Tag Archives: Mario Draghi

thought(s) for the day: eleventh hour musings on Election 2015

A few hours ago I picked up a somewhat blunt pencil at a polling station in the constituency of Sheffield Central and cast my vote. Around the country an estimated 30 million other people will have done likewise by the time the polling stations close at 10 pm. Following which, we must wait, expectantly.

It is too late for persuasion and so this article is purely for the record – I meant to post sooner but simply couldn’t finish it (not satisfactorily — and though it needs further polishing I’m out of time, sorry). Yet the message I have been wishing to convey is a comparatively simple one. That whatever else happens, the Tories and their Lib Dem lackeys must be defeated.

This atrocious Con-Dem Coalition government has failed our nation in every conceivable way, and even if we choose to judge only by economic performance (I have included something on this as an addendum). Indeed, were it not for Rupert Murdoch and his central role in a far dirtier campaign than any since the 70/80s, both government parties would surely have been routed in this election. Shockingly, the Tories may yet hold on to power:

It’s forty years since anybody has won power in a UK general election without the backing of Rupert Murdoch. He’s not happy about the prospect. That’s the explanation for the surreal juxtaposition of the Sun covers from England and Scotland: 1

Image and text taken from one of a sequence of excellent articles written by John Lanchester and published by the London Review of Books.

Under other circumstances, I would have voted for a genuine anti-austerity alternative, either TUSC or Left Unity, however, given the nature of our “first past the post” (FPTP) electoral system, I have opted instead for Labour. The rest is (just) details…

*

Five years ago, as the last dregs of the constituency results trickled in at about 4 o’clock, it became clear that there would be no overall victory in the General Election. Instead we had drifted to a stalemate: a hung parliament. And given how our peculiar (and extremely unfair) FPTP system habitually returns majority governments, this state of post-electoral limbo was difficult to grasp, especially as we crawled off late to bed. Next day there was an almost palpable sense that something important had been left undone. Electorus interuptus.

Many of us felt relieved nonetheless, that the Tories had not prevailed with an outright majority, given how the polls had been consistently forecasting a Tory win. At least they had until about a fortnight prior to polling day, when this happened:

Get used to it. The whole 2010 general election changed on the night of Thursday 15 April. It may now stay changed until polling day. Our ICM poll today maps the key elements of this new emerging electoral landscape. The Conservatives, until recently the likely winners on 6 May, now only have 33% support, ensuring a struggle to win enough votes or seats for victory. Labour, previously battling to get on terms with the Tories, have now slumped to 28%, third in votes for the first time since 1983, though strong in seats, courtesy of the first-past-the-post system. Meanwhile, the Liberal Democrats, given and seizing their chance at last, have surged 10 points into second place. It is possible that what Lord Tebbit yesterday dubbed “the Clegg bubble” may burst between now and 6 May, of course. But don’t rely on that. It is just as possible that another strong performance in this week’s debate will give the Lib Dem wagon another hearty push, send their rivals into tailspins and have Whitehall mandarins scrabbling for Lib Dem telephone numbers. Either way, politics has changed. There is a new electoral reality. And about time too. And doesn’t it actually feel rather good? 2

So began an effusive Guardian editorial, and not since David Steele instructed his party members to “go back to your constituencies and prepare for government”, had centrist hyperbole touched such feverish levels. That in-your-face mantra “get used to it” repeated maniacally at the beginning of every paragraph, and all under a banner that read like a flaccid, if truculent, Lib Dem cry for electoral justice: “Labour would come third by popular vote yet still have the most seats – such a result would plunge British democracy into crisis”. As it transpired, of course, the Tories ultimately prevailed instead, limping into office on the arm of Nick Clegg’s hasty acquiescence, and in spite of the fact that the Lib Dems had actually polled rather disappointingly – as usual.

You may recall too that five years ago the party still had their unique selling point – that long-held and dependable commitment to overhaul our unfair FPTP system and replace it with PR (much more to their own liking). But this didn’t happen. Even as the Lib Dems hitched their own ride into office on the back of the Tory’s miserable failure (a decade in opposition, yet unable to defeat one of the least popular governments in modern history), the Lib Dem leadership still didn’t manage to negotiate a referendum on PR… let alone actually get PR!

Nothing monumental occurred in Election 2010. Labour didn’t come third whether by number of seats or in proportion of outright votes. Quite contrary to the Guardian’s excitable speculation, our democracy was no more “in crisis” post-election than before.

*

Election 2015 is different. This time around a hung parliament is anticipated and there has been almost non-stop speculation on the eventual makeup of our next coalition. In fact, since the campaign proper started, the media have been collectively hung up on hung parliament. So can we trace the roots of this monomania?

We have the polls, of course. And the polls have been quite consistently indicating two outcomes for this election, certainly since the turn of the year. Firstly, north of the border, the forecast has been that Labour will be mauled by the Scottish Nationalists (SNP) – and the size of that mauling seemingly gets bigger every time they run the latest poll (a daily occurrence for some reason) – and secondly, south of the border, the polls suggest Labour are unable to take the lead over the Tories. But then why should we trust the opinion polls? History testifies to their unreliability – as when the Lib Dem share was blown up out of all proportion in 2010:

In the run-up to the UK general election few people would have predicted a Conservative–Liberal Democrat coalition goverment – and fewer still that the Lib Dems would actually lose seats despite their popularity in the polls. […]

A record total of nine polls based wholly or mostly on interviewing conducted in the final few days of the campaign were published during its final hours. Their success at anticipating the eventual outcome can only be regarded as ‘mixed’. […]

The exit poll caused such surprise because its projection for the Liberal Democrats was at variance with the predictions of the final polls, which had suggested that the much-vaunted surge in favour of Nick Clegg’s party had carried through to polling day. It was on this point that the polls were wrong, significantly overestimating Liberal Democrat support for the first time in recent polling history. 3

The reliability of polls obviously depends upon people telling complete strangers how they intend to behave at a moment in the future. But then, the only thing at stake when you are cornered by a pollster is your street cred. As a consequence, it turns out, that those polled are inclined to say they will vote for the more exotic alternatives, but then, when it comes to making any real commitment, people tend to revert to habit. Their final X put beside the devil they already knew:

Twenty-seven per cent. That’s the number of people who told ICM/Guardian this January that they intend to vote for what we used to call ‘another’ party. It’s probably not news to anyone that UKIP, the SNP and the Greens are all making the kind of in-roads into traditional voting patterns that many commentators think could result in a complete overhaul of the political map. […]

Will all these people who tell pollsters that their cross will go against an emerging party actually turn out and vote for them? Here are a few examples of when the answer was ‘no’. Most will remember Cleggmania in 2010. Some final polls had the Liberal Democrats on 29% and the average was more than 27%, but the Lib Dems ended up with roughly the same 23% they achieved five years earlier. […]

I’ll leave you with a couple of stats. ICM re-interviewed UKIP and Green intenders after the 2010 election to understand what they ended up doing: only 60% of UKIP intenders voted for them, only 42% of Green intenders voted for their own pre-election choice. 4

Trust in polls also depends upon having trust in the independence of the polling agencies themselves, so what are we to make of fact that this time around many of the polls are sponsored by former Conservative Party Deputy-Chairman, Lord Ashcroft – a man with such a unenviable record for dodgy dealing that he is better known to many as “Lord Sleaze from Belize” (Belize being the tax haven he calls home):

[But] by and large, Lord Aschcroft’s increasing influence over British politics has passed unchallenged. And that’s strange, for a number of reasons.

Firstly it’s strange because there are legitimate questions to be asked about the accuracy and reliability of what have euphemistically become termed “The Ashcroft Polls”. As I say, there was a lot of comment over the weekend about the new Sheffield Hallam poll. But it wasn’t new. It was first published back in November, and at that time showed Nick Clegg 3 points ahead. That week, Antony Wells of Yougov identified errors in the published data, leading Lord Ashcroft to revise Clegg’s lead down to three points behind. Lord Ashcroft then reviewed two other polls, one for Thanet South and another for Doncaster North. A published lead of 5 points for the Conservatives in Thanet should in fact have been 1 point. A published 29 point lead for Labour in Doncaster should in fact have been 30 points.

Nor was this the first time mistakes like this had been indentified [sic]. The Doncaster poll was also first published back in November. It generated a lot of excitement at the time, because it showed Ed Miliband only a relatively slender 12 points ahead of UKIP in his seat. But again, Anthony Wells identified an error in the data. And once it had been corrected, it showed Ed Miliband 29 points ahead, not 12. [that’s quite a discrepancy!]

So writes Dan Hodges in an article published in The Telegraph (traditionally the most rightwing broadsheet of our Tory-centric press). Hodges wonders if Ashcroft, a Conservative peer, might have an agenda of any kind…

What does Lord Ashcroft want? Not a quiet life, certainly. Last week saw him again setting the political agenda, with a raft of constituency polling in Scotland showing Labour heading for electoral annihilation and the SNP poised to emerge as kingmakers after the poll.

And what possible interest could a former Conservative Party Deputy-Chairman and a Tory peer have for providing evidence that “Labour is heading for electoral annihilation”? None at all that I can think of… although as Hodges points out:

Yet just because he has no clear agenda, it doesn’t mean he has no agenda. While donating to the Tory party, he tried to focus his efforts on specific candidates and constituencies. As he said back in 2005: “I much prefer to be involved, to make sure that my investment is wisely placed.”

Lord Ashcroft wants something. It may be an improvement in the nature of our national political discourse. It may be a more informed electorate. It may just be a ring-side seat for the greatest political show in town. 5

Or maybe this “something” Ashcroft wants is connected to his longstanding association with the Conservative Party… who knows, hey?

*

Let us cast our minds back again, to recall how a majority of voices in the media had been quite insistent that the country was heading for ‘another’ Tory victory – I put ‘another’ in inverted commas because although it was routinely presented as something of a repeat performance, little mention was made of the rather awkward fact that the Tories don’t in fact enjoy a majority, having failed to hold one since the heady days of John Major’s government.

Nevertheless, twelve months ago the mainstream was chock-full with opinion that the Tories were all-but home and dry in the forthcoming General Election, until that is, out of a less than clear blue sky, there were UKIP successes first in the council elections and then more spectacularly in the Euro-elections. This dent to Tory morale was swiftly followed up with the Tory to UKIP defections of Douglas Carswell and Mark Reckless, and consequently, an already precarious Tory minority was suddenly a lot more wobbly.

Like an oil tanker changing course, the media apparatus corrected its position, a little. Given that a Tory majority was no longer such a nailed-on certainty, they concluded in unison, we could, in all likelihood, expect a hung parliament. It is this prospect of another hung parliament that the media has latched on to ever since, as if majority governments per se have become an endangered species.

Indeed, “rainbow coalition” has since become the media’s main infatuation, endlessly touted, not merely as inevitable, but as vital to ensuring some renewed vigour in our clapped-out political system. Politics, the media commentators have been routinely informing us, is so completely transformed from five years ago, that (to steal from the Guardian editorial again) we’d better get used to it. To a political landscape that is more “diffuse”, more dynamic, and just more damned interesting (apparently)! We have seldom witnessed such certainty about uncertainty.

Since the election officially kicked off (what feels like a lifetime ago) all of our TV channels have thus been emblazoned with multicoloured logos. Of course, the media enjoys offering its audience the perception of a broader variety of choices. Variety generates interest, which in turn sells election coverage.

In our deeply consumerist society, in which political alternatives are sold to us as party brands, any perception of broader variety actually suits politicians too. As in other branches of sales, greater choice translates into increased customer demand, which means our faltering interest in party politics gets a shot in the arm. The rainbow graphics serve this end: portraying a more multifaceted election. It’s a win-win for both politicians and the media alike, helping each to flog more of the other…

But could the news media be subliminally urging us to vote for a coalition government? I’ve put a question mark there, but only because there is no recognised punctuation mark to more perfectly convey a raised eyebrow. Certainly there are agendas lurking extremely close to the surface. (In fact, long before I finished writing this, one in particular had erupted through that surface altogether!)

*

Tory strategy has been to hurt Labour on two interconnected fronts. Firstly, they aim to weaken them in England scaring voters with the spectre of a Nationalist threat having influence at Westminster. Secondly, they talk up the SNP in Scotland to further undermine Labour. Both increase the prospect of Cameron remaining in Downing Street after the election. This is smart short-term electoral tactics, but one far removed from the pro-union message in the indyref. 6

So writes Gerry Hassan, Research Fellow in cultural policy at the University of the West of Scotland – but I’ll come back his article later.

Now, when I came across this many weeks ago, I thought it sounded far-fetched enough to need supporting. So I had intended to frame it in such a way as to gently convince the skeptical reader. For instance, I had decided to refer back to BBC’s weekly political panel show, Question Time, when on April 2nd, journalist Peter Hitchens raised the issue of what he saw as “an unholy alliance” forming between Conservatives and SNP. Hitchens was the first political commentator to draw mainstream attention to the strategy.

And why, I then wondered, was Chief Tory Whip, Michael Gove (on the same outing of QT) also gushing with enthusiasm and praise for SNP leader Nicola Sturgeon’s performance during that same night’s “seven leaders debate” (on ITV immediately prior to QT). What had brought the Tory bigwig Gove to be waxing altogether lyrical about the remarkable talents of (presuming we accept the hype) such a progressive radical as Sturgeon?

Furthermore, it wasn’t just Gove who had been wooed over by SNP leader Sturgeon. A fortnight later, on the QT broadcast immediately following the five leaders debate on BBC1 (a debate which both Cameron and Clegg declined invitations to join, preferring to keep their heads down), it was Conservative Party Chairman, Grant Shapps, who was overeager in his praise Sturgeon’s follow-up performance, saying he thought “frankly she ran rings around Ed Miliband”.

So in short, I had noted this canoodling long ago (about the time I first began drafting the post), but then, all of a sudden, what was merely alternative speculation had breached its allotted confinement and the mainstream were pumping for all it was worth, while every man and his dog jumped in to offer their two pennies (Tory old guard being particular keen to chip in). Soon we had John Major, Michael Forsyth, Malcolm Rifkind and even Norman Tebbit all at it. For instance, Tebbit, who is highly critical of this no longer covert Tory strategy said on April 21st:

“What I find puzzling now is the prime minister’s position that the SNP is far worse than Labour because, if so, as there are not many seats in Scotland where the Conservative Party has a chance to win, the logic would seem to be that Conservatives should vote tactically for Labour as the lesser of two evils.

“I think it’s a huge scare tactic against Labour and whether the particular seat in the House of Commons is occupied by a Labour member or an SNP member perhaps it’s not a great difference.

“Having bungled the Scottish referendum it seems pointless to just irritate Scots by shouting at them from Westminster – the English are irritated into voting for UKIP, by being shouted at from Westminster – and the Scots are irritated similarly.’ He said, “the risk to the union comes from the SNP, not from anyone else.” 7

*

Although we can actually trace a love-in between influential figures from the centre-right (Tory right, if you prefer) and leading lights of the SNP much further back again. The love that dare not speak its name is not the novelty it might first appear:

Murdoch and [former SNP leader] Salmond, the Scottish first minister have always had a friendly relationship. In February 2012 Murdoch tweeted: “Alex Salmond clearly most brilliant politician in UK. Gave Cameron back of his hand this week. Loved by Scots.”

In notable contrast to the aloofness which characterises how Westminster MP’s now deal with Murdoch and News UK, Salmond is still (even in this post-Leveson and phone-hacking environment) ready to admit to affection for the media magnate – who had a Scottish grandfather.

Asked by Alistair Campbell in April’s GQ if he liked Murdoch, he stated: “I do. He is a remarkable man. What is wrong with this relationship? Why shouldn’t politicians engage with people in the media?”

And, let’s remember too, that it was Murdoch’s Sunday Times which on September 7th published the famous YouGov opinion poll which put the “Yes” vote two points ahead in the independence referendum – the only poll during the referendum to put “Yes” ahead, and coming at such a critical moment in the immediate run-up to the vote itself. Not that polls can ever be rigged, of course, how dare anyone suggest such a thing…

Whilst on the evening before that rather remarkable poll, Rupert Murdoch had tweeted: “London Times will shock Britain and more with reliable new poll on Scottish independence. If right on 18th vote everything up for grabs.”

And then the next day followed up with: “Salmond’s private polls predict 54-46 Yes. Desperate last ten days ahead for both sides. Most powerful media, BBC, totally biased for No.”

But on this occasion, it was the polls that were wrong (yet again), rather than the BBC. So, aside from the fact that he’s a politician, why exactly has Alex Salmond been kissing up to Murdoch? (Or is it the other way around?) John Jewell, who is Director of Media Studies at Cardiff University, makes the following observations in a fascinating article (from which the quotes above are also drawn) entitled “How Rupert Murdoch is sticking his oar into Scotland’s independence referendum”:

We know from the Leveson Inquiry and subsequent admissions that Salmond planned to lobby the UK government on Murdoch’s behalf in News Corporation’s bid to take over BskyB completely in 2010.

We know, too, that Murdoch and Salmond met in Edinburgh 2012, in a meeting described by the first minister’s office as “very constructive”. Under discussion was: “News Corporation’s substantial economic footprint in Scotland … and the potential for further investment within the country.”

Rumour had it at the time, in speculation fuelled by former Murdoch acolytes Andrew Neil and Kelvin Mackenzie, that Murdoch was prepared to move BskyB to Scotland in the event of independence.

Jewell adds:

Tittle tattle maybe, but there is no denying that the proposal to cut corporation tax in an independent Scotland to 3p below the UK rate would prove attractive to any multinational company. 8

Click here to read the full article at The Conversation.

I do agree with Murdoch on one point here – perhaps the only point we could ever possibly agree on – which is how the BBC is “totally biased”. But then, no matter how hard ‘Aunty’ tries to pretend otherwise, she is, and always has been, a willing arm of the British establishment. Come the independence referendum, and given the first B in BBC, it would be astonishing if they had been otherwise; any break-up of the Union immediately prompting the likely break-up of the corporation itself. Turkeys and Christmas, anyone?

So doubtless the BBC were one-sided during the referendum, although I would say that their coverage since has been more than favourable to the SNP. By contrast, of course, Rupert Murdoch’s own considerable media empire operates as the very epitome of impartiality, as everyone knows…

No, sorry, I meant this one:

Strange hey. How The Scottish Sun is backing “the Nats” as the gallant underdogs, whilst simultaneously The Sun (its sister tabloid in England) talks up our wonderful Tory government and frets about how it might be “brought down by the few dozen MPs of the left-wing [a swearword in The Sun] Scottish Nationalists” who will usher into power their “puppet” Ed Miliband. Now this really is balance – isn’t it?

This pincer attack is the same Tory strategy again, of course. The singular intention to reduce the Labour share of the vote with both editorials effectively saying (in differing ways) that SNP stand on the verge of a landslide victory. North of the border this message continues: “Get used to it” (where have we heard that before?); whereas the southern edition scaremongers that “If the Tories cannot get the votes to stop them [meaning SNP] ruling the roost down here, we are in for five years of mayhem and misery”.

Yet the oddest part of this now wide open agenda is what Peter Hitchens, speaking on BBC’s weekly political panel show, Question Time, on April 2nd, described as “an unholy alliance” between Conservatives and SNP. According to Hitchens, himself a dyed-in-the-wool, old-style Tory (a firebrand reactionary and someone I try not to agree with), there is an unmistakable and curiously overt New Tory attempt to bolster SNP support with the deliberate intention of breaking the Union – the very thing the old party (formally known as the Conservative and Unionist Party) served to protect. A week earlier, writing in his Daily Mail blog, Hitchens even had this to say:

Which UK party do the Scottish Nationalists most want to do well in the coming election? Might they prefer the Tories? And might the Tories, deep down, also prefer a Scottish exit from the UK to the continuing Union they claim to support? Is this the love that dare not speak its name?

The reason, Hitchens claims, is that otherwise there will never be a future Conservative government in Britain ever again (and here’s hoping):

The Tory party’s best hope of a getting a Westminster majority again is to get rid of Scotland.  A UK shorn of Scotland would produce a Tory majority Parliament and so at least temporarily halt the slow but accelerating death of the Tory Party.  But time is short. The core Tory vote is (literally) dying in droves as it is composed almost entirely of older voters. It is not being replaced. And as the new mass migrants become UK citizens, they are unlikely to become Tory voters.  The break must happen soon if the Tory party is to regain its lost ability to govern with an absolute majority, and all the fundraising and other advantages that come with that status.

He concludes:

What if the Tories and the SNP both ended up helping each other to get what they wanted – a Tory majority government at Westminster, and Scotland gone from the UK? A phrase from my childhood – ‘accidentally on purpose’ – springs to mind. 9

*

It is curious that, for different but clearly interconnected reasons, there has been a surge in the support of not one, but two nationalist parties. Nationalists with diametrically opposing outlooks. Yes, UKIP and the SNP are exceedingly strange adversaries. So let us briefly turn from the SNP to consider their grotesque ugly sister nemesis, UKIP.

UKIP and their leader Nigel Farage are hard to separate – impossible, in fact. He dominates his motley UKIP crew more than any British political leader since the days of Margaret Thatcher – and comparison with Thatcherism does not end there. Like Mrs T, Mr F somehow manages to blame the EU for most of our society’s many ills, but then placing blame on an outside menace is a tried and tested demagogic strategy. And as it goes, the EU presents him with a perfect target. Its unelected commissioners are indeed in the pockets of multinationals, while the ECB operates as an unprincipled organ of the financial oligarchs. The people of Greece or Spain or Portugal are in the best position to judge the works of the EU Commission or the ECB – two-thirds of “The Troika” – and a majority would agree that the agencies are not only incompetent and heavy-handed, but callous, corrupt and parasitical. And in Greece, Spain, and Portugal, it is better if you don’t mention the role of the Germans…

One protester recently took her complaint directly to former Vice Chairman of Goldman Sachs and current President of the ECB, Mario Draghi. Interestingly, Forbes magazine last year nominated Draghi as 8th most powerful person in the world, but they had yet to see him cowering beneath his table when confronted by a smallish woman throwing confetti and demanding that he “end ECB dictatorship”:

A very reasonable demand.

Even Farage’s poisonous alarmism about an insidious invasion by Bulgarian migrants is rooted in a more justifiable concern. For why have consecutive British governments dropped our nation’s border controls with countries significantly more economically deprived than we are? This policy was bound to lead to increased downward pressure on pay and conditions for workers at home, whilst boosting the profits of the exploitative bosses and gangmasters. But none of this is anywhere near to the top of UKIP’s true concerns. Immigrants are the scapegoats, and this anti-Europe line is UKIP’s preferred wrapper, just as the Union Jack is its other wrapper. No amount of make-up can disguise UKIP’s frothing at the mouth.

On the one hand, Ukippers claim to be libertarians, which in Britain translates more than loosely as Thatcherite – free market and pro-austerity – whilst, on the other, they feign to be radicals when are very evidently reactionaries, and thus more Thatcherite still – a mix of Alf Garnetts and Colonel Blimps (more often Major Blimps and Captain Blimps). Little Englanders who simply can’t abide Johnny Foreigner. Which is why UKIP appeals mainly to those who would love to be able to vote for Thatcher, if only she wasn’t quite so dead… and why they offer very little in the way of true opposition to Labour. Instead, the serious threat to Labour’s vote is decidedly north of the border. UKIP, meantime, pose a genuine threat to the Tory’s share of the vote – and in splitting the traditional Tory vote, I personally wish them every success!

The big thing that connects the rise of UKIP with the rise of the SNP is that many who have traditionally voted either Labour or Conservative are likewise desperate for real change. In offering themselves up as alternatives, UKIP and SNP are trying to pool support from disaffected voters with drastically alternative outlooks. But beware: all nationalism feeds upon division.

There was a time, not so long ago, when SNP were shunned by those on the left (as nationalists customarily are) and disparaged for being “Tories in tartan”. But the great wonder of nationalism is that by tying oneself to a flag rather than being anchored to a secure political creed, one is able to flutter freely and change direction at a whim. A quick overhaul of political livery and the flag is still billowing beautifully. Thus the SNP, on seeing how the wind had turned, adroitly put on the guise of an anti-austerity party. Tartan Tories no longer, but relaunched as McSyriza.

Likewise, UKIP, once just a sad and lonely hangout for embittered True Blue Tories, have recently been trying quite hard to reposition themselves within the main current of our times. After all, given how the European Commission and the ECB are two of the worst pro-austerity bullies – this is irrefutable – then anyone who opposes them must be anti-austerity almost by exclusion, or something. But as a tactic, this has its limits, especially when the leader of your party, the son of a stockbroker, is himself an unrepentant City of London commodity trader. Never mind though, the austerity card can still be played, occasionally and with extreme caution. Meanwhile, to get around the background checks, Farage prefers to highlight how he actually held down a “real job” unlike all those Oxbridge pretenders from the other parties – which they are, every other one (approximately) holding a degree in PPE from Oxford University (a degree that puts strong emphasis on that E and with neo-liberal silently prefixed). So no wonder our choice of political alternatives has become dreary, and so narrowly defined. Such a shame our nation is no longer led by real men who drink pints and smoke fags and do “real jobs” like former City of London trader Farage…

As an illustration of this tightening political convergence, just think about TTIP for a moment. Here’s a quick reminder of what we know about TTIP:

Now, if we ask Nicola Sturgeon whether she and her party are in favour of the so-called “free trade agreement” she will reply that she is, although with reservations. She will point out the need for ‘robust’ negotiations ensuring exclusions for the NHS. Ed Miliband will say almost precisely the same thing, if similarly pressed. Alternatively, if you ask Nigel Farage this question, keeping in mind that we are talking about a clandestine EU treaty that will effectively mark the beginning of the end to the very existence of the nation state, rather than challenging it, he instead recommends the UK negotiate our own (secret) free trade deals with America, but in half the time it takes to cut through all of the red tape from Brussels.

In short, there are no mainstream parties large or small that are not captured and beholden to the corporatocracy. All five are sold out to differing degrees (to be fair, the Greens are officially opposed to TTIP but their limited record in power in Brighton is extremely poor and the “Green surge” is, in any case, a will-o-the-wisp). So voting in this election can only be a damage limitation exercise at best. Which brings me to ask simply this: which of the parties is the lesser of these evils? In England the answer is rather obvious, but in Scotland… back to Gerry Hassan:

Beneath this the differences between Labour and SNP are less than first appear, but magnified by language, tribalism and intense electoral competition.

A British Election Survey at the end of last year showed that SNP voters thought they were the most left-wing of Scotland’s mainstream parties and their party the most left-wing with Labour as significantly to their right; while Labour voters thought the same of themselves and their party, and placed the SNP to their right. 10

So, when it comes to which of the two is the more radical (a tallest dwarf contest if ever there was one) it is all in the eye of the beholder, whilst what actually encourages some Scottish voters to discriminate for and against goes back to the positions each assumed during the independence referendum: Labour penalised for its partnership with the Tories (as if it really had a choice given the circumstances) in the “Better Together” campaign.

*

A friend said to me recently, that if we don’t trust the polls, then what do we have to go on? Not much. Mostly, we have those election results in the European, council and bi-elections, all of which came as bad news for anyone hoping to see the return of a Tory government (coalition or otherwise). So the post-referendum rise of the SNP has been a tremendous boon to flagging Tory morale. But what are we to make of the media’s role in other ways?

The media has been hypercritical of Ed Miliband from the very beginning. But given that so much of the media (especially the press) is Tory supporting (much of it overtly so), this ought to come as little surprise. Nor should it have come as any surprise that the same media once gave Tony Blair the thumbs up. Murdoch’s press, in particular, praising him to the rafters. But then, Blair was not merely an establishment favourite, he also managed to ingratiate himself into the Murdoch household to such a degree that he was honoured as godfather to Rupert’s daughter, Grace:

Is any of this reminiscent of another of today’s leading political figures?

In contrast to Blair, Ed Miliband has been dismissed as a nerd who looks like Wallace and worse, he struggles to eat a bacon sandwich with the least bit of conviction (incidentally, he should have sacked his own advisors for that preposterous stunt). He’s just too weak, they tell us, to lead the country. But worse, apparently he quite literally “stabbed his own brother in the back.”

Understood properly, what the media are reminding us here is how the New Labour baton was supposed to have been passed to elder brother David, the designated and rightful heir to the kingdom of Tony Blair. However, Ed somehow got in the way… whatever happened to primogeniture? Neither the establishment, nor the media that speaks for it, have forgiven such impropriety.

Leading the charge against the usurper has been a familiar face. The boss of News Corp who recently tweeted: “Cameron’s Tories bash vulnerable Miliband for months with no effect on polls. Need new aspirational policies to have any hope of winning.”

And according to an article in The Independent, Murdoch may be out to get Ed for reasons other than mere party politics:

It is understood that Mr Murdoch reminded executives that Labour would try to break up News UK, which owns The Sun, The Times and The Sunday Times. The party has suggested that no owner should be allowed to control more than 34 per cent of the UK media, a cap which would force News UK to sell one of the titles.

It has also pledged to implement recommendations in the Leveson report for an independent press regulator backed by statute, bitterly opposed by Murdoch. Mr Miliband has made “standing up” to Mr Murdoch over the phone-hacking affair a central plank in his attempts to persuade voters that he is a strong leader. A source said: “Rupert made it very clear he was unhappy with The Sun’s coverage of the election. He basically said the future of the company was at stake and they need to get their act together.” 11

Miliband is weak? Well, not if he really does stand up to Murdoch and News Corp. In any case, as Murdoch unhappily concedes, the Tory strategy of playing the man instead of the ball has largely failed.

Two and a half years ago I personally heckled Ed Miliband during a speech he made at a rally in London. I make no apologies. After all, how dare anyone climb onto the stage of an anti-austerity protest and call for cuts. So it pains me to say that we must hope Miliband is our next PM.

But Ed Miliband is not Tony Blair, and he has already shown backbone when it matters. When he held his ground and – along with the support of a number of Tory defectors (I like to give credit wherever it is due…), though no support from Lib Dems (…but not to forgive easily) – was able to defeat the government on a vote for war, something unheard of. The Nato attack against Syria was thwarted largely thanks to Miliband; winning a Commons’ vote that spared countless lives. Of course, having opposed not only Obama, but the entire Anglo-American war party, he immediately took more flak. The “special relationship” was supposedly damaged beyond repair, the media bleated in unison in the weeks that followed. Warmongering gibberish peddled by a news media drunk on decades of senseless bloodletting.

*

Our public services are close to breaking point (some will say already past it), so what if anything will survive another five years of Tory cuts? And harsher, deeper cuts, as they have kept on promising us. Meanwhile, how divided will the nation be once more wealth has been transferred from the destitute to the superrich, even as the national debt continues rising because of “austerity”. New Labour are very much responsible for this trend too, but in fairness to Ed Miliband, he was hardly central to their neo-liberal programme. I believe we should at least give him a chance (I never said the same for Tony Blair).

My expectations of Labour remain low, but a change of political direction is as desperately as it is urgently required – and what begins as a small change might be accelerated as other nations such as Greece push the same demands. In the longer term, we can obviously do much better than New Labour, but just how “New” Labour is Ed Miliband? When asked why he voted against brother David, he replied that his own political outlook is radically different. I hope there is truth to this – although if Ed Miliband is elected into office, then we must be ready to hold his feet to the fire.

I try to steer clear of making predictions on this blog (for obvious reasons) but I am about to make a slight exception… I believe that Labour can win this election, and that even an outright majority should not be ruled out of hand. After all, prior to the last election our FPTP system delivered majority governments time and again. Has politics really changed so much in just five years? Of course, it could be that the Tories get a majority instead, however, there are other reasons to believe that Labour are more likely to win. Threefold reasons and ones that have next to nothing to do with Ed Miliband himself.

Firstly, the collapse in the Lib Dem share will most likely return to Labour. Secondly, UKIP have wounded the Conservatives – a right-wing split that is reminiscent of the SDP splitting the left in the 1980s. Although I seriously doubt UKIP will gain many, if any, seats (I certainly hope they don’t, but neither did the SDP), even without taking seats they may undermine the Tories who hold marginal seats. Thirdly, one victory which the Lib Dems did achieve during their miserable stint in government was to block Conservative attempts to redraw constituency boundaries. This was in tit-for-tat retaliation after the Tories reneged on their Coalition commitment to House of Lords reform. 12 However, the consequence of this is very much to Labour’s advantage:

Labour can reach a Commons majority with a smaller lead in the vote than the Conservatives can, all else being equal. The past two elections illustrate this: in 2005, Tony Blair turned less than three percentage points into a Commons majority of more than 50, while five years later David Cameron fell nearly 20 seats short of a majority despite a seven-point vote lead. This advantage to Labour has several sources – Labour constituencies tend to have fewer people, turnout is lower in Labour-held seats, and Labour has traditionally lost fewer seats to third parties. The Labour vote is also more “efficient”. The ideal in our system is “win small, lose big” – the fewer votes spent on crushing victories or narrow defeats, the better the return of seats to votes. Labour’s vote is closer to this ideal – fewer mega-majorities, and a better record of wins in tight races. 13

Thus the stage is set. UKIP poised to steal votes away from the Conservatives and hopefully to finally break the party in two. But, and this is the real sticking point, the SNP will undoubtedly grab votes from Labour. So the outcome is actually dependent upon the results of these two lesser battles: Conservative v. UKIP and Labour v. SNP.

I appreciate that many in Scotland will be encouraged to vote SNP either to punish Labour or else in the hope of landing a better deal for Scotland – and why not be self-interested. But let’s face facts, SNP are not Syriza, nothing like them – and perhaps, as I suspect, more closely akin to the Lib Dems of five years ago. As one who fell for the Lib Dem scam, I feel obliged to (rather belatedly) caution you.

Should the vote in Scotland go solidly the way of the SNP then it may pave the way for an unthinkable outcome – Conservatives failing to win a majority (as they likely will) yet winning most seats overall and somehow thereafter cobbling together a second Tory coalition. Can we even begin to imagine how ruined our nation (Scotland very much included) will be if there are five more years of rule by the Tories? I sincerely hope we are not about find out.

*

Addendum:

The national debt figures are out – £1.2 trillion and rising – and although I hate to say it, the Labour Party has a valid point to make. If you don’t adjust for inflation, Osborne has borrowed more in under four years than the Labour Party borrowed over 13 years.

So wrote Fraser Nelson, editor of Conservative mouthpiece The Spectator magazine in an article published in November 2013. To back his claim, the same article featured this graph captioned “Osborne borrows more in 5 years than Labour did in 13”:

Nelson concludes:

Is this recovery real, or another debt-fuelled illusion? The annoying truth is that we just don’t know. 14

For a multitude of reasons we really do know… Indeed, many of the reasons are outlined in an article published almost a year later, as the general election campaigns were just beginning to limber up, by Telegraph (another Conservative mouthpiece obviously) finance correspondent Liam Halligan. He begins with some basic bean-counting:

When the Tories took office, total government debt was £811bn. On last week’s figures, it’s now £1,451bn – an 80pc rise in just five years, with a lot more to come. This national debt matters. It must be serviced with regular interest payments, diverting money from front-line public services. Even at rock-bottom interest rates, the Government spends as much on debt interest annually as on defence. As the national debt escalates, courtesy of £100bn-plus annual deficits, and as interest rates inevitably rise, we’ll soon be spending more on government debt service than on state education.

Halligan then gets stuck into the meat of his own worries (of which I am only providing a taster):

I remain deeply concerned about our national debt, not only because of the absurdity of vast debt service payments, the damage to coming generations and the incentive politicians have to “inflate the debt away”. I also worry that our vast liabilities could ultimately spark another systemic meltdown, not least because such a high share of UK government debt is now owned by foreign creditors. And that makes our public finances extremely vulnerable if there’s a considerable weakening of the pound.

This issue has been on my mind for a while, but recently crystallised while talking to friends at the Social Market Foundation (SMF) think-tank, where I’ve long served on the advisory board. As a result of quantitative easing, around a third of the UK’s gilt stock is owned by the Bank of England. That’s right, 32pc of our government bonds have been bought by our central bank, using virtually printed money. That’s helped to rig the market, keeping interest rates artificially low.

All of which sounds like a “debt-fuelled illusion” to me, and Halligan is justifiably concerned that “such a high share of UK government debt is now owned by foreign creditors”. He continues:

The UK recently chalked up the largest external trade shortfall in our history, with our so-called current account deficit registering well over 5pc of GDP. While our imports have long outweighed our exports, our net income on overseas government investment and assets has recently swung from a surplus of 3pc of GDP to a deficit of over 2pc.

A lot of the explanation for that is the vast interest payments the Government now makes to the raft of foreign creditors propping up our public finances. 15

The systemic failures which led to the banking crisis of 2008 have never been remedied and instead the can was kicked down the road. What Gordon Brown started, the Con-Dem coalition have simply continued, and as a consequence of complete lack of reregulation of the financial markets, we can expect that the next crisis, whenever it comes (and the can might yet be kicked a lot further) will be far bigger than the first. Meanwhile, as the debt burden mounts, there can be no significant economic recovery so long as further money is simply wasted on banker bailouts and debt repayments instead of being invested in infrastructure and services. “Austerity”, meaning cuts to all government spending aside from its debt repayments, is a form of wealth transfer from the poor to the rich.

This is why the Con-Dem government have failed by every single count including their own narrowly determined neo-liberal measures. So that not only do we have a million people who have been so impoverished over the last five years that they are now dependent upon food banks; and a workforce so blighted and demoralized by the insecurity and unreliability of zero hour contracts; and even our mediocre GDP figures bolstered on account of drug use and prostitution (two commodities set to grow as the depression deepens); but worst of all, the imposed “austerity” hasn’t diminished the deficit, let alone the debt. In fact, the only real growth this country has seen has been in the wealth gap:

The UK is the only G7 country to record rising wealth inequality in 2000-14. Wealth inequality has risen four times faster in the seven years after the crash compared with the seven years before. The rich in the UK are becoming richer faster than ever. Wealth inequality rose under Labour; it rose faster under the coalition. 16

Under the circumstances, I find it hard to comprehend how either the Tories or their lickspittle accomplices, the Lib Dems, could possibly be re-elected, even with the might of Murdoch’s media empire behind them. Certainly bribery may help and Cameron has been offering temptations like there’s no tomorrow: “right to buy” houses, free childcare and even a quick bonanza from the sale of shares in Lloyds. Fiscal responsibility? For the price of re-election, “austerity” be damned! Hopefully there really will be no tomorrow for this atrocious Tory government, but if they do somehow manage to limp across the line and survive for another term in office then here’s the genius who will be back in charge of rescuing broke(n) Britain:

*

Update:

The punch in stomach surprise of a Tory majority shocked and sickened many of us, and not only those on the left. Right-wing commentator, Peter Hitchens, was also called to account over his prediction (referred to and reprinted in the piece above) that the Tories would probably never be able to achieve such a result. In an extended reply to his critics entitled “Groundhog Day Comes Round Again” [published Friday 8th – the day after the election] he wrote:

I never for a moment imagined that Big Money and Big Lies could so successfully scare, cajole and diddle the electorate of this country. I grew up in a Britain both better-educated and more honest than the one we have today. Perhaps that is why I could not see this possibility. I have not seen, in my lifetime, a campaign so dishonest, so crude, so based in fear and so redolent of third-world and banana republic political tactics.

On which, I entirely concur. Indeed, I find that Hitchens, whose political perspective differs from mine by very nearly 180 degrees, frequently offers a more perceptive and interesting take than other mainstream commentators when surveying the bigger picture. Looking beyond his old school, reactionary opinions, which leave an altogether bitter taste in the mouth, his broader analysis of the wretched state of contemporary politics too often strikes a major chord – as here:

The truth is that both major parties are now just commercial organisations, who raise money wherever they can get it to buy their way into office through unscrupulous election campaigns. They then presumably reward their donors once they are in office. The electorate are a constitutional necessity for this process, but otherwise their fears, hopes and desires are largely irrelevant. They are to be fooled and distracted with scares (‘The other lot will privatise the NHS!’ ‘The other lot will nationalise your children’s toys and then wreck the economy!’ ) or with loss-leader cut-rate offers, like supermarkets (‘Vote for us and get a cheap mortgage!!’ ‘Vote for us and have your rent frozen!’) . Even if these wild pledges are implemented, the customer will pay for them through higher taxes elsewhere, just as with supermarket loss-leaders.

By playing our part in this ludicrous pantomime, we license it to continue forever. I have thought for years that the key to ending it was simple and obvious. We could revenge ourselves on these fakes by refusing to vote for them. The arrival of new parties, UKIP on one side, the Greens on the other, made such a revolt and redemption even easier.

But I must now admit that the people of this country actually seem to prefer to live the same experience over and over again, and seem astonishingly ready to believe the crudest propaganda. I seethe with frustrated amazement at the Tory claim to have fixed the economy, so blazingly untrue that in commercial advertising it would get them into serious trouble with the authorities.

Ailing GDP figures just before the election were barely mentioned in the media, but easily-obtained statistics on productivity, trade, manufacturing and construction, are all bad and the Tories have missed their own target (whether wise or not) on deficit reduction. In any case, the Tory record on the economy is dreadful.

Likewise, Hitchens is quite correct in his assessment of the Tory’s (not so) secret romancing of the SNP:

A Tory Party really concerned about the loss of Scotland would have done as Norman Tebbit suggested, and urged its supporters to vote Labour to stop the SNP. Instead, to the dismay of elder statesmen and experts such as Michael Forsyth, it talked up the SNP, paying elaborate compliments to Nicola Sturgeon after the leaders’ debate (George Osborne and Michael Gove were observed doing this). To claim, while behaving in this fashion, that the Tory Party is a bulwark against the SNP and Labour is in their clutches is absurd. The SNP are delighted by the Tory victory, which makes it all but certain that they will get a repeat landslide in next year’s Scottish general election, with a manifesto commitment to a second referendum, which I think they will then win. Let us see how Mr Cameron now copes with the SNP’s sweeping victory, for which he must take so much of the blame.

At least the Sun newspaper was brazenly open about its ludicrous inconsistency, campaigning for a Tory (and supposedly Unionist) victory south of the border, and for the unquestionably separatist SNP north of it.

Click here to read Peter Hitchens’ full post-election article.

*

1 From an article entitled “Episode 18: Panic Stations”, written by John Lanchester, published by the London Review of Books on May 5, 2015. http://www.lrb.co.uk/blog/2015/05/05/john-lanchester/episode-18-panic-stations/ 

2 From an editorial entitled “General election 2010: All change for new politics”, published by the Guardian on April 20, 2010. http://www.theguardian.com/commentisfree/2010/apr/20/general-election-2010-poll-editorial

3 From an article entitled “General Elecion 2010: Did the opinion polls flatter to deceive?” written by Martin Boon & John Curtice, published by Research magazine on July 6, 2010. http://www.research-live.com/opinion/general-election-2010-did-the-opinion-polls-flatter-to-deceive?/4003088.article

4 From an article entitled “Bursting the polling bubble” written by Martin Boon, published in Research magazine on February 12, 2015. http://www.research-live.com/blogs/election-blog-bursting-the-polling-bubble/4012895.article

5 From an article entitled “Lord Ashcroft’s polls are not what they seem” written by Dan Hodges, published by The Telegraph on February 9, 2015. http://www.telegraph.co.uk/news/general-election-2015/11401622/Lord-Ashcrofts-polls-are-not-what-they-seem.html

6 From an article entitled “The tartan tsunami and how It will change Scotland and the UK for good” written by Gerry Hassan, published March 20, 2015 on the OpenDemocracy website. https://www.opendemocracy.net/ourkingdom/gerry-hassan/tartan-tsunami-and-how-it-will-change-scotland-and-uk-for-good

7 http://www.bbc.co.uk/news/live/election-2015-32394920

8 From an article entitled “How Rupert Murdoch is sticking his oar into Scotland’s independence referendum” written by John Jewell, published in The Conversation on September 10, 2014. http://theconversation.com/how-rupert-murdoch-is-sticking-his-oar-into-scotlands-independence-referendum-31531

9 From an article entitled “The SNP and the Tories – is This the Love that Dare not Speak its Name?” written by Peter Hitchens, published in The Mail on March 23, 2015. http://hitchensblog.mailonsunday.co.uk/2015/03/the-snp-and-the-tories-is-this-the-love-that-dare-not-speak-its-name.html

10 From an article entitled “The tartan tsunami and how It will change Scotland and the UK for good” written by Gerry Hassan, published March 20, 2015 on the OpenDemocracy website. https://www.opendemocracy.net/ourkingdom/gerry-hassan/tartan-tsunami-and-how-it-will-change-scotland-and-uk-for-good

11 From an article entitled “Rupert Murdoch berated Sun journalists for not doing enough to attack Ed Miliband and stop him winning the general election” written by Adam Sherwin and Oliver Wright, published in The Independent on April 21, 2015. http://www.independent.co.uk/news/media/rupert-murdoch-berated-sun-journalists-for-not-doing-enough-to-attack-ed-miliband-10191005.html

12

Plans to redraw constituency boundaries before 2015, backed by the Tories, have been defeated in the House of Commons.

MPs voted by 334 to 292 to accept changes made by peers, meaning the planned constituency shake-up will be postponed until 2018 at the earliest.

It was the first time Lib Dem ministers have voted against their Conservative coalition colleagues in the Commons.

The two parties have been in dispute since proposed elections to the House of Lords were dropped last year.

From an article entitled “Conservatives lose boundary review vote” published by BBC news on January 29, 2013. http://www.bbc.co.uk/news/uk-politics-21235169

13 From an article entitled “Election 2015: how Labour gains from UK electoral system in a tight race” written by Robert Ford, published in the Guardian on March 15, 2015. http://www.theguardian.com/politics/2015/mar/15/election-2015-hung-parliament-majority-coalition-labour

14 From an article entitled “Osborne increases debt more than Labour did over 13 years” written by Fraser Nelson, published in The Spectator on November 21, 2013. http://blogs.spectator.co.uk/coffeehouse/2013/11/the-tories-have-piled-on-more-debt-than-labour/

15 From an article entitled “It’s time to come clean about our national debt”, written by Liam Halligan, published in The Telegraph on October 25, 2014. http://www.telegraph.co.uk/finance/economics/11187727/Its-time-to-come-clean-about-our-national-debt.html

16 From an article entitled “Growing wealth inequality in the UK is a ticking timebomb” written by Danny Dorling, published in the Guardian on October 15, 2014. http://www.theguardian.com/commentisfree/2014/oct/15/wealth-inequality-uk-ticking-timebomb-credit-suisse-crash

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Whoops austeritypocalypse! or why unbounded economic reasonableness runs into such trouble…

Q: At the onset of the crisis, the former Finance Minister Papaconstantinou likened the Greek economy to the “Titanic” heading straight for the iceberg. Do you also feel as if you are standing on the bridge of the “Titanic”?

A: No. The “Titanic” sank a while ago. We’re steering the lifeboat and throwing lifebelts to those drowning around us.

This was the response Greek Prime Minister, Alexis Tsipras, gave in an exclusive interview to German magazine Stern1

*

“austerity”, what is it good for…?

As the economies of the western world continue to flounder, with Germany too (Europe’s last remaining industrial powerhouse) reeling just a little from the greater crisis, debt reduction is still regarded as the key component to any recovery programme. To meet these ends, all our governments have been overseeing huge cuts in public services, welfare payments especially gouged, in concerted efforts to reduce their deficits. This death of our societies by a thousand cuts of “austerity” being the recommended cure which mainstream economists have called for, and though alternative voices have no less insistently pointed out that “austerity measures” are inherently counterproductive (since they reduce tax revenues), these dissenting voices continue to be marginalised.

A few years ago Thomas Herndon stepped forward. Herndon, a university student and thus less rigid in his outlook, caused quite a rumpus – as a consequence, he has since been rewarded with his own wikipedia entry. This sudden burst of fame coming after he inadvertently stumbled upon grievous errors in an influential paper entitled Growth in a Time of Debt (published 2010), authored by eminent Harvard professors, Carmen Reinhart and Ken Rogoff – Rogoff, a former chief economist at the IMF.

In their paper, Reinhart and Rogoff had purported to show that whenever national debt is in excess of 90% of GDP, growth is “roughly cut in half”. This correlation had subsequently been quoted by policy-makers across the world, as well as routinely served up as empirical proof that there was simply no viable alternative to our continuing “austerity” programmes. Most notably, perhaps, former EU Commissioner for Economic and Monetary Affairs, Olli Rehn, leant rather heavily on Reinhart and Rogoff’s work.

But then doubting Thomas Herndon decided to check their figures for himself. And, to his own astonishment, discovered that one of the most frequently cited justifications for the imposed “austerity” strategy actually rested upon a few careless mistakes on a spreadsheet!

[Herndon had] spotted a basic error in the spreadsheet. The Harvard professors had accidentally only included 15 of the 20 countries under analysis in their key calculation (of average GDP growth in countries with high public debt).

Australia, Austria, Belgium, Canada and Denmark were missing.

Oops.

Herndon and his professors found other issues with Growth in a Time of Debt, which had an even bigger impact on the famous result. The first was the fact that for some countries, some data was missing altogether. 2

Click here to read more in this BBC news article.

Taken aback by this unexpected challenge from a novice, Reinhart and Rogoff felt obliged to issue a response:

We are grateful to Herndon et al. for the careful attention to our original Growth in a Time of Debt AER paper and for pointing out an important correction to Figure 2 of that paper. It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful. We will redouble our efforts to avoid such errors in the future.

Confessing to their blunder, but keen also to defend their professional reputation, they casually added:

We do not, however, believe this regrettable slip affects in any significant way the central message of the paper or that in our subsequent work.

There has since been no halt to the economic gouging and scourging of Europe. Despite the more immediate evidence coming out of Greece, Spain, Portugal, and every other place where such “measures” have been most strongly administered, that prove “austerity” isn’t working. And even when all other factors, social and human factors, are set aside, and success or failure is judged within the exceedingly narrow terms of its proponents, we see that the sovereign debt burdens in all these countries have continued to rise. 3

Given such a lack of success, the response is obviously to double-down. Apply more stringent “austerity”; if the original cuts have failed, then they needed to be deeper. In former times the doctors would just have ordered more leeches, or the priests would have demanded a tightening of the cilice. Tougher love. Just too bad if the supposed antidote is the worst of the poison, because orthodoxy asserts that, poison or not, it is the best and only remedy. The really important thing is to never let mere facts (especially incalculable costs like human misery) get in the way of a damned fine economic theory!

*

 whose debt is it anyway…?

But how did these sovereign debt burdens arise in the first place? Or put another way, the related question might be asked, to whom are the debts actually owed? This second question is rarely broached, but in 2013 award-winning business journalist, Harald Schumann, sought a direct answer to precisely this question. He journeyed across the stricken eurozone countries and poised the question to those working inside the so-called “Troika” (IMF, European Central Bank and EU Commission) as well as significant politicians, economists, lawyers, journalists and even the occasional central banker. The result, a brilliantly constructed documentary entitled The Secret Bank Bailout, is embedded below:

I highly recommend watching the documentary in full, but would also like to offer a brief overview.

Schumann asks which parties were actually rescued by the bailouts, and finds that contrary to what ordinary Germans were led to believe (this is a German documentary originally titled Staatsgeheimnis Bankenrettung) the people living in the poorer eurozone states received barely a penny of this apparent ‘foreign aid’ – our own media perpetuates the self-same falsehood.  Because rather than letting the creditors and the banks absorb their speculative losses, these financial institutions were deemed “too big too fail” and protected. So the bailouts were never used to support the governments, but always passed on to the creditors of major banks, especially ones in Germany and France, who had taken the unwise risks that caused the crisis – the original losses often due to property bubbles in places like Spain and Ireland. (The whole notion of “too big too fail” is, of course, a contravention of even the most basic tenets of free market capitalism.)

And who have been the ultimate recipients of all this bailout money? Well, that has remained a closely guarded secret. We ought to be asking why, of course, which Schumann’s documentary does. He also seeks to penetrate the secret itself.

In the next sections, I will present a further overview comprising highlights of Schumann’s discoveries, and following the same route (then a little beyond it) as he investigated country by country, across the blighted eurozone.

*

 Ireland

The Irish people have been forced to take on 70 billion euros of additional debt to pay off foreign creditors.

Stephen Donnelly, independent Irish MP, says that the ECB held the Irish government virtually at gunpoint:

“The suspicion is that European Central Bank said ‘You will continue to pay these bondholders [the mainly foreign creditors] to whom you owe nothing or we will pull the emergency funding out of your banking system, thereby collapsing your banking system, thereby collapsing your economy.’ To me that is gunboat diplomacy… [with a little prompting] or blackmail. It is a very, very serious threat for a central bank to have made in actually forcing a sovereign nation to surrender its sovereignty to bailout an independent group of investors. Was the ECB acting illegally?”

Brian Hayes, Irish Deputy Minister of Finance:

“Of course that was a position that was foisted on the Irish people as a result of the decisions taken… It was the majority view of the ECB that this money had to be paid back.”

And where did the Irish bailout money go? A full breakdown of the bondholders of Anglo Irish bank is available here. (The list was publicly released by blogger Guido Fawkes.)

Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.

France is next with 10 bond holders.  Who have an estimated 4 trillion.

Britain is third with 9 who have around 3 trillion.

The Swiss have 6 but who have about 8.5 trillion.

America has only three and hold only a trillion.

Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.

The bondholders include some of the world’s largest banks: Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). There is also Goldman Sachs and Rothschild Group4

As Harald Schumann says “It’s like a Who’s Who of the financial world.”

Back to Stephen Donnelly:

“No country on earth in history has ever paid that amount of money back without having its own monetary policies… you gradually bleed, year on year on year. And now you really do depend on Europe. There was a quote by Nelson Mandela where he said something like: ‘It is the greatest tragedy of the human condition that we must endure so much pain before arriving at a compromise that we always knew was going to be needed.’”

The first lesson, therefore, is that the solution – any practicable solution – has to include debt cancellation.

*

 Spain

The Spanish people have been forced to take on 40 billion euros of additional debt to pay off foreign creditors.

Harald Schumann confronted Luis De Guindos, Spanish Minister of Finance, with advice he was given Stephen Donnelly that they would be better to let (some of) the banks fail because “banks have to be allowed to fail”. But Luis De Guindos disagrees:

“I think that the Irish situation is totally different from the Spanish situation. As I have said before, the size of the balance-sheet of the Irish banks in comparative terms with the GDP of Ireland was three times larger than the case of Spain. So I think that while in the case of Ireland the cost of recapitalising the banks has been above 20% of the Irish GDP, in the case of Spain we are talking 4% of GDP. So it’s a totally different situation and it’s not comparable at all.”

But economist Juan Rallo disagrees with De Guindos, and beginning with the figures themselves: “The real figure is not 40 billion, but 80 or 90 billion…”

And who are the creditors of the Spanish banks (particularly Bankia)? When Schumann manages to get hold of a list (thanks to “friendly people that help me”) he discovers that Deutsche Bank again features prominently.

Juan Moreno is a lawyer working with the 15M protest movement, who filed the lawsuit for the closure of Bankia to save the Spanish taxpayers from a bailout. When asked if the system would have collapsed, Moreno says:

“If you were to drop Bankia it would probably lead to the collapse of other banks, but not the big banks like BBVA, Santander, La Caixa, [Banco] Sabadell, or [Banco] Popular.”

Back to Luis De Guindos:

“A money market economy with fiat money is unstable. And we have an example that we let the banks go down… it was the Great Depression. It was the worst depression we had over the last century.”

Juan Moreno’s response:

“It’s all scaremongering. I don’t want that, I want numbers. I want to know what would really happen if they were to go bankrupt… With what we know now we would say this bank is beyond saving. We can’t continue to pour billions of euros into it. The creditors must take losses…

“The trial uncovered that the bank figures were falsified by upper management, but now we discover that the same had happened at the lower management levels. So a banking culture developed where employees were rewarded with bonuses so that the upper level did not realise how bad things were at the local branch level… The judge said that there was indeed public control of the bank, but the government supervisors played along. Letting the fox guard the hens is good for nothing.

“They’re all criminals: those in charge of Bankia and the public supervisors. If they’d let the savings banks go bankrupt, we would have found out what the politicians did with the money. Much of the debt that cannot be repaid is money that went to political parties, to city administrations, for work in the autonomous southern regions to companies connected to the government. These revelations would have made the political class disappear.”

So what is Moreno’s advice to the Germany citizens who are paying to prop up this corrupt system…?

“Numbers. The balance-sheet. It’s simple. You have to know the facts and apply the laws.”

*

 Cyprus

Meanwhile, depositors in Cypriot banks (savers as opposed to taxpayers) had more than 6 billion euros seized overnight in a so-called bail-in to pay off foreign creditors. This has crippled many businesses and stifled economic growth in a different way.

Panicos Demetraides, Governor of the Central Bank of Cyprus:

“It’s a change from past bailouts that we have had to bail-in on this occasion [from] uninsured depositors in the two big Cypriot banks. The burden of this bail-in has been borne partly by non-residents, but also partly by residents, Cypriot companies and households. About two-thirds of the burden has been borne actually by non-residents and one-third by residents.”

But as German MP Gerhard Schick (Green Party) explains:

“The European Central Bank allowed the Cypriot Central Bank to give money to banks in Cyprus even though they were insolvent. That’s a real mistake because then non-functioning structures are upheld and taxpayers’ money – and that’s what we’re talking about with a central bank – is endangered. In this way the ECB slowed down the rescue programme and made it possible for many creditors to withdraw their money and invest it elsewhere… The ECB was a creditor acting in self-interest to protect its own money. This conflict of interest should never have been allowed to happen, but it did because central bank money was put into bad banks.”

Back to Panicos Demetraides:

“Certainly the delays offered more informed investors [the chance] to protect their own investments. And they put the less informed investors at a disadvantage.”

Does this mean the ECB allowed other European banks time to withdraw their money? That must be some sort of rumour, says Demetraides. It is a rumour that must persist until there is an independent investigation, but as Gerhard Schick points out:

“The problem is that the ECB is a closed shop, and neither the European Parliament nor national parliaments are really able to call it to account when it breaks the rules.”

Harris Georgiades, Cypriot Minister of Finance:

“For us it was a take it or leave it situation. A decision that we accepted under pressure, and with no time to negotiate extensively. Essentially both of our kneecaps have been broken, and now we are asked to run.”

*

 Greece

Greece entered the crisis with a debt-to-GDP ratio of 110% and with around 10% unemployment. It was then put through an “austerity programme” supposedly designed to tackle the debt. Five years and several thousand suicides later, unemployment currently stands at 30% and debt-to-GDP is at around 180%.

This tremendous spike in debt remains in spite of ‘haircuts’ known as the Greek “Private sector involvement” or PSI, the first announced in July 2011, and quickly followed by PSI Mk2 (after PSI Mk1 failed), which involved a impressive sounding 50% reduction in the face value of Greek government bonds (GGB). 5 But then, as Yanis Varoufakis, current Greek Finance Minister, but as then a lowly Professor of Economics, wrote soon after:

In short, and so as not to overlabour the point, PSI Mk2 is dead in the water. The shenanigans of the shadow banking sector (which, lest we forget, includes not only the hedge funds but also, remarkably, the ‘proper’ banks shady Special Vehicles) plus the predictable deterioration of the Greek economy have put paid to it. The negotiations may go on for a little while longer, the announcement of a brilliant agreement may be made but, in truth, the idea that the Greek haircut will put Greece’s debt-to-GDP ratio back on a course towards 120% has sunk without trace. And if you need hard evidence for this, the European Summit of 9th December provided it even before 2011 was seen off: Officially, Europe’s great and good announced the end of PSI as a policy of the new ESM; Europe’s future central, permanent bailout fund. It had all been a mistake, they seemed to confess. 6

Greece has never been bailed out, only the European banks (well over 90% of the bailout money returning to them), and likewise the ‘haircut’ actually caused more problems than it solved. In particular, it permitted the looting of social security and public pension funds that are mandated by law to invest in government bonds – the following is taken from a special report published by Reuters:

Greece’s pension funds – patchily run in the first place, say unionists and some politicians – have been savaged by austerity and the terms of the international bailout keeping the country afloat.

Workers and pensioners suffered losses of about 10 billion euros ($13 billion) just in the debt restructuring of March 2012, when the value of some Greek bonds was cut in half. That sum is equal to 4.6 percent of the country’s GDP in 2011.

Many savers blame the debacle on the Bank of Greece, the country’s central bank, which administers three-quarters of pension funds’ surplus cash. Pensioners and politicians accuse it of failing to foresee trouble looming, or even of investing pension fund money in government bonds that it knew to be at high risk of a ‘haircut’ – having their value reduced. 7

Click here to read the full Reuters report.

In June 2014, Yanis Varoufakis was interviewed by Harald Schumann. Excerpts would feature in another collaboration between Arpad Bondy and Schumann; their follow-up documentary The Trail Of The Troika (in German, Macht ohne Kontrolle – Die Troika), which plotted another route across the continent in order to show how “austerity measures” have utterly failed to rescue the eurozone economies, and how in the process “the Troika” has also flagrantly breached its own European treaty regulations. Unfortunately, an English version of this more recent documentary is at present unavailable on youtube or elsewhere (so far as I can ascertain – but I will certainly embed a version as and when I find one). Meanwhile, uploads of the various interviews filmed during its making are now freely available, and embedded below is Schumann’s unabridged interview with Varoufakis, of which I have again selectively transcribed some of the answers he gave last summer:

What was the bailout for? The bailout was not in order to bail Greece out. Greece was never bailed out. The bailout loan that was extended in May of 2010 had a very singular, simple purpose. It was to transfer banking losses from the asset books of banks, not only Greek ones, but also French ones and German ones, onto the shoulders of the taxpayers. Initially the Greek taxpayers – because they knew that these shoulders were too weak to bear those losses, eventually it was always part of the plan to transfer them onto the shoulders of the German, and the French, and the Dutch and the Finnish taxpayers. And “the Troika” is here supervising this sinister transfer. [5:45 mins]

Smart people in Brussels, especially in Frankfurt, and of course Berlin, knew in May 2010 that Greece would never be able to repay its debts. They knew that again in the Spring of 2012 when they extended the second loan. They know it again now. In their minds they have already written off a very large bulk of the billions and billions that was given to the Greek state to give to the Greek banks and to give to the rest of the banks. All other things being equal, of course, “the Troika” would much rather more money was repaid than less money. But all other things are not equal. At this very moment in time, as we speak, while the Greek banks have huge black holes that we all know, even though they are not being admitted to, something similar is happening in the rest of the eurozone. Deutsche Bank, Finanzbank, BNP Paribas are skating on thin ice. They will never admit to it. And part of the angst and of the anxiety of the powers in Brussels, in Frankfurt, in Berlin, is how not to admit to the German, to the French, to the Dutch, to the Finnish people, that their banking sector was never really put back on an even keel. 8 [7:15 mins]

In 2010, what they had done was this: they lied to the Greek people and to the German people. They said to the Greek people: We have avoided bankruptcy. And they said to the German people that the Greeks, they were waivered, now we are going to punish them with austerity. But we will lend them the money because European solidarity demands that. In reality, what they were doing was transferring banking losses from the bankers – the European bankers, all of them – onto the shoulders first of the Greek taxpayers and eventually onto the German taxpayers, because the Greek taxpayers could not shoulder all of this money.

So they had lied to the German taxpayers. They said: We are not going to haircut the Greek debt. They were always going to haircut the Greek debt. They knew it. What they did with first bailout loan was to shift that big bulk, a 110 billion, from the bankers’ loss book onto the shoulders of Europe’s taxpayers. And then, after that had been effected, of course then they had to haircut – to do what they said they were never going to do – and who did they haircut? They haircut the small bondholders and the pension funds… So the PSI, the second bailout, the haircut of the private sector, was part of the original process of shifting the burden of adjustment and the cost of the crisis from the shoulders of those who caused it, onto the shoulders of those who didn’t cause it in Greece and in Germany. And all that in the name of European solidarity. And then they wonder why right-wing parties of the extreme part of the spectrum are winning power – or, at least, winning seats in the European Parliament. [21:30 mins]

Asked whether he thought the 2008 crisis had been caused as a result of incompetence or due to a more deliberate act of conspiracy, Varoufakis replied:

It wasn’t a conspiracy. It was a very simple operation: How do we stay in power? Mr [Jean-Claude] Juncker said it. Once he admitted: we know what needs to be done, we just don’t know how to do it and remain in power. Now don’t forget that before 2008, 2010, all parties of government, whether they were Christian-Democratic, Social-Democratic, it doesn’t matter. They had developed this extremely close relationship with the financial sector. They had looked at the financial sector as the cow that would bear the milk from which they would feed all, not only their political parties and careers, but also the welfare state – from the point of view of the Social-Democrats.

There was a kind of Faustian bargain between our politicians and bankers. We will let you do what you want, and you pay us a small amount proportional in order to fund our states. So when the crisis hit – which was completely unexpected for them – they had neither the analytical power nor the moral authority to go to these bankers and say: You know what, you’re out. You’re bankrupt, we’re taking over the banks… 9 [24 mins]

Finally, here was what Yanis Varoufakis, the economist (and not yet Finance Minister) said when asked for “any realistic proposal [to] how the dire economic situation in Greece can be improved”:

Well, we have to stop doing what we are doing and do something quite diferent. And there are two levels at which you should see this, because let’s not forget that once we have a monetary union you can’t talk about the overcoming of the crisis in one part of it in isolation to the others. It would be like talking about how South Dakota would escape the Great Depression in 1933 without the rest of the United States going through the New Deal. So we need a New Deal for Europe… 10 [32:30 min]

But, I have to insist: The solution must be European, because the crisis is European. And there are things we can do within two weeks to end this euro-crisis without violating any of the European Union treaties as long as we have the political will to do it. 11 [34:30 min]

*

there is a better alternative… (and always was)

Q: Your Finance Minister Varoufakis said that he is not afraid of an Armageddon.

A: He said in parliament: if you enter into negotiations, you are not seeking a breakup. But you have to keep a breakup in mind as a contingency. I share this view.

 

Q: So you have a Plan B in case Greece does decide to exit from the single currency?

A: We don’t need a contingency plan because we will stay in the eurozone. But we won’t achieve this objective at the expense of the weak – like our previous government.

 

– Alexis Tsipras in same interview published in Stern magazine.

On April 16th, Varoufakis was invited to speak at a press conference hosted by the Brookings Institute which is based in Washington. In answer to a question about being trapped in a position where the Greeks are left with little alternative but to default, Varoufakis replied:

I would willingly, eagerly and enthusiastically accept any terms offered to us if they made sense. I would have no problem with the Memorandum of Understanding if it was founded upon a reform programme that attacked the worse cases of rent-seeking in Greece, and made the reforms that were necessary in order to enhance efficiency and social justice. If it came for the planet Mars, if it came from Berlin, if it came from Brussels, if it came from Portugal, from Slovakia, I don’t care which, I would have embraced it. The problem we have with these conditions – you know, the take it or leave it conditions – is not so much the authoritarianism, it is that fact that we’ve tried that medicine and it hasn’t worked…

It is almost precisely three years ago since I wrote a post entitled ‘austerity’ or ‘Grexit’: is there really no better alternative for Greece? There have since been more than two and a half years of unrestrained “austerity” (prior to Syriza’s victory), a “take it or leave it” Hobson’s choice, which has deepened the crisis not only in Greece but across the entire eurozone. ‘Grexit’ has never been a realistic alternative, and as Syriza have maintained from the outset, they have no intention whatsoever of ditching the euro. So ‘Grexit’ becomes ‘Grexident’, in other words, an impossibility. Because any accidental Greek exit can only occur if it is accidentally on purpose, and that would mean ‘Grexpulsion’ – a term the mainstream has yet to adopt for obvious reasons.

In Washington, Varoufakis was once again unequivocal about Syriza’s position:

“Toying with ‘Grexit’, which is something we don’t do – we are refusing to discuss it, because as I have said before even worrying about it is like worrying about being hit by a comet in a universe in which comets are attracted to you if you are worried about them – toying with ‘Grexit’ and ideas of amputating Greece is profoundly anti-European because anybody who claims that they know what the effect of a ‘Grexit’ is, are deluded.” [52 mins]

*

Which brings us to an impasse. Accept “austerity” or get out! Jump off a cliff or suffer slow death by a thousand cuts. Is there really no genuine alternative for the Greeks?

Well, the answer to that question actually depends upon what you value. If you think that all debts are sacrosanct, then it necessarily follows that the Greeks must go on paying the banks to their bitter end. That the debt is unpayable doesn’t matter. That the debt is the consequence of so much ineptitude and malfeasance within the banking system doesn’t matter either. The Greeks must cough up because otherwise the chaos will worsen (or so we are again constantly given to believe). But if you value human life above money, and recognise that debts that cannot be repaid will never be repaid, then you can begin to think more constructively. In fact, the alternative becomes immediately and blindingly apparent. Since a debt cancellation will inevitably come sooner or later, the only real question is how much longer must the Greeks be punished in the meantime.

A way-out of all this mess is entirely possible. It doesn’t involve “austerity” and does not necessarily require a Greek exit from the eurozone. What is needed is simply an end to the bottomless banker bailouts and then new money being made available for reconstruction projects and other productive enterprise within Greece, Spain and elsewhere. Such a ‘New Deal’ injection is unlikely to be offered by the IMF, and neither will it be supported by the likes of Angela Merkel. But it can be fought for by the Greek people themselves, and in this battle to stop the wanton destruction of their nation, as fellow Europeans we should stand with them, recognising that the same aggressive financial interests that have already eviscerated Greece, will be pillaging our own lands soon enough.

The paragraphs above are taken from the post I wrote three years ago – yet so little has significantly altered that it remains pertinent enough to repeat it.

Back to Varoufakis who puts flesh on those barest of bones regarding the ‘New Deal’ option for Europe (and presenting the way ahead without any recourse to deficit spending by governments – so heretical to the neo-liberals):

Europe as a whole, the eurozone as a whole, is typified not only by a mountain of great private and public debts, which we do have. But there is another mountain hiding behind it: a huge mountain of idle savings with nowhere to go. And it should be our joint project to energise, to motivate, those idle savings, to help them overcome their great fear that keeps them idle, and channel them into productive investments – not investments into assets, but investments into real productive capacity. Now, how do we do this? Well, we have the European Investment Bank [EIB] that could do this. And we have the European Central Bank which is embarking on quantitative easing. Well, why can’t the EIB fund a major ‘New Deal’ for Europe, that channels investment to the private sectors of the countries and regions within countries that have a major output gap? [44 mins]

The whole of Varoufakis speech at the Brookings Institute and the subsequent Q+A session is embedded below:

*

last frenzy of reasonableness…?

Just days after Syriza were swept to election victory on January 26th, economist and former US Assistant Secretary of the Treasury for Economic Policy under Reagan, Paul Craig Roberts, published an article entitled “Is Democracy Dead In The West?” which began:

We will find out the answer to the question posed in the title in the outcome of the contest between the new Greek government, formed by the political party Syriza, and the ECB and the private banks, with whose interests the EU and Washington align against Greece.

Roberts, once known as the “Father of Reaganomics” but more recently a repentant neo-liberalist and outspoken opponent of the financial elites, continues:

The new [Syriza] government wants to moderate the agreements made by previous Greek governments that sold out the Greek people. The new government wants to stop giving away at bargain prices Greek public assets to clients of its creditors, and the new Greek government wants to raise the Greek minimum wage so that the Greek people have enough bread and water on which to live.

However, for the private bank creditors, for Merkel’s Germany that stands behind the banks, for Washington which could care less about the Greeks, for the Greek elites who see themselves as “part of Europe,” Syriza is something to be rid of.

Adding that:

A purpose of the “Greek financial crisis” is to establish that EU members are not sovereign countries and that banks that lend to these non-sovereign entities are not responsible for any losses with regard to the loans. The population of the indebted countries are the responsible parties. And these populations must accept the reduction of their living standards in order to ensure that the banks do not lose any money.

This is the “New Democracy.” It is a resurrection of the old feudal order. A few super-rich aristocrats and everyone else serfs obliged to support the ruling order. 12

Click here to read Paul Craig Robert’s full article.

The question is, who is actually right here? Certainly we ought to acknowledge that elements in Paul Craig Roberts’ more conspiratorial outlook are irrefutable, recognising that Goldman Sachs did indeed deliberately help to hide previous government debt in order to extend credit to Greece. The Greeks were set up; this has been established – details of Goldman Sachs involvement can be found in this previous post.

Varoufakis is diplomatic, arguably too diplomatic. But then, is Paul Craig Roberts unduly pessimistic when he says that Syriza can now do “very little”, and, in either case, is the very moderate and rather modest approach of Varoufakis a good one, pragmatically speaking? Extending a hand of friendship being unlikely to impress “the powerful rich interest groups that rule the West [who] could not care less about the people over whom they rule” (to quote Roberts again, who knows them well, of course). Yet it may be effective in another way, such relentless persuasion and his “frenzy of reasonableness” at least winning the more public battle for hearts and minds. My own view is that Varoufakis (and Syriza) have adopted a sensible stance, which is in fact evidenced by the harsh criticism they have received from both extreme flanks. Appearing too flexible has made him a target for derision from the more radical (and Communist) left-wing, whereas standing his ground irritates his more powerful opponents working within the establishment (who lash out publicly whenever Varoufakis is out of earshot).

Meanwhile, ‘Grexident’, German Finance Minister Wolfgang Schäuble’s own portmanteau neologism (I gather), is now trending on twitter – not literally, of course, because it doesn’t have a celebrity angle. But the hashtag certainly exists and the tweets that include it are mostly German and Greek, alternating like a stack of incomprehensible post-it-notes. And sadly, the word ‘Grexident’ isn’t the only eurozone nonsense currently trending:

Academic-turned-finance minister Varoufakis was called “a time-waster, a gambler and an amateur”, a source privy to the closed-door talks told the news service Bloomberg.

This is according to a Guardian article published on Friday [April 24th] and entitled “Time is running out for Greece, says Eurogroup chief”. The article continues:

Jeroen Dijsselbloem, head of the eurogroup of finance ministers, told reporters in Latvia it was a “highly critical” meeting as Greece had still not agreed a comprehensive and detailed list of reforms.

Although there were positive signs, there remained “wide differences to bridge on substance”, he said.

“We are all aware that time is running out … too much time has been lost.” […]

Dijsselbloem warned on Friday that after the lack of recent progress it would be very hard to consider a new programme for Greece to cover its funding needs beyond June. He ruled out giving Greece an early slice [of] bailout cash. […]

ECB president Mario Draghi also betrayed his exasperation and warned that central bank could impose tougher conditions in return for keeping Greek banks afloat.

Weeks ago, the Riga meeting had been pencilled in as the moment when the eurozone could sign off an aid payment for Greece, but in the event ministers vented their frustration with Varoufakis for Greece’s failure to bridge the gap with creditors.

Just to remind you, Mario Draghi is not only the former vice chairman of Goldman Sachs – directly implicated in bringing the crisis to Greece – but serves as a trustee of the Brookings Institute13

So watching Varoufakis descend into the belly of the beast that is the Brookings Institute and to receive such a warm welcome and nonjudgmental reception, I must confess that I was instantly reminded of the film, Goodfellas, Martin Scorsese’s gangster classic, and of one scene in particular:

“If you’re part of a crew, nobody ever tells you that they’re going to kill you. It doesn’t happen that way. There weren’t any arguments or curses like in the movies. So your murderers come with smiles. They come as your friends, the people who have cared for you all of your life, and they always seem to come at a time when you’re at your weakest and most in need of their help.”

But Varoufakis is not easily daunted, and so, as the Guardian piece describes:

Varoufakis said the talks [in Latvia] were “intense”, but remained confident that the two sides will resolve their differences in time.

“We agreed that an agreement will be difficult but it will happen and it will happen quickly because that is the only option we have,” he told a press conference.

Varoufakis later declared: “We want an agreement and we are willing to make compromises to achieve this … The cost of not having a solution would be huge for all of us, Greece and the eurozone”. 14

In saying so, he is quite correct. Not only the Greeks, but the Germans too, whose major banks are set to carry the heaviest losses in the event of default, ought to be aware of the extreme dangers of such brinksmanship. A basic instinct for self-preservation is what Varoufakis is relying on, but for so long as the banks and other financial institutions remain confident of receiving further bailouts, it is the German taxpayers who ought to worry – as should the rest of us – because so long as they remain “too big too fail” (i.e., untouchable) then bankers like Mario Draghi and co really have nothing at stake. For once the Greeks are unable to shoulder the debt burden, as Varoufakis reminded us last summer, it will be passed on to the shoulders of the Germans and the French.

Indeed, the people of Europe stand to lose enormously if this so-called ‘Grexident’ (in reality ‘Grexpulsion’) leads to ‘Grexit’ and then to ‘Grextagion’ as it will be doubtless be called; as idiotically named as it will have been idiotically contracted and spread. Because, if no compromise can be reached in spite of Varoufakis’ tireless efforts, then sooner then we imagine we may all be standing in the Greek people’s shoes.

*

Update:

A weekend can be a very long time in politics…

Unbeknownst to me, on Sunday 26th [the day before I posted this article] Yanis Varoufakis had put out a tweet in which he quoted the words of Franklin D Roosevelt, who famously said “They are unanimous in their hate for me; and I welcome their hatred”, adding simply “A quotation close to my heart (& reality) these days”:

This would be one of his final acts as chief negotiator at the Eurogroup meetings:

Greece moved to inject fresh momentum into problem-plagued talks with creditors on Monday, reshuffling its negotiating team to try and defuse tensions over its outspoken finance minister. […]

In a bid to ease tensions with lenders, the Syriza party-led coalition said the minister of international financial relations, Euclid Tsakalotos, would take over the coordination of the new team. The appointment will see the economics professor, who was raised in the UK, assuming a more active role in face-to-face negotiations with creditors.

So writes Helena Smith in the Guardian [April 27th], her report released a mere two hours after I posted.

Varoufakis told us that before he took the job he had written a pre-prepared resignation letter to carry around with him at all times, just in case he ever found himself sounding too much like a politician. Hopefully this will not be needed, and news that he has been “removed” is perhaps a little exaggerated:

[However,] one well-placed Athens official insisted that Varoufakis’s role had been upgraded “in many ways”. The official added: “To make him resign would be to retreat and the government would never do that.”

Three months after his elevation to power, prime minister Alexis Tsipras has come under extraordinary pressure to remove Varoufakis. Yet last night Tsipras said that his finance minister “is an important asset for the government, and [with creditors] he speaks their language better then they do”. In a wide-ranging interview aired on Greek TV, Tsipras rejected suggestions that his government had any intention of sacrificing the politician. Now that negotiations with creditors were in the final straight, Greece had to reorganise its negotiating team, the PM said. […]

But insiders insisted that the politician still enjoyed Tsipras’ confidence, even if the young premier was now reaching out to the German chancellor Angela Merkel in an effort to reach a political solution.

With his high popularity ratings at home, Varoufakis is credited with internationalising the country’s debt problem and raising questions over austerity economics.

“They [creditors] couldn’t counter his economic arguments rationally so they went for him claiming he didn’t understand eurozone rules and regulations, that his reforms weren’t good enough,” said one official. “Tsipras knows this is not about Varoufakis, but his government, because it has dared to take on the system that is Europe’s neoliberal doctrine. He knows that if one goes the other goes too, which is why Varoufakis is here to stay.”

I very much encourage Tsipras to stick by Varoufakis, certainly in the capacity of his chief economic advisor, if not within government itself. We so very seldom see anyone of such intelligence, integrity and courage in public office. The world needs more politicians like Varoufakis, not less.

Please note that I corrected this update after mistakenly believing that Varoufakis had stepped down from his role as Greek Finance Minister. Apologies for posting the incorrect original version.

*

1 From an interview published as “Give us six more months, and we will be another country”, written by A. Albes, F. Batzoglou, A. Petzold, published by Stern on February 18, 2015. http://www.stern.de/politik/ausland/interview-with-greek-primeminister-alexis-tsipras-give-us-six-more-months-and-we-will-be-another-country-2174273.html

2 From an article entitled “Reinhart, Rogoff… and Herndon: The student who caught out the profs” written by Ruth Alexander, published by BBC news on April 20, 2013. http://www.bbc.co.uk/news/magazine-22223190

3 Here are some interesting graphs taken from an wikipedia article entitled “European sovereign-debt crisis”, which show the rise in the levels of Greek, Spanish and Portuguese debt since 1999 as compared to the average of the eurozone:

 

 

 

All three graphs (and others including those for Ireland and Cyprus) show a marked turning point around 2007–8, providing further evidence not only that “austerity” hasn’t worked (even within its own terms of debt reduction), but that the western world is actually faced with a systemic banking crisis that flared up at that time. The debt-to-GDP ratios have flattened towards the end, but even so the downturn is mostly in the projected regions.

And this is from an article written by Tyler Durden and posted on zerohedge from February 18, 2013:

“Beleaguered Prime Minister Mariano Rajoy just broke another record. As if a plague of corruption scandals was not enough, Spain’s debt-to-GDP has now reached levels not seen in over 100 years. As El Pais reports, Spanish debt levels rose at an alarming EUR 400 million per day in 2012 making for the largest annual increase in debt in the nation’s history – all the while proclaiming austerity.”

And here’s another helpful graph that goes along with the article, showing once more that rather than reducing the nation’s debt, “austerity measures” are more closely correlated to the growth of that debt:

 

 

http://www.zerohedge.com/news/2013-02-18/chart-day-spanish-debt

4 These details of a summary of more detailed notes complied here: http://www.golemxiv.co.uk/2010/10/who-are-the-bond-holders-we-are-bailing-out/ 

5 Based on figures taken from an article entitled “Greece’s PSI is Dead on Arrival: An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal” written by Yanis Varoufakis, published on January 11. 2012:

Back to the drawing board, our European leaders came up with a deeper haircut in October 2011. They called it PSI Mk2 and even had the foolish Greek PM fall on his sword, to be replaced by a hitherto loyal ECB functionary, so as to ensure that PSI Mk 2 would become Greece’s new light on the hill; a beacon of the last glimmer of hope for a desperate nation. PSI Mk 2 envisaged an impressive sounding 50% reduction in the GGBs’ face value which, in present value terms, would result in a haircut no less than 60% (since the interest rates charged on the new bonds, that would be swapped with the old ones, could not exceed the interest rates charged by the ECB and the EU for the original bailout funds). In other words, holders of GGBs would be hair-cut in two ways: a 50% reduction in face value and an interest rate less than 5% which would cut further into the present value of the old GGBs.

http://yanisvaroufakis.eu/2012/01/11/greeces-psi-is-dead-on-arrival-an-error-in-search-of-a-rationale-but-also-a-failure-that-may-prove-a-harbinger-for-the-modest-proposal/ 

6 Ibid.

7 From a special report entitled “Greeks rage against pension calamity” written by George Georgiopoulos & Lefteris Papadimas, published in Reuters on November 30, 2012. http://www.reuters.com/article/2012/11/30/us-greece-crisis-pensions-idUSBRE8AT0CV20121130

8 Varoufakis adds:

“The one thing if I were, I am not, but if I were the CEO of Deutsche Bank, I would be very wary of the dangers from “the Troika” in Athens that is casting a critical gaze into what is happening to Greek banks. Because if “the Troika” takes a keen interest, it will have to declare that the Greek banks are beyond salvation. And the only possible outcome of that would be nationalisation of these banks.”

9 Varoufakis  adds:

“There is no doubt that there was a great deal of incompetence. Our leaders, and I have to say most of my profession – speaking as an economist – had become steadily lobotomised since the late 1970s. We didn’t have leaders who understood macroeconomics… You just let the markets perform their triumphant trick and everything will be fine. Politicians were convinced of that, their careers went swimmingly, their cosy relation with the financial sector was working out for them beautifully. When the whole thing, this bubble, collapsed, they were found wanting analytically – they didn’t understand what happened – they believed their own rhetoric and when they started realising the truth, at that point they had already misled parliaments and electorates to such an extent that they would much rather die than confess to the sins of omission and commission.” [25:45 min]

10 Varoufakis offers the following example:

Regarding the Greek situation, the Greek debt, for instance. What we need to do is, we need, since the German government is going to find it politically very difficult to go to the parliament in Berlin and say: Well, it was all a mistake, we have to write off their debt. What you can do is you can create euphemisms – you can create what Keynes referred to as bisque bonds, GDP-related bonds. The Greek government could issue particular bonds that it exchanges for the debt that the ESF [European Social Fund] holds. And those bonds could specify that they can last 30 years let’s say. In 30 years they become extinct whether they have been repaid or not. And that the coupons, the repayments, on a year to year basis depend on the level of growth in Greece. So if growth is more than 3% then it specifies particular payment. That way Mr Schäuble will be able to look at his parliamentarians and say: We haven’t haircut it, but the extent to which the Greek debts will be repaid will be linked to our success in helping Greek growth. So you make them partners in Greek growth as opposed to bailiffs who come in and take your furniture away and throw you out on the street. [33:15 min]

11 The details go as follows:

Three things: The first thing we need to do is deal with the banking sector troubles throughout the eurozone. And the way I would do it – because we know we have declared this banking union which is really a term confirms there is no banking union – so what we should do about banks is this: Banks that are found out by the ECB in September (when the ECB assumes the role of the single supervisor of the banking system) to be wanting in terms of recapitalisation to have bad assets that have not been declared so far, they should accept money from the ESM – from the European stability mechanism – directly, not through the governments, directly. And the ESM should get shares, the shareholders should be wiped out and the ECB should appoint a new board of directors – hopefully not from within the country in which the bank is domiciled. This way you Europeanise these banks. In 6 months, 12 months, you resell them – you will resell them with a profit because those shares will be purchased by the ESM at very low prices. And then the ESM gets money back, the European taxpayers get their money back, TARP-like. And you do it step by step. You don’t Europeanise all 6,000 banks. The banks that are in trouble…

The second thing you do is to deal directly with the public debt, which is getting worse everywhere – except in Germany because of the low, low interest rates due to the fact that the crisis is proceeding. The European Central Bank should make a simple announcement tomorrow morning that will cost it nothing, zero. And the announcement is this: From now on, every time a government bond matures, the ECB will service, will pay, for the proportion of that bond that corresponds to the country’s Maastricht compliant legal debt. So in the case of Italy it will be half of it. So the European Central Bank will pay for this, not the Italian government. Now I said it won’t cost the European Central Bank anything, so how can that be if it pays half of it? The answer is the ECB issues its own bonds and sells them to the Chinese, to the Russians, to whoever wants to buy them at very, very low interest rates – because the ECB is such a sterling institution – and immediately opens a direct debit account for Italy. And says to Italy: Look, within ten years, this amount of money has to go in there in order to repay the Chinese. So in other words, what I’m suggesting is that the ECB should play a management role for public debt in Europe that costs nothing, that doesn’t require printing a single euro, and does not violate any treaty. Because ths is not a bailout…

And then we have the big problem of growth. Of investment. We have an amazing dearth of investment in Europe, both in the north and in the south. Even in Germany. So what we need is really a Roosevelt-like New Deal – a very large investment programme. I am not talking about a 100 million here and a 100 million there. We need something between 8 and 9% of eurozone GDP to be invested in productive activities… That would be what we need in order to avert deflation and in order to restart growth in Europe. Now we have the European investment Bank in Europe. The European Investment Bank is three times the size of the World Bank. It could very easily effect such a large scale investment-led recovery programme in Europe. The reason why it doesn’t do it, is because the convention is that 50% of every project is funded from a nation state. The nation state is bankrupt. Waive it. And what should we do instead? We should have either the ECB issuing more bonds in order to support the EIB bonds or something simpler than that. Everyone now, including Mr [Mario] Draghi and Mr [Jens] Weidmann [President of German Bundesbank], are speaking about the need for quantitative easing in Europe. Or at least they are considering it. Now we do not want American-style or British-style quantitative easing because this simply inflates bubbles… Mr Draghi’s worried about quantitative easing because he doesn’t know which assets to buy. German assets? Italian, you know, we are going to start arguing like children amongst ourselves, as to whose assets should be purchased. Bu the European Investment Bank issues European bonds, EIB-bonds. Why not have the EIB effect quantitative easing by purchasing EIB-bonds to such an extent that the EIB ca start a New Deal for Europe programme of 8–9% of eurozone GDP with the ECB buying only its bonds, which are European bonds?  And also they are triple-A bonds. Now that a combination of those three measures would deal with the banking sector crisis, it would create a rational way of managing the Maastricht compliant and legal part of the debt… and you have a massive investment-led recovery programme.

12 From an article entitled “Is Democracy Dead In The West?” written by Paul Craig Roberts, published on January 29, 2015. http://www.paulcraigroberts.org/2015/01/29/democracy-dead-west-paul-craig-roberts/ 

13 From Bloomberg Business (bold highlight added):

Mr. Mario Draghi has been the President of Executive Board and President of European Central Bank since November 2011. Mr. Draghi served as Governor of Banca d’Italia SpA since December 29, 2005 until November 01, 2011. He served as Managing Director of The Goldman Sachs Group, Inc. until January 2006. He served as Director-general of Italy’s treasury. He served as an Adviser to the Bank of Italy, an Executive Director of the World Bank and as a member of the Group of Seven deputies. He served as the Chairman of Financial Stability Board. He has been a Director at Bank For International Settlements since June 2012. He serves as a Trustee of The Brookings Institution. He has been Member Of Governing Council of European Central bank since January 16, 2006. He served as a Member of Governing Board at Banca d’Italia SpA and served as its Member of General Councils. He served as Member of Board of Governors – Italy of Asian Development Bank until November 2011. He served as Director of Bank For International Settlements from September 2011 to November 01, 2011. Mr. Draghi has a Doctorate in Economics from the Massachusetts Institute of Technology.

http://www.bloomberg.com/research/stocks/private/person.asp?personId=13154633&privcapId=5774394

14 From an article entitled “Time is running out for Greece, says Eurogroup chief” written by Graeme Wearden, published in the Guardian on April 24, 2015. http://www.theguardian.com/business/2015/apr/24/time-is-running-out-for-greece-says-eurogroup-chief-jeroen-dijsselbloem

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Filed under analysis & opinion, austerity measures, Cyprus, debt cancellation, did you see?, Germany, Greece, Ireland, neo-liberalism, Spain

reflections after Saturday’s anti-cuts demonstration in London

Saturday’s anti-cuts march in London attracted more than 150,000 people, which makes it one of the bigger protests I’ve ever been part of and certainly worthy of greater media coverage. With the economic destruction of European nations like Greece, Spain and Portugal already so well advanced, the need for mass protest across the whole of Europe and the rest of the western world having never been more urgent. So these relatively large numbers are still disappointing. I had anticipated that perhaps a million or more might be marching along the streets of London at the weekend – as there had been ten years ago when we marched against the Iraq War – but sadly no.

My conclusion, therefore, is that the people of Britain either didn’t get sufficient notice that a major protest was taking place (and one of my friends told me that the event wasn’t particularly well publicised), or couldn’t be bothered, perhaps because they’ve given up all hope of ever changing anything, or, and most depressingly, are actually opposed to the objectives of the march itself. Those in the latter category remaining convinced that ‘we just need to take our medicine’ like good little boys and girls, whilst leaving everything to the clever men who understand the system better, trusting that as they inflict injury after injury, this process of deliberate evisceration might somehow, presumably as a side-effect, rescue us from the jaws of recession. Which is a manifestly deluded hope, of course, firstly because it mistakes depression for recession (and many have known since well before the crash of 2008 that the world was on the imminent brink of a global depression), but also because it is in contradiction to all the evidence provided by failures abroad. ‘Austerity’ having rescued no country from this worsening crisis, but only serving to sink them ever deeper into trouble.

Even the Nobel Prize winner and former chief economist at the World Bank, Joseph Stiglitz, came out with a statement last week pointing to the obvious failure of the current ‘austerity programme’ in Europe:

“Spain and Greece are in depression, not recession. That impact was brought about by austerity” with the countries now trapped in a vicious cycle of spending cuts and slumping growth, he said.

Stiglitz, who served as a senior advisor to former US president Bill Clinton, was speaking on the eve of a key two-day summit of EU leaders in Brussels that will seek to address the eurozone crisis.

“Austerity is bringing Europe down and diminishes chances of making things work — it is the wrong measure,” said the Nobel laureate, who is a professor at New York’s Columbia University.1

Unfortunately, however, there are many who will continue to fail to understand that the so-called ‘austerity’ now being imposed throughout our continent and beyond, is the major cause of our accelerating death spiral into the grinding teeth of a total global depression. ‘Austerity’ being a policy that those holding significant positions of power must already have known would be disastrous for the simple reason that such methods have failed so many times before, and in places as far afield as Chile, Argentina, South Korea, as well as in all corners of Africa. But then it all depends what one means by ‘failed’ I suppose. What fails for the ordinary people generally serves the finance oligarchs very nicely don’t you know.

What the small turnout showed then, is that sadly a great many in Britain (as elsewhere) are still bewitched by those guys in their pin-striped suits pulling their strange levers and twiddling their incomprehensible knobs on the top floor offices of the hedge funds and within such megabanks as Goldman Sachs and JP Morgan. Still ignorant, or else strangely oblivious, to the scale of the fraudulent means by which these same financial elites have saturated the world with their odious debt. Debts being used to hold us to ransom: menacing all of our nations with the threat that if ever their own well-deserved demise should actually occur, then the repercussions would be so serious as to result in the ruin of all of us. “Too big too fail”, no longer a slogan, but thanks to unquestioning media propagation, an inculcated factoid.

Again, I cannot believe that playing the suicide card has worked so well for the bankers, nor that remarkably few of the general public are yet to appreciate just how successfully these same financial giants have inveigled themselves into the highest positions of public office, placing their own puppets Lucas Papademos and Mario Monti directly into the governments of Greece and Italy, whilst former vice chairman of Goldman Sachs, Mario Draghi settled in as president at the European Central Bank. The self-proclaimed ‘masters of the universe’ more or less openly ruling the world these days, which is why the crisis goes on and on and gets ever worse.

And the money-changers who now swivel in and out of power via the revolving doors of their own convenience have no interest whatsoever in saving the folks at home. Their own funds are safely offshore in any case and when the paper currencies begin to collapse as they sooner, rather than later, inevitably must, they won’t be worrying about this either, because their own stash of wealth will have been converted into more solid and stable forms, by, primarily, turning their assets into gold and silver and real estate. At this moment they lie to you, of course (but then they always did and always will), continuing to pretend that gold and silver are poor investments and using every possible means at their considerable disposal to artificially hold the prices down. But only the foolish still listen to what these people say, the ones who speak for Goldman Sachs and JP Morgan, instead of wisely judging on the basis of what they actually do. And if you look, you will discover that the leading financial players are suddenly buying heavily into gold because they know what’s coming, and they also know that what’s coming is coming soon enough.

Here’s an example from an article entitled “Rothschild bullish on gold as central bankers get out of their depth”, which was published by Investment Europe in late July:

Equity markets cheered after Mario Draghi promised recently to do “whatever it takes” to save the euro, but Rothschild Wealth Management believes this was just another sign of central bankers “moving further into uncharted territory”, and that gold could benefit as a result.

Dirk Wiedmann (pictured), head of investments at RWM, said the precious metal could not be manipulated by central bankers, in contrast to paper currencies. He therefore called the environment “extremely positive for gold”, although he cautions investors in it should expect a volatile summer.2

And here’s another entitled “Billionaires Soros, Paulson Bet Big on Gold” taken from ABC news and published in August:

Once again John Paulson is choosing to heavily invest in gold and fellow billionaire George Soros is making a similar bet.

According to Bloomberg News, Paulson & Co. and Soros Fund Management bumped up exposure to SPDR Gold Trust to 21.8 million shares and 884,000 shares, respectively. Paulson & Co. now has 44 percent of its $24 billion fund exposed to bullion.3

So if you do not already feel the pinch of ‘austerity’ then please believe me that you soon will, and that when it comes, that pinch will tighten until it becomes a deathly hold. ‘Austerity’ not really being an intended remedy at all, but, and as it always has been, the underlying aim of the neoliberal ideology. The savaging of public services, the oppression of workers and the privatisation of whole states simply being the well tried and tested methods which the bankers have long used to build their empires, although in former times the use of these approaches being mostly restricted to places faraway. The imposition of ‘austerity’ making nations ripe for exploitation and ready to be enslaved.

Right now, those same financial elites have, and whether by accident or design, manufactured the perfect storm, and with it comes their greatest opportunity to consolidate what is already enormous power, and this time in order that they may wield it with the same nefarious intent much closer to home. Which is the real reason that this latest crisis will have no end, or at least no end until we are collectively prepared to stand tall and say very loudly that enough is enough. Some kind of organised programme for mass dissent being our last chance of averting the total destruction of society that will otherwise inexorably follow in the wake of further rounds of banker bailouts and imposed ‘austerity’.

I had therefore felt a very urgent need to go to London for Saturday’s protest, travelling down the M1 with four friends from Sheffield who had also decided that it was vitally important to publicly express their own dissent. We did this in good humour, and as it transpired, also in good time, arriving at Hyde Park to hear some of the speeches at the rally – something I’ve never managed on any previous marches, and an indication again that the turnout wasn’t as spectacular as at those earlier protests. But then, as one of my friends pointed out along the way, there were other reasons to doubt that our journey to London would achieve very much on this occasion. The police presence being so low profile and non-confrontational, she surmised, and in reply to my own musings, presumably because the protest itself was a more or less officially sanctioned affair.

And indeed, Saturday’s protest was so significantly endorsed that one of the speakers at the rally turned out to be none other than the right honourable leader of the opposition, Ed Miliband – and we had got there just in time to hear some of what he had to say. This is what we heard:

And you know [the government are] not just incompetent, their old answers don’t work any more. Trickle-down economics, cutting rights at work – David Cameron calls it ‘the sink or swim society’ – you don’t build a successful country with sink or swim, you do it by building one nation. And that is what a Labour government will do.

So far so good, I suppose, but unfortunately this was just a sweetener, his clever way to rally the traditional Labour ranks against the common Tory enemy. So here’s what Ed Miliband said next:

Now, of course, there will still be hard choices. And with borrowing rising not falling, I do not promise easy times.

You know, it’s right that we level with people, that there will still be hard choices. I’ve said that whoever was in government right now, there will be cuts, but this government are cutting too far and too fast.

Many in the park applauded, buoyed on by his words of condemnation for the incompetent incumbents in Whitehall, whilst wanting to show solidarity with the old party. Alongside the faithful, however, many hundreds of others booed and heckled.

I was one of those who booed Ed Miliband, and I am very proud to have done so. For these are nothing but weasel words. Polite but utterly insincere justification for further ‘austerity’ and all dressed up within that old Thatcherite garb of ‘there is no alternative’. Such words prove only how sold-out Ed Miliband and the Labour Party still remain, and as such deserve nothing but our outright contempt.

My friends and I had already left before Miliband went on to explain how his future Labour government would “end the privatisation experiment in the NHS and [we] repeal their NHS bills” and before his entirely hollow “pledge” to small businesses “that instead of a country that serves its banks, we will have once again banks that serve this country”. Even if we’d stayed longer, we would still not have heard him apologise, as he should, for New Labour’s important role in enabling the NHS to fall into private hands, whilst meanwhile permitting the banks to entirely run amok during more than a decade in government.

Our premature departure also meant that we hadn’t, at least, had to suffer his wretched and totally over-worked ‘one nation’ finale – and if you decide to listen to his speech on the embedded video below, then tell me if you don’t, like me, hear his voice audibly distort, almost as if in mimicry, to become indistinguishable from the bleating insincerity of Tony Blair – and I can almost hear the voice of Tony Blair as I read the transcript back again:

One nation is a country in which those with the greatest shoulders bear the broadest burden. One nation is a country where we give hope to our young people again. One nation is a country where we defend and improve institutions like our National Health Service. One nation is a country united not divided. A future that works. A future that Britain builds together.

He might just as well have included mention of the need to go “Back to Basics” and calls for “the Big Society”, before closing with “because you’re worth it”, or something else equally as vacuous. But the final straw for our own little party was when he told us all how he was so tremendously committed to “tax[ing] the bankers’ bonuses”. And not, as he should have proposed, to putting a significant but fair sales tax on the enormous volume of their market manipulating high frequency transactions. Nor to securing any of the unpaid taxes protected by the multitude of convenient offshore havens, the majority of which are, of course, British dependencies. Nor even to prosecuting any of those involved in what we now know – and with the revelations surrounding the fixing of Libor, know beyond all doubt – to be nothing less than a vast criminal racket. And finally, no mention whatsoever of any need for a cancellation of debts, something which must happen if only because the debts are simply unpaidable, as they always have been. In short, Miliband proffered no hope and made plain simply by omission that he has no real interest in bringing any kind of justice at all, social or otherwise.

Yet I remain glad that I made the effort to join in the demonstration, and if only because, as this entirely avoidable and still potentially reversible crisis deepens into greater chaos, and as the British people are slowly gripped by the same despair that those in Greece, Spain and Portugal are already feeling, it will help me again to salve my own conscience. For when all are wondering why we couldn’t have prevented our lemming-like march over the precipice, many will also turn to wonder why they themselves had not done more, or acted sooner, and if only by learning what’s actually going on, or by spreading the message, or more simply by standing firm and saying no. If only more had tried, they will realise too late, we might actually have saved ourselves…

And if you are wondering what kinds of remedies might truly be effective if we are to save ourselves from a fate worse than Greeks, Spanish, Portuguese and others are already suffering, then I refer you to my many earlier posts, and especially to those categorised under neoliberalism, debt cancellation and “austerity measures”. Perhaps the most succinct combination of analysis and suggested alternatives having been put together in this one.

Oh, and here is Ed Miliband selling himself as the new Benjamin Disraeli:

Click here to link to the official October 20th protest website.

*

Additional:

The anti-cuts campaign continues on November 17th with a Unite the Resistance national conference in London. The list of speakers are as follows:

Mark Serwotka – PCS general secretary

Hind Adb-al-Gawad Ibrahim – Independent Union of Local Development Information Centre Workers Egypt

Karen Reissmann – Unison NEC

Mike Mansfield QC – campaigning barrister

John McDonnell – Labour MP

Matt Wrack – FBU general secretary

Ian Hodson – BFAWU president

Kevin Courtney – NUT deputy general secretary

Zita Holbourne – a PCS executive member and joint chair of BARAC (Black Activists Rising Against Cuts)

Owen Jones – author of “Chavs – the Demonisation of the Working Class

Karen Reissmann – Unison NEC member

They will also be joined by an unnamed South African miner who has been involved in the bitter struggle against British-owned mining firm Lonmin.

Click here for further details.

*

Although I do not ordinarily publicise events taking place in other countries, I feel that it is worth making an exception in the case of the UFAA – United Front Against Austerity campaign which begins with its inaugural conference next weekend in New York. Here are more details:

When:

Saturday, October 27, 2012
12:00 pm — 6:00 pm

Where:

Walker Auditorium / INN World Report
56 Walker Street
New York, NY 10013
One and one half blocks south of Canal Street, between Church & Broadway

Purpose:

To organize an effective opposition to the impending austerity offensive; agitate to shift the burden of the economic depression onto Wall Street oligarchs; and to build momentum toward a genuine political revolution of, by and for the people.
Participants will hear proposals from distinguished speakers, engage in floor debate, and vote on vital strategic matters. The UFAA intends to build on Wisconsin and Occupy — with decisions, demands and action.

Speakers:

Cindy Sheehan — Antiwar Activist
Webster G. Tarpley — Author, historian and economist
Dr. W. Randy Short — SCLC, University of Virginia
Don DeBar — Founder, Community Progressive Radio
Anthony Monteiro — African-American Studies, Temple University
Dr. Jay Arena — Professor of Sociology, College of Staten Island, CUNY
Eric Lerner — Popular science writer and Occupy Wall Street activist
Rev. Edward Pinkney — Benton Harbor, Michigan activist (via Skype)
Murrell Brooks — Political Science, Virginia Wesleyan College
Eric Draitser — Independent journalist, StopImperialism.com
Bruce Marshall, moderator — former Congressional candidate, Green Party of Vermont

We will also play pre-recorded messages from:

Amelia Boynton Robinson — Civil rights leader
Yanis Varoufakis — Political economist, Greek SYRIZA coalition
Glen Ford — Radio host, Black Agenda Report
Stephen Lendman — Research Associate, Center for Research on Globalization
David Swanson — Activist, blogger and author

You can also find out more by visiting the official website at http://againstausterity.org/

*

Update:

Click here to watch a recording of that small but very lively inaugural United Front Against Austerity meeting.

The proposed anti-cuts programme agreed upon was stated as follows [2:53 hours in]:

The United Front Against Austerity adopts a jobs for all resolution that specifies that we demand:

  • 30 million jobs at good union wages
  • the nationalisation of the Federal Reserve
  • a Wall Street sales tax
  • that the jobs programme be open to all including immigrants and persons formerly incarcerated.

 *

1 From an article entitled “Greece, Spain ‘in depression’: Nobel winner Stiglitz” published by France 24 on October 17, 2012. http://www.france24.com/en/20121017-greece-spain-depression-nobel-winner-stiglitz

2 From an article entitled “Rothschild bullish on gold as central bankers get out of their depth” written by David Walker, published by Investment Europe on July 31, 2012. http://www.investmenteurope.net/investment-europe/news/2195534/rothschild-bullish-on-gold-as-central-bankers-get-out-of-their-depth

3 From an article entitled “Billionaires Soros, Paulson Bet Big on Gold”, written by Lyneka Little, published by ABC news on August 16, 2012. http://abcnews.go.com/blogs/business/2012/08/billionaires-soros-paulson-bet-big-on-gold/

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Filed under analysis & opinion, austerity measures, Britain, campaigns & events

a depression by any other name: so what is anyone doing about it?

News that the British economy has now entered a dreaded “double-dip recession” is being greeted with surprise from the government, when it ought really to have surprised no-one. That the government’s own dismal failure is immediately reworked into the justification for imposing more ‘austerity measures’ and more quickly, is, again, something we might all have expected.

David Cameron apparently said that the figures were “very, very disappointing”, whilst adding only that the government would stick with its plans and do “everything we can” to generate growth.1 Everything, that is, aside from tackling the real cause of what is actually a worldwide economic depression, by, for instance, re-regulating our own financial markets and also criminally investigating the banks that are responsible for the crisis. And everything except for making significant investments in infrastructure projects and government services that would actually generate useful jobs at union wages.

Austerity isn’t simply cruel, from a national perspective it is suicidal. Just ask the Greeks… or the Italians, or the Irish, or the Spanish, or for that matter, the Argentinians and the Chileans.

Labour leader Ed Miliband said the figures were “catastrophic” and asked Mr Cameron what his excuse was.

“This is a recession made by him and the chancellor in Downing Street. It is his catastrophic economic policy that has landed us back in recession,” Mr Miliband said.

From the same BBC news article.

Fair enough, but where are Labour’s alternatives? During the last general election, the choice was between hardcore austerity meted out by the Torys, or softcore austerity from New Labour. How about no austerity! How about closing down the offshore tax-havens and thereby forcing the major corporations to stump up for the deficit. I don’t hear you, Mr Miliband.

The people are very slowly getting wind of what is really going on here. They increasingly see that the bankers have far too much power and influence over our elected representatives. Indeed, Goldman Sacks have blown their cover completely with the dictatorial appointments of Lucas Papademos and Mario Monti in Greece and Italy respectively, not to mention the more recent appointment of Mario Draghi as President of the European Central Bank (ECB). Yet there remains an almost total political vacuum in this country, with no mainstream party prepared even to question, let alone challenge, the steady ‘technocratic’ takeover of our societies.

So I see every reason to repeat an earlier plea for the urgent formation of a new political party. The party I envisage stands for human rights and social justice. It stands for the people and against the established elite. It says defiantly that enough is enough.

*

Economist Michael Hudson spoke about the reasons for the deepening financial crisis on yesterday’s Keiser Report on Russia Today.

In the interview with Max Keiser [part 2 of the show: 13 mins], he explains why the bailouts have failed and, in their current form, must continue to fail. He also points out how there are plenty of alternatives for solving this crisis other than the deathly hammer of ‘austerity’.

*

Here is a previous post, written last summer, which breaks down why ‘austerity measures’ will fail to rescue the economy, whilst presenting a few ideas for alternative measures that would genuinely help to turn the country around.

1 According to a BBC news article entitled “UK economy in double-dip recession”, published on April 25, 2012. http://www.bbc.co.uk/news/business-17836624

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Filed under austerity measures, Britain