The banks are multinational and too big to fail. Mrs Thatcher saw to that. Increasing uk interest rates before 2007 would have had no effect. It would have caused a uk recession but the banking crisis would have still happened here. Uk banks would simply borrow somewhere interest rates are low (not parking reserves in Bank of England) and atill lent into dodgy high yield markets such as US sub prime. The madness with derivatives would have still happened. In 2008 net borrowing was 2.6% of GDP, net debt was 36% of GDP and structural deficit was 2.6% of GDP. The next year net borrowing and trebbled (6.7% and then 11.1% last year) as had the structural deficit (rising to 6.3% and then 8.8%). Net debt rose from 36% of GDP in 2008 to 43% and then to 52%. These changes have bugger all to do with labour spending and everything to do with the costs of the worldwide bank induced great recession. In 2008 there was a Worldwide financial crash. The cause is the fundamental basis under which the money supply has operated since the 1980s. Basically the only way we currently allow the money supply to widen (allowing growth) is for private banks to create new money as debt. This is how 97% of all new money (£2.6 trillion of it since 1997) has been created. This has nothing to do with labour (it has to with Mrs Thatcher and Mr Reagan if were looking for blame) and is how all G20 countries now work their economies. There are very good reasons we should return to the system we had before the 80s as the cause of our problems is the debt and inequality that allowing the banks to create debt causes. What should happen is massive QE to buy back government debt and then the Bank should destroy the debts. Fortunately this process is fairly advanced now with the wholly publicly owned Asset Purchase Facility owning a third of all outstanding government debt the OECD think this will rise to 40%. In our current liquidity trap with the money supply contracting due to the banks, private sector and households all deleveraging there is no danger in doing this and it will be done. However, To prevent inflation this needs to be matched with a corresponding decrease in bank leverage levels – making the banks safer. The result is a money supply, not based on debt that ensures less recessions and financial crashes. This is how the money supply operated for thirty years after WW 2 – a period of high growth, no financial crashes and only two very mild recessions. Also much more equality and very high growth in real terms earnings and living standards. The Tories get over 50% of their funding from bankers. They have done nothing to reform the banks and have removed the bankers bonus tax. What we need is public outcry to force the seperation of retail from casno banks now – not in 2019. We need a statutorylimit on bankers earnings at 25 times minimum wage. We need a financial transaction tax. We need a banning of tax havens such as the Crown protectorates. We need a full ban on over the counter derivatives. Bankers and media magnates should be banned from political patronage. Guilty bankers should be thrown in jail.
Category: Politics
Britain’s press are fighting a class war, defending the elite they belong to
It’s not just Rupert Murdoch and his crooks. All the corporate barons who corrupted our political system must be unmasked
guardian.co.uk, Monday 12 December 2011 20.30 GMT
Illustration by Daniel Pudles
Have we ever been so badly served by the press? We face multiple crises – economic, environmental, democratic – but most newspapers represent them neither clearly nor fairly. The industry that should reveal and expose instead tries to contain and baffle, to foil questions and shut down dissent.
The men who own the corporate press are fighting a class war, seeking, even now, to defend the 1% to which they belong against its challengers. But because they control much of the conversation, we seldom see it in these terms. Our press re-frames major issues so effectively, it often recruits its readers to mobilise against their own interests.
Crime and antisocial behaviour are represented as the predations of the poor on each other, or on the middle and upper classes. “Blonde millionaire’s wife raped in luxury home by asylum-seeking benefits cheat” is the transcendental form of a thousand tabloid headlines, alongside “Pippa Middleton’s bottom gets £1m makeover from top designer”. Though benefit fraud deprives the exchequer of £1.1bn a year while tax avoidance and evasion deprive it of between £40bn and £120bn, the tabloids relentlessly pursue the petty crooks, while leaving the capos alone.
On Monday the rightwing papers applauded government plans to cut benefits for people in social housing who have more rooms than they need. The “growing scandal of under-occupation”, the Mail observed, contributes to the housing crisis, depriving larger families of the homes they need. The Express told us that “it is only right that decisions such as this must be taken”. But what about the private sector, where there’s a much higher rate of under-occupation, especially among the wealthy? When this column suggested that these under-used homes should be taxed, the corporate press went berserk. Only the poorest should carry the cost of resolving our housing crisis.
Not a day passes in which rightwing papers fail to call for stiffer regulation of protesters, problem families, petty criminals or antisocial teenagers. And every day they call for laxer regulation of business: cutting the “red tape” that prevents companies and banks from using the planet as their dustbin, killing workers or tanking the economy.
The newspapers’ own criminal behaviour, more of which is being exposed before the Leveson inquiry as I write, looks to me like the almost inevitable result of a culture that appears to believe that the law, like taxes and regulation, is for little people. While portraying the underclass as a threat to “our” way of life, the corporate papers ask us to celebrate the lives of the economic elite. Saturday’s Telegraph devoted most of a page to a puff piece flogging the charming jumpers being sold by a Santa Sebag-Montefiore (nee Palmer-Tomkinson) from her “white stucco Kensington House”. She works – if that’s the right word for it – with someone she met at Klosters, where she and her family “ski with the Prince of Wales and Princes William and Harry”. So far they have managed to sell 40 of these jumpers, which somehow justifies an enormous photo and 1,400 breathless words.
I mention this sycophantic drivel not because it is exceptional but because it is typical. A friend who used to work as a freelance photographer for the Telegraph stopped when he discovered that most of those he was sent to photograph were the well-heeled friends and relatives of people on the paper. Journalism is embedded in the world it should be challenging and confronting.
These papers recognise the existence of an oppressive elite, but they frame it purely in political terms. The political elite becomes oppressive when it tries to curb the powers and freedoms of the economic elite. Take this revealing conjunction in the Daily Mail’s leading article on Saturday: “David Cameron yesterday finally said no to the European elite – vetoing plans for a treaty that included an EU-wide tax on financial transactions.” In other words, Cameron said yes to the British elite. But it cannot be explained in those terms without exposing where power really lies, which is the antithesis of what the rightwing papers seek to achieve.
As the theologian Walter Wink shows, challenging a dominant system requires a three-part process: naming the powers, unmasking the powers, engaging the powers. Their white noise of distraction and obfuscation is the means by which the newspapers prevent this process from beginning. They mislead us about the sources of our oppression, misrepresent our democratic choices, demonise those who try to challenge the 1%.
Compare the Daily Mail’s treatment of the Occupy London protesters, confronting the banks, to its coverage of the camp set up by people of the charming village of Meriden, confronting some gypsies. “Desecration, defecation and class A drugs” was the headline on the Mail’s feature article about Occupy London. Published on the day on which the City of London began its attempts to evict the protesters, it deployed every conceivable means of vilifying them and justifying their expulsion.
The Mail’s Meriden story, on the other hand, was headlined: “Adding insult to injury: now villagers who have protested against an illegal travellers’ camp for 586 days are told: YOU are facing eviction.” The story emphasised the villagers’ calm fortitude and the justice of their cause. Presumably they don’t defecate either.
Press barons have been waging this class war for almost a century, and it has hobbled progressive politics throughout that time. But the closed circle of embedded journalism is now so tight that it has almost created an alternative reality.
Ten days ago, for example, the Spectator ran a cover story that could not have been crazier had it been headlined: “Yes, Father Christmas does exist, but he’s been kidnapped by lizards”. A serial promoter of mumbo-jumbo called Nils-Axel Morner, who claims he has paranormal dowsing abilities and that an iron-age cemetery in Sweden is in fact the Hong Kong of the ancient Greeks, was given 1,800 words to show that sea levels are not rising. Citing “evidence” that was anecdotal, irrelevant or simply wrong, explaining that it was all a massive conspiracy, Morner ignored or dismissed a vast wealth of solid data from satellites and tide gauges.
The Spectator kindly gave me space to write a response last week, but it strikes me that a story like this could not have been published five years ago. It first required a long process of normalisation, in which evident falsehoods are repeated until they are widely believed to be true. The climate talks in Durban were slotted by the papers into the same narrative, in which climate scientists and the BBC conspire to shut down the economy and send us back to the stone age. (And they have the blazing cheek to call us scaremongers.)
It’s not just Murdoch and his network of sleazy crooks: our political system has been corrupted by the entire corporate media. Defending ourselves from the economic elite means naming and unmasking the power of the press.
• A fully referenced version of this article can be found on George Monbiot’s website
Britain is ruled by the banks, for the banks
Is David Cameron’s kid-glove treatment of the City remotely justified, when it neither pays its way nor lends effectively?
Aditya Chakrabortty
guardian.co.uk, Monday 12 December 2011 20.00 GMT
The City, London . . . Britain’s finance sector contributes less to the country than manufacturing. Photograph: Andy Rain/EPA
The national interest. It’s a phrase we’ve heard a lot recently. David Cameron promised to defend it before flying off last week to Brussels. Eurosceptic backbenchers urged him to fight for it. And when the summit turned into a trial separation, and the prime minister walked out at 4am, the rightwing newspapers took up the refrain: he was fighting for Britain. In the eye-burningly early hours of Friday morning, exhausted and at a loss to explain a row he plainly hadn’t expected, Cameron tried again: “I had to pursue very doggedly what was in the British national interest.”
As political justifications go, the national interest is an oddly ceremonial one. Like the dusty liqueur uncapped for a family gathering, MPs bring it out only for the big occasions. And when they do, what they mean is: forget all the usual fluff about ethics and ideas; this is important.
You heard the phrase last May, as the Lib Dems explained why they were forming a coalition with the Tories. More seriously, Blair used it as Britain invaded Iraq.
But here Cameron wasn’t talking about foreign policy; nor about who governs the country. The national interest he saw as threatened by Europe is concentrated in a few expensive parts of London, in an industry that would surely come bottom in any occupational popularity contest (yes, lower even than journalists): investment banking.
In its haste to depict events as Little Britain v Big Europe, the Tory press hasn’t dwelt on the inconvenient details of last week’s fight. But it was only after the prime minister failed to secure protection for the City from new financial regulation mooted by the EU that he told Nicolas Sarkozy to get on his vélo.
On one issue in particular, Cameron had a good case: Britain wants banks to put more money aside for a rainy day than the EU is considering. Elsewhere, he just looked unreasonable – what exactly is wrong with having international banking supervision? One reason for the euro crisis was that its members have 17 national bank watchdogs and barely anyone looking across borders.
Step back from what even EU officials were calling “arcane” details, though, and the big principle is this: the prime minister effectively stuck relations with the rest of Europe in the deep freeze in order to protect one sector of the economy.
In my recollection, no British minister in recent times has termed one industry as being of “national interest”. “Vital” or “key”? Why, such words are the very currency of the MP’s address to a trade association. But on the big phrase, I asked the Guardian’s librarians to check the archives from 1997 onwards. They came back empty-handed.
Cameron is merely expressing more openly something Labour frontbenchers also believe: that the City is pretty much the last engine functioning in Britain’s misfiring economy. Indeed, one of the Labour lines of attack against Cameron this weekend has been that he has left the City more open to regulation.
A few weeks ago, the shadow chancellor Ed Balls warned against any further taxes on financial trading within Europe. However, he said, he would urge a “Robin Hood tax with the widest international agreement”. In other words, Balls will give his fullest support to something that has no chance of happening.
This is the same kind of political subservience towards the City, observed by the Financial Services Authority (FSA) in its report into the collapse of RBS. According to the watchdog, a major reason why Fred Goodwin wasn’t checked as he drove RBS off a cliff was because of “a sustained political emphasis on the need for the FSA to be ‘light touch’ in its approach and mindful of London’s competitive position”. Had regulatorsbeen harder on the bankers, “it is almost certain that their proposals would have been met by extensive complaints that the FSA was pursuing a heavy-handed, gold-plating approach which would harm London’s competitiveness”.
As all British taxpayers know by now, securing the “competitiveness” of RBS has wound up costing us around £45bn.
So what is it that justifies the kid-glove treatment of the finance sector? Switch on the news and you normally hear some minister or lobbyist (come on down, Angela Knight of the British Bankers’ Association) talking about the vital contribution banking makes to employment. Our tax revenue. Or the role banks ideally play in directing money to needy businesses.
These claims are repeated so often that they rarely get even the briefest patdown from interviewers, let alone backbench MPs or economists. Yet they are largely bogus, as explained in a new book called After the Great Complacence, produced by academics at Manchester University’s Centre for Research on Socio-Cultural Change (Cresc). Indeed, on nearly any important measure, finance actually contributes less to Britain than manufacturing.
Take jobs. The finance sector employs 1m people in Britain. Chuck in the lawyers, the PRs and the smaller fry that swim in its wake and you are up to a grand total of 1.5m. And most of these people are not the investment bankers for whom Cameron went to war in Brussels. At the big British banks such as RBS and HBOS, 80% of the staff work in the retail business. Even if Sarkozy were to shroud Canary Wharf in a giant tricolore, those staff would still be needed to staff the branches and man the call centres. Even in its current state of emaciation, manufacturing employs 2m people.
What about taxes? Lobbyists like to point out that banks are usually the biggest payers of corporation tax, but usually omit to mention that corporation tax isn’t that big a money-spinner. For their part, even leftwingers will usually assume that the bankers effectively paid for the tax credits, hospitals and schools we enjoyed under Labour.
It’s not true. The Cresc team totted up the taxes paid by the finance sector between 2002 and 2008, the six years in which the City was having an almighty boom: at £193bn, it’s still only getting on for half the £378bn paid by manufacturing. It would be more accurate to say that the widget-makers of the Midlands paid for Tony Blair’s welfarism. But that would be a much less picturesque description.
Even in the best of times, the finance sector hasn’t paid anything like as much to the state as the state has had to pay for them since the great crash. According to the IMF, British taxpayers have shelled out £289bn in “direct upfront financing” to prop up the banks since 2008. Add in the various government loans and underwriting, and taxpayers are on the hook for £1.19tn. Seen that way the City looks less like a goose that lays golden eggs, and more like an unruly pigeon that leaves one hell of a mess for others to clear up.
Ah, but what about lending? After all, this is why we have banks in the first place: to channel money to productive industries. The Cresc team looked at Bank of England figures on bank and building society loans and found that at the height of the bubble in 2007, around 40% or more of all bank and building society lending was on residential or commercial property. Another 25% of all bank lending went to financial intermediaries. In other words, about two-thirds of all bank lending in 2007 went to pumping up the bubble.
This doesn’t look like a hard-working part of an economy humming along: it’s nothing less than epic capitalist onanism.
If the statistics don’t support the arguments for the City’s pre-eminence, the public don’t either. In 1983, 90% of the public agreed that banks in Britain were well run, according to the British Social Attitudes survey. By 2009, that had plunged to 19%.
In other words, both the evidence and the voters are against investment bankers. So why do the politicians cling on to them?
Part of the answer is financial. Bankers used the boom to buy themselves influence – so that, according to the Bureau of Investigative Journalism, the City now provides half of all Tory party funds. That is up from just 25% only five years ago.
Another part must be cultural. Running this government are two sons of bankers. Cameron’s father was a stockbroker, Clegg’s is still chairman of United Trust Bank (and famously helped his son get some work experience). For its part, Labour spent so long outsourcing all economic thinking to Gordon Brown and Ed Balls that it has long lost the ability to argue against the orthodoxy of giving the City what it wants.
In a poorer country, the cosiness of relations between bankers and politicians would be scrutinised by an official from the World Bank and disdainfully pronounced as pure cronyism. In Britain, we need to come up with a new word for this type of dysfunctional capitalism – where banks neither lend nor pay their way in taxes, yet retain a stranglehold on policy-making. We could try bankocracy: ruled by the banks, for the banks.
What are the results of bankocracy? It means that the main figures arguing for a Robin Hood tax are the Archbishop of Canterbury Rowan Williams and Bill Nighy. It means that opposition to the rule of banks isn’t found in Westminster, but in tents outside St Paul’s or among a few grizzled academics and NGO-hands – with no political vehicle to carry them. Meanwhile, the politicians declare that the national interest of Britain can be defined by what suits one square mile of it.
Osborne set to borrow billions more than Darling was projected to
We know from this morning’s unemployment figures that the government’s austerity programme is hurting – and it’s hurting the young and unemployed the most. But is it working?
David Cameron and Nick Clegg asserted in the Coalition Agreement (pdf) that tackling public sector debt was the government’s ‘most urgent task’. It has been revealed this morning that across the finance industry, the verdict is failure.
The Treasury has collated 14 independent forecasters’ predictions (pdf, p.18) for net government borrowing over the next four years.
Their collected view is that chancellor George Osborne will borrow billions more than the Office of Budget Responsibility predicted he would in June 2010 (pdf, Table C7, p.90) – or that the OBR said Alistair Darling (pdf, Table 4.5, p.38) would have if Labour had been re-elected.
Here are the raw figures:
At worst, the government’s swinging cuts have stopped the recovery in its tracks, leading to borrowing far above and beyond what they predicted their supposedly profligate rivals intended. At best, with the European and global economy facing such turmoil, the facts have significantly changed since the general election of May 2010.
The current strategy has failed. It’s time for serious change.
NHS cancer figures contradict David Cameron and Andrew Lansley’s claims
The prime minister and health secretary have criticised the NHS on cancer, but new figures suggest the service is a world leader
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Denis Campbell, health correspondent
guardian.co.uk, Monday 7 November 2011 18.48 GMT
Article history
Andrew Lansley and David Cameron, who have used criticisms of the NHS record on cancer to justify a planned shakeup. Photograph: Dan Kitwood/PA
David Cameron and Andrew Lansley’s repeated criticisms of the NHS’s record on cancer have been contradicted by new research that shows the health service to be an international leader in tackling the disease.
The findings challenge the government’s claims that NHS failings on cancer contribute to 5,000-10,000 unnecessary cancer deaths a year, which ministers have used as a key reason for pushing through their radical shakeup of the service.
In fact, the NHS in England and Wales has helped achieve the biggest drop in cancer deaths and displayed the most efficient use of resources among 10 leading countries worldwide, according to the study published in the British Journal of Cancer.
“These results challenge the feeble justification of the government’s changes, which appear to be based upon overhyped media representation, rather than hard comparable evidence. This paper should be a real boost to cancer patients and their families because the NHS’s performance on cancer is much better than the media presents. It challenges the government’s assertion that the NHS is inefficient and ineffective at treating cancer – an argument for reforming the NHS,” said Prof Colin Pritchard, a health academic at Bournemouth University.
He co-wrote the research with Dr Tamas Hickish, a consultant medical oncologist at Poole and Royal Bournemouth and Christchurch hospitals in Dorset.
The research shows that ministers have misrepresented the NHS’s record on cancer in order to gain support for their unpopular shakeup, said Pritchard.
The prime minister and the health secretary have said that both survival and death rates from the disease in Britain are low by international standards. Cameron, for example, claimed during last year’s general election campaign that Britain had a higher rate of cancer deaths than Bulgaria.
The authors studied cancer mortality and the amount of GDP spent on healthcare between 1979 and 2006 in England and Wales and nine other countries, including Germany, the US, Spain, Japan and France.
While cancer deaths fell everywhere, England and Wales saw the biggest drop in mortality among males aged 15-74 – down 31%. While six countries saw falls of at least 20%, England and Wales – which in 1979-81 had the third highest rate with 4,156 deaths per million men – improved the most, achieving the fifth lowest rate among the 10 countries by 2004-06 with 2,869 deaths per million. Among men aged 55-64 and 65-74, who are more likely to get cancer, mortality dropped by 35% and 28%.
While mortality among women the same age declined by less, at 19%, that was the third biggest improvement after Japan (23%) and Germany (20%).
And the NHS was the most efficient of the 10 countries at reducing cancer mortality ratios once the proportions of GDP spent on healthcare were compared, the study found. While England and Wales spent less on health than most others, they achieved the biggest overall annual fall in cancer mortality over the 27-year period, of 900 deaths per million. Once average GDP spending on healthcare was compared, the NHS saw the biggest fall in male and female cancer deaths of an extra 119 lives a year per 1% of GDP spent, ahead of the Netherlands (74) and almost double that in Germany (68), France (67) and Japan (60).
“That shows how good England and Wales are on cancer care, relative to spend. We do significantly more with proportionately less. It means that 34,484 people are alive today that wouldn’t have been if things had not improved since 1980,” said Pritchard.
Two authoritative studies have concluded that cancer survival rates in the UK have lagged behind those in comparable major developed countries, though experts dispute which indicators give the most accurate picture of Britain’s cancer performance. For example, Prof John Appleby, chief economist at the King’s Fund health thinktank, published research in the British Medical Journal earlier this year which disputed the portrayal of Britain as “the sick man of Europe” and argued that cancer survival rates had been improving, significantly in the case of breast cancer.
Duleep Allirajah, policy manager at Macmillan Cancer Support, said: “In the past 10 years cancer services in the UK have improved dramatically. Waiting times have decreased and services have been modernised.” But, with cancer survival improving, the NHS now has to address new challenges, notably improving care for patients who have undergone treatment.
“Far too many people in the UK still experience sometimes serious problems related to their cancer treatment. For many these can persist up to 10 years after treatment. The focus now must be for the government and the NHS to address the issues of aftercare and making sure cancer is treated as a long term condition,” said Allirajah.
Pritchard said: “David Cameron and Andrew Lansley are happier with NHS ‘bad news’ stories rather than, as our research shows, that we should celebrate the NHS which, in monetary terms, is vastly superior to the private healthcare system of the USA.
“Of course we should always be looking to improve. But the only way to judge the NHS is to compare it with other countries, which shows that we are still getting the NHS on the comparative cheap.”
The Department of Health declined to respond directly to Pritchard and Hickish’s findings. “There is a difference between achieving efficiency and the results patients receive. While it is good that NHS cancer treatment is relatively efficient, we know that the results patients actually get lag behind many other countries,” said a spokesman.
“Our cancer strategy is clear – we aim to save 5,000 lives extra every year by 2015 which will bring us up to the level achieved in many other comparable countries. We owe it to patients to deliver standards which are up there with the best in the world,” he added.
http://www.guardian.co.uk/society/2011/nov/07/nhs-cancer-figures-cameron-lansley
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