In case anyone is interested, here is the list of other Liar’s Lexicon posts.
Each takes one of the phrases or concepts which we’ve all heard and often been needlessly confused by. It has been my contention that none of these concepts is difficult. They are bandied about partly, I think, to encourage us to think we can’t understand and should just sit down and be quiet.
They are not difficult. They are, I contend, jargon whose purpose is to confuse and often to lie.
Repo – Liar’s Lexicon
Volatility – Volatility – the market god, slayer of nations
Toxic assets – Toxic assets – a taste
Losing money – Losing money: how to do it
Debt laundering – Debt Laundering and theft
Leverage – Cash, Debt and the magic of Leverage
Short Selling – Short Selling – end game guide
Speculation – Specualtion and Bubbles
Securitization – Securitization – The Undead heart of the Shadow banking machine – Part 1
The Undead Heart – part 2
The Undead Heart – part 3
Inflation – Inflation deflation
Mark to Market – Liar’s Lexicon – Mark to Market
Hard to disagree. Such deliberately opaque terminology is just one more thing Orwell warned us against years ago.
Politics and the English Language:
http://www.orwell.ru/library/essays/politics/english/e_polit
"[M]odern writing at its worst does not consist in picking out words for the sake of their meaning and inventing images in order to make the meaning clearer. It consists in gumming together long strips of words which have already been set in order by someone else, and making the results presentable by sheer humbug. The attraction of this way of writing is that it is easy. It is easier — even quicker, once you have the habit — to say "In my opinion it is not an unjustifiable assumption that" than to say "I think."
The North Briton,
Orwell's essay "Politics and the English Language" is what I have in mind when I try to write. What a wonderful quote.
Thank you.
Hi Golem,
You mentioned in a comment to a recent post that searching the blog was not particularly easy. One possibility would be to 'tag' or 'label' posts as described here
It might be a bit of work to go back through your old posts and add the tags.
PS. I thought that the post on the Liars Lexicon was great! As an old surfer, I'm looking forward to watching your program tonight. Carpe Wavium!
PS. Maybe your readers could 'crowdsource' your old posts and propose tags? Any Volunteers?
Uncle,
Glad you liked teh Liar's Lexicon.
I think you're right about tagging. I think it's what I'll have to go back and do bit by bit.
Wave film might not be quite what you expect. Hope it's not a dissapointment
It's got to be better than the usual c***! I'll let you know tomorrow. Just promise me that there is no Jack Johnson in the sound track 😉
Orwell vs Huxley
Just finished reading Neil Postman's excellent polemic Amusing Ourselves to death and tend to agree that we currently have the worst elements of both Dystopias:
"What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one.
Orwell feared those who would deprive us information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism.
Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance.
Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumblepuppy."
Golem, I would like to thank you for putting leverage, and several others into a vernacular I could wrap my thick head around.
David, I see what you meant about the film. I thought that it was great – very personal and very brave. Thanks for making it, I it really affected me.
Hawkeye 16.25–
" What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one.
Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance."
Reminds me of the Jeb Bush response to the appearance of a critical book —
"HUH, only a million Americans read books", to which he could have added –" and even those never DO anything."
We'll see about that.
Interesting post, Hawkeye, distributed!
On the other hand, —
" Inside the anti-kettling HQ
A group of young computer geeks is wielding a new weapon in the fight against controversial police tactics at demonstrations ".
Hawkeye,
Like Dave from France I thought your post about Orwell and nHuxley was very thought provoking indeed. Would you drop me an email?
Ajarni Loki,
Glad you found it helpful. And glad to meet you.
Uncle,
Thanks. I am glad it gave you something.
I too found the comparison of Huxley and Orwell to be very thought provoking. I think that Huxley's vision of the future is closer to the mark. There is so much information and it travels very fast. There are waves of empathy, amusement, outrage criss-crossing the globe.
I was really outraged by the plans to sell/lease forests. I signed the petition and wrote to my MP. Waves of outrage dissipating into MPs in trays before being passed to civil servants as new plans to implement.
I don't think that too much information is bad, but our brains are not capable of dealing with it all individually. We don't have enough spare time or enough attention span. I think society as a whole can deal with it. I think that Huxley could not imagine concepts such as crowdsourcing or search engines to sift through reams of data or trending in twitter. These have all been developed to help our poor one track minds deal with the overload. I think that more tools will appear in the future. Through the 38degrees website I was able to mail my MP in a few minutes – the wave of outrage could be directed to dissipate its energy in exactly the right place.
As for becoming a trivial culture, I think that is mainly because we have had 60 years of relative peace and mostly increasing standards of living. From what I have seen recently, young people are becoming more politicised and concerned about important things. Look at the young people in Egypt or Tunisia.
Bookmarked. Thanks!
Hawkeye,
Have you read "We" by Zamyatin? It was written in 1921. Orwell read it and it greatly influenced his 1984. I would be glad to hear your thoughts should you chose to read it.
Bloody Sky has taken BBC4 off my other channels section – grr- so I missed the waves (which is what I pretty much do when trying to surf too!)
Am definitely switching to UPC.
@ Golem, just a note about your repo post (sorry am still trying to catch up) But a person/business shouldn't be able to significantly avoid tax by buying an asset. Unless your tax system is radically different to ours. And if Lloyds did use repos for this purposes it raises grave questions about its auditors, I am pretty sure this is fraud, and the onus on the auditor to detect any kind of fraud has been beefed up hugely recently.
I personally think banks should be audited by some sort of secret international organisation or something, and the fee should be a collected by the taxamnand then given to this secret org – every year. The threats to independence from the sheer size of the fees, and then with the big accountancy firms, there has to be all sorts of conflicts of interest with their other mega wealthy clients.
"In real life it is always the anvil that breaks the hammer"
Thank you for helping make clear what is hidden from us. You are an inspiration.
Rebecca,
Repo and the auditors is a mirky story. If you can get your hands on a copy you might be horrified by Prem Sikka's "The Accountant's Laudromat".
Sorry taht should be "Laundromat"
Thanks Golem I will take a look at that but I think even since that came out there have been moves to make the auditor more responsible.
I think the problem is that the current system is set up around an idea of the shareholders of a corp being like bosses whom the directors and auditors are answerable to. And especially with regards to banks this is just nonsense. The average shareholder in the Irish banks was just some puny average joe as far as the managers were concerned.They know well that they can just bamboozle them with financial jargon and the auditors know this and that means that the checks in the system do not work. So you are left with only one real check for the ordinary deposit holder – the regulator and that is clearly not enough.
Rebecca,
I agree about the total lack of any real regulatory power. It is why I tried to imagine how depositors could become a potent power in their own right.
It was perhaps a fanciful thought but I imagined depositors, humble though they are, doing with their depositing power what workers once did with their labourt – make it collectively powerful.
I suggested a depositors union – a bad title I know.
But if ever it could be done it, depositors able to threaten to move their money together, would have the power to humble any bank.
More power thatn any regulator, auditor stock holder or Board could ever have.
Golem,
I changed my bank account when you first wrote about this subject in the columns of the Guardian. Then you followed up with great clarity in your blog – Depositors Union. It is a splendid idea, but I have not come across many posters here who a) agreed with you, and b) decided to do anything about it.
Where are they all?
For those interested in the Huxley / Orwell comparison, here it is in easy- to- digest cartoon form!
http://www.recombinantrecords.net/docs/2009-05-Amusing-Ourselves-to-Death.html
Hello gorgeous cleo,
Great to hear from you. I remember you saying you were going to move your account.
Problem is, I suppose, a Depositor's Union it might be a good idea but it would take a deal of organizing to give it real power. Once it was made it really would be a power in the land, of course. But no small undertaking to fashion it.
Simply moving accounts out of bailed out banks to a clean one is a good first step though.
Hawkeye, thank you for your very interesting comment synthesising ideas of Orwell & Huxley.
Key: Participating vs Spectating
Dave from France, excellent Sukey link.
With regard to information overload and Uncle’s reference to search engines, here is an interesting article on what the internet & google may be doing to our brains, affecting our reading & thought patterns.
Rebecca , and all ,
One of my very favourite Accountancy Age articles —
Lords Accuse Auditors of Deceiving Investors
I lost my HD, but googled "accountancy age house of lords", first up!
————————————
AUDITORS "MISLED" investors in the lead up to the crisis by supplying UK banks with a clean bill of health after being told taxpayers' money would be used to bail them out, a House of Lords Committee has heard.
The Lords' Economic Affairs Committee criticised auditors for signing off on banks' accounts on the basis the UK Government would prop up the banks.
Further reading
Big Four defends auditors' role during crisis
Lords want return to 80s-style banking regulation
Big Four expect a grilling from Lords audit inquiry
"Your duty is to report to investors the true state of the company. You were giving a statement that was deliberately timed to mislead the company and mislead markets and investors about the true state of those banks and that seems to be a very strange thing for an auditor to do," said Lord Lipsey.
Debate focused on the use of "going concern" guidance, issued by auditors if they believe a company will survive the next year. Auditors said they did not change their going concern guidance because they were told the government would bail out the banks.
"Going concern [means] that a business can pay its debts as they fall due. You meant something thing quite different, you meant that the government would dip into its pockets and give the company money and then it can pay it debts and you gave an unqualified report on that basis," Lipsey said.
Lord Lawson said there was a "threat to solvency" for UK banks which was not reflected in the auditors' reports.
"I find that absolutely astonishing, absolutely astonishing. It seems to me that you are saying that you noticed they were on very thin ice but you were completely relaxed about it because you knew there would be support, in other words, the taxpayer would support them," he said.
—————————
One might say the auditors were intensely relaxed…
hi
There are some very smart posts here. I am especially interested in the discussion about Orwell / Huxley. It resonates a little with an article in the Guardian about 'Sukey' anti-kettling app. for smart phones. In effect it acts as an information filter to allow people to make sense of what is happening and avoid being kettled during protests.
Also the idea of a depositers’ union. I think that is connected up with the mutual and friendly societies of the past, and there is probably a need to re-invent something like these organisations, but taking into account the technology changes . I was connected to the Nationwide BS for years and have no complaints but I was always suspicious of the process of ‘voting’ for officials and policies I had no way of making much sense of. I was always too busy or lacked the inside knowledge that makes sense of these processes.
Certainly there seems to be a real desire to get round the stranglehold that the main banks have developed over peoples' banking options.
Of course the stranglehold is connected to the availability of credit in the past and the willingness of people to enter into a relationship where they are inevitably in a weak position as debtor. However in time I think the present situation will be seen as part of an evolving process of awareness. I think we are in effect moving into the first glimmerings of consumers being able to understand the more abstract meanings of 'money'. It is as if there have been large numbers of people who have a concrete(naive)understanding of monetary systems-who have operated to simple 'cash' system characteristics while the political and banking classes have been using much more complex analytic models, placing the majority of their customers at their mercy. In other words, children, and far from responsible benign 'adults'.
My analogy is of a Piagetian developmental transition, applied to wider society rather than an individual.
When the possibility of credit came along, it was just naively accepted by many people.
At the moment many people are in the intitial stages of developing a more abstract understanding of the monetary systems but what is really needed are strategies which allow us to incorporate a more advanced knowledge into personal action, something equivalent to the anti-kettling software.
Credit unions were always weakened by not being able to provide much/any income to depositers ann looked unattractive compared to the interest bearing deposit accounts available at the high street banks. However that weakness now seems rather irrelevant, as the value of people's savings is being stripped by the main banks anyway.
A robust discussion and some creative thinking about what can be done to reduce the influence and power of the banks and convert the undoubted power of the consumer into socially beneficial leverage might be a good start. 'Local and community' is always a good starting idea. (as in ‘politics is always local’ ). The problem is that the meanings of these words are evolving, along with the technology.
I am sure there is still much leverage in informed, and smart, localised consumer power.
Many thanks to Golem for his substantial contributions.
Just to resituate the mention of Neil Postman's "Amusing ourselves to Death" which mainly deals with the negative effects that television has as a medium.
In particular Postman claims that TV harms education and political debate by leading to false expectations that learning is fun and that serious information gathering can be performed without reading or effort. He contrasts, for example, the contemporary descent of politics into soundbites with 19th C. election debates where ordinary members of the public would turn up to listen to 4 hours of in-depth discussion.
In Postman's view Sesame Street is typical of this sort of effect and no matter how much I love the Bert and Ernie I can see his point. Film-makers take note (!): Postman says TV is at its best when simply entertaining, at its worse when it seeks to inform at the same time…
However, I think the rise of blog culture is happily leading us back to the importance of the written word as a means of spreading knowledge and encouraging debate. The consistently high quality of the posts and comments here convinces me of that!
I just came back from an 'anti cuts' meeting. Not much talk of mark to model accounting or Iceland but alot of talk of job losses in all sectors straight from the mouths of the people losing the jobs.
Pretty grim picture was painted. There is gonna be a hell of a lot of buses going up to London on the 26th. So my first ever post on G's hub of thoughts is more relevant than ever.
Bring Bottled Water.
Interesting article in the Guardian today:
http://www.guardian.co.uk/business/2011/feb/03/bernard-madoff-jp-morgan-uk-authorities-before-confession
So is a Ponzi an "equity exotic" or a "hybrid"?
@ Golem & the MacPuddock
I think a depositors union would be a great idea, provided its leadership had a v quick turnover, but would you envisage that the union would then appoint auditors? The problem with a union is sthat it could only be as effective as the advance information it was given.
As MacPuddock pointed out the average deposit holders would struggle with the intricacies of what banks do, let alone whether their internal controls are up to scratch. It is esential that a team of experts can go in annually and not leave until they fully understand all the transactions being made and whether
a) they're legal and
b) they put the continued health of the business at risk form a whole range of pressures which take up a whole, hard to digest, book.
Especially now, when you see that Goldman Sachs has already moved on to some new game called 'Dark Markets' or something that again few people can understand.
The problem is that in countries like the UK & Ireland there are a small number of banks rotating an even smaller number of audit firms. With the top level staff of each all eating at the Ivy,playing golf in the K club, sitting next to each other at Glyndebourne and on and on.
I think that breaking up the banks is essential to counter this effect. I think that small credit unions should be encouraged and that the government should guarantee these deposits andno other. Then people can choose between safe; with necessarily higher bk charges and lower rates, or risky; with big banks giving high yields and low charges but no guarantee.
The managers of these banks would be held personally accountable by their shareholders and stakeholders in the event of recklessness.
But none of that will undo the damage that has already been done. And with most people I know in net debt to the banks (when mortgages are taken into account) they're more worried about losing their jobs than their savings.
Which just goes to show we should have let the bloody lot go down the tubes. You can be damn sure that those people who were net debtors of the banks would have pursued every last director down to their last gold toothpicks in the courts and the majority of us would have been none the worse off.
Rebecca,
My inotion was simpler, less ambitious. I was not envisaging a watchdog with inside info. I asked myself who , for instance could really force a bank to lower its bonus payments? My answer was a depositor's union.
The union polls it's members electronically. If an overwhelming majority say they are angry the Union would say to the bank – stop the bonuses OR we will recommend to our membership that they move their deposits on a day we announce.
IF and I know teh 'if' is the crux of it, but if we imagine for a moment such a union did exist, thenthe bank would simly have to take note. Imagine the carnage for any bank if there was even just a credible threat that on a given day or few days it would lose a significant percentage of its depositors? Even before it happened, if investors had a reason to belive a union could do it, then those investors would see a perfect short opportunity.
That would be the power.
In a leverged bank it would not take much of a capital flight to have the desired effect.
That was teh idea. Not an accounting watchdog but a big stick.
I wrote about two years ago on teh Guardian and again on the second ever post on this blog and expanded a bit in a reply to a comment underneath.
Hi again
My main point is that somehow, growing awareness must be converted into some kind of action. This process requires a lot of discussion and development.
To elaborate- it is not quite enough to become more aware-that process risks becoming repetitive, circular and frustrating.
Golem had mentioned the forest sell-off. There has been a very widespread grass roots condemnation of the value system ( i.e. mainstream politics) that feels that this is a perfectly legitimate action.
In the past our politicians would have regarded the Forestry Commission as a strategic resource and inviolable, but in reality government, as it is now conceived, has no business trying to manage what turns out to be nothing more than ‘enterprise’. In reality a great deal of the forestry estate is a dark, close planted Sitka or Norwegian Spruce, or ponderosa pine plantation with virtually no aesthetic or community amenity value. Globalization has rendered the strategic resource argument null and void. So the inescapable logic is : “why not just get out of the timber business. Government is not a timber company. Hand it over/sell to those who can exploit the asset ‘meaningfully’ (profitably).
Of course this model of governance dismisses a great underlying complexity here. Forestry ( and many other institutional developments of the last 100 years) means many things.
It is a physical resource, a welcome landscape feature, and a potential recreational and emotional and educational resource, a potential local climate buffer, a potential resource of biodiversity and a potential carbon sink. It also has a place in our imagination, both as a sylvan paradise and as a dark ‘mirkwood’, and has relationship to our ideas of the ‘commons’. To dismiss such complexity and significance as a ‘profit /income possibility’ reveals the shallow and inadequate nature of the political mainstream . Many people now regard the Forestry Commission as some kind of commons, but in reality it has no such status. The ‘commons’ were ‘enclosed’ and ordinary (non) people excluded long ago, in the 17th and 18th centuries. So the FC really represents an aspiration and intuitive attachment to principle of common ownership and inviolable common benefit-something dismissed and held in contempt by late capitalism as an ‘unproductive’ asset.
Traditionally, the meaning of ‘public’ was not universally inclusive, but an expression of those people with ‘title’. In effect, in England and elsewhere, the gentry were the public. (Also ancient Greece and Rome). This is why Eton and Harrow are ‘public’ schools but intensely exclusive.
What I am trying to get at is that we need to re-examine how we respond to the current conception of government, and not simply allow the current incumbents dictate what is turning out to closely resemble a strangely compelling approach to Nazism-which is a partnership of corporations and government , and the marginalization of the individual . There is a real deficit of accountability and a real and growing deficit of legitimacy in government. They are no longer trusted but the majority of people have no idea how to respond meaningfully. Can they vote any way that will create change. This option is deeply constrained because the mainstream has to all intents and purposes merged into a single entity completely devoted to a single philosophy of governance political economy. Essentially the ‘west’ consisting of the various political entities are the same, with flavour variations, and any voices not conforming- for instance – Ralph Nader are depicted by the mainstream as wacky and marginal.
It is important to understand that technology is the creation of corporations, and creates massive advantages. That is why government is so powerless. Even the best intentioned governments have found they are outflanked by the flexibility and technical prowess of the corporations. Government then mutates from a representative, protective role into either a technocratic player role where its instincts move to authoritarianism (Nulabour and Thatcherism – ‘There is no alternative’) or a supine establishment Big society entity- Cameronism(also Thatcherite , but hands -off , non -technocratic, and laissez-faire).
Examples: Vodaphone is perfect example of a government /corporate creation, created out of a deal between Thatcher( personally) and two people, directors of Racal- an electronics defence contractor which had been the beneficiary of the tax funded contract to create a military communication system, the clansman project, in the sixties and seventies. Their experience and technical advantage was converted into commercial advantage , and there can be very little doubt that these people were in a strong position to plan their development into the mass market. In one way we see that ‘risk’ and development costs are borne by the public and converted in to private benefit. I am sure there are parallels in the finance system.
The issue of whether people in the government are then tempted to then invest in such strong certainties is not for me to say. I just would not be surprised to see that there was strong share dealing activity among a relatively small group of connected people in government.
Anyway to wrap up- we ‘little’ people need to start to develop concrete alternatives to government as it is now conceived and accepted by many. I was suggesting that we re-visit the cooperative movements, localism and transparent mutualism and unionism but with the advantages that communication technology brings. Community no longer has a physical meaning. As a previous poster pointed out, Neil Postman’s pessimism is now superceded by blogging, social networking and the decline of mass state controlled broadcasting. Despite Fox ‘news’ and GlennBeck arsebabble, I am also reasonably sure that the Murdoch empire is a passing phase. It will die without his guiding hand, and with his passing into perdition, both hopefully and statistically an event in the not too distant future.
There are genuine informed debates going on across cultural borders, genuine activism and genuine instrumentality. I doubt that neither Postman , nor Orwell, nor Huxley foresaw the development of the intimacy and connectedness and potential of the internet.
The MacPuddock,
You are on a roll. Great comments.
Hi
Your 4th link, "Losing Money – How To Do It" has a bad link.
The full link should be http://golemxiv-credo.blogspot.com/2010/05/losing-money-how-to-do-it.html
Your link misses the 'go' from …//golemxiv-…
nik,
thank you for telling me. It's fixed now. Thanks again.
Superb post, so nice to have them all in one place.
I've been thinking about Inflation/Deflation some more.
Banks are issuing less debt to private individuals. So I think that things that you take out a loan to purchase; things whose so-called 'value' is really just determined by the easy creation of private debt – should fall in price. So we should have deflation in housing prices for example.
On the other hand, things that have a value simply because people are competing for them – food, fuel etc – will inflate. Less money, more people, less resources = inflation.
The third part of the equation is public debt, which is increasing. As Governments take on the bank failures, the game changes. I'm still trying to figure out the way this a huge rise in government debt will play out.
A bubble perhaps in things that governments spend borrowed money on, such as wars, but at the same time, inflation (with resultant cuts) in things they spend income on, such as services?
From reading Davids excellent blogs & the similarly excellent comments, it's obvious to me that many share the view, if we add up all the failing parts, that the whole damn system is crooked & dysfunctional in respect of outcomes for the majority of ordinary citizens. While societies were small enough to ignore the stupity of an infinite growth paradigm on a finite planet we could muddle thru'. What's really happening now is the underlying convergence of the real limits of this 'model'. But we have a near universal 'culture' that still thinks all that's needed is a few 'tweaks'. Well, the game's up – whether we, as a species, grasp this now it not, the next few decades will not be, cannot be, any way like the last few decades.
In the spirit of offering some ideas toward solutions, let's start with a fundamental truth. There are two reasonably distinct groups in society. Those who earn a living by their labour (lets call group A) & those who gain significant income by using capital or assets to provide income (lets call group B). The financial 'crisis' offers stark proof of this. 'High' & 'Ultra-High' Net Worth Individuals (group 'B'), some 9 million globally, are suffering no 'crisis' at all. They have collectively merely experienced a slight 'pause' in the disproportionately high annual increase in wealth enjoyed over decades of 'neo-liberal' policies. Read here: http://www.counterpunch.org/raventos10292010.html
This is who the 'system' works for. In fact, via direct corruption &/or just incremental cultural capture of politics, media, economics, academe etc – every institution with any 'public interest' remit – group 'B' are effectively in control, thru' personal involvement or the power that 'wealth' affords.
Cont…
The important accompanying societal change to the growth of 'inequality' is that 'capture' by the interests of group 'B' has also increased considerably.
Unless the breaking of the link between wealth & power informs the restructuring of any & all institutions purporting to act in the (majority) public interest, such reforms will not succeed. There's only one way to do this. Any individual occupying a position in such an institution must accept a lifelong limit to the extent of their wealth, such that they remain in group 'A'.
Elected politicians must act as individuals, living with means broadly similar to their constituents. News & Current affairs media providers must be removed from private & corporate ownership & use only self-employed or common ownership structures – their staff similarly 'wealth' restricted. Civil servants must also have wealth restrictions. If people desire above average wealth – aspirations to join group 'B' – they must stay in the private sector.
These measures will then provide the appropriate means to make decisions that are actually in the interests of the majority. If we continue to let greed & self-interest be the dominant motivation of power in society, then for most people life is going to get a lot nastier as 'limits to growth' bite hard. The divisions in society, both between nations & within them, will become more extreme. The likelyhood of serious conflicts is very high.
The challenge is to translate our species natural tendency to co-operation at the micro scale to the macro. With all the informational & communication tools, ideas & ingenuity we already have, this is possible.
A final word with regard to economics. Can we all just kill the myth that nations' economies need be run like a household budget? The two are totally different. The actual size of nations' budget deficits with a fiat money system should +not+ be the primary, controlling metric. For the explanation of why this is so, google Professors Bill Mitchell & Randall Wray. 'Austerity' measures are a political choice, pure & simple, not a matter of economic need.
@mikehall
It was Thatcher, I believe that popularised the notion that a state budget had to be balanced like the family budget. Using all of her Grantham shopkeeper common sense she used this as an image to talk to the masses about the need to cut state spending.
Please note that this week France took the step of beginning a process of constitutional change so that enshrined in the constitution is the obligation not to run a budget deficit.
I'd like to see how that would work in the USA…
@thrawn pop
Yes, I believe you're right about Thatcher. I live in Ireland where it's treatment by Europe can only really be described as part of a neo-liberal coup. Two recent pieces of news illustrate just what a debt slavery trap the EU 'bailout' & 4yr plan is, barely after the ink on it all is dry. The 'plan' growth forecast (on which just debt interest payment depends, no repayment) for 2011 is now downgraded by nearly 2/3. Also, economists here, studying the latest known funds needed to bail the banks have identified a further shortfall of 16B euros. (Hardly a mention of this in the media naturally. Just the usual election BS.) So, hardly a month old, it's clear a lot more finance will be needed. In a stunning piece of cognitive dissonance, central bank economists recognise that the budget cuts are deflationary, killing the growth that such a debt burdened 'plan' depends on. At the same time they support both the plan & those austerity measures that will ensure it's failure!
The latest news from EU talks on provision of future euro 'stability' loans is a proposal to enshrine strict state budget limit conditions & control from central europe. A recipe for mass unemployment & poverty in perpetuity in the peripheral euro member states. Of course our self-serving politicians (with minor exceptions) & public servants, media, over paid 'professionals' etc., could care less. Mass unemployment is merely a social welfare budget 'control' issue – to cut funding as much as they can get away with. (As the UK is already doing under the ConDem new Thatcherites.)
It's crystal clear from this that Ireland should default right now & leave the euro, rather than become debt slaves to bail out Irish & EU (& some US) banks. (ie, the world's 'high net worth individuals')
Doubtless there'll need to be mass home foreclosures before we cop on & follow Tunisia & Egypt's lead & occupy central Dublin.
@mikehall:
excellent earlier post but I hope you don't mind the following thoughts:
“The challenge is to translate our species natural tendency to co-operation at the micro scale to the macro.
With all the informational & communication tools, ideas & ingenuity we already have, this is possible”
Therein, I think, lies the crux of the problem; in general, it has been necessary to invoke Plato's “Noble Lie”or create wars or generate a phantom external menace (e.g. communism/islamic fundamentalism) to trick us into converting our intrinsic micro scale cooperation into macro scale cooperation.
Unfortunately, despite all the information and communication available, I see no way that this will change; I think there is a population concentration above which, barring real or imagined external threats, cooperation is not possible at the level required to pull society out of the consumption abyss and above which greed & self-interest will always be the dominant motivation of power in society.
In any event, micro scale cooperation isn't necessarily always a benign feature in society, as it can easily be usurped to less desirable ends.
I think it will be necessary to invoke a hybrid of the “Noble Lie” and a phantom external threat to try to change the current obsession with “growth”. All people alive today, certainly in Western society, have lived through never-ending growth (barring a few temporary hiccups); this means you are asking people to accept a way of life which is a paradigm shift from what they have always known.
Is there also not a danger that, just because a certain, lets call them “Marxist elite” can see what's coming, and know better than anyone else, do they have the right to try and direct society in a certain direction? Perhaps most people don't give a damn about how much oil/rare earth metals/fish etc are left, so long as they, personally have enough. Personally, I hope not, but it is easy to fall into despair.
@mebumu
I appreciate your thoughtful response.
I agree it's far from clear whether people have the will to use the tools of communication we now have to bring about the radical changes we need – or at least with the urgency that many see is also needed.
A small step is perhaps right here where David & others have created a space to educate & share with each other. But what about Egypt (& Tunisia)? Looks like they've made great use of the internet & twitter to organise. There has been some violence, mostly provoked by Mubarak's henchmen, but the overwhelming tenor is toward a peaceful transition to a vastly improved democracy. Powerful stuff I think.
As regards people getting acustomed to a low growth/no growth scenario, effectively most people have been experiencing this for many years. Under neo-liberalism, nearly all the growth of the last few decades has actually accrued to the wealthiest few percent. Economist Michael Hudson talks about the US in this Real News piece:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=6197
But I believe it's applicable to much of Europe too.
I'm not sure what you refer to exactly by 'Marxist elite' in your last paragraph? But, to be clear about my own views, the historical efforts at what we might call 'state planned' economies made the mistake of allowing the enrichment of beaurocrats & officials. This ultimately centralised corrupt power little differently to what prevails now in our own 'governing' classes. Control is much more subtle in our present 'Western' societies, but it's control (by the few over the many) just the same.
I think if we could actually achieve government by ordinary people, a new pragmatism could emerge fully capable of producing a reasonable 'mixed' economy. Again, our relatively new ability to collect & collate extensive & timely economic data offers the potential for management in a way not remotely available to our forebears. The profession of economics is one of the most heavily 'captured' modern institutions in private, public & academic sectors. But there are individuals (like Hudson & others) who are not, now getting their views out thru' the internet. Neo liberal, monetarist economics is now a proven failed system. All that's needed is for elected politicians, truly representing us, not themselves, to face down the economics & financial elites, demand the acceptance of this fact & insist on radical change.
This is kind of off comment, but I'm taking up Golem's kind offer of his blog as a place for general debate.
Listen to the Today Programme this morning it was mentioned that the BoE's future decision on inflation was in the balance, with the risk of inflation being weighed up against the risk of stalling the economy with higher rates. The real danger, the commentator noted, was that price inflation would lead to wage-inflation. For the moment, he claimed, that was not yet happening.
But surely, price inflation without wage inflation just equals falling purchasing power. In that scenarion price inflation leads indirectly to stalled econmic growth anyway as workers are able to buy fewer goods with their fixed revenues?
@mikehall:
Thank you for your interesting reply and the link to Michael Hudson.
My use of the term "Marxist elite" was at least clumsy and probably erroneous. I used the term to specify a group, like, for example, people who post on this blog, who are well versed in what is going on, and have radical ideas for change with the best of intentions for society as a whole and to specifically differentiate this type of elite from financial and political elites; my view of financial and political elites is that they simply aim to maximise their wealth and/or power, and while many show typical sociopathic and even psychopathic traits, they generally have nothing to offer in terms of ideas for the improvement of society and indeed are completely ambivalent about the future of society as a whole as long as they can maintain their status.
I suppose what I was indirectly stating was my uncertainty over the relative merits of positive vs negative freedom; perhaps when it appeared that there are no limits to the earth's resources and no climate change issues then negative freedom was harmless and positive freedom was dangerous; however, my fear is now that positive freedom seems the only way forward and negative freedom will have to be sacrificed. I am concerned however that positive freedom has failed in all previous attempts.
Not sure where to post this, but I was very moved by your Secret Life of Waves. What I expected to be a straightforward exercise in scientific observation ended, quite surprisingly, as a tender insight into our own impermanence. A lovely piece of filmaking!
Sorry I was a bit dumb …You are much further along on this Devils Dictionary thing than I realized in my earlier post on your Mark to Markets post. Of course the Liars Lexicon! The alternative economics text book ( will go down great in economics departments) is already well on its way…
@ mikehall
"..soldiers with cell phones stopped the massacre."
Very interesting comment
"..This is yet another way that new technology has played a surprising role in this new wave of revolutions. A lot of armies, including the U.S. army, allow their people to carry cell phones. Now an army in the field has used cell phones to organize a mutiny. Will they be re-thinking that?"
found herehere on a Robert Fisk article relating to Egyptian revolution.
"The critical moment came on the evening of 30 January when, it is now clear, Mubarak ordered the Egyptian Third Army to crush the demonstrators in Tahrir Square with their tanks after flying F-16 fighter bombers at low level over the protesters.
Many of the senior tank commanders could be seen tearing off their headsets – over which they had received the fatal orders – to use their mobile phones. They were, it now transpires, calling their own military families for advice. Fathers who had spent their lives serving the Egyptian army told their sons to disobey, that they must never kill their own people."