What will it cost us to bail out the banks and keep the financial system from suffering its losses?
Well last week in Dublin we started to see the outlines of the answer.
It happened at a meeting of steely knives in Ireland’s flesh at the Merrion Hotel in Dublin. Last week not only was the IMF delegation there but so, according to a Banker friend of mine who happened to be there too, were the French, Chinese and an Arab delegation.
So what were they all there to decide?
Well after a round of confidential meetings of representatives of ‘bond holding nations’ and officials from the EU, ECB and IMF, the EU/IMF held in press conference at which they began to unveil Ireland’s political future. Here is a quote from Dan O’Brien, the Economics Editor of the Irish Times who was there listening.
“nothing quite symbolised this State’s loss of sovereignty than the press conference at which the ECB man spoke along with two IMF men and a European Commission official. It was held in the Government press centre beneath the Taoiseach’s office. I am a xenophile and cosmopolitan by nature, but to see foreign technocrats take over the very heart of the apparatus of this State to tell the media how the State will be run into the foreseeable future caused a sickening feeling in the pit of my stomach.
Loss of sovereignty is right. And it will come to us all. Ireland is NOT to make its bond holders nor the bond holders in its private banks share the pain. ALL the pain is to be taken by the Irish people. Even though billions of Euros of these loans were made by Private banks to people, institutions and other private banks NONE of them in Ireland, it will be the Irish people who will pay the debt.
And that will happen not just because financial experts at the European Commission, the ECB and the IMF have said it will, but because the continuation of all the ruination visited upon us so far by these people depends on it happening.
The banks are to be bailed out yet again. Not just those in Ireland but those in France, Germany, the US and the UK as well. Which is why for two days stock markets around the globe have rallied. The entire rally has been fueled by greed and relief predicated upon and caused by the rumour, now confirmed by M. Trichet, that one way or another the ECB will continue to buy up any bond of any degree of worthlessness from anyone who tenders it.
At the same time, on the same day (yesterday) the European Commission suggested the Portuguese government should cut its unemployment payouts. The Portuguese tartly replied it did not yet need any ‘suggestions’ from Europe.
And this caught my eye. It was an impolitic thing to say to any sovereign nation and particularly so when Portugal is watching as the bond speculators (AKA banks) push its debt costs up and up and the nation further and further into the quicksand of unpayable debt.
So why say it, why mess with the sovereignty of a second country and why now?
The answer is that the bail out and the ‘suggestion’ are intimately related.
In the conclusion of the Debt Generation book, I wrote this, from May of this year,
“…to quote one leading market analyst, ‘there are still doubts on whether the peripheral countries can deliver on austerity.’ That’s their worry now. That is what the financial class sees as the proper and apparently only role of government. DELIVER ON AUSTERITY. That is what your government is for. Welcome to your future.”
Things have moved on and the question the financial class have been mulling over is HOW?
We now have an embryonic version of
their likely answer. It was released a week ago by the IMF. One of the names on its cover and the man who authorized its release as an official IMF document, is Ajai Chopra, who is head of the IMF mission to Ireland and was last week probably in the Merrion Hotel (can’t be sure) and later was at the press conference.
Its title though dull hints at its agenda. “Lifting Euro area growth: Priorities for Structural reforms and Governance.” It would have been more honest if it had been called Structural reform OF governance. For that is what it is about.
In the eyes of the IMF, finance requires that governance change – in the direction of removing democracy a step or two away from the people.
It has a few key points which it stresses.
This reform package would combine (i) a shift from labor to VAT taxes, (ii) a reduction in the level/duration in unemployment benefits and in early and old-age retirement schemes,
The IMF document says over and over again that what is wrong with Europe, what holds it back is its labour costs. They are too high. So first reduce tax on labour. Which means income tax should be reduced and the burden of tax shifted to VAT. Which means a shift from a graduated tax system where the higher the wage the higher the tax to a flat rate of tax.
The employer no longer has such a high wage bill and the tax burden shifts to the worker simply by re branding him/her as a consumer. The wealthy get taxed a LOT less and the poorer find all their essentials cost a lot more. VAT in the UK IS going up. Funny coincidence.
The IMF likes point (i) so much it says,
Shifting taxes away from the labor factor and toward consumption therefore presents strong potential for growth.
Also in the spirit of ‘reform’ AKA cutting the costs of paying people, there is point (ii) … If people should become unemployed make sure they are paid less and for a set period after which they should forage as best they can, as befits those who are nothing but an economic liability and whose children will doubtless grow up to be the same. And when they get old keep them working for as long as possible and when they do eventually retire cut what they get paid.
All of that reduces taxes on the wealthy and on business, and cuts the tax base of the state thus ensuring even if some pesky left wingers do get in they will be in charge of a state that has no income. No chance of rebuilding any welfare without the cash to do it.
Then the IMF gets back to the cost of work and ‘suggests’,
Promoting decentralized wage bargaining… moderate minimum wage…softening employment protection,
Or, in English, cripple the unions and collective wage bargaining, reduce the minimum wage idea and make it far easier to fire and hire. Oh and ‘harmonize qualifications’. Making a mockery of national standards.
This last point may seem soft but it is not. It gets to the rotten, anti-democratic core of the IMF and its ‘reforms’. The IMF is non democratic and in its heart, distrusts it. It is and always has been One dollar one vote. The IMF believes in the rule of technocrats and ideologues – its own preferably. The IMF has spent half a century forcing governments to ignore their people and follow IMF diktats. It is what the IMF believes. It is what it knows.
EU-driven reforms have been more successful where national authority was delegated
Delegation is the dirty word here. Delegate too near to the unwashed people and nothing ‘good’ can be forced through.
Much of the paper talks about how new powers should be created and held at the European instead of national level . New powers OVER nations, of surveillance, funding and punishment. At one level, the idea of keeping an eye on errant debtor nations sounds fine. At another it is clearly about removing democratic control over tax, spending and financial regulation further from the people. It is about concentrating that power in the hands of fewer, more removed officials and panels of experts.
The EU would like to be seen as democratic and ideally the EU should be, but as it is presently constituted and run, it is in fact a mechanism for removing democratic control and making it ever more remote.
Here is another quote of how the IMF sees the EU.
The Single Market Program, coordinated by the European Commission, has been successful in opening product market access and leveling the playing field. By contrast, labor market and social policy reforms, left to national authorities, and subject only to peer pressure, have proceeded gingerly.
In other words the great success story of the EU, in the IMF’s eyes, is the way Finance and services has been deregulated and markets opened. Which is exactly why and how we had German banks selling securities and making loans to southern Europe out of the ‘self regulated’ Dublin financial centre which caused the largest and still ongoing, continent-sized and systemically suicidal financial collapse of all time.
That is what the IMF and now the EU, in its almost limitless intellectual enslavement to a blind ideology is about. That is the model they want to impose on all aspects of our democracy.
Be seen to be in favour of democracy, but in reality cut off its balls and sell them to the financial class as sweet meats.
Good post.
On another note, have you all seen the FED data release?
http://www.federalreserve.gov/newsevents/reform_transaction.htm
You can click on a programme to the right & get an excel sheet with summaries of the beneficiaries & the amounts.
Someone with a deeper understanding than me needs to look at it and comment.
Golem great and utterly sobering post! You are right to focus on the language as well as the facts. As Orwell observed it is how totalitarianism cloaks its moves. Remember the Ministry of Love..? And the IMF seems like fiscal totalitarianism. "Delivering Austerity to the Periphery" it has the fine bland ring of when I first heard the term "Collateral damage" and " impacting ordinance" back in the days of the Vietnam War. I mean its even more Panglossian …Delivering used in this sense… like delivering the coup de grace?
Does anybody still remember the Asia crisis of 1997? If I remember correctly, it started with a banking-crisis caused by poor financial regulation. Even though these countries had their own currencies, it was the policy of the IMF to force them to high interest rates and austerity measueres, which caused a lot of pain and anger in the affected countries.
We in the western world probably will learn to know how that felt…
I wonder if it might be worthwhile to compare the Asia-crisis of '97 with the Euro-crisis of today, and what conclusions one might be able to draw from it.
As a result of the Asian crisis, most of these countries now run a huge account surplus and have accumulated vast reserves of foreign currency. As to never again to have to endure the pain an humiliation of an IMF programme forced upon them.
It is astonishing what is happening to Ireland, I knew of someone who once calculated how long it would take for an aggressive outside aggressive force to take over Ireland (this was in and around the time of the invasion of Iraq) and they came up with 30 days, not even close! A plane lands on a Thursday carrying an invasion force of a dozen and leaves ten days later with full control and not a shot fired.
It's an act of breathtaking callousness, too mind boggling to even contemplate, not that there seems to be much will to do so in this country, a lot of my fellow citizens claiming to be "sick of it." Our country has had a biblical curse fostered on it by the ECB/IMF, death, sickness, poverty, and ignorance will be its fruit, whilst most of my generation will flee the coup leaving the country once again in the hands of the bastards who set it this way.
As an example of how our media are spinning this see the following http://www.irishtimes.com/newspaper/frontpage/2010/1203/1224284682093.html?via=mr which was front page of the Irish Times today (the same newspaper which featured no coverage of last Saturday's protest on it's website front page until after it had been held). A billionaire no doubt up to his neck in the banking collapse telling this country's poorest to effectively "suck it up."
That being said your blog is excellent, do you have any plans on speaking in Dublin anytime soon?
Thanks Seanán
Seanán,
Thank you for commenting. And welcome.
I would dearly love the chance to come to Dublin to talk. But I so far have no connections with any group that would be able to sponsor it. And I am sadly not a man of enough means to fund it myself.
But if I get the chance I will.
In the great paradigm of the left I did not think such little things a sovereignty mattered. Now it does it seems, marked progress indeed.
I did not hear any sounds of caution from the Groan et all when the banks were bunging Brown and Blair 80 billion in tax revenues per year, for them to build new Jerusalem. this was neither capitalism nor socialism it is pure unadulterated corporatism, and continues to be.
btw is your book available in ebook form? not that I am trying to "save" the planet as I am sure a few pebble bed nuclear reactors would do the trick, but my attic is so full of books the floorboards are bending under the weight, your book might be the tipping point. I will apply the precautionary principle.
Sean,
So far we have not ventured into ebooks. We may do, but just getting the paper books sorted ihas been a task.
Ben,
Market Ticker have written about the single most important aspect of the data dump and one which is clear evidence, from an official source that Golem's thesis of widespread bank insolvency is correct. The data shows that under the TAF programme, ALL the big banks were putting up collateral in the form of 'assets' that dwarfed the amount of the loan they were taking out.
In other words, the FED was effectively valuing the 'assets' at as low as 10% of their mark-to-model prices. Considering all this collateral was returned to the banks, and that the condition of the MBSs could not possibly have improved under the intermediate economic conditions, how can the banks possibly have been solvent then and how can they be solvent now?
Golem –
thought you might like this from today's Q&A with Julian Assange in the Guardian…
"The west has fiscalised its basic power relationships through a web of contracts, loans, shareholdings, bank holdings and so on. In such an environment it is easy for speech to be "free" because a change in political will rarely leads to any change in these basic instruments. Western speech, as something that rarely has any effect on power, is, like badgers and birds, free. In states like China, there is pervasive censorship, because speech still has power and power is scared of it. We should always look at censorship as an economic signal that reveals the potential power of speech in that jurisdiction. The attacks against us by the US point to a great hope, speech powerful enough to break the fiscal blockade."
I accept your overall analysis – very alarming.
But I'd just like to make one detailed, contrarian, point on VAT. I think some of the tax burden should move to VAT, away from corporation tax. The reason: We have many large (notionally-UK) corporates avoiding paying corporation tax in the UK, with some other 'good guys' paying their 'fair share.
I would reduce the level of corporation tax and increase VAT correspondingly, shifting the point of tax collection to the point-of-sale, which is much easier to collect (i.e. more difficult to avoid).
Overall, for a 'good guy' corporation, the effect on the value chain should be neutral – the cost just moving from one point to another.
They would use their corporation tax saving to reduce pre-VAT prices.
But the 'bad guys' would see their cost rise and their products become more expensive, as the tax they were previously avoiding became collectable.
Result: the good guys get a relative competitive advantage AND the overall amount of tax collected should increase (coming from the 'bad' guys). Honestly done, it ought not to increase overall consumer costs.
Sean,
A suggestion. Buy the book, read it and then give it to a friend !
golem & Seanán
i forwarded the petition to the Irish president to an irish friend, but i noticed that it has not got so many signatures yet, i hope that it starts snowballing
They would use their corporation tax saving to reduce pre-VAT prices.
Your trust in the corporate world is charming, but misplaced. Businesses set prices based on what the market will bear (i.e., how much people will pay,) not how much it costs them to manufacture (with tax included as a cost.)
“Slavery is the first step towards civilization. In order to develop, it is necessary that things should be much better for some and much worse for others, then those who are better off can develop at the expense of others." Alexander Herzen
Are humans thinking of ways to get out of this nightmare? Why not do a documenary on creating a world without money? Peter Joseph’s film Zeitgeist Addendum did talk about this, but left out steps we could take today….such as
Making money visible. Visibility is simply another word for truth. Know the truth and the truth shall set you free. Governments, corporations, people of power know that, which is why they would never allow the truth – the plain and simple truth – to be the basis of any political, social, or economical system they would devise.
There should be no secrets. Everyone should know what everyone else has (bank accounts should be open for all to see), what everyone else earns, what everyone else pays in wages, taxes and benefits, what every other corporation charges and buys and sells, and for how much and for what profit……EVERYTHING should be open. But this is only possible in an enlightened society, because only enlightened citizens are not willing to get anything, or have anything, at someone else’s expense.
D,
I am of your mind when it comes to the paucity of truth and the need for openess. Part of the cancer eating away at the tissue of our society is the thick lobes of corporate and commercial confidentiality.
A good 90% of such confientiality is nothing but a smothering growth of gristly corporate secrecy whose only use is to hide lies.
I think one of the necessary pre-requisits to recovering any democratic and legal control over the corporate world is to revoke the notion that a corporation has rights similar to a person. We have ceded such rights which have then accreted further rights to secrecy and confidentiality which are everyday rotting our society.
Andrew,
thank you. A very apposite quote.
Hi Golem
After reading the IMF report and then your analysis I find your views overly grumpy.
Erosion of democracy, the gradual encroachment of commercially led governance, I see everywhere, including the IMF report. What I have to disagree with is your reluctance to lowering labour costs.
High labour costs are a major impediment to employing people. As an employer, I would rather give people decent salaries and let them decide how they are going to spend it, whether it be on health insurance, pensions, child care, etc. Provided that I give employees a safe working environment, flexible hours and adequate leisure time, how they lead the rest of their lives is up to them. Having people look after themselves, rather than letting corporations do it, is better for democracy. Those who can't must be caught by the social welfare network.
What's especially irritating about the IMF report is how they use the USA as a yardstick, like a golden standard. From the look of the heat charts the UK is 90% there.
"Oh! Listen to that poor 51st Stater with the crooked teeth. Is that an English accent I can hear?"
There were two great visions of the future written in the recent past; 1984, Orwell's black vision of a vast totalitarian state with ultimate power and viciousness locked in an endless struggle/embrace with similar empires and Aldous Huxley's Brave New World a hedonistic consumerist paradise. The former, Stick and the latter, Carrot as forms of the exercise of Control. Both were run by a highly secretive inner cabal. The future we have stumbled into and which is being so graphically described in these posts is yet another one. Late Consumer Capitalism writhing into endless mind boggling shapes ( like a Corporate Capitalist China run by a Marx espousing Corporate Communist Party) A future which shares elements of both of those earlier visions in which the truth can be found if it is searched for hard enough but will make no difference to the structure of things. The very symptom that power works hard to propagate.There is nothing you can do. That is how it is. It is the nature of things. See how revealing all this rottenness will make no difference. That promotes the weariness that Seanan speaks of in Ireland "We are sick of it". A sense of helplessness in the face of hidden power. They thrive on it.
The inner motive which is driving you Golem and other bloggers, Wikileaks, Whistleblower and the many commenters here and throughout the internet is the belief that Truth will as D said Make us free. That the structure will eventually be affected by knowledge.
In the 1800's Democracy was a potent and dangerous idea. What is being formulated here as the search for transparency is the search for an Open Society. That is what this evolving Corporate system has been slowly and intently throttling. To understand the economics behind this power is vital but it is only part of the story… frankly most people will never make the effort to delve into the ways of economic power… it is too convoluted too complicated. Even when as in Ireland the economic facts hit them full in the face. They have to survive.
Ideas like withdrawing money from the banks come up… perhaps they might have a practical effect but I personally have strong doubts it would be at all effective. Who has the money to withdraw? But it undoubtedly catches at people who might never grasp the complexities of shadow banking. It encourages the questioning. And it is the developing questioning that is the key.
That is what is so brilliant in this blog and I salute you and your savvy band of commenters. It is a forensic attempt to see the rot. To undermine the mechanism of Denial. To rip away the shroud.
To fight or flee? As a small country the Irish may well choose the age old remedy of the helpless but hopeful.. emigration…to flee .. but for the rest of us fleeing is not an option. Where would we go? We have to stay and therefore we have to fight. And the struggle will be the struggle to reformulate what Democracy in the 2000's will mean.
My take on this, fwiw: http://andwhatwillbeleftofthem.blogspot.com/2010/11/men-of-money-women-of-steel.html
Dear GolemXIV,
when I see now the the number of comments to your postings and the quality of many of them, I believe that your great work since 2008 is finally paying off – at least intellectually – the tide is turning…. or am I too optimistic?
I enjoyed the post and will now sign the petition!
Ta 🙂
Wirplit,
Thank you. Like you I will stand and firght.
RichGB,
Labour costs is one of those convoluted terms isn't it. So I may not have been very clear. Partly because the IMF document wasn't very clear. At least not to me.
I read their document as saying – Cut minimum wage. Now that I am against. Cut the maximum wage. Why always target the bottom?
Dispensing with collective wage bargaining is only ever designed to lower wages is it not? So it seems clear there is a strong desire to lower wages. Which is at odds with your desire to give peope a descent salary.
What you do seem to be saying is that you find it onerous and difficult for a small company to also pay high tax contribution on top. Is that right?
I can uderstand the frustration of feeling you are contributing to a system which you might think of as innefficent. But if you take away the tax payments won't you have to replace them with salary increases in order for your employees to buy the services in teh amrket?
Basically I was objecting to the push to move from a graduated tax to a flat tax.
I agree it makes no sense to strangle business. but neither does it makes sense to impoverish people.
The IMF's logic has always been lower salaries. The business can make and sell chaeper. Cheaper goods win market share. A year later the business can hire a second worker.
From the IMF's and statisitcal POV this is 'growth'. Employment has gone up, unemployment down and profits at teh company up as well. But frmo the workers POV there has been no improvement. They are simply doing the same work for less. Continue the logic and wages should always go down until everyone is employed at the lowest possible wage.
Re: Seanán's comment
Hi Golem,
I agree, it would be great to have you speak in Dublin (or Cork or anywhere here in Ireland for that matter).
I've been reading about this stuff on & off for the last 3 years and I stumbled across your site a couple weeks ago. I have to say that you have a real talent for clearly & understandably communicating the concepts involved. Not only that but I have been repeatedly left asking myself after reading one of your entries: "Why isn't this being said clearly in the domestic irish media?"
What sort of groups do you normally connect with? What sort of money are we talking about? Enough to cover transport & accomodation or do you need to make some cash too?
Admittedly I have no experience of this sort of thing but I have a huge desire to spread & share this information. For example I imagine would student groups like to hear you speak? Or community groups or environmental groups? I can even see someone like Vincent Browne being interested to have you on his current affairs tv show? And it's a shame, because David McWilliams ran a economics festival last month which I am sure you could have connected with.
Peace,
Ronan
[email protected]
Thanks for posting up David. As ever, excellent research & commentary. One despairs of ever finding such information in our mainstream media.
This IMF document is very sinister indeed. Decades ago, growing up in UK, I remeber that polticians regularly spoke seriously of the goal of full employment. It was very nearly achieved in the post war period. The Thatcher years of 'monetarist' economics put paid to that & what we've had since is an ever harsher & more cruel development of that 'system'. Even in the debt-fuelled 'boom' times, there is no job for 1 person in 20. High unemployment is 'built in' to this economics in the (bogus) name of 'efficiency', 'competitiveness' etc. In reality, it means 'efficient' vacuuming of society's 'wealth' upwards to the already wealthy.
'Competition' used to mean 'make workers compete' for fewer & fewer jobs in 1st world countries. Note that even now, 'productivity' increases are still a major priority for 'growth' etc. Even tho', with massive unemployment, this means more 'output' with less jobs. But now, the agenda seems to be to take advantage of the crisis to make a cruel & sinister step further. Workers in Europe are now to more directly 'compete' with those in places like China. And if unemployed suffer the same fate. Of course, as we know, it's not just about China (or other low wage, no human rights countries). The wealth of financial elites here (that we created) is being massively invested there, particularly in manufacturing. I've been calling this China-isation for some time.
For the sake of ourselves & our children, Ireland must start to move to a more self-sufficient society. 'Peak Oil', other resource issues & climate change are all approaching faster than we think & will have devastating results. Above all we must not give away our sovereignty or democracy (our opportunity for it, not the sham we have now) via politics or debt slavery either.
If ever there was a clear message that Ireland should default & get out of the Euro now, whilst we still have the best starting point to forge our own future, it is this IMF program for the next major step toward totalitarian oligarchy.
To be honest, even recently, I hadn't thought the rise of such inhumanity would, at my age, impact
my own life much. I was clearly wrong. Looks like Naomi Klein had much to say with 'Disaster Capitalism'.
Where the &^%$ are the politicians & mainstream media with this? Absolutely outragious. What complete incompetent %$£holes they are, peering out from their high-waged cocoons.
Sorry, but I'm getting more angry by the day.
Gweilo becoming Coolies, funny.
Mikehall get Angry.
And then get Even.
Hi Golem
I agree, the IMF are advocating lower wages throughout the report. Everyday objects are just too cheap to keep people in jobs. The only solution for the manufacturing sector is higher productivity or diversification in to high-value products. Cheapening labour will only cause poverty and depress the domestic consumer market.
I wonder what Adam Smith would say about the IMF.
ahimsa,
Thank you for your comment. To your question about costs. All I need is to cover my costs of getting there and back and satying warm and fed. I am very happy to kip on someone's floor and take what food is going. I am not looking for a profit. I just don't have the money to bankroll a loss.
In the UK the Green Party has helped us as have the Quakers and various sudent groups and their university.
I'll drop you an email to say hello.
Mikehall,
Deep breaths mate. It's what I do. It helps – a little.
Posts like yours are essential. We all need to know that the anger we each feel is shared by others with whom we can feel some solidarity and support.
Constantin Gurdgiev, an economist at Trinity College Dublin says banks were distracted from productive investment by the property binge. "The attitude was, 'we can make a 10% return by building semi-detached bungalows in the middle of nowhere, so why should we invest in your company'," he says( observer 05 11 10)
This seems to confirm the suspicion that people were building houses to skim off the %'s from the top rather than because anyone wanted to live in them.
For me, at the moment, what is happening in Ireland is a kind of " belly of the beast " moment, like Lehmans in Oct 2008, when we are briefly permitted to see the workings of the system most clearly, when that system goes wrong. The IMF walks in and takes decisions away from sovereign power, which reveals itself as having been already bargained away and sold off years ago. We suspect this of our own governments in the UK ( as do the residents of portugal or spain et al.) but say nothing, suspecting ourselves our naivety or cynicism.
In Ireland we now see much of this cynicism confirmed as being simply the way the cookie crumbles. The truth will out….
in France, last week, r.e. Wikileaks, Francois Baroin, budget minister and government spokesman, told Europe1 radio, "I always thought a transparent society would be a totalitarian society."
no sir, i don't reckon you're right.
Golem,
Why do you use the term 'democracy' here. Sovereignty seems more applicable.
In my own view, the best option for citizens of Ireland is a default patterned after Iceland's. I suspect Ireland's voters are not ready for this, though. Based on videos of public demonstrations there, too many still think striking for higher wages and benefits is still a good strategy.
This reminds me of the sinking Titanic. Since democracy is on your mind, here is a question: Do you think democracy would have helped folks on the Titanic objectively? morally?
Mark,
I agree about sovereignty. I supose I am using the two terms turn and turn about about I see them as inextricably entwined.The loss of sovereignty is happeneing because we are losing our democracy. And vice versa. The loss of sovereignty is happening because we keep ceeding what were democratic powers to non-democratic institutions.
We signed up top GATT and gaebv powers to it and its successor the WTO. For example. We gave away the power to make certain decisions that used to be made democratically, to a non-democratic quango.
But I am as happy to say we are giving away our sovereignty and that is eroding our democratic control. I have no stake is claiming one should be above the other.
The only other reason I make so much of it is because if too much democratic control is eroded it leaves us with fewer and fewer peaceful avenues to oppose what is being done.
As to your question it is sort of what I am saying. if we are on the Titanic I want the captain and his rich mates to NOT be in control. I want a change of command. To continue with the comparison. The ruling officers locked those in the lower deck in to stop them disrupting things and there they were left to drown. I fear that is what is happening to us.
I'm not suggesting that having a nice vote and passing some lovely resolutions is going to save anyone locked in a sinking ship. Of course not.
I am saying that if we want to do something about it we can try to re-vivify real radical democratic control over our nations OR we can wait until it's too late and there are no democractic possibilities and then we will have waited until our only courses of action will be violent.
Sorry I this is less than clear. I am off to bed as I am rather tired. I suspect my brain is too tired to think very clearly.
David, a chara,
I've only recently come to your blog, having thashed around helplessly, trying to understand what the hell was happening, and running into my own ignorance at every turn. I'm waiting on delivery of your book, and looking forward to it – in dread. Everything I've read here confirms my worst nightmares…
We definitely need to hear you speak here in Ireland; people are sleepwalking into the nightmare. They're angry, but don't even know for sure who or what to be angry about. If you're willing to come, I will do everything I possibly can to make that happen.
As if the nightmare wasn't bad enough, have a look at this link
http://bit.ly/fIC3hU
Thanks for the illuminating posts, for making sense of so much that didn't add up.
Anne L
Have you maybe done some research on (and do you have any interest in) the collapse of the Yugoslav economy? Seems somehow relevant. The following in particular:
"The economic crisis was the product of disastrous errors by Yugoslav governments in the 1970s, borrowing vast amounts of Western capital in order to fund growth through exports. Western economies then entered recession, blocked Yugoslav exports and created a huge debt problem. The Yugoslav government then accepted the IMF's conditionalities which shifted the burden of the crisis onto the Yugoslav working class. Simultaneously, strong social groups emerged within the Yugoslav Communist Party, allied to Western business, banking and state interests and began pushing towards neoliberalism, to the delight of the US. It was the Reagan administration which, in 1984, had adopted 'Shock Therapy' proposal to push Yugoslavia towards a capitalist restoration. "
Sean Gervasi is probably one of the best sources if you're interested. Apologies if this doesn't seem relevant, but it just seems it's all the same again and again (to certain details even), until the last traces of anything humane in the world politics and economy are extinguished.
It has occurred to me that the West aims for the cheap working force that could rival the Chinese ultimately.
This link to a list of the US bailout recipients could be useful: here.
Unfortunately, they don't say how they arrived at these figures.
RichGB,
Great link thank you as always.
M,
I haven't done much research on the former Yogoslavia. I did some on its political break up. But what you are saying is interesting to say the least. I will take a look at the source you suggest. Thank you.
Anne,
Thank you for your kind comments. I hope the book speaks to you.
If you want to contact the other person on this thread who thought about me coming to speak in Ireland drop me an email and I can put you two in touch. There are also people at two of the big Irish boards C.Flower or Captain Con O'Sullivan at Politicalworld.org who might be worth contacting and might be able to help.
Please keep in contact.
Couple more for the List
Had a whole free day to read the book yesterday, couldn't put it down once I started. I checked out High Anxieties after. Mr Lovelock is a gem.
It's all take take take till it BRAKE (another song there me thinks).
Talking of songs and all take take take, here's a bit back back back bro:
Cold Turkey
With my compliments.
Dude, I can only get the song to work if I open in a new tab. Here's the address too
http://www.mediafire.com/?lf7kcayqigwcruo
New campaign video from nef:
http://www.neweconomics.org/press-releases/who-will-tame-the-giant-vampire-squid
I attended a 'fink club' tonight on the subject of how to tame the banks in King's Cross. Ann Pettifor from Debtonation, the Daily Mail's Associate City Editor and some other nef bods talked and invited contributions from the floor on how to tackle the problems of the banks.
It was great to be in a room with a bunch of people who had identified the banks as the main enemy and who were putting forward great alternatives to banking with the big banks and measures that could have prevented the crisis and would prevent it happening again. But there was still no real recognition of the crisis in democracy and no desire to entertain the notion that the banks should not have been bailed out and should not be bailed out again.
It seems to me that this is the main hurdle that people struggle with – what are the consequences of a banking crisis in which there is no bailout from the taxpayer?
I know Golem, that you've addressed this issue many times in the blog but maybe it's time to revisit it. Only this time as a plan for the future rather than as an alternative to what took place before. Last time the bailouts got through without much opposition because we just weren't given enough time to think about it. If we are to face down the next round of economic shock therapy we need to be there, shouting loud when the decisions are being made.
According to this nef paper the banks will face a funding gap of £25Bn per month in 2011 and the only people they'll be able to borrow it from is us. What happens if we don't give it to them?
Jamie — if I remember correctly your fig is just the British banks ?
25 a month is lower than I've seen for, I assume 'senior debt' , sure I've seen double that elsewhere…
Yes Dave, just British banks I think – the report's extrapolation is based on Bank of England data.
I'm sure the figure will vary widely depending on your source, there are after all a lot of unknowns because the banks won't tell us just what they're sitting on.
I wouldn't be at all surprised if that figure turns out to be way too low.
Regarding the nef paper we WILL give them the money. The question on what happens if we don't give it to them should be HOW can we figure out how not to give it to them.
The rest is easy. It's that first bit that's tricky and what the nef paper with it's 88 pages seems to overlook. Still a good read.
Couldn't hand it out in a railway station/city centre/pub car park/bus station/sport meeting/fitness club/local shop and get people to read it though.
It is laughable that the author talks of leftist governments getting in as a problem for the rich bankers. Nearly every government that has created this system, every aspect of it, have been leftist, for decades. The EU itself was a leftist project, the governments that ran up the debts are leftist, the government that guaranteed the tax loans are leftist.
Yet the author says "even if some troublesome leftists get elected …"
Other than that an excellent article, but I do think you need to rethink the source of your salvation over there. Take a step back and look at who has opposed the EU project, which is all about devolving democracy? Which individuals and groups opposed it? Who opposed the currency union? Who kept England out, so that they have a semblance of independence still, and who sold Ireland out. Which politicians supported the morphing of the treaty which allowed it to avoid referndums in every country. Which parties controlled the parliments that approved the rule of bankers via bureacratic dictat imposed by the EU?
Vlad Z.
Thank you for your post. I think I didn't make myself clear when I glibly threw in the "lefties" comment.
You are quite right to point out that parties that have called themselves left and been accepted as such have been as culpable in facilitating the financial class. I regard ALL our political parties as two sides of the same counterfeit coin. They can call themselves right, left, pink or purple I care not. They are all of the same party and all of the same ideology.
When I said 'leftist' I simply meant a party concerned with a more distributive as opposed to flat rate tax system. But perhaps you are right that it was teh worng place to be sloppy in my use of left and right.
Appologies.
I hope you will comment again in future.
Try calling yourself a leftist and see if that will make you one. Just let a single word or phrase do the magic for you, and you could become anything. It's that easy.
I think "lefties" is an unfortunate term.
But it's almost amusing that exactly these so-called leftist and socialist governments (Greek, Irish, Portuguese, and Spanish) are the first to be hit and tested, so they can demonstrate their loyalty and commitment to the great European project.
m,
Well actually Iceland and ireland were the first and neither were left or socialist. Both were rather committed to the ideology of the Free market, globalisation and financial self/light-touch regulation.
And of course outside Europe the first and epicentre of the debacle was America the bastion of right wing free market idoelogy. Unless one wants to go fuerther back to Japan as teh test case where again you find a poltical class in thrall to and captured by unquestioning faith in the Free Market and Globaliztion.
So I rather think that should be kept in mind.
Fianna Fáil is just "left of" Fine Gael actually, apologies for that one. Anyhow, it's clear to me that that all these are not left or socialist, no matter what they call themselves, as you said. The same applies to China.
An interesting thing to consider in Ireland's case is the trouble the referendum on the Lisbon Treaty caused the first time around, and how it was imposed eventually, how the whole campaign was run (and what such an aggressive campaign costs). Irish policy of military neutrality is also relevant I think. It's the Irish constitution that's troubling the EU, which is funny in the context of "Merkel's demand for voting rights to be withdrawn from member states that fail to meet strict eurozone fiscal rules".
VladZ,
The Fianna Fail/Progressice Democrats alliance presided over the entire run away housing boom and the creation of the Wild West of Euro Finance at the IFSC Dublin. They are about as far left as you can go in Ireland.
Mary Harney (of the PDs) talked constantly about Ireland being 'nearer to Boston than Berlin.'
Bertie Ahern (FF Taoiseach) told 'lefty' commentators and politicians who urged the Government to prepare a soft landing for the housing boom, or who questioned the rampany credit fueled consumerism that they would be better off 'commiting suicide'. Charming Non.
Ireland was the poster child for neo-liberalism when we were doing well and now we're broke we're lefty/socialist? How does that work, unless you work for Fox News?
Or else you mean that if there was no social safety net there'd be no deficit and we could give the banks absolutely everything and problem solved?
For which I'd refer you to America crime costs and the cost of her 'war on drugs'.
aargh – that should be ' as far right as you can go- but you probably guessed that
As for the EU. I too deplore how the Irish Labour Party is every bit as willing to tug its forelock and implement the new bata scoir with regards to the Lisbon and Nice referendums. But I have to point out that the only real political opposition to those treaties, and to the banking bailout has come from the extreme left of Irish politics – Sinn Fein and the Socialist Workers Party and if they're not 'lefty' no one is
My problem with the EU is not with how it stands now – I would much rather Ireland grow more like Berlin/Stockholm than Boston/Washington. I'd quite like some form of rent control and banking regulations and I found the credit driven consumerism where Irish people had as a big a carbon footprint as the Americans shaming to say the least. I think we should learn to save not borrow.
My major problem with the EU is where it is going. The Lisbon Treaty (or Dictat) paves the way for a neoliberal Europe, presumably with the intention that Europe will then come to rival China and the US. I think it is about a desire for power on the part of the unelected Euro Elite that is not matched in any way by a similar desire in the majority of the EU populace. And I think the treaty was also about ensuring that these issues would never have to be put before that populace either in terms of debate or decision making. That is why I and most people I know vote No. It wasn't xenophobia or a reluctance to provide aid to Eastern Europe- it was a horror at what was being done to derail democracy and aid the rise of corporatism within that treaty.
That may sound a little paranoid but I actually don't beleive its any more paranoid or crazy than the scheming and planning that goes on in Brussels, Washington and the Pentagon.
Rebecca,
You speak my mind on not wanting to follow an American neo-liberal model and yet finding how Europe is being taken to be deeply anti-democractic and corporatist.
All this discussion of who is left and who isnt' who claimed to be and who didn't is the trap I do not wnt us to fall in to here. Forget who claimed what. They were as they did and that's syrely the acid and only test.
I don't care that Labour was once a left wing party. What Tony Blair did was Thatcherite and neo-liberal with a sop here and there afforded because we were in a boom.
Golem,
Totally agreed re nu-Labour in Britain. I guess I am just clutching at the hope that the Labour party here might miraculously turn out to have some integrity and backbone. If they got in with the New Left Alliance (who are very very anti bail out) there might be some hope for a normal democratic solution to this crisis.
Ok you can go ahead and laugh at me now, I am clutching at straws I know. It will almost certainly be a FG/Labour alliance and they will be about as much good at fighting neo-liberalism/corporatism as Blair was. Fianna Gael being the most blindly fervently pro EU party we have.
I am just sickened though with how insiduously 'lefty' is used almost become almost a synonym for 'loony'. Even now when neo-liberalism has so spectacularly failed and then when people want to imply its the fault of socialism as a concept (rather than parties that were nominally/formerly) socialist, I just …. can't
Rebecca,
Conventaionl politics has turned itself inside out. So left is right, up is down and foul is fair. Time to throw off the lot. New politics won't be made from tarnished hopes.
It's up to us to make it. And we can.
"Forget who claimed what. They were as they did"
Naming is doing too, though not what VladZ seems to think it's doing. I am aware of what you said about this being a trap you don't want to fall into, but it's easy enough to avoid the trap once you know it's there. I'm afraid most people don't, and they're being pushed right into it by the mainstream media. You reverse the curse of this inside-out and upside-down discourse constantly by revealing what debt, whose debt, who's bailing out whom, and so on.
This blog might not be the right place for discussing what "humanitarian intervention" and "peacekeepers" are, but the curse is the same.
Golem,
I understand the desire not to let this into a left vs right type discussion (there r lots of boards where everyone can yell at each other about that), or an endless point scoring competition of who did or did not do anything to get us where we are and I realise it is more unifying to say lets get rid of all the current lot than to try and unpick who might or might not be less corrupt/ easily influenced.
But I would worry about what happens when the decks are cleared, all too often in history, that did not work out too well. Most of the time those idealist who swept in to put everything right fell foul of the same corrupting influences they were supposed to be so against.
I think we should try to identify those who are in the system, who are aware of the pressures and who have shown some integrity in speaking truth to power, as well as supporting new blood. A more grafting approach to use a gardening metaphor, rather than just trowing some more seeds on to the same ground in the hope they'll magically do better. I think change that has come about in this way has been more lasting and more effective. In the end as in most things I think the hard painstaking way tends to produce the most lasting goods.
Speaking of which I have to respect the way you have painstakingly sifted through all the information to bring us this blog, I tried to read some of the sites and gave up pretty quickly
Sorry, I seem to have a complete lack of talent for the short pithy comment – verbal diarrhoea.
P.S.
I am not a member of any political party or anything but it has slightly alarmed me in reading about this issue on the net to suddenly find myself on the same page as holcaust denying Mel Gibson fans ranting about 'Jew' bankers and the like. I don't think we should be so arrogant as to think that if we got rid of the all the current lot we couldn't end up in a scarier position than the one we'd just left – a la Germany in the 30s
Rebecca,
I very much like gardening metaphors and find I agree with much of what you say.