The Pivot Point 305


The massive economic shock following the banking collapse of 2007–8 is the direct cause of the crisis of confidence which is affecting almost all the institutions of western representative democracy. The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods, and which then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.

It was a rotten system, bound to collapse. But unfortunately, it was a system in which the political elite were so financially bound that the consequences of collapse threatened their place in the social order. So collapse was prevented, by the use of the systems of government to effect the largest ever single event transfer of wealth from the poor to the rich in the course of human history. Politicians bailed out the bankers by using the bankers’ own systems, and even permitted the bankers to charge the public for administering their own bailout, and charge massive interest on the money they were giving to themselves. This method meant that the ordinary people did not immediately feel all the pain, but they certainly felt it over the following decade of austerity as the massive burden of public debt that had been loaded on the populace and simply handed to the bankers, crippled the public finances.

The mechanisms of state and corporate propaganda kicked in to ensure that the ordinary people were told that rather than having been robbed, they had been saved. In the ensuing decade the wealth disparity between rich and poor has ever widened, to the extent that this week the BBC announced the UK now has 151 billionaires, in a land where working people resort to foodbanks and millions of children are growing up in poverty.

With the mainstream media employed entirely in diverting them from the true causes of their difficult lives, it is hardly surprising that ordinary people do not necessarily understand why a society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak. But they know that something has gone very wrong, they witness the vast wealth disparities of our unequal society and the deliberate dismantling of communal and altruistic public provision in favour of privatisation, and they feel contempt for their ruling classes, be they political, media or just wealthy.

The rejection of the political class manifests itself in different ways and has been diverted down a number of entirely blind alleys giving unfulfilled promise of a fresh start – Brexit, Trump, Macron. As the vote share of the established political parties – and public engagement with established political institutions – falls everywhere, the chattering classes deride the political symptoms of status quo rejection by the people as “populism”. It is not populism to make sophisticated arguments that undermine the received political wisdom and take on the entire weight of established media opinion.

Sometimes history appears to be approaching a pivot point, and then the weight swings back and nothing happens. But sometimes it does tip, and times such as these are times of great potential for change. I see hope, for example, in the upsurge of support for Green politics, and the happy convergence of popular political discontent with rising awareness over climate change. Jeremy Corbyn’s rise is in itself an example of the revolution in popular thought – that he is using the mechanism of one of the failed Establishment parties as his vehicle has both positive and negative consequences. In Scotland, of course, I remain anxious the revolutionary moment is being let slip and a new non-radical political class being firmly cemented into power, but retain an underlying confidence in the radicalism and will for self-determination of the Scottish people.

These are stirring times. The popular rebellion against establishment politics is continually portrayed as an unwelcome aberration. It is not – it is a reaction to massive corruption and outrageous inequality. Everybody should fan the flames of change.

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305 thoughts on “The Pivot Point

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  • KarenEliot

    What concerns me even more is the possibility that the success of the last crash landing will merely encourage another even harder one some time soon. If it can be spun as the fault of a left of centre govt here in the UK then that really would be too neat to be coincidence. You can certainly rest assured that the presstitutes will find a way to point blame somewhere else.

    Meanwhile, in Iran….

  • Loony

    There is no hope – and it is entirely wrong to suggest otherwise.

    There is no possibility of paying off the debt that is in the system and a debt that is being added to at a fantastical rate. For the moment the only thing underpinning this debt is the massive inflation of asset prices. As anyone can see these assets are now out of reach of anyone that did not own such assets prior to 2007/8. This necessarily causes discontent and ultimately unrest.

    There is no need to worry too much as the system cannot persist indefinitely and sooner or later the same crisis (that was never resolved by the bailouts) will morph into its next phase, namely a full blown currency crisis.

    This will be bad news for just about everyone – and it will be worst of all for countries that need to import substantial amounts of food and energy. The only thing Corbyn can do is to act as a trigger for such a currency crisis. If you want to know what a currency crisis looks like then take a look at Zimbabwe. Do not forget Zimbabwe had a way out via the US$ and the Rand. This time around and thanks to globalization, all currencies will be destroyed and hence all escape routes blocked.

    That there is no hope is well understood and hence policy makers doing all they can to delay the inevitable for as long as possible. You should thank them – but you won’t, but when the end game arrives you will wonder why.

    • Themaninthelane

      I don’t normally post here, though I’ve followed Craig’s blog since its inception. Nor do I usually agree with Loony. But he’s spot on the money on this occassion. I moved into my present modest 3 bed semi in 2007/8, having paid the princely sum of 200,000 pounds for it. Today the neighbour’s have just sold for 320,000 in just 10 days. That’s a 60% increase in just over 10 years, or 6% per annum. And no, I do NOT live in London, or the south, but in the rural midlands.

      Have wages risen by 60% in ten years? Have they buggery. Can the average twenty-something, or even thirty-something couple afford to buy a house like mine? Can they buggery.

      Loony is dead right. Big Poo is about to hit fan in a really major way. The very poor will just get a bit poorer. The very rich will stay rich, for the time being perhaps, but the so-called ‘squeezed middle’—those with 90% mortgages, 2 cars on PCP, and credit cards maxed out are going to really suffer. It will not be pretty. And Neither Corbyn or any other current politician can or will do a damn thing to stop it. So, sorry, Craig, I disagree. The sheep are still fast asleep and simply do not see the train heading straight for them.

      • N_

        @Themaninthelane

        You omit to mention the reason for such absurd rises in house prices. It’s because of moneylenders’ success in normalising ever greater debt. The demand that has pushed prices to rise so far is – except at the very top of the market – largely composed of borrowed money, and money that is borrowed at an ever greater multiple of the debtor’s annual salary. That’s why house prices are so high, that’s why they’ve risen so fast, and that’s why they’re much higher in Britain than on the continent. In some countries, while your “average” person borrows money to put towards a house, they borrow much less than they could borrow if they wanted to. But in Britain many people borrow as much as they possibly can. Some of them talk about the bank “giving” it to them and think a person only counts as “in debt” if they get into “problems with their payments”.

    • Clark

      Loony: “policy makers doing all they can to delay the inevitable for as long as possible. You should thank them”

      Nonsense. Like Loony, they are obsessed with money. But you can’t eat money, it does not assuage your thirst, and even burning it won’t keep you warm for long.

      The ‘policymakers’ abdicated long since, preferring to oil the wheels of profit-making, while abandoning humanity’s only life support system, Earth and its network of life, to be bought and sold and turned into landfill at the ever increasing rate demanded by the addiction of finance to “economic growth”. That which grows without limit is cancer.

        • Clark

          I wasn’t talking about Africans, and you contravene moderation policy by impugning my motive 🙂

          Africa is the last continent with a growth rate above the replacement rate, but it seems likely that it will follow the same course as all the others.

        • nevermind

          guess how many African countries have more population than the UK,N_, without using google, and then talk to me about the death rates from hunger disease and strife in African countries, because they do not have social safety nets or healthcare as we have.

    • Tom Welsh

      “There is no possibility of paying off the debt that is in the system and a debt that is being added to at a fantastical rate”.

      Quite so, Loony. And as the great Michael Hudson assures us, debts that cannot be paid won’t be paid.

      The alternative is simply to write off the debts. Just debts owed by individuals and families to richer individuals and businesses. Oh, and governments. They won’t be paid anyway, and if they are formally repudiated the debtors will retain their dignity and the means to live a decent life.

      Money is just an idea – chicken scratchings on paper, or nowadays electronic and magnetic traces in computer systems. Once it gets beyond the realm of everyday transactions, it has very little connection with reality. If graduates repudiate their “student debts”, that won’t somehow make them unproductive in society. On the contrary, it will free them to make far greater contributions. The same for mortgages, and loans taken out for the necessities of life or for education.

      Many creditors have far more than they could ever need or spend – they ought to lose the right to take from others who barely have enough to get by.

      Money was made for man – not man for money.

    • Blissex

      «That there is no hope is well understood and hence policy makers doing all they can to delay the inevitable for as long as possible.»

      Some important people think you are an optimist:

      https://medium.com/s/futurehuman/survival-of-the-richest-9ef6cddd0cc1
      «I just sat there at a plain round table as my audience was brought to me: five super-wealthy guys  —  yes, all men  —  from the upper echelon of the hedge fund world. After a bit of small talk, I realized they had no interest in the information I had prepared about the future of technology. They had come with questions of their own. [ … ] Finally, the CEO of a brokerage house explained that he had nearly completed building his own underground bunker system and asked, “How do I maintain authority over my security force after the event?”
      The Event. That was their euphemism for the environmental collapse, social unrest, nuclear explosion, unstoppable virus, or Mr. Robot hack that takes everything down.
      This single question occupied us for the rest of the hour. They knew armed guards would be required to protect their compounds from the angry mobs. But how would they pay the guards once money was worthless? What would stop the guards from choosing their own leader? The billionaires considered using special combination locks on the food supply that only they knew. Or making guards wear disciplinary collars of some kind in return for their survival. Or maybe building robots to serve as guards and workers — if that technology could be developed in time.»

    • Tom Welsh

      Read Michael Hudson – especially “…and forgive them their debts”. He makes it crystal clear that, ever since the dawn of urban civilization, societies have been divided between debtors and creditors. Creditors, finding themselves with surplus funds, lend them to the poor who cannot make ends meet for whatever reason. It’s rather like fishing: the loan is bait, and when the debtor swallows the loan, sooner or later he and all his property will become the creditor’s.

      There is no reason why society should tolerate this behaviour, and rational societies don’t. Hudson adduces almost all states before the era of Classical Greece. In Ur, Babylon, Assyria, Egypt and other early kingdoms, the rulers regularly imposed debt jubilees – creditors were obliged to forgive all personal debts, to return all goods distrained for such debt, and to release all slaves and indentured servants whose status was due to personal debt. (Business debts were unaffected).

      In the absence of debt jubilees, a familiar pattern always emerged. The rich got wealthier and wealthier, while the poor got poorer and poorer. Eventually, many of them were destitute and had to sell themselves into slavery or serfdom. After a while, society decayed into a small class of super-rich and their servants, a mass of slaves or serfs, and some independent traders. The king lacked tax revenue to run the country or defend it, because there were no longer any free men and women. That is in fact exactly what happened to late classical Greece and the Roman Empire – and that is why Rome fell and was conquered by barbarians.

      In the Middle Ages usury was strongly discouraged by the Church, but with the Reformation it became respectable again – first in Protestant areas, then even in Catholic ones. And today we are trapped in the belief that repaying all debts, to the penny, with whatever interest is imposed, is a moral duty! Unfortunately, that is the direct route to destruction.

      • Blissex

        «Hudson adduces almost all states before the era of Classical Greece. In Ur, Babylon, Assyria, Egypt and other early kingdoms, the rulers regularly imposed debt jubilees – creditors were obliged to forgive all personal debts, to return all goods distrained for such debt, and to release all slaves and indentured servants whose status was due to personal debt. (Business debts were unaffected).»

        That’s not how it went, and it seems to me “motivated storytelling”, and M Hudson has written in part papers in which he told the real story, that the jubilees were about *tax arrears* that had been “securitized” (already 2,000 years BCE) and sold to easily identifiable foreign traders working as tax collectors/farmers, who as a rule would then be massacred. Example: Your have a sheep, and the king demands tribute of half the wool produced by your sheep. But he needs silver to pay his soldiers, so sells the debt tablet with the record of what you owe to a tax-farming foreign merchant for 10 grains of silver, and the foreign merchant demands that the debt tablet not only describe a definite quantity of wool to pay, but also 3 grains of silver as interest, compound, for every year you delay paying. Because last year the gods/sun/sky/time have not been favourable, you cannot deliver that much wool, and the foreign merchant starts to compound the grains of silver until you have to sell the sheep and you end up in debt slavery to the foreign merchant. The soldiers of the king enforce the collection of the debt because they know well that their pay depends on the silver paid by the foreign merchant to then king. Every couple of decades the king relieves the pressure by declaring a “debt jubilee” which means a massacre of the foreign merchants and a breaking/burning of the securitised tax records given to those foreign merchants, who are invariably easy to spot because they dress differently, speak with a different accent, or have different facial features (e.g. slanted eyes) from the populace.

      • mog

        It is arguable that slavery was relegated in the industrialised capitalist sphere as a consequence of fossil fuels providing us with such an abundance of almost free energy. At a certain point, slaves became a hinderance more than a benefit to the wealth classes.
        As the energy surplus gradually slides away, we have to ask whether the ethical systems which dominate our current society are able or willing to counter a pull towards a return to slavery. We see its origins now in the economic stagnation of the masses, the commercialisation of prisons and the run away wealth of the creditor elites.
        We also see it in the many land grabs that the corporate elite seem obsessed with nowadays. In the post fossil fuel world, sheer acreage will once again start to become the main source of most energy (and therefore wealth), in the form of solar farms, biomass, food, grazing, lumber.
        The Green New Deal- 4th Industrial revolution- rewilding agenda economics will likely put a rocket under this change.
        Politicians are for the most part directed by the opinion of economists (unfortunately not of the Hudson type though). Almost all economists have neglected to account for the energy input necessary for all economic activity.
        It is all about energy.

      • Tony M

        You think this is applicable to the modern world? Magical thinking? You’re encouraging indebtedness, encouraging people to think someone, or thing, sometime is going to wave a magic wand and they’ll be free of lawful debts and keep the assets. And what of the people, poor but not in debt, the sensible, frugal nothing for them in this bonanza, just lucky ex-debtors continuing to rub their noses in it for not aping them and getting in on the scams. Collect every single last penny, and the interest, plus penaties and if they don’t pay seize the assets and let them take their chances with social housing, with catching buses and living as those many do who wisely chose to live within their very limited means, who’ve suffered all their now expiring lives. Spare us from those Guardianistas who no doubt loudly and hypocritically condemned malign Thatcherite economics, red in tooth and claw all the while counting their new ill-gotten paper worth. You are not the norm, your pleading for massive undue handouts, your lifestyle, has been and will continue to be financed by further turning the screw on and increasing the number of those you’ve long despised and consider beneath you. Your plea is save me, sod the rest.

  • james

    thanks craig for trying to articulate what is going on here… as i see it, the financial system at present – and it has been this way for quite some time – is essentially a grand ponzi scheme… it is a complete racket hiding behind the facade of characters dressed in suits and ties trying to convey some legitimacy to their ponzi scheme.. the whole thing needs to come down.. at present, the us$ is de facto world currency… when a country tries to ”pivot” out of it, they are held up for regime change.. this is partly whey we are seeing the neo con war drool towards iran.. until the whole system collapses, i can’t see any change.. all the ill gotten wealth will remain in the hands of a few..

  • Daniel Messer

    It’s always good to feel positive. However, the pivot point for me, by which all will eventually be judged, is whether or not the Neo-Cons get their regime change in Iran. Time will tell.

  • Baalbek

    The post-1945 era of the western middle class and ubiquitous upward social mobility is an historical anomaly. That is not not how things usually work. What people who think “making themselves heard” on the internet and voting for politicians that promise ‘green new deals’ and the like are missing is that great power is rarely, if ever, relinquished without violence or an existential threat that compels the powerful to loosen their grip. And that periods of economic stagnation are often reset by a period of organized state violence, i.e. war.

    People widely underestimate the lengths those in power will go to stay there. Example, all the mechanisms are in place to turn the internet into the “greatest tool of repression the world has ever known”, as Julian Assange remarked in 2010, and the public has been primed since 9/11 to fear endless bogeymen and “threats from without”. This won’t be reversed in an election cycle or two. I would go so far as to say that as a society we are in deep denial about what faces us. And I haven’t even mentioned global warming (if you think it’s a ‘hoax’ or ‘no big deal’…enjoy that delusion while you can).

    Last word goes to Aldous Huxley: ‘That men do not learn very much from the lessons of history is the most important of all the lessons of history.’

    • Ingwe

      Baalbek at 19:03. I agee with you. Elections aren’t going to change nothing. If they could, they’d be abolished (a graffito I’d seen painted in the road years ago). I grew up in apartheid South Africa and its demise was only a result of the armed struggle. Not from the puny disinvestment pressures (largely ignored by the UK).
      Voting in Corbyn will at best be the lesser of two evils. The Labour Party is not radical and wants to make capitalism acceptable; a notion itself that shows just how reactionary Labour is. The gross inequalities in society are a result of capitalism working entirely as it is intended to work and pretending it is only a matter of tweaking it to make it fairer is pure fantasy.

    • Clark

      “We have recently and continually been told we need to get off Carbon or we will fry”

      The warning was made official in 1988 when Hansen testified to the US Congress, and since then the corporate media have done their usual dreadful job, confusing the public by applying “journalistic balance”, degrading matters of hard fact to “Adam said this but Bert said that”.

      But we needn’t take anyone’s word on matters of science; with a bit of scientific background eg. Bad Science by Ben Goldacre, it is easy to tell a coherent scientific argument based on multiple, supporting evidence bases, from a corporate hodge-podge designed to confuse.

      “About fifteen years to go to year zero”

      Zero hour was decades ago. Now, by making every effort in our power, we can minimise the damage. Delay has reduced us to crisis management.

  • David Ashby

    Craig,

    I agree that the actions of our governments in response to the financial crisis were morally appalling. I agree that we are bearing the consequences of those actions today and I agree that our society as currently constituted provides neither just nor good outcomes for many of its citizens. I also agree that our media have furiously and deceitfully attempted to convince us that our robbers were our saviours.

    Where we differ is in what we view as a possible solution.

    In my view neither the green party, nor Jeremy Corbyn represent any kind of hope at all. They would both leave all our insititutions in place and merely replace one powerful, corrupt government with another which, if perhaps not quite as corrupt initially, would rapidly become so.

    Your own story is a remarkable one. You stood up to corruption and exposed it. You have my admiration for that. But “the system” turned on you. In the end no-one was willing even to stand by you. That is the nature of power and its corruption. I know you have observed with dismay the behaviour of your beloved Scottish National party when allowed even a taste of power. Do you really think Jeremy Corbyn’s Labour party would be any dfferent? Or the Green party?

    The institutions in our society would corrupt them as surely as they are rotting away at the Scottish Nationalists, but more speedily as there is a great deal more power in Westminster than Edinburgh.

    I believe the answer lies in less government, not more. Government can never be used to alleviate poverty or increase opportunities for its powers lie only in the abilities to deny, to dictate, to control, and to punish. Its purpose, if it has one at all, is to inhibit those who seek to aggress, to cheat and to steal.

    Doing good is hard. Using the coercive power of government as a shortcut will never work. The end does not ever justify the means, for that is always and everywhere the short and slippery path to dystopia.

    The solution to our problems is not to attempt to use the power of government to steal from the wealthy and return to the poor what was already stolen from them. Once you grant government the power to treat men unequally and take from one man to give to another, then many are tempted to grasp the levers power in order to pull them in their own direction. And time after time after time throughout history we have seen who wins that battle. It is always the despot or the oligarchs, never the poor. The poor may achieve some insignificant handouts that fail to recompense them for a fraction of the opportunities they have lost, but they will always lose to the cunning and capable thieves who devote themselves fully to personal gain from political machination.

    The only workable solution is, and always has been, liberty. In practice this means ripping apart most of the institutions of power we have created over the last few hundred years.

    We must tear down the bank of England. We must rip up our intellectual property laws. We must eliminate corporate personhood and the attendant ills of limited liability and immunity from criminal prosecution. We must ensure that all men have the same rights. No man be he government minister, spy, policman or soldier can be exempt from any law. And no man, be he government agent or civilian, may commit any act of violence against another unless in defense of himself or his property. And we must remove from our government control of the judiciary or all of this is meaningless.

    David

    PS Despite my criticism of your hoped for solution, I remain an admirer of your courage and your principles. Keep up the wonderful work you are doing!

    • Jay

      You neglected to mention the vehicle through which this extra parliamentary coup takes place and your solutions are delivered.

  • Goose

    Serious talk of a ‘PM Boris Johnson’ must be music to Scots Nats’ ears?

    If he does become leader and PM, Nicola needs to bring that vote forward.

  • John Goss

    The great problem of this disproportionate distribution of wealth is that the 151 billionaires are the ones not just controlling the financial sector but the media, the judiciary and all the self-justifying parliamentary pressure-groups befriended by politicians each hoping for a slice of the pie. The power of these people is not possible to gauge because of the complex accounting procedures and their various “foundations” and “charities”, off-shore bank accounts and other vehicles to ensure no taxes are paid. That’s where you and I come in.

    • Blissex

      «and their various “foundations” and “charities”, off-shore bank accounts and other vehicles to ensure no taxes are paid.»

      I have read somewhere that one of the simplest techniques to “sponsor” a politician is to get them to buy a mansion in some nice foreign country, through a shell company in a foreign country, and then to “rent” it by paying the “rent” for the “house” from a foreign account of the sponsor to a foreign account of the shell company owned by the politician. Since the house property, the company owning it, the bank account of the “sponsor”, and that of the shell company, are all abroad, in the UK it is all invisible, including to the tax office, and it all looks like a “commercial” transaction.

      • John Goss

        Thanks Blissex. I bet there are a few more multimillionaire scams out there! I guess they think how clever they are dreaming them up while we poorer people keep the country going.

  • Hatuey

    No offence, I thought this piece was a bit clunky. A lot of it obviously true but Brexit isn’t necessarily a blind alley.
    If you pay too much attention to the MSM narrative, you might think Brexit is entirely a Tory party problem, affecting and involving only those who vote Tory, Tory politicians, etc. I used to think that myself.
    But today I’m forced to acknowledge that there’s much more to Brexit than that. Ordinary people in their millions voted for it. I don’t assume they were all conned into doing so.
    And there’s more to Brexit than EU relations. There’s real cynicism towards the political classes, seething distrust, and a desire — even if it leads to self harm — to disrupt business as usual.
    I think only a sort of left wing snobbery prevents us from describing Brexit as revolutionary. And it’s that same snobbery that has prevented Momentum and the left generally from supporting it.

    • craig Post author

      “There’s real cynicism towards the political classes, seething distrust, and a desire — even if it leads to self harm — to disrupt business as usual.”
      I think you proved my point. A desire to act which leads to self-harm is precisely a blind alley.

      • Hatuey

        Well, you could describe lancing a boil as self harm if you take a narrow view of it. It is.

      • Colin Alexander

        “In Scotland, of course, I remain anxious the revolutionary moment is being let slip and a new non-radical political class being firmly cemented into power…”

        Is this bit deliberately vague?

      • bevin

        You are begging the question. Far from being “self harming’ Brexit gets to the root of the problem of neo-liberalism, which had long been in existence and had long been employed to rationalise cuts in the living standards of working people, before the crisis of 2008.
        In fact the financial crisis, while it exacerbated the problems was not the beginning of anything, unless it was the beginning of the end of a capitalist system which has long been evidently unsustainable.
        What Brexit signals is a reversion to the grassroots- much like Scottish desires to ‘exit’ the British union- as people set out to get to grips with what it is that makes the arrival of an era of abundance coincide with levels of inequality never before seen in human history.

        • Hatuey

          bevin, you clearly support Brexit and that’s okay but let’s not pretend it gets to the root of anything. As for neo-liberalism, most brexiteers wax lyrical about slotting right into the global economic order and for some unfathomable reason think they will be better off.
          The only aspects of brexit that make sense are the nonsensical aspects — i.e. rocking the apple cart, disruption, etc. The supposedly sensible parts, leaving the EU and the economics of brexit, are utter madness.

          • David

            Are you sure the economics of Brexit are utter madness? Personally I rather think that Briatin’s economy will do better with a hard Brexit than with continued membership. It won’t be good for our politicians or our bankers of course – which is why they strive so ardently to inundate us all with propaganda. And, while it is not proof of anything, it is at least interesting that GDP growth slowed upon entry into the union in the first place and has remained below what it was prior to entry ever since.

            Trade certainly has value. But the costs of membership are also huge. The excessive regulation and the enormously expensive and corrupt bureaucracy, in my view, more than offset the benefits of the trade. So we stand to gain from exit, provided of course that we don’t replace that regulation and corruption with additional layers of homegrown regulation and corruption.

          • Hatuey

            David, it would be easier to take you seriously if every point you make wasn’t basically regurgitated word for word from the Brexit buffoon handbook.
            I refuse to address your individual points because I’m so bored of them and have responded to them all individually a thousand times.
            On economics, Brexiteers are keen to point out that the uk is the 5th biggest economy in the world — “of course we could manage on our own” etc., etc., etc.
            They forget that the status of the UK’s economy today is surely, to a large extent, down to our EU membership over the last 50 or so years.
            According to research, the UK loses twice as much to tax avoidance per year (around 19 billion) than it pays to be an EU member state. Why don’t you and people like you, who purports to be so incensed about these things, mention that in your rants?

    • Dungroanin

      Brexit was not ever a grassroots event like the Yellow Vests are or the mass membership inflow to the Labour party was when Corbyn was threatened by the PLP chicken coup.

      Brexit was funded by the billionaires from abroad as well as here. They used the DS apparatus and social media targeting as well as MSM to deliver the millions of voters. Splitting families and friends with a multitude of lies with one simple scapegoat, the EU.

      The billionaire owned puppet governments created Austerity, a political decision, and then blamed membership of the EU as the reason for continued hardshiip. The funds set to magically appear as soon as the hard brexit is enabled. The carrot to the austerity stick.

      The bigging up of the tired kipper king and the bully prince Yaxley Lennon (the MSM directed to use his ‘street’ name) as a last gasp attempt to coalesce an anti-Labour political grouping in the next General Election, is their now only chance to avoid the tipping point and an end to their ressurgent decades of warmongering global robber barony.

      CM has written a clear and plain english pamphlet for the revolutionary moment that we are faced with. I’m sharing it with my peer group.

      • Hatuey

        There’s s lot of problems with that analysis. There’s s lot of it that fits too but, then, it would be remarkable if none did.
        The role you attribute to billionaires and the MSM in conjuring up the Brexit demon, as a process, is indistinguishable from the normal functioning of what we call liberal democracy.
        From there it’s very easy to end up tarred with an anti-democratic brush. And since most people who describe democracy in the same terms tend to want to stop or cancel Brexit, you couldn’t really object.
        I guess we have a disagreement over defining democracy.
        Brexiteers would argue — rightly, I think — that they played and won by the same rules all previous elections and referendums were won by; the only difference here is that you hate the result so much that you’re prepared to change the rules and abandon democracy as we know it.
        It’s interesting that the Labour Party is held up as a solution to all this. The Labour Party played an important role in causing the credit crunch and historically has had no queasy qualms or reservations when it came to decimating places like Iraq.
        I don’t doubt that you think Corbyn is exceptional. But the millions who voted for it think Brexit is exceptional too.

        • Dungroanin

          Many millions voted on lies told publicly.
          Maybe a million or so voted on private lies – a billion FB secret adverts targetting a few people in tightly targeted area.
          Millions more were disenfranchised and not allowed to vote – these expats.
          Funding for the campaign has not been revealed and billions more in dark funding from abroad never will.
          The Electoral Commission is a toothless old dog and doesn’t even bark at the daylight robbery.

          The enpowerment of the voters (many first timers) is a great thing for the democratic well being of the country. I don’t diss them or their choice – i hope they carry on voting forever more – hopefully they will make choices based on truth not lies, and they act rationally on manifestos not emotionally on having their buttons pushed by the greatest PR experts in the world.

          In this distorted foggy battlefield there is but one clear rallying point, if we ignore it recklessly and not give it a chance to change the track back to the post war social democratic ideals, then our children and grand children will be doomed to servitude and poverty that we were spared.

          We can always rejoin – we won’t ever have a chance to elect a genuine socialist government.

          All best

          • Hatuey

            Dungroanin, everything you say about the lies not only could be said about virtually every election that’s taken place in the last 40 years, it was said. I agree with what you’re saying about the lies and corruption, to be clear, but it seems a bit selective of you to attach such importance to that stuff only in this case, Brexit.

          • Dungroanin

            Glassy, the ever closer union with its insistence on a level playing field is an anathema to the Money and Aristos – it has driven them mad that they no longer can demand control and veto over the inevitable trajectory and success of the € and regulatory regime.

            They are driven to causing chaos to riven the EU by the Alt-rightist agent provocateur groups funded and controlled by the glpbal robber barons. They have FAILED.

            Hatuey – i agree about the media distortions of every election since the 70’s.
            But back then, the easy fix was to intercept a few ballot boxes on the way to the count…
            The full spectrum msm/pr and now social media data pointed algos has been developed to interfere in all elections all across the world.
            While even being caught red handed by revelations of the IoS/II type or even self aggrandising celebration of cheating like Dominic Cummings’, raises not a whisper from many, except ‘ain’t nuffin to see here .. move along’ bs.

  • Clark

    From Craig’s post: “I see hope, for example, in the upsurge of support for Green politics, and the happy convergence of popular political discontent with rising awareness over climate change. […] The popular rebellion…”

    I find the attitude within Extinction Rebellion a source of great hope; truly refreshing. Over sixty attended our public meeting in Chelmsford yesterday evening, and our numbers have grown once again.

    Founders Gail Bradbrook and Roger Hallam respond to questions and criticisms:

    https://www.youtube.com/watch?v=UYTkbB4w6a4

    • Loony

      [ Mod: Please divert this discussion to the Extinction Aversion thread. Further comments on the topic of global warming and climate change on the current thread will be deleted. ]

      If you find Extinction Rebellion to be a source of great hope then presumably Extinction Rebellion does not concern itself with the fact that 2018 saw global capacity growth in renewable energy stall for the first time this century. Currently annual additions to renewable energy capacity are running at about 60% of the level required according to IEA estimates.

      Offsetting this failure grow renewable energy at the required rate is the fact that global emissions increased in 2018 by 1.7% and that emissions from conventional power generation reached an all time high.

      Despite this catastrophic failure to reduce emissions end user power prices continue their relentless rise with the consequence that further swathes of people continue to be tipped into poverty.

      Presumably the Chelmsford devotees all walked to the meeting barefoot prior to feasting on a variety of raw root vegetables. Or then again maybe they didn’t – because to do so would require a commitment beyond vacuous virtue signalling.

      An alternative to walking around barefoot and eating turnips would be to offer unqualified support to President Trump and his attempts to rein in the great spewer of unwanted gaudy trinkets to all corners of the earth. But no doubt you prefer death to actually supporting the only person on the planet who is actually able and willing to assist in achieving your stated aims.

      • Clark

        Loony, this thread is called “The Pivot Point”. I have joined Extinction Rebellion precisely because it directly addresses itself to the issues you raise in your first three paragraphs, and because one of its founders, Roger Hallam, has studied social pivot points, and has started a movement deliberately designed to catalyse one.

        Trump is uninterested in stemming the flood of “unwanted gaudy trinkets”; he merely wants any such products to be made in the US – or rather, he wants the money from their sale to remain in the US, so that he and his cronies continue to hold power.

  • Conall Boyle

    Craig, don’t spread yourself too thin!

    You are absolutely right in what you say, and your point that Brexit is a decoy to divert attention from the Real power in the Land. The UKIP bunch bang on about “taking back control” (from Europe), but miss the two biggest ways we have NO control. The first is War and foreign relations, and this really is your territory Craig. We are in hock to NATO and the Americans and will not so much as issue a single squeak against them. This is so even when the public is overwhelmingly against War (Iraq) or when NATO/US rampage through the middle east. Craig, your knowledge and experience in this field are enormously valuable, and has helped me and many others to see through the evil schemes of our war-mongering, poison-plot faking overlords.

    But it is control of our money that is the really big one. The of the power to produce our sovereign money has been given away to the commercial banks, and that is an even bigger loss of control over our own affairs. It is truly ironic that UKIP use the £ symbol for their party, yet fail to notice that most (97%+) of our money is lent to us by Hong Kong and Shanghai, Santander etc, Banks.

    To find out more about this deliberately hidden way the Banks control our money have a look at Positive Money to find out more. Steve Keen is also very good on this, as is Martin Wolf on the FT.

    So Craig, yes, tell us about the real control we should be taking back, but try to reference the real experts in this field when it comes to banking.

    • michael norton

      It is not just about money, it is also about intelligence, they can have knowledge of what you interact with on your computer, your phone, you intelligent speaker, we are being forced to pay for our water by how much we use, they will ramp up the cost, we are being forced to have smart electricity meters and smart gas meters, they are doing away with cheques and doing away with cash.

      We are being made into automatons, already young people do not know how to read maps, they only do sat nav, soon we will only have autonomous electric vehicles they will know our every movement.

      They can already control planes and make them crash.
      This is a complete horror.
      Soon there will be no pensions, no health service only destitution or slavery.
      Brave New World is in just a few years.

    • Mr Shigemitsu

      “It is truly ironic that UKIP use the £ symbol for their party, yet fail to notice that most (97%+) of our money is lent to us by Hong Kong and Shanghai, Santander etc, Banks”.

      This is false.

      Retail banks create credit, which needs to be repaid, so no new net financial assets are created.

      Only the UK govt can create Sterling as a debt free financial asset, and it does this every single day, as it instructs the BoE to credit the reserve accounts of the retail banks of the recipients of any initial public spending.

      As money does not stop at first use, tax is imposed not only on the initial govt spend, but on each subsequent transaction, until almost all of it returns (“re-venue”) to the Treasury, where it’s effectively destroyed, so that the whole public spending can continue, ad infinitum, without causing the massive inflation that untaxed spending would create.

      Positive Money not only ignores the essential role of govt created “vertical” currency, but also wants to delegate control over money creation and supply to an unelected “panel of experts”. This will inevitably lead to permanent recession and austerity, because not only will it be staffed by the same people who now work for the OBR, but also those who believe in PM’s erroneous take on money creation.

      #LearnMMT

    • Mr Shigemitsu

      Besides which, ask yourself why in earth the monopoly issuer of Sterling would ever need to borrow the Sterling that it creates every day via a BoE keystroke from a commercial or retail bank, and let alone a foreign one!!

  • fwl

    Curious and worth considering is to what extent the financial system went wrong under the Democrats (Clinton) and new Labour (Blair) for it was under them that the moonlight moonshine of derivatives were given a free hand and unregulated and investment bankers were encouraged to indulge as they had not expanded before.

    That’s not to say that it was especially the liberals the Democrat and Labour’s fault. Investment banker’s like to run things to excess and will do if they can after all part of their wire skill skill set is to go to the edge whilst arranging for politicians and tax payers to provide a safety net.

    In the past there was at least some traditional resistance within the establishment that knew that prudence required certain curbs. Just as some might say patrician Tories (if there are any left- save for Rory Stewart) have been more capable of resisting security services’ excesses, whilst labour fearing that they might be perceived as weak on security have tended to roll over and quickly accept national security arguments so too with the economy and banks. Some patrician hands had known better than to acquiesce to every banker’s petition for more freedom whilst new labour wanted to look modern and city friendly. It takes two to tango and we have got into trouble when they the bankers have danced with labour.

    The problem now is how to get off QE? Will the left’s embrace of Modern Monetary theory (QE2) be the end of QE or is Modern Monetary theory nothing but a ruse to keep the taps under cover of public works whilst its fundamental purpose would be to keep the tap running.

    • Blissex

      «In the past there was at least some traditional resistance within the establishment that knew that prudence required certain curbs.»

      That would have been MacMillan style “one nation” tories, but they have been wiped out of the Conservative party, by thatcherites, who are more whigs than tories (while a small part of the base of Conservatives and Labour are whiggish, many of their top layers are whiggish).

      «Just as some might say patrician Tories (if there are any left- save for Rory Stewart) have been more capable of resisting security services’ excesses»

      That has never happened, as to their own security the tories and whigs have always been ruthless.
      What has changed is the indiscriminate manner in which ruthlessness has been deployed. Americanization…

      «Some patrician hands had known better than to acquiesce to every banker’s petition for more freedom whilst new labour wanted to look modern and city friendly.

      «It takes two to tango and we have got into trouble when they the bankers have danced with labour.»

      Again, a much larger proportion of Labour’s top layers are whiggish, and are more properly called “New Labour”. Peter Mandelson for example seems to me a conservative whig, and Tony Blair used to be a “one nation” tory and Peter Mandelson gradually converted him into a conservative whig too.
      Alastair’s Campbel deputy spinmaster wrote in his diary (1999-10-19) about a New Labour strategy meeting something that is still largely true:
      Philip Gould analysed our problem very clearly. We don’t know what we are. Gordon wants us to be a radical progressive, movement, but wants us to keep our heads down on Europe. Peter [Mandelson] thinks that we are a quasi-Conservative Party but that we should stick our necks out on Europe. Philip didn’t say this, but I think TB either can’t make up his mind or wants to be both at the same time.

      • fwl

        Thanks Blisssex.Nothing like a bit of popish Whiggery on these pages.

        There is something to be said for Hogartherian Tories with their earthy satire and lack of whiggish cosmopolitanism. Less Whites or Brooks and more Pratts. It was indeed the Whiggs with their (17 / (18 Euro money that glamourised society gambling whilst the Tory squires sadly gambled away their landed estates just as the post WWII descendant Whigs liberalised the city as a casino and transformed proprietary trading so as to free the ordinary bottom feeding Joe day trader to give away his daily bread.

  • mickc

    A first class analysis of the present situation. Our Rulers simply don’t understand the anger which has built up in normal people.

    • Jones

      Perhaps they do know but don’t care as the British are mostly passive and do little more than grumble, it does make one wonder how far people can be pushed before a pivot point becomes a tipping point.

  • Jones

    The pivot point for me is when those whose wealth soared on the backs of those who’ve suffered austerity over the banking crisis and now threaten to leave the country at the prospect of a Corbyn government actually pack their bags and clear off, their passport should be torn up so they can never return and i would say good riddance to parasites who’ve bled the country dry. I would gladly wave goodbye to the cry babies threatening to run off to the sun with their bags of money in fear of having to contribute to the society that made them rich.

  • Blissex

    Dear blogger, many of your points are very welcome, but on some you have been perhaps misinformed, so please consider my points, of which the first is the most important and factual:

    «The massive economic shock following the banking collapse of 2007–8 is the direct cause of the crisis of confidence which is affecting almost all the institutions of western representative democracy.»

    According to per-head electricity consumption figures the massive economic shocks seems to have begun at the same time in several economies around 2004-2005, when the financial economy was still booming, consider this graph:

    https://blissex.files.wordpress.com/2018/02/dataelectreuothersconsperhead1960to2015.png
    https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:DEU:ITA:GBR:FRA:ESP:GRC:CHN:JPN:KOR:MYS:THA:BRA:MEX:URY:TUR:IRL:SGP:IND:ISR:USA

    After a century of pretty much straight line electricity per head consumption many first-world economies saw it collapse, or stall in the richer countries, regardless of what the “official” GDI index reported.

    Even more interestingly the collapse was merely a stall in the richer countries, and this happened within the UK too, London and the south-each had a stall, which is already not good, and the poorer part a large collapse, this was the graph that caused my original interest, copied from another blog::

    https://blissex.files.wordpress.com/2018/02/dataelectrukfallbyregion2005to2015.png

    I strongly reckon that electricity consumption data is very tightly related to actual GDP and also to ability to pay, and that the UK official GDI index has been built in the most optimistic way possible for several years. The UK and Greece have had much the same collapse in electricity consumption since 2004-2005, but the curve of the official GDI index has been very different. This may be because since their 2010 crash, the greek government has been forced by the EU to have realistic national statistics.

    That collapse starting in 2004-2005 if reflects a similar collapse in overall real economic activity has been far more important and long lasting than even the 2008-2009 crash of the financial economy, and may have even triggered it (by reducing the supply of the greater fools).

    When looking at the very different curve for China, that instead started growing much faster at around the same time, my guess is that the 2001 entry in the WTO of China has transferred a large chunk of the real economy to that country from most “first-world” countries.
    Put another way the “first-world” elites in the years after 2001 discarded around 20-30% of their “overpaid, unionized, uppity” hired help and replaced them with biddable, nonunionized, docile chinese coolies.

    Another interesting graph for comparison is that for the ex-“second-world” countries:

    https://blissex.files.wordpress.com/2018/02/dataelectrexsovietconsperhead1960to2015.png
    https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:BLR:BGR:CZE:KAZ:LVA::HUN:LTU:MDA:POL:ROU:RUS:SVN:UKR:GBR

    That graph should illustrate why “electricity saving technology” is a rather improbable explanation why per-head electricity consumption in the North East fell by 20% between 2005 and 2015.

    • Casual Observer

      Electricity demand in the developed world is falling. Think about those bulbs that now burn 5 or 6 watts instead of a hundred, or the monitors that now consume a quarter of the old CRT’s ? So probably less to do with GDP, and more to do with the more efficient use of energy ?

      Interestingly the graphs you link to show the former Communist countries having higher consumptions from about 95 ? So likely to be as a result of the fall of Communism, and the ability of Capitalism to provide items to burn more electricity ?

      Its also worth pointing out that the energy companies are more than happy for the climate scare to persist, simply because they can make a little extra by handling the green subsidies. In fact thats probably what enables them to continue paying the shareholders ?


      [ To continue this discussion, please go to http://www.craigmurray.org.uk/archives/2019/04/extinction-aversion/comment-page-8/#comment-866566 ]

      • Casual Observer

        Malaysia and South Korea are still on the upwards swing of economic development.

        The former Communist countries did indeed suffer a period of depravation following the collapse of the command economies. But then started to grow again, but still not at the levels of prosperity enjoyed in the ‘West’

        The Ukraine has been the victim of its own home grown parasites since it became independent, so its probable that the circumstances of individual Ukrainians has indeed led to lower consumption. Although I doubt the GDP of the Ukraine has fallen due largely to its becoming a sham battleground between Russia and America ? The same can be said of Moldova, but in spades. As for either country being Capitalist, I’d venture they are more in the nature of kakastocracy’s ?

        The GDP aspect is an interesting angle, but declining usage must take notice of technological progress ?

        • Blissex

          «Malaysia and South Korea are still on the upwards swing of economic development.»

          Then they would be adopting the very most modern electricity saving technology, while the UK, Spain, Italy, Greece have plenty of less efficient legacy electrical devices, so energy efficiency should be improving much faster in south Korea and Malaysia.

          There is also the matter of absolute levels: you may have noticed that Malaysia has reached the level of consumption per head of the UK, Greece, Italy, Spain, and south Korea has surpassed it by far. They are pretty developed already in terms of electricity use.

          «The GDP aspect is an interesting angle, but declining usage must take notice of technological progress ?»

          In the past hundred years technological progress in electricity consuming devices has been massive, with enormous improvements in electrical device design, generators, transformers, motors, and consumption per head has been growing on a straight trend. If anything, except for LEDs, that kind of progress has slowed down as technology has matured.

          Also, I still find no reason to fantasize that electricity efficiency per head has improved by 20% in the north-east and not at all in London, a pattern that is repeated in regions of some other “first-world” countries, and among “first-world” countries too.

  • Mist001

    Where’s all the money though? If I go into the bank and ask for a £500 loan and am accepted, I certainly don’t see £500. The cashier merely types the figure 500 into her PC and magically, I’m £500 richer for the moment. The bank of course, has its interest rates which they don’t see either. All they have is someone punching a number into a computer terminal.

    I read a good one on Facebook last night saying that hackers should up their game and wipe out the debt and mortgages of everyone and funnily enough, that’s all it would take to solve the banking crisis. A snotty 17 year old kid in his bedroom with an plan..

    • N_

      Let’s not rely on hackers or other experts. A few hundred thousand people going to their local bank branch one morning and withdrawing in cash however much they can afford to withdraw would hit the banking system with an almighty earthquake, and has sometimes been suggested.

    • Casual Observer

      If there was no debt, there’d be no money. Think about that for a minute. Probably 99% of money exists because somebody has borrowed from the bank, and by the magic of Fractional Reserve Banking, increased the assets against which the bank can lend, thereby allowing for more money to come into existance.

      Check out https://www.youtube.com/watch?v=2nBPN-MKefA it’ll explain to you why, if as you suggest, a hacker wiped out all the debt records, you’d have no money in a very short period of time.

      • Blissex

        «by the magic of Fractional Reserve Banking»

        Fractional Reserved Banking effectively disappeared in the “first-world” countries many decades ago. Currently lending is constrained (in theory) by regulations on leverage, that is capital (for “funny” definitions of capital) ratios, not reserve ratios. Quite a different thing really.

        • Casual Observer

          Thats just what the video link says 🙂

          It also points out just how few people give any thought to just how money is created. I’d think that the idea that physical money being only about 5% of the total of all money would also be a shock ?

          I’d agree with you that any notion of deposit ratios went out of the window decades ago, despite what the revised Basel accords might suggest. But it remains the fact that if credit were to be either stopped from expanding, or reduced, the fallout would be dramatic indeed.

        • squirrel

          Blissex absolutely not, that’s not true. The current system is fractional reserve banking, where nearly all the money in our bank accounts has been created as loans by private banks, and where the money created by the central bank (from which the private banks have their reserves as cash or central bank credit) is a tiny fraction of that.

          The consequence of this is that the money supply is unstable, there must exist perpetual private debt, and as a society we are having to pay continual interest on our money supply when

          There is surely no difference between a ‘capital ratio’ and a ‘reserve ratio’. If one has full reserve banking there is no need for any such nonsense, the amount that you can lend is simply determined by the amount that you have.

    • Tatyana

      Re: “hackers should up their game and wipe out the debt and mortgages of everyone and funnily enough, that’s all it would take to solve the banking crisis. A snotty 17 year old kid in his bedroom with an plan..”

      It is funnier in russian – как ограбить банк вилочкой от доширака. И чтобы не как в прошлый раз.
      *How to rob a bank with a plastic fork from the instant noodles box. And to avoid what happened last time.*

  • Goose

    It looks like the Tories have bitten off more than they can chew with Brexit.

    This Gordian knot and whether they split over it, could well shape the UK for the next decade or more.

  • N_

    Emmanuel Macron, once François Hollande’s number two, was by far the more “establishmenty” of the final two presidential candidates in France. Insofar as popular rejection of the political class raised its head during the campaign, it manifested in support for the racist Marine Le Pen and (which is much better news) for Jean-Luc Mélenchon. Many of Mélenchon’s supporters abstained in the runoff round.

    But anyway…there’s an election in Britain next week. A recently-founded right-wing nationalist party, organised on a “new” model, led by a man who has never been an MP, and who is famous for “havin’ a pint down the pub”, is leading in the polls, sometimes with a voteshare that’s as big as those of the two main British political parties combined.

    The ballot papers will have arrows printed on them – with little notches to make them look like a smartphone – pointing to where voters must tick if they want to choose the Brexit Party option. The word “Brexit” of course has huge recognition. And the BBC and the rest of the media are talking about the eclipse of the said two main parties. I won’t be surprised if the Brexit Party wins more than 50% of the vote. That will be a pivot point all right.

    • N_

      I won’t be surprised if the Brexit Party wins more than 50% of the vote. That will be a pivot point all right.

      I’ve already mentioned how the ballot papers next week will have arrows on them pointing to the box for the Brexit Party. That single fact is a major giveaway. Most people don’t vote because of what they think about a customs union or a single market, notions they don’t have anything like a clear idea of the meaning of.

      Dominic Cummings thinks “SW1” is evilly planning to keep Britain in the EU. His problem is that he is insane. On this matter he doesn’t get it at all. The plan is not Remain. The plan is a crashout. I believe there is a term for it that comes from a Noel Edmonds TV show.

      Next Tuesday night the BBC will show the second episode of Years and Years, featuring the rise of a new political party. (That party is led by a person who first shot to fame by saying she didn’t “give a f***” about what kind of oppression the Israelis were inflicting on the Palestinians.) The first episode in the series was the first TV programme I have watched anywhere near the time of its original broadcast for decades. It was worth it. In a sense next week’s election will be a one horse race, and the jockey on the horse is Nigel Farage.

      That episode will be what millions will be talking about on Wednesday. Then on Thursday people go and vote. Farage’s party may well get more than double the voteshare of whoever comes second, even if they don’t win a majority which I think is quite likely.

      Any guesses for which party the Sun will support in “killer” headlines next week, especially on Tuesday and Wednesday?

      Watch out for an immigrants crossing the Channel in dinghies story or similar.

      Pivot point?

      Tonight’s latest YouGov poll:

      Brexit Party 35%
      LibDems 16%
      Labour 15%
      Green 10%
      Conservatives 9%
      Change UK 5%

      • N_

        The BBC news item that the US advertising and surveillance company Google is currently serving me at the top of its list: “Cross-party Brexit talks to end without agreement, and 100 stabbed in UK this year“.

        What picture do many voters have in their minds of who is doing the stabbing and who is getting stabbed?

        And “stab stab stab” is getting linked to how the old parties and the “political class” can’t even manage to take Britain out of the EU because they are fannying about so much.

        We’re six days away from voting day. The Brexit Party will get at least 40%, no problem.

        • Michael McNulty

          I suspect the real purpose of the Brexit Party is to stand candidates in a General Election to prevent Corbyn forming a majority socialist government. The EU election can establish its bona fides and hide its reason for being. The EU election will show the Leave-voting areas where Labour is vulnerable and they can target those seats. Losing forty or so seats could stop Corbyn’s social reforms because he has many Blairite back-stabbers who can conspire with opposition MPs to keep Britain neo-liberal.

          Brexit offered this opportunity because the Tories can’t stop him, and Corbyn may have blown it by offering a confirmatory vote which is just anti-democracy in the guise of democracy. They can go back to stopping Brexit after first stopping Corbyn.

  • Blissex

    «The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices»

    Here I recommend reading the fabulous book by JK Galbraith “The Great Crash 1929” written in 1954, which describes quite well (except that the artifices have changed form but not substance) the political and financial climate of the amaziong 2001-2008 bubble.

    «which permitted wealth to be generated and hoarded primarily through multiple financial transactions»

    A technicality here: “purchasing power” not “wealth” in the proper sense. A £100 banknote has £100 of purchasing power, but a very small fraction of it as “wealth” in the proper sense. That matters a great deal to understand how the scheme worked.

    «unfortunately, it was a system in which the political elite were so financially bound that the consequences of collapse threatened their place in the social order.»

    That’s quite a misleading point, because while it is true, the system was supported by many millions of middle and upper-middle class who were also so financial bound to it, by their ownership of Home Counties and London property, and of share based pension accounts. That is really important politics.

    «So collapse was prevented»

    It actually happened, and it is still slowly occurring. Most of the USA and UK financial system collapsed, and is still today bankrupt. Critical indicator, a technical: the FAS157 rule for “mark to model” that makes pointless the balance sheets of all USA financial corporates is still there.

    «by the use of the systems of government to effect the largest ever single event transfer of wealth from the poor to the rich in the course of human history.»

    More precisely from the poor to the middle and upper-middle class and to the rich, and from the north and Scotland to the Home Counties and London.

    «and charge massive interest on the money they were giving to themselves. This method meant that the ordinary people did not immediately feel all the pain»

    That is a bit of a myth, reality is much worse than that: while by far and away the largest handout was trillions of “forever loans” at 0% interest from the central banks to the sponsors of the neocon/neolib politicians, several hundred billions were simply donated from the state treasuries to those sponsors. In the UK the state spent £10 billion a year to cover losses just at NatWest/RBS, for over 10 years.

    To cover that massive welfare spending on benefits for a small number of rich scroungers ferocious cuts had to be made in several other departments.

  • Blissex

    As to the politics of this situation, we have very different points of view, even if I understand that of our blogger:

    «but they certainly felt it over the following decade of austerity»

    That “austerity” is a huge myth unfortunately: a large minority of voters, many millions of people, in particular in the Home Counties and London, made large amounts of money with booming property prices and rents and also with higher share prices, pumped up relentlessly by BoE intervention in the markets. When I visit the Waitroses and John Lewises in the Home Counties and London I don’t see any sign of austerity, I see them full of people spending without worrying the fruits of the hard work of property renters and buyers. After all for millions of people booming rents and property prices have gained them around £20,000-£40,000 a year (work-free, usually tax-free) in rents and capital gains over ordinary 2-3 bedroom flats and houses. No austerity there.

    Conversely the ferocious cuts in state spending especially on social insurance have been for most people rather smaller than the huge increase in the rents they pay or the savings they have to make to buy inflating property prices, if they want to live in the areas where the government concentrates investment to attract jobs, that is the Home Counties and London. Consider this map of real property price changes between 2005-2015 by region:

    https://loveincstatic.blob.core.windows.net/lovemoney/House_prices_real_terms_lovemoney.jpg
    http://www.lovemoney.com/news/53528/property-house-price-value-real-terms-2005-2015-uk-regions

    «ordinary people do not necessarily understand why a society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak. But they know that something has gone very wrong, they witness the vast wealth disparities of our unequal society and the deliberate dismantling of communal and altruistic public provision in favour of privatisation, and they feel contempt for their ruling classes, be they political, media or just wealthy.»

    Again the critical point here is that a large minority, many millions, of those ordinary people, have shared in the extraordinary boom in living standards for those owning southern property and other favoured assets. Of the 14 million people who voted Conservative in 2017 a majority are grateful for big improvement in their quality of living, and worship Thatcher, Blair, Osborne as economic geniuses.

    «Sometimes history appears to be approaching a pivot point, and then the weight swings back and nothing happens. But sometimes it does tip, and times such as these are times of great potential for change.»

    That pivotal point happened in 1983, with the victory of those for which the «aim is nothing less than to bring about ‘a fundamental and irreversible shift in the balance of power and wealth in favour of [property and business rentiers] and their families’». And that was largely due to the transformation of many working class people into petty rentiers thanks to the achievements of socialdemocracy, good pensions and low price houses. The Conservative membership has shrunk from 5 millions to 100,000 because it is not necessary: every one of those millions of petty rentiers is in effect a Conservative supporter.

    • N_

      But not all – not even a majority – of those who own property in the Home Counties or London, or even those who own property debt-free, own any other property than the one that they live in.

      • Blissex

        «But not all – not even a majority – of those who own property in the Home Counties or London, or even those who own property debt-free, own any other property than the one that they live in.»

        How does that change the story? Suppose someone on £80,000 a year lives in a modest 2 bed flat with a low price of £400,000: at 7%-10%/year rate of price growth, that’s £28,000-40,000 per year, added to their net wealth, tax-free, work-free, thanks to the government, taken (indirectly) from the incomes of renters and buyers. It is the same as if the government taxed (directly) renters and buyers to put in their SIPP/ISA share account £28,000-£40,000 a year as a free gift. With the difference that you cannot re-mortgage your SIPP/ISA share account, but you can re-mortgage that £400,000 property to turn its equity into cash right now, tax-free.
        Once they retire they can cash in their property, by selling it outright, just as they can cash in their SIPP/ISA share account, and buy an annuity or income-generating securities, and move to Costa-del-Sol, like so many small property rentiers have done.

        • N_

          It doesn’t change the general picture much. But a large chunk of the rent paid by the proletarian tenant class goes not to white van man but to banks. That is true whenever a rented property is mortgaged.

          There is also a large network of solicitors, estate agents, financial advisers and other swindlers, often gang-connected, who trick many uneducated “paid off their mortgage aged 50” homeowners out of their money by offering them great deals, involving remortgaging and sometimes “investments” (!) in the Costa del Sol. They tell their punters that they are sitting on a goldmine and that all they’ve got to do is sign here and the money will pour in. There is a big difference between inner London and many places in outer London and the rest of the South East.

          Quite a few such homeowners don’t try live the life of Riley, largely because they don’t want their offspring who grew up in parentally owned (albeit mortgaged) homes to suffer the insecurity of staying tenants all their lives. Some such homeowners who do remortgage their homes and buy what they think is some kind of title to a flat on the Costa are more likely to find themselves up Sh*t Creek than socialising in a private club with Nicholas van Hoogstraten. The story is reminiscent of the one about a Rockefeller selling off all his shares when the boy who shone his shoes started recommending great shares to buy.

          There are many streets in say Margate or even Epsom where the typical income of this kind of homeowner if they are still in employment is nowhere near 80K and also where 400K will buy a lot more than a small two bedroom flat.

  • mark golding

    It is my own opinion the massive bail-out was to save the centrality of the US/UK financial system in the global economy including the dollar’s status as the world’s dominant reserve currency and the use of sanctions as a financial cudgel to non-compliant and recalcitrant states.

    Sanctions have not only become blatant expressions of displeasure from an increasingly isolated United States, they are now used in an attempt to gain commercial, economic advantage.

    Sanctions affect ordinary folk and I remember the sanctions on Iraq enforced by the US Office of Foreign Assets Control that issued fines to those peace activists gifting medicine and other humanitarian supplies to Iraq. Today we witness the Venezuelan economy deprived of millions of pounds of foreign exchange needed to pay for essential and life-saving imports. These sanctions are illegal under international human rights law and other US laws. ENCOVI & CodeVida surveys have recorded lack of water, malnutrition and excess deaths of Venezuelan children; some 22% of under 5’s have stunted growth (March 2019 UN Report “Venezuela: Overview of Priority Humanitarian Needs.” – This document is not publicly available.

    • Blissex

      «Today we witness the Venezuelan economy deprived of millions of pounds of foreign exchange needed to pay for essential and life-saving imports. These sanctions are illegal under international human rights law and other US laws. ENCOVI & CodeVida surveys have recorded lack of water, malnutrition and excess deaths of Venezuelan children; some 22% of under 5’s have stunted growthx

      Much the same happened in every latin-american crisis for many decades, whether run by right-wing or left-wing parties, even if the USA government has been obviously trying to make the situation worse.

      Much of the blame has to fall on the buffoons like Maduro and his party, who are typical ineffective populist, long on rhetoric and songs of “el pueblo unido jamas sera vencido”: serious left wing politicians would have figured out long ago that they would piss off important people who could get them in big trouble, and planned effectively, like stockpiling, import substitution, etc., and also sought ways to minimize USA displeasure, if possible, and build links abroad; the Madurista buffoons did the good thing of distributing more of the windfall of oil to the poorer/darker skinned venezuelans, but very little hard-headed planning, economic and political, a lot of posing.
      I expect that scottish independence, however opposed by “The Establishment”, would likely be a different matter, the culture is less about talk and more about action and being prepared.

      • Loony

        You are worrying about all the wrong things.

        The inevitable consequence of the bail out policy is a currency crisis. Because of “group think” globalization there will be a crisis of all currencies. When this day arrives the current situation in Venezuela is going to seem like a paradise. There is nothing you can do to prepare for what is coming so why worry about it?

      • mark golding

        Some say you can’t have your oil and eat it. The ‘hard-headed planning’ of the 1980s and 1990s Thatcherista charlatans decided to roll back regulations in the belief that this would produce a more dynamic economy. Buffoons such as Maduro would not have the wisdom to grasp this ‘rotten system’ would mean a massive growth in the size of the financial sector and a tolerance for increasingly risky investments with little genuine oversight.

        ‘The poorer/darker skinned venezuelans have no chance of dipping into their home equity with lines of credit or simply loading up on credit-card debt to offset austerity at a time of stagnated wages.

        No! the Blair/Brown Thatcher economic experiments have failed and we should be wary of Trump/Farage buffoons who think they can ease the pain with their authoritarianism and lies.

        • Blissex

          «Thatcherista charlatans decided to roll back regulations in the belief that this would produce a more dynamic economy.»

          It did: for *their* economy. The GDP per head growth rate halved since 1980, but the rate of growth of house rents has doubled, and that of property prices trebled, to 7-10% per year for southern property, for decades.

          Such crony rentierism based on gifting big discounts on state assets to their supporters has even been called recently (in the FT, by columnist W Munchau), “enterpreneurial capitalism”:

          Margaret Thatcher’s successful brand of entrepreneurial capitalism in the UK in the 1980s. Through privatisation, she turned ordinary savers into shareholders. Through the sale of council houses, she turned tenants into property owners.

          That made those thatcherite “charlatans” vastly richer at the expense of poorer and less powerful people. Pretty smart “charlatans”…

          • mark golding

            at the expense of poorer and less powerful people. I find it interesting in the way banks, councils and some tenants exploited the ‘right to buy’ in which Heseltine noted that “no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people.” Digging in further we realise this thatcherite ‘trick’ is a component of the central themes of Keynesianism where despite sophisticated models and formulas common sense can expose the benefits to the ruling class and the power of governments to control the economy and our lives.

            Respect towards ordinary citizens has been lost together with honesty, tolerance and kindness; the bank bail-out being a clear example of public exploitation. Government lobbying by large corporates is now de rigeur and crony capitalism is considerable, rewarding destructive entrepreneurship and blurring the separation of state and market. leading to absurdities such as Huawei manufactured security problems.

            https://www.dw.com/en/british-board-finds-security-flaws-in-huawei-5g-networks/a-48107798

          • SA

            Blissex
            Inflation of property prices only benefits the renters not those who use their property for the prime purpose of living in it and then maybe passing it on to their children. In addition more expensive property prices becomes an albatross as rates increase and affordability for maintainable becomes more difficult. It is difficult to imagine that the 14 million who voted Tories are all rentiers.

  • Chemical Britain

    Long live Nigel Farage.

    Brexit means Brexit.

    The democratic vote of the people must be respected.

    Our hero Craig is as elitist, arrogant, undemocratic and coloniser of his own people as the Queen in undemocratically trying to obstruct the democratic wish of the people of the United Kingdom.

    • Ken Kenn

      How is Nige going to bring that about?

      He has no MPs and after seven tries he’s not one either.

      If he wants a general Election to exploit his parties gains I’m all for that.

      Trouble is- in a GE you need policies and a Manifesto.

      The Brexit party doesn’t have those neither.

      A one trick pony.

      • Jo1

        “A one trick pony..”

        …and not a happy pony either on Channel 4 News tonight. In fact, positively rattled.

      • N_

        @Kenn – I don’t think the Brexit Party is a one-trick pony any more than Trump was with “I’m gonna build a wall”. It’s the current incarnation of what UKIP was up until 2016. Labour and even more so the Tories will have bigger problems than the Brexit Party in writing a manifesto if the next general election is any time soon. Manifestos as documents (Labour’s one in the 2017 GE mentioned “LGBT” about a dozen times) aren’t the big thing. The big thing is the message, which includes a promise. The BP have got a message: “stop fannying about and leave the damned EU good and proper.” The Tories’ message is…? Labour’s one is…? The LibDems’ one is “Stay in the EU”. Seriously it’s not looking as though they’ll make much mileage with that. The Greens are talking about a dinosaur wipeout type of event if lots of people aren’t made to stop breathing carbon dioxide emissions aren’t reduced. Bit of a ceiling with that one, even if one of the top Extinction loonies goes on about 3.5% as the big number. “Brexit” is the political buzzword of the day – it has been for three years now and the end is not in sight – and the Brexit Party are riding the wave of it. It’s been a very capable bit of strategy, the way Tommy Robinson and Nigel Farage have been moved on the table in the war room. Farage – new and rising? It didn’t seem that way even only a few days after the Leaver euphoria in 2016. It seems that way now. He’s going to have the Tories eating out of his hand. Betfair will probably offer him as a option for Tory leader…

        • Ken Kenn

          farage and his mates can shout Leave Now! all they want.

          They haven’t got any MPs.

          In order to get MPs ( a possible 50 according to YouGov on current polling figures) you need candidates in a GE.

          The Brexit Party can only be what UKIP was when first set up – a pressure group.

          True they are gaining significantly in the Euro Polls but they are already pressurising the already pressurised ERG Group and some panicky Labour MPs.

          It’s alright going on the doorstep telling Leavers what they already know in the Euro Elections but in a GE you’ll have to do better than just state we want to leave and fall onto WTO Trade Agreements.

          You need economic and social policies and selling the NHS off to the Yanks will not go down well with all classes of the public.

          Not even in Hartlepool or Featherstone.

          I don’t hear Farage calling for an election or the ERG Group as a means of getting No Dealers into Parliament to change the arithmetic.

          I don’t hear the other side calling for a GE neither. In fact the Lib Dems and Change UK will prevent a vote of no confidence – not cause one.

          Shifty business politics.

          The only thing that is true in Manifestos are the page numbers.

          Farage’s only has one page – in fact one phrase.

          Leave now with No Deal.

          That’s it.

    • nevermind

      Give us some chemistry as to this Brexit party palns, what Nigel and his plans for the UK in Europe really are.
      Apart from his failure to get elected to Parliament, he has been a failure in the EU as well, more mouth than action.

      Don’t let his lazy past on the fisheries committee taint your judgement, just give us some slogans on what he is planning for those working people who can’t make ends meet and are using food banks, or what he intends to do with UCredit and its ravenous impact on those with permanent disabilities.
      thanks in advance.

      • SA

        One has to however, marvel of the cleverness of Farage to capitalise on the political paralysis by getting so much publicity and polling results. The Brexit party May represent the majority view of those who voted Brexit, but the loyalty of the remainders has remained with their parties.
        Also the majority of those who seem to be supporting him are from the Tory side and fewer from other parties.
        The other thing to bear in mind is that 40% of 36% (expected turnout) is only 14% which is a different story.

  • FranzB

    CM – “The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods,”

    I think the cause of the banking collapse was the realisation that various collaterised debt obligations, e.g. mortgage backed securities, weren’t as solid as the ratings agency led us to believe. Moody’s and Standard & Poor were giving MBS instruments triple A ratings when in fact they contained tranches of sub prime mortgages. As shown in the film The Big Short, once initial low cost interest rate periods ran out, lenders found the increased costs of their mortgages impossible to meet, they then defaulted, and due to a fall in the housing market in the US, the asset (the lenders house) was worth less than the loan against the house. Those triple A mortgage backed securities then began to pop, and banks found themselves holding CDOs whose worth they didn’t know.

    CM – “the crisis of confidence which is affecting almost all the institutions of western representative democracy”

    I’d disagree with this – see e.g. the recent mid term elections in the USA where the democrats bounced back. Also worth noting (and doubtless to the BBC’s chagrin) was the election of the progressive Zuzana Caputova in Slovakia. Right wing governments in Hungary and Poland aren’t populists – they are right wing. In Spain, the socialist party is far and away the biggest party after the recent elections.
    The election of the pro EU investment banker Macron, who had been Hollande’s deputy, doesn’t strike me as a turn to populism

    • Blissex

      «I think the cause of the banking collapse was the realisation that various collaterised debt obligations, e.g. mortgage backed securities, weren’t as solid as the ratings agency led us to believe.»

      That was rather the mechanism, not the cause. The people issuing and buying those CDOs (and the big deal was “synthetic” CDOs, as CDOs based on mortgages were a big but not fatal problem), the rating agencies, the regulators, very likely all knew they were “toxic”, but the system was rigged to make a lot of money for them. JK Galbraith writing in 1954 in “The Great Crash 1929”:

      «Governments were either bemused as the speculators or they deemed it unwise to be sane at a time when sanity exposed one to ridicule, condemnation for spoiling the game, or the threat of severe political retribution. [ … ] Long-run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience in the present. So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.»

      BTW as to the rating agencies, one of the most interesting graphs is that of the stock price of Moody’s from 1994 to 2018:

      https://blissex.files.wordpress.com/2019/05/stocksmoodys1994to2018.png

      it has been gently rising/oscillating in the $15-$20 range until 2002, then when it started issuing highly favourable ratings it exploded, tripling to $50 in a few years at the time of “irrational exhuberance” then quadrupling to $190 presently, massively rewarding its executives for their contribution to the financial system. A fascinating story.

      • Hatuey

        I remember when I was young waiting to cross the road and a drunk guy stumbled forward next to me and was definitely going to fall in front of very fast moving traffic. I instinctively grabbed him by the collar and pulled him back. I know I probably saved his life. After it though he attacked me for man-handling him.
        That’s a true story. I didn’t learn anything from it or anything.
        I guess the economy is like that.

  • Gary

    Those in power prior to the ‘Credit Crunch’ were well aware that it was on it’s way. Gordon Brown was oft heard telling the press that the housing market needed ‘to be cooled’ He wasn’t wrong, it was, ultimately, the source of the toxic debt that took the world into depression. He was aware in a general sense that it would happen but then, 18months to 2 years prior to it actually, publicly, happening, he reneged on a Civil Service Pay Deal (in the department I worked in!) It had been a ‘five year deal’ but on it’s first anniversary he weaselled out of it claiming it had been nothing of the sort, next we knew the Credit Crunch had ‘Crunched’ No coincidence.

    However, as to the SNP being overly comfortable. I always think you are a little unfair. The SNP, support for more devolution and independence NEED to be normalised, need to have support built. It needs to be built to an overwhelming level to ensure that there is a tsunami of public opinion pushing for independence by the end of the next ten years. Imagine the SNP running Holyrood for 20 years. The mainstreaming of independence campaigning will ensure that it is yet harder for news reporting (TV and print) to continue to sideline and marginalise this point of view. Whilst our independence can be held back from us by Westminster we need to increase the pressure in every way possible. It will NEVER be easy and certainly won’t be happening within the next two or three years…

    • N_

      a tsunami of public opinion pushing for independence by the end of the next ten years

      So in a time of widespread social collapse you would want to hail the rise and the victory of a powerful mass movement positing nationalism as the answer and that sweeps away whatever lies in its path?

      • Stonky

        So in a time of widespread social collapse you would want to hail the rise and the victory of a powerful mass movement positing nationalism as the answer and that sweeps away whatever lies in its path?

        Do me a favour N.

        Just pretend that our skins our mostly brown. You’ll suddenly discover a deep and unquenchable enthusiasm for our aspirations to self-determination.

        • N_

          SNP supporters do imagine lots of stuff to feed their nationalistic fervour and forget the empire was British.

          After its failure in the 2014 referendum, the party lost its majority at Holyrood in 2016, got 37% in the GE in 2017, and may possibly manage 37% in the 2019 EP election if it’s lucky. That’s if the Sun doesn’t play up the Brexit Party so much north of the border. Yet many still have that wild look in their eyes as if the Glorious Day is inevitable, and as if everything that happens is fuel for it.

          But…I won’t be surprised if the BBC paints a 35% voteshare in Scotland next week (two out of three people saying no thanks, and on a low turnout relative to in GEs too) as a moment when “Scotland says no to Brexit while England and Wales say bring it on”.

          • N_

            “As if everything that happens is fuel for it” – today’s example being the possibility of Boris Johnson as prime minister.

          • Stonky

            SNP supporters do imagine lots of stuff to feed their nationalistic fervour and forget the empire was British…

            Why isn’t a fake left bigot like you all in favour of the empire, and implacably opposed to all that nationalistic fervour that led to its break-up? Seriously?

            Actually, I know why. The clue is in the word. I am in favour of self-determination for Scotland, as I am in favour of self-determination for all the other unwilling constituents of the empire. And that’s where you get stuck. Because you can hardly go round brandishing your fake-left credentials, while at the same time denouncing a right that is enshrined in Article 1 of the UN Charter, and which has served for decades to liberate people all around the world.

            So what do you do? You create a different word. “Nationalism”. It’s not self-determination you hate. It’s ‘nationalism’, and all those horrible ‘nationalists’. That’s what you hate.

            I can’t defend myself against your shrill accusations of ‘nationalism’, because you never define what you mean by the word. You just screech it at the top of your voice as a term of abuse, and eventually you don’t have to define it because it has taken on a meaning of its own. Every right-thinking person just hates ‘nationalists’ and ‘nationalism’ and their ‘nationalistic fervour’, don’t they just!

            I defy you to go ahead and define exactly what you mean by ‘nationalism’ in your next post. Because the fact is this: the more clearly and specifically you define ‘nationalism’ and explain why you hate it so much, the less it will resemble any cause that I or any of my fellows espouse, and the more it will resemble a different set of beliefs, espoused by a different group of Scots, who, ironically, are staunch and loyal Unionists to a (bowler-hatted) man.

          • Rob Royston

            You have missed out the 2015 GE where the SNP took 50% of the votes and sent 56 MP’s to Westminster. The Scottish people give them all the power they needed but they did not take it up, hence the declining support since.

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