speculators. I am fairly certain that the chickens will come home to roost sooner or later in America and Britain (and in Germany too), but meanwhile the governments simply go about cooking the books and telling us how inflation is only 4% or whatever when fuel prices, for instance, have rocketed during the past few years. In any case, we get ‘austerity’ too, not as hardline yet as the ‘austerity’ being imposed elsewhere, but it will come – of this I have no doubt. Either it will happen slowly, or worse, there will be a huge war and the ‘austerity’ will be brought into place to justify the expense of that. This is a deliberate attack by the bankers against the people of the world, and until the people of the world say that’s enough, and most of the debts are cancelled outright, I don’t see any way this can be reversed.
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Another topic I briefly touched upon in the chapter above is the matter of inflation. What is it and what causes it? My answers were sketchy, in part, because I wished to avoid getting too bogged down in technicalities beyond my training. But this question about the causes of inflation is, in any case, an extremely thorny one. Different schools of economists provide different explanations.
One less orthodox account that I have frequently come across is that our fractional reserve banking system when combined with a central bank’s issuance of a fiat currency is inherently inflationary. That in the long term, and solely because of these extant monetary mechanisms, inflation is baked into the cake. So I wrote to a friend who holds with the above opinion and asked if he would explain “in the briefest terms that are sufficient” why he and others believe that central bank issuance of currency and fractional reserve banking are the primary underlying cause of inflation. Here is his succinct but detailed reply:
In a central bank system, money is created in the first instance by governments issuing bonds to banks and banks “printing” money and handing it over to the government in return. The government then owe the banks the money plus interest. If they ever pay back any of the principal, then a corresponding amount of bonds are handed back, i.e. cancelled. In that case, the money repaid goes out of existence!
Before elaborating any further, let’s take a step back. Fractional reserve lending doesn’t require central banks, nor does it require governments to create money by issuing bonds in exchange for it. Fractional reserve lending is simply the act of taking someone’s money to “look after it”, then turning around and lending a fraction of it to someone else. If the lender has enough depositors, then sum of all the unlent fractions of each deposit should cover him if one of them suddenly comes through the door asking for all their money back in one go. As I’m sure you know, if too many turn up at once looking for their money, a run ensues. Fractional reserve banking doesn’t even require a government sanctioned paper currency to exist. Depositors can simply deposit something like gold and the lenders can issue receipts which become the paper currency.
In olden times, when depositors of gold first found out that the goldsmiths they were paying to store their gold safely were lending it out for a percentage fee, they were outraged. The goldsmiths appeased them by offering them a cut of the fee for their interest in the scam. Accordingly, this money became known as ‘interest’.
So where do central banks fit in? Countries like the Unites States prior to 1913 have operated without central banks. There were thousands of banks of all sizes. To compete with one another, they had to endeavour to offer higher interest to depositors, lower interest rates to borrowers or to cut the fraction of deposits that they kept in reserve. This latter aspect was what caused banks occasionally to go to the wall, to the detriment of their depositors.
Central banking avoids this risk because the same fractional reserve ratio applies to all the banks under a central bank’s jurisdiction. However, it is really a way to avoid competition and if the system ever does get into trouble, the government feel obliged to bail it out or risk collapse of the whole system.
Now to answer your question about inflation.
In a fractional reserve central bank system, money is created as I’ve described by the government issuing bonds to the bank, receiving money created out of thin air and having to pay interest on it. When they spend it by paying salaries of government employees, contractors, arms manufacturers and so on, that money goes straight into bank accounts and the bankers can’t wait to lend out as much of it as possible, up to the limit of whatever fractional reserve ratio applies. So now there is a double claim on the money. The government employee thinks their salary is sitting in the bank but 90 percent of it is in the pocket of a borrower who thinks it’s theirs as long as they keep up with interest. That borrower, will inevitably either put the borrowed sum in their own bank account or spend it. Either way it will end up in another bank account somewhere. Then the same thing happens again; up to 90 percent of it gets lent out (81 percent of the original government-created money) and so on…
We end up in a situation where all of the money in circulation has arisen from someone somewhere, signing the dotted line to put themselves in debt. The money isn’t backed by a commodity such as gold. Instead it is backed by the ability of the borrower to repay. All these borrowers, including the government are paying interest. If interest is to be paid on every penny in circulation, then it doesn’t take a genius to figure out that new money must be continuously ‘created’ to keep paying this. That occurs by governments constantly borrowing so that their debts keep on increasing and borrowers constantly borrowing more and more. This seems to work as long as prices, wages and asset values keep increasing. Generation after generation, workers can afford to pay more and more for the houses that they live in because the price of the house keeps going up so it looks like good collateral to the lender and also their wages keep going up, so the borrower can meet payments in the eyes of the lender.
Working out what the rate of inflation is at any given time is practically impossible. Government figures such as RPI and CPI are just another tool for the propagandists to use as they see fit at any given time. However for the banks to gain anything from the game, the rate of inflation must be:
less than the rate of interest paid by borrowers and;
greater than the rate of interest paid to savers.
This is why savers money is ‘eroded’ if they just leave it sitting in a bank account.
Now imagine a different system where:
governments issue paper money by printing it themselves;
the amount in circulation is absolutely fixed;
there is no central bank but there are plenty of independent banks.
In such a country, there is no need for the government to have any debt and there is ample historical evidence of nations that have existed without government debt for very long stretches of time. What borrowers there are have to find the interest by earning it from the fixed pool of currency that is in circulation. There is little need for anyone to borrow but that’s something that most people you speak to have difficulty accepting. That’s because they’ve only ever lived in a system where they spend their lives in the service of debt and cannot conceive of it being any different.
The bankers right at the top of the system aren’t out to grab hold of all the money in the world. They’re not after all the tangible in the world either. Their only goal is to ensure that as much human labour as possible is in the service of debt.
Now for something different. How can this whole thing go horribly wrong for the bankers? I don’t just mean a run on banks or a recession. That happens periodically and is known as the business cycle. People lose confidence and are reluctant to borrow for a number of years, then they regain confidence and start to borrow again and the whole thing picks up and the cycle repeats.
What can go horribly wrong is if, after generations and generations and generations of increasing prices and debts, everyone gets more spooked by debt than ever before and totally fixated on repaying it. They sell assets but there are so many folk doing that that asset prices start to decline. That spooks people further. A spiral is under way. Banks try to ‘stimulate’ the economy by lowering interest rates but there is very little confidence around, especially if asset prices are declining compared with debts and wages aren’t rising either (or may be in decline), so that the ability to repay debt is impaired. This decline can be long and protracted. Also there can be many ups and downs along the way, although the long term trend is down. Ups can be deceptive as they are perceived as “coming out of the recession” by those used to the normal business cycles we’ve experienced throughout the whole of the twentieth century. In this way, asset prices can bleed away until eventually they reach something like a tenth of of their peak value. This process can reach a very late stage before a lot of people recognise what’s really going on. This is just a scenario but one worth considering seriously. We could be in for long term deflation but it will be well under way and too late for many people in debt by the time it gets mainstream acknowledgement.
A closely-related question and one that automatically follows is why do countries bother having central banks at all? Instead of a government issuing bonds, why not directly issue the currency instead, thereby cutting out the middle men? It is an approach that actually has a number of historical precedents as pointed out in this open letter to Obama urging him to reissue ‘greenbacks’ and the campaign in Britain to print ‘treasury notes’ like the Bradbury Pound. So in a further reply to my friend I asked him, “do you think that the re-issuance of ‘greenbacks’ in America or the Bradbury Pound in the UK might offer a realistic solution to the current crisis?” His response:
The issue of greenbacks or whatever you call them (essentially government-issued money) would probably make no immediate difference. Already, the money created by quantitative easing is not working its way into the system, so why would money issued by any other means?
In the longer term, such a fundamental upheaval would make a huge difference as the government wouldn’t need to be in debt the whole time and people wouldn’t have to keep paying increasing prices for houses and cars on top of interest. Pensioners wouldn’t be on a treadmill, having to ‘invest’ their savings just in vain an effort to keep up with inflation.
There’s a risk that the government might be tempted to print more and more money, which is often cited as a point in favour of the present system. It is claimed that having to pay interest and ultimately repay the whole principal is a disincentive in this respect. However, the current system ensures constant “printing” all the time as there’s no way that everyone involved can pay interest otherwise.
There’s talk at the moment about banks charging people a few percent for holding their money on deposit, i.e “negative interest”. People think they’ll lose money as their account balances will go down over time. However, it’s no different to being paid say six percent interest at a time when inflation is at 9 percent and the cheapest loan you can get is 12 percent.
I’m amazed at how people in the alternative media can inform us that banks are going to charge us ‘negative interest’ for our deposits, express outrage and then in the next breath claim that we’re in a hyperinflationary environment. Low/negative interest is a sure sign of massive deflationary pressure. I don’t know what’s going to happen but I’m convinced that deflation’s the one to watch. It has the potential to catch people out.
Getting back to your original question, the direct issuing of money by the government would represent a seismic shift of power from bankers to governments; a shift in the right direction, no doubt. It’s only possible if everyone knows what’s exactly going on. We’re a very long way off yet. Peoples’ understanding of the banking scam is very very poor.
I would add that very much front and centre in that scam is the role of the central banks. These extraordinarily powerful commercial bodies that adopt the outward appearance of public institutions when in fact they work for commercial interests. The US Federal Reserve, for instance, is a de facto private corporation and all of its shareholders are private banks. The status of the Bank of England is more complicated. This is what the main wikipedia entry intriguingly has to tell us:
Established in 1694, it is the second oldest central bank in the world, after the Sveriges Riksbank, and the world’s 8th oldest bank. It was established to act as the English Government’s banker, and is still the banker for HM Government. The Bank was privately owned [clarification needed (Privately owned by whom? See talk page.)] from its foundation in 1694 until nationalised in 1946.[3][4]
Original references retained.
Clarification needed indeed! Anyway, nowadays it is officially (since 1998) an ‘independent public organisation’. However, the BoE is not really as independent as it might first appear, since along with eighteen other central banks from around the world (including the US Federal Reserve) it is a member of the executive of “the central bank for central banks” – the little known Bank for International Settlements (BIS) based in Basel, Switzerland. To hear more about the history, ownership and function of this highly profitable (tax free and extraterritorial) organisation, I recommend listening to this interview with Adam LeBor, author of the recently released book The Tower of Basel:
For my own more detailed thoughts on effective remedies to the on-going financial crisis please read this earlier post.
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Please note that for the purposes of ‘publishing’ here I have taken advantage of the option to incorporate hypertext links and embed videos – in order to distinguish additional commentary from the original text all newly incorporated text has been italised.
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1 From “The Future”, Essays in Persuasion (1931) Ch. 5, John Maynard Keynes, CW, IX, pp.329 — 331, Economic Possibilities for our Grandchildren (1930).
2 Adam Smith applied “the law of diminishing utility” to solve “the paradox of water and diamonds”. Water is a vital resource and most precious to life and yet it is far less expensive to purchase than diamonds, comparatively useless shiny crystals, which in his own times would have been used solely for ornamentation or engraving. The reason, Smith decides, is that water is readily abundant, such that any loss or gain is of little concern to most people in most places. By contrast, the rarity of diamonds means that, although less useful overall, any loss or gain of use is more significant, or to put it more formally the “marginal utility” is greater.
3 Extract taken from The soul of man under socialism by Oscar Wilde (first published 1891).
4 Legal tender is a technical legal term that basically means an offer of payment that cannot be refused in settlement of a debt.
5 Fiat (Latin), “let it be done” meaning that these currencies are guaranteed by government decree only.
6 Milton Friedman pays homage to Ronald Reagan’s record on deregulation in an essay entitled “Freedom’s friend” published in the Wall Street Journal on June 11, 2004. Drawing evidence from The Federal Register, “records the thousands of detailed rules and regulations that federal agencies churn out in the course of a year”, Friedman contrasts Reagan’s record with that of Presidential incumbents before and since: “They [the rules and regulations] are not laws and yet they have the effect of laws and like laws impose costs and restrain activities. Here too, the period before President Reagan was one of galloping socialism. The Reagan years were ones of retreating socialism, and the post-Reagan years, of creeping socialism.” For socialism read regulation. http://online.wsj.com/news/articles/SB108691016978034663
7 Definition of “too big to fail” taken from Businessdictionary.com: “Idea that certain businesses are so important to the nation, that it would be disastrous if they were allowed to fail. This term is often applied to some of the nation’s largest banks, because if these banks were to fail, it could cause serious problems for the economy. By declaring a company too big to fail, however, it means that the government might be tempted to step in if this company gets into a bad situation, either due to problems within the company or problems from outside the company. While government bailouts or intervention might help the company survive, some opponents think that this is counterproductive, and simply helping a company that maybe should be allowed to fail. This concept was integral to the financial crisis of the late 2000s.”
8 According to IMF economic database for October 2010, World GDP is $61,963.429 billion (US dollars).
9 Unto This Last is based on a collection of four essays first published in the monthly Cornhill Magazine, 1860, and then reprinted as Unto This Last in 1862. This extract is drawn from his second essay: “The Veins of Wealth”
10 George Soros proudly explains the events of “Black Wednesday” on his official website: “In 1992, with the economy of the United Kingdom in recession, Quantum Fund’s managers anticipated that British authorities would be forced to break from the European Exchange Rate Mechanism (ERM) then in force and allow the British pound to devalue in relation to other currencies, in particular the German mark. Quantum Fund sold short (betting on a decline in value) more than $10 billion worth of pounds sterling. On September 16, 1992—later dubbed “Black Wednesday”—the British government abandoned the ERM and the pound was devalued by twenty percent.” http://www.georgesoros.com/faqs/archive/category/finance/
11“Last year [1979] Bunker and his syndicate began buying silver again, this time on a truly gargantuan scale. They were soon imitated by other speculators shaken by international crises and distrustful of paper money. It was this that sent the price of silver from $6 per oz. in early 1979 to $50 per oz. in January of this year. Chairman Walter Hoving of Tiffany & Co., the famous jewelry store, was incensed. Tiffany ran an ad in the New York Times last week asserting: ‘We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver from baby spoons to tea sets, as well as photographic film and other products.’” Extract taken from “He Has a Passion for Silver”, article published in Time Magazine, Monday 7April, 1980. http://content.time.com/time/magazine/article/0,9171,921964-2,00.html
12“Many Government officials feared that if the Hunts were unable to meet all their debts, some Wall Street brokerage firms and some large banks might collapse.” Extract taken from “Bunker’s busted silver bubble”, article published in Time Magazine, Monday 12 May, 1980. http://content.time.com/time/magazine/article/0,9171,920875,00.html
13“What may deal the Hunt fortune a fatal blow is the fallout from the brothers’ role in the great silver-price boom and bust of 1980. Thousands of investors who lost money in the debacle are suing the Hunts. On Saturday the brothers lost a civil case that could set an ominous precedent. A six-member federal jury in New York City found that the Hunts conspired to corner the silver market, and held them liable to pay $63 million in damages to Minpeco, a Peruvian mineral-marketing company that suffered heavy losses in the silver crash. Under federal antitrust law, the penalty is automatically tripled to $189 million, but after subtractions for previous settlements with Minpeco, the total value of the judgment against the Hunts is $134 million.” Extract taken from “Big bill for a bullion binge”, article published in Time Magazine, Monday 29 August, 1988. http://content.time.com/time/magazine/article/0,9171,968272-1,00.html
14 Extract also taken from the second essay, entitled: “The Veins of Wealth” of Unto This Last by John Ruskin.
‘Dirty’ Industries: Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]?
wrote Larry Summers when he was Chief Economist at the World Bank. The words are contained in a memo to Brazil’s then-Secretary of the Environment Jose Lutzenberger on December 12th 1991 that became known as the “Summers memo”.
This memo (which was apparently ghost-written by Lant Pritchett who worked under Summers, and signed by Summers himself) then went on to suggest three reasons why dumping toxic waste in the poorest regions of the world is a great idea; reasons that are summarised below:
1) “…a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages… I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”
2) “I’ve always thought that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City.”
3) “The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity… Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.”
Summers adding that:
The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.
Lutzenberger later wrote a response to Summers as follows (although I believe that his reply came after the memo itself had been leaked):
“Your reasoning is perfectly logical but totally insane… Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in… If the World Bank keeps you as vice president it will lose all credibility. To me it would confirm what I often said… the best thing that could happen would be for the Bank to disappear.”
You can read this alongside the Summers memo at the satirical website whirledbank.org
If this first leaked memo was, well let’s just say more than a little embarrassing for the World Bank and Larry Summers, then what turned up recently looks altogether more incriminating again. This second memo – a document that fell into the hands of investigative reporter Greg Palast and who says he expended great efforts to affirm its authenticity – “confirmed”, as Palast put it in his recent article for Vice Magazine, “every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet.”
When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it. […]
The Treasury official playing the bankers’ secret End Game was Larry Summers. Today, Summers is Barack Obama’s leading choice for Chairman of the US Federal Reserve, the world’s central bank. If the confidential memo is authentic, then Summers shouldn’t be serving on the Fed, he should be serving hard time in some dungeon reserved for the criminally insane of the finance world.
Since Palast wrote his piece, it transpires that Summers will not be replacing Ben Bernanke as Fed Chairman, but instead the job looks likely to go to Timothy Geithner1– Geithner being the author of this latest memo, which (to quote Palast again) “begins with Summers’ flunky, Timothy Geithner, reminding his boss to call the then most powerful CEOs on the planet and get them to order their lobbyist armies to march”:
“As we enter the end-game of the WTO financial services negotiations, I believe it would be a good idea for you to touch base with the CEOs….”
So just what was this “end-game” that Tim Geithner is referring to in his memo sent in late November 1997? Well, it’s complicated but here’s Palast again picking up the story:
It’s not the little cabal of confabs held by Summers and the banksters that’s so troubling. The horror is in the purpose of the “end game” itself.
Let me explain:
The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.
Second, the banks wanted the right to play a new high-risk game: “derivatives trading.” JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets.”
Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt to control derivatives.
But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws?
The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet – in one single move. It was as brilliant as it was insanely dangerous.
How could they pull off this mad caper? The bankers’ and Summers’ game was to use the Financial Services Agreement, an abstruse and benign addendum to the international trade agreements policed by the World Trade Organization.
Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.
After further background surrounding the nature of the “WTO financial services negotiations” Geithner is alluding to in his memo to Summers, Palast then adds:
Does all this evil and pain flow from a single memo? Of course not: the evil was The Game itself, as played by the banker clique. The memo only revealed their game-plan for checkmate. 2
Click here to read Greg Palast’s full article entitled “Larry Summers and the secret ‘End-Game’ Memo”, which was published on August 22nd 2013.
You can also watch an interview with Palast on Tuesday’s [Sept 17th] Keiser Report in which he talks more about the “End-Game” memo:
Going back to the original “Summers memo” and we discover that in their defence both Lant Pritchett (the self-confessed author) and Summers himself said later that their suggestion for dumping toxic waste in third world countries was just meant sarcastically – so in other words just a great big insider joke, ha, ha, ha… stop me because my sides are splitting!
Presumably then, this more recently discovered “End-Game” memo will turn out to be just another example of the boys at the US Treasury, the WTO and the heads of the major banks larking around. Playing at being mobsters with a wink and a nudge – you know, like Bugsy Malone or something. Destroying the global economy with toxic derivative “products”, ha, ha, ha… like that could ever happen!
1 From an article entitled “Federal Reserve:Who will replace Ben Bernanke?” published by BBC news on September 16, 2013:
“There are three candidates being discussed as possible replacements to Ben Bernanke, chairman of the Federal Reserve, the US central bank. They are vice-chair of the Federal Reserve Janet Yellen, previous vice-chair Donald Kohn and former Treasury Secretary Timothy Geithner.” […]
The 52-year-old was heralded by watchers of the Fed as the man to replace Ben Bernanke. He is a confidante of Mr Obama, and a White House favourite. But he has ruled himself out of the race.
Chris Orndorrf, senior portfolio manager at Western Asset Management, told the BBC he thought Mr Obama would try to persuade Mr Geithner to take the job.
“He [Mr Geithner] said he doesn’t want it but stranger things have happened in Washington. I would say maybe a 25% chance,” Mr Orndorrf said.
There is no doubt that Mr Summers had been Mr Obama’s preferred choice to lead the post. ”
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.
Taken from Adam Smith’s Wealth of Nations (1776) 1
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At one point in the meeting, during a tense exchange about contingency plans for dog-walkers, [police Chief Inspector] Rhodes let slip that Operation Discuss (the codename for the Bilderberg security operation) had been up and running for 18 months. Residents and journalists shared an intake of breath. “Eighteen months?” The reason for all the secrecy? “Terrorism”.
After 59 years of Bilderberg guests scuttling about in the shadows, ducking lenses and dodging the news, that’s the rationale we’re given? The same rationale, presumably, is behind the Great Wall of Watford, a concrete-and-wire security fence encircling the hotel. As ugly as it is unnecessary, it looks like the kind of thing you throw yourself against in a stalag before being machine-gunned from a watchtower. Appropriately fascistic, you might say, if you regard fascism as “the merger of corporate and government power”, as Mussolini put it.
The same threat of “terrorism” was used to justify the no-pedestrian, no-stopping zones near the venue. The police laid out their logic: they had “no specific intelligence” regarding a terror threat. However, in recent incidents, such as Boston and Woolwich, there had been no intelligence prior to the attack. Therefore the lack of any threat of a terror attack fitted exactly the profile of a terror attack. The lack of a threat was a threat. Welcome to 1984.
So writes Charlie Skelton, who is again one of the only mainstream journalists reporting from this year’s Bilderberg meeting which officially opened yesterday. Skelton, who also has a career as comedy script writer, adding with typically understated irony:
The audience was an odd mix. Half were residents from around the venue worried about the possibility of tyre-damage to a strip of lawn; the other half were journalists from around the world worried about the geopolitical implications of a conference at which BAE, Stratfor and General Petraeus will be discussing “Africa’s challenges”.
Both halves were worried about the funding for the gigantic security operation. The police assured sceptical residents that the conference would be “cost-neutral” for Hertfordshire, thanks in part to a “donation” from the conference organisers. This “donation” will have come, in part at least, from the Bilderberg Association, a registered UK charity that takes “donations” from BP and Goldman Sachs.
So, in a sense, the Herts police are doing charity work for Goldman Sachs. Which must be a comfort for the executives of Goldman Sachs attending the conference: the vice-chairman, a director and the chairman of Goldman Sachs International. They’ve got their charity team out patrolling, keeping the lenses at bay.2
Click here to read his full article entitled “Bilderberg 2013: welcome to 1984” published by the Guardian on Wednesday 5th.
Here is Skelton again reporting a few days earlier on his same Bilderblog, and on this occasion delving deeper into Bilderberg’s wonderful and little known works of charity whilst also pointing out how the timing of this year’s get-together happens to coincide with a long overdue scandal about political lobbying:
If you’ve been wondering who picks up the tab for this gigantic conference and security operation, the answer arrived last week, on a pdf file sent round by Anonymous. It showed that the Bilderberg conference is paid for, in the UK, by an officially registered charity: the Bilderberg Association (charity number 272706).
According to its Charity Commission accounts, the association meets the “considerable costs” of the conference when it is held in the UK, which include hospitality costs and the travel costs of some delegates. Presumably the charity is also covering the massive G4S security contract. Fortunately, the charity receives regular five-figure sums from two kindly supporters of its benevolent aims: Goldman Sachs and BP. The most recent documentary proof of this is from 2008 (pdf), since when the charity has omitted its donors’ names (pdf) from its accounts.
Public education! From an organisation that hides its face in shame behind armed guards and steel cordons. Skelton adds:
If you are concerned about transparency or lobbying, Watford is the place to be next weekend. Whether the delegates reach out to the press and public remains to be seen. Don’t forget, they’ve got their hands full carrying out the good works of Bilderberg. The conference is, after all, run as a charity.
A charity which specialises in helping those most in need of a little corporate lobbying:
It’s a remarkable spectacle – one of nature’s wonders – and the most exciting thing to happen to Watford since that roundabout on the A412 got traffic lights. The area round the hotel is in lockdown: locals are having to show their passports to get to their homes. It’s exciting too for the delegates. The CEO of Royal Dutch Shell will hop from his limo, delighted to be spending three solid days in policy talks with the head of HSBC, the president of Dow Chemical, his favourite European finance ministers and US intelligence chiefs. The conference is the highlight of every plutocrat’s year and has been since 1954. The only time Bilderberg skipped a year was 1976, after the group’s founding chairman, Prince Bernhard of the Netherlands, was caught taking bribes from Lockheed Martin.
Here is the definition of “bribe”: Something, such as money or a favor, offered or given to a person in a position of trust to influence that person’s views or conduct. So surely then, every form of lobbying is a kind of bribery.
Just imagine, for example, if my college discovered that I or any of my colleagues were accepting cash payments (or other ‘gifts’) from students – they would rightly sack us on the spot. Would it make any difference if I told them that the students were only “lobbying me” about their coursework, or would it be deemed more acceptable if I had “registered their interests”? Of course it wouldn’t! So in what way is lobbying not bribery?
That said, some kinds of bribery are more prosecutable than others. So was Prince Bernhard ever criminally charged after accepting a $1.1 million bribe from Lockheed? Of course not, after all he’s Prince Bernhard. Although apparently he was forced “to step down from several public positions and was forbidden to wear his military uniforms again.”4 Rough justice.
Back to Skelton’s comparative analysis of the current goings on at the Grove hotel to the on-going parliamentary scandal:
It may seem odd, as our own lobbying scandal unfolds, amid calls for a statutory register of lobbyists, that a bunch of our senior politicians will be holed up for three days in luxurious privacy with the chairmen and CEOs of hedge funds, tech corporations and vast multinational holding companies, with zero press oversight. “It runs contrary to [George] Osborne’s public commitment in 2010 to ‘the most radical transparency agenda the country has ever seen’,” says Michael Meacher MP. Meacher describes the conference as “an anti-democratic cabal of the leaders of western market capitalism meeting in private to maintain their own power and influence outside the reach of public scrutiny”.
But, to be fair, is “public scrutiny” really necessary when our politicians are tucked safely away with so many responsible members of JP Morgan’s international advisory board? There’s always the group chief executive of BP on hand to make sure they do not get unduly lobbied. And if he is not in the room, keeping an eye out, then at least one of the chairmen of Novartis, Zurich Insurance, Fiat or Goldman Sachs International will be around.
Click here to read Charlie Skelton’s full article.
Charlie Skelton is doing an excellent job again this year, and when, later today, I finally make it down to Watford myself, perhaps I’ll happen to run into him. If not then I’d certainly like to express my gratitude to him here before I leave.
I must also say that it is quite pleasing to see others in the media finally picking up the gauntlet and taking serious note of this most extraordinary annual general meeting for globalisation. There was even a surprisingly balanced report on Channel 4 news broadcast yesterday. You can watch it here:
Finally, here is Charlie Skelton talking to Max Keiser on Tuesday’s Keiser Report:
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This year’s official list(which is reliably unreliable) has been released and includes amongst many the following names of particular interest:
George Osborne – Chancellor of the Exchequer
Ed Balls – Shadow Chancellor of the Exchequer
Tim Geithner – Former US Secretary of the Treasury
Christine Lagarde – Head of IMF
Peter Sutherland – Chairman of Goldman Sachs
Mario Monti – Former appointed Prime Minister of Italy
Ken Clarke – who is listed merely as “Member of Parliament”
Peter Mandelson – listed as Chairman of Global Council and also Lazard International
José Barroso – President, European Commission
Richard Perle – neo con, veteran warmonger and well known member of PNAC
Henry Kissinger – listed only as “Chairman of Kissinger Associates”
last, but certainly not least, I notice the recently disgraced Gen David Petraeus – why he, we might wonder?
And so to Watford… I’ll definitely be keeping an eye out for Mark Carney who has attended previous meetings at St Moritz (2011) and Chantilly (2012) and is about to replace Mervyn King as the next Governor of the Bank of England.
Various livestream broadcasts of the event can also be found here.
1 From Adam Smith’s Wealth of Nations, Chapter X, Part II, p. 152.
If you want the hagiography then I recommend BBC news. Tributes to our Iron Lady that roll on and on and on. All very hard to stomach. But what did Mrs T actually achieve aside from, as The Sun newspaper famously put up, saying “Up yours Delors”! What did the policies of a government led by a Prime Minister who told us that she didn’t believe in society, actually do to our society? The answer is that she set about dismantling it altogether.
There were winners, of course, but that was inevitable given that Thatcher’s aims were all about winners and losers. So as she asset-stripped the nation, selling off our telecommunications, our electricity and gas companies, and our water supplies (government gradually reduced to the role of the banker in a game of Monopoly) those who bought the shares at bargain prices made a quick buck, thank you very much. And money was also flooding into the coffers from the sale of council houses, but mostly thanks to the boom in North Sea oil.
So where was all that money spent? Well, mostly it was redistributed by way of tax cuts; our own money given away so that it would supposedly trickle down back to us, ha ha… but of course the money never did trickle back down, and simply percolated upwards, lining the pockets of the new millionaires and then trickling away altogether into the off-shore tax havens and Swiss Bank accounts of the super-elites.
But Thatcher’s policies didn’t only ensure the tremendous wealth transfer from the poor to the rich. In achieving these ends she had also set about smashing up the trade unions, making ready to begin deindustrialising the country, whilst simultaneously “liberalising” the markets. So a country that had once been a powerhouse of industrial output was being reduced, cut down to leave our so-called “service economy”, and increasingly dependent upon sustained growth within The City of London. Growth that was delusory, since it was, we now realise, based upon an ever-expanding bubble of new “financial instruments”. A growth that was eating into the economy itself.
In short then, Thatcher encouraged us to be more selfish than ever whilst deregulating those parts of our society that most needed regulation. Deregulation that has carried us to where we find ourselves today… on the brink of bankruptcy. But obviously I wouldn’t expect those who still love and admire Mrs T to believe me when I say that this financial mess is actually her one true and lasting legacy. No, please don’t listen to me. Listen instead to Paul Craig Roberts, the former head of policy at Department of Treasury under Reagan and so-called Father of Reaganomics; the man behind the same neo-liberal policies and strategies that were also being applied at the very same time across the Atlantic:
Here’s what Paul Craig Roberts wrote in a recent article [March 6th] posted on his own website (please note that had Thatcher been American, she would undoubtedly have described herself as a Libertarian):
Libertarians will be the last to comprehend that the return of crony capitalism, robber barons, and economic insecurity is the direct consequence of a quarter century of deregulation. As I show in my new book, The Failure of Laissez Faire Capitalism And Economic Dissolution Of The West, it is the failure of the latest laissez faire experiment that has saddled us with crony capitalism. Monopoly concentration and rule by the few, not Libertarian nirvana, is what deregulation and unbridled greed produce.
More on how the economic policies of Thatcher and Reagan were the root cause of this present economic crisis, as well as proposed strategies for rescuing ourselves from an otherwise inevitable financial catastrophe, can be found in my earlier post [published July 2011] entitled “The answer to TINA… is TRISH”.
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Additional:
And this is British author, journalist and political activist, Tariq Ali, offering his own brief assessment of Thatcher’s legacy on today’s Democracy Now!:
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Update:
On the latest episode of the Keiser Report [broadcast on RT, April 10th], Max Keiser and Stacy Herbert examined the question of whether Margaret Thatcher “saved Britain.” They draw attention to the economic impact of peak North Sea oil revenues, and ask, if Thatcher had saved some of our nation’s oil wealth, just how large might a UK sovereign wealth fund be today:
In the second half of the show, Max Keiser also talked to Jan Skoyles of The Real Asset Company about whether the safest way to protect your money is by investing in gold, silver or Bitcoin – an informed and interesting discussion.
wall of controversy 