Category: Uncategorized

Don’t Believe The Hype

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Much to the almost certain consternation of Harriet Harman, forty-eight labour MPs did the honourable thing by voting against the Tories’ welfare reform legislation. As I alluded to previously, Harman’s concession to the Tories was predicated on the belief that Labour has to move right in order to be electable.

Given the Liberal Democrat’s close ideological proximity to the Tories during their power sharing term, and their subsequent virtual demise following the last election, the strategic move by Harman and the party hierarchy is clearly a calculable risk.

Harman’s assumption appears to be that there is no longer any more political and electoral traction to be gained by appealing to a diminishing band of traditional left wing voters. But the question is, are the abandoned merely lying dormant and waiting to be awoken from their slumber by a parliamentary opposition worthy of the name?

If we accept that the class structure remains in tact and that the real life experiences of the vast majority in the country will be made worse by the impending cuts, then rationally the answer to the question is they will at some point make their voice heard. But neither Harman or any of the Blairites competing for the leadership will be the catalyst.

In essence, there is no fundamental difference between the people of England and the people of Scotland. And yet, with the exception of a solitary seat, the latter wiped out from power a pro-austerity party, while the opposite was true for the former.

Outside the relatively small band of Labour Party dissenters, the opposition to benefit cuts in England will come from the SNP, Plaid and the Greens. The dominance of the SNP in Scotland and the popularity of both Jeremy Corbyn and Nicola Sturgeon, puts the lie to many of the claims in the corporate media that you have to be right wing to win elections. The forthcoming labour leadership battle is likely to bring this myth into even more of a sharper focus.

The reality is the people of England are inherently no more right wing than the people of Scotland. But the media who marginalize, ridicule and smear those with left wing views, most certainly are. So it’s not a question of their being no appetite for left wing views among the public, rather, the issue is one in which a right wing consensus is arrived at between the political establishment and the media. This is a policy that works.

We can expect greater media vilification of Corbyn as his campaign gains momentum in the coming period. The notion that a singular right wing ideological elite are first and foremost motivated by an overriding quest for the reins of power, has been addressed by former UK Ambassador, Craig Murray.

As Murray contends, persuasively, not only are the supposed parameters between left and right upon which electoral battles are fought based largely on an illusion, but as evidenced by successively low electoral turnouts, there is little enthusiasm for their leaders either.

Blair may of been the exception, but as Murray points out, his popularity was predicated on a set of left-wing policies outlined in his manifesto that he subsequently u-turned on once gaining power. As people discovered that New Labour were “intensely relaxed about people getting filthy rich”, to quote Mandelson, their popular support plummeted. “The great communicator” Blair for 90% of his Prime Ministership was no more popular than David Cameron is now. 79% of the electorate did not vote for him by his third election.

Nevertheless, since Blair’s election victory in 1997, successive Tory-lite labour strategists have appeared to have taken the view that the preferred direction of travel for the party is that which is undertaken by their opponent. This ignores the fact that this ‘race to the bottom’ is in nobody’s interests other than the narrow careerist and financial ones of those at the top. And that, as far as Harman is concerned, is clearly the crux of the matter.

Increasingly, the political battle lines are being drawn, not between the ruling party and the opposition, but between the ruling party, opposition and the rest of us. I don’t remember a time when the disconnect between the political establishment and the people has been greater. For the vast majority of the political establishment and their paymasters in the corporate media, they really are all in it together. But that doesn’t mean that left wing views are unelectable as Nicola Sturgeon has shown. Maybe Jeremy will become England’s Nicola. We need him.

Is It Time To Say That Religion Is The Problem?

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Low on substance and high on rhetoric, British Prime Minister David Cameron’s speech in Birmingham today (July 20) unveiled what could loosely be termed as a less than coherent strategy to tackle Islamist extremism that would have likely gone down well with many of his core Friends of Israel Tory MPS some of whose constituents have left the UK to fight against the occupied and oppressed Palestinian’s, whilst others have gone to fight alongside the Kurdish Peshmerga.

Are we ever likely to have the likes of Cameron talking condescendingly to the Jewish community in the Golder’s Green district of North London about strategies to tackle Jewish-Zionist extremism? Moreover, is Cameron likely to debate in leafy Surrey, the Christian-Zionist fundamentalism of Blair and Bush which resulted in the death of at least half a million Iraqi’s on the basis of a pack of lies.

The questions of course are rhetorical since we know the answer. Unlike the Tory voting wealthy middle classes and Friends of Israel, likely anti-Tory Muslims within a de–industrialized urban landscapes like Birmingham are regarded as political fair game for Cameron’s shananagans.

Ignoring many of the causal factors that drive a small minority of mainly young Muslims to ISIS such as our endless wars in Muslim lands, Cameron outlined his government’s five-year plan to defeat home-grown extremism. Cameron set out four major areas that needed attention: countering the “warped” extremist ideology, the process of radicalisation, the “drowning out” of moderate Muslim voices, and the “identity crisis” among some British-born Muslims.

He spoke about the need to enforce British values without specifying what these ‘values’ are. He went on to conflate what British values were not by referencing forced marriage and female genital mutilation. The implication being that these manifestations of un-Britishness are unique to Muslim culture which of course they are not. “No more turning a blind eye on the basis of cultural sensitivities,” he said. Fine. I’ll now wait in eager anticipation for a similar speech by Cameron to the Jewish community in Stamford Hill.

“I want to work with you to defeat this poison [of Islamist extremism]”, he said. Presumably, ‘defeating’ ISIS doesn’t involve the counterproductive action of bombing to smithereens yet more innocent civilians as the justification for mission creep.

The one (unintended) positive that emerged from his speech was when he talked about the differentiation between Islamist extremism on the one hand, and Islam the religion, on the other. As such he brought into focus the wider questions regarding the differing interpretations seemingly inherent to religious doctrine.

Jon Snow of Channel 4 News quoted the Muslim Council of Great Britain saying: “We need to define tightly and closely what extremism is rather than perpetuate a deep misunderstanding of Islam and rhetoric which inevitably facilitates extremists to thrive.

Do we know what Islamic extremism is exactly? Is there a distinction between Islam and extremism peddled in the name of Islam? Can a distinction be made between the Wahabbi version of Islam in Saudi Arabia and extremism? Surely the former is indistinguishable from the latter.

In order to tackle the problem associated with certain extremist interpretations of Islam it makes sense to want to tackle the problem at source. But crucially, this was the aspect missing from Cameron’s speech. For if he was to highlight it, he would have been cutting off his nose to spite his face.That’s because Britain has a an extremely cozy relationship with the oppressive totalitarian states’ of the Arab Gulf Peninsula, all of who without exception, adhere to the extremist theocratic Islamic ideologies.described but nevertheless represent extremely good business for Great Britain PLC.

Is it the duty of Muslims living, in say, Birmingham to defend other Muslims living, in say, Baghdad? Conversely, can the killing of innocent people in Western liberal democracies’ ever be considered as justifiable on the basis that theoretically the populations’ within these nations’ often elect governments’ who initiate wars of aggression against Muslims in their name? Can violent acts in these circumstances ever be justified? Does this, in the minds of extremists, justify Jihad against Westerners by Muslims irrespective of where either reside in the world?

Some moderate Muslims like Baroness Warsi insist that Jihad is about self-improvement, self-evaluation, questioning injustice and being prepared to raise your voice when you see injustice. This contrasts with the more extreme interpretation of Jihad in which external factors like the taking of arms are seen as the precursor to the kind of self-evaluation outlined by Warsi.

One of the main problems that needs to be addressed, but tends to be constantly evaded, relates to the contradictory aspect of religion itself. Irrespective of whether one is a follower of ISIS, or whether one is a part of the vast majority of the wider Muslim community of Sunni or Shia, all groups and sects will self-identify with, and hence, claim they are the true representatives of Islam and all will justify their opposing positions with recourse to the Koran.

Death By Too Many Cuts

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News that the Conservative government in Britain have delayed the publication of deaths caused by their cuts to welfare appear to be a slap in the face to the 220,000 people who signed a petition insisting that the Department For Work and Pensions (DWP) release the numbers in full under the Freedom Of Information Act (FOI) initiated by campaigner Mike Sivier through his blog.

The delays are opening the government up to the claim made by their critics that the numbers will be fudged. Although actual death figures were published in 2012, the DWP, in a ten page letter, have appealed against the release this time round, insisting that the new ‘standardised’ methodology represents a more accurate picture.

The fact that the Information Commissioner watchdog ruled the actual numbers figure should be made public, would suggest that DWP want to hide behind the standardised version. It’s the former not the latter figure that is pertinent to Mr Sivier’s FOI request:

[The standardised version] is not what I requested. It is not what anybody wants. In this context, is it any wonder that so many people are signing the petition?. This claim about ‘high standards’ is motivated by another claim, that the actual number of deaths could be ‘misinterpreted’ if it comes into the public domain. But the Freedom of Information Act is motive-blind. Without being able to hide behind any specific exemption, such as the plan to publish the number of deaths later (allowed by section 22 of the Act), the law says only two requirements must be satisfied: Does the DWP have the information? Yes it does. And can the DWP publish it within the legal expenditure limits? Yes it can”.

By shifting the focus away from the actual figures (the basis of Mr Sivier’s FOI request), the DWP is seeking to avoid scrutiny and the government are clearly trying to hide the devastating impacts of their benefit regime.

The last figures that were released by the DWP in 2012, showed that 1,300 ESA claimants died within six weeks of being placed in a ‘work-related activity’ group between January and November 2011.

A string of families have come forward to say their relatives died after being found fit for work.

Mark Wood starved to death in David Cameron’s constituency four months after his benefits were cut – weighing just 5st 8lbs when he was found.:

Ex-nurse Jacqueline Harris, 53, took her own life after she was ruled fit for work despite having slipped disks in her back and severe pain.

And mum-of-three Elenore Tatton, 39, died of a long-standing brain tumour just weeks after she too was ruled fit for work.

London Smells

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Compared to the visual aspects of the city, or even the audible city, a great deal less thought, consideration and design is given to smells of city life. Or at least, we don’t talk about it so much.
But smells clearly matter. They can shape how we move through cities, who we sit next to, who we don’t. They mark out different parts of the city from each other, as well as different city dwellers. They are integral to our emotional relationship with cities and our attachment to specific places. And finally of course, smells of the city conjure vivid memories. All of this becomes particularly noticeable when, for whatever reason — and there are many — one loses their sense of smell.
In terms of sensory loss, people clearly place smell loss at the bottom of those that matter. But to lose the sense of smell is to lose one of the key ways in which we anchor ourselves in culture and social relations.

And make no mistake; smell has its part in social relations. In terms of a city like London, a mixture of symbolically dirty and really dirty smells have characteristically been placed down wind (in the east), in a way that enabled the development of more refined atmospheres up west.
Both Marx and Engels, for instance, were keenly aware of the sensory divisions in the city. As they saw it, the sensory deprivation of the East End, the heat of furnaces, the smoggy air, the poor sanitation, were precisely what made possible the perfumed airs of the gentle west of London. In this sense, class relations really did have an explicit olfactory element to them. Even those ‘working class smells’, smells that weren’t actually a toxic product of their environment (say the smell of the ubiquitous herring the working classes ate), were increasingly banished from upper class homes for their mere association with a ‘dangerous’ class.

Today things smell very different. Sewers and sanitation are ubiquitous. London is no longer an industrial city. That means healthier air. It also means a lot less of the powerful aromas associated with the various industries that marked out various inner city boroughs in the past: vinegar brewing and biscuit baking in Bermondsey, matchstick making in Bow, the heady mix of plastics and chemicals around Hackney Wick. The demise of industry has also come at the same time as the demise of the clear-cut class and cultural distinctions that came with it. So aromatic divisions in the city aren’t what they once were.

But the smell of London tells us a great deal about the city, its boroughs and its residents today. Walking through Shoreditch to the City at lunchtime, for instance, in between the yogic exhalations of cigarette smoke, in places it smells a lot like Hanoi: starchy rice steam, red basil and chargrilled meat fumes. The presence of Vietnamese restaurants in the city’s east is an important legacy of the final years of the Cold War. But its ubiquity on the street is testament to the ways in which, over recent years, Vietnamese food has established a central place in the new urban street food scene. This smell, and our relationship to it, is an important way in to understanding the relationship between Asia and Europe within urban culture today.

Walking south through Shoreditch towards the glinting towers of the City, you can also smell a new city being born. The concrete, solvents, wet paint and sawdust that accompany the northward expansion of the financial quarter.

At one point however, the smell changes briefly. The change is signalled by a pile of sleeping bags and cardboard pillows where people cluster to sleep rough under the new London Overground bridge. We don’t talk about it, but as much as class distinctions aren’t as obvious to the nose as they once were, abject poverty still has a smell. Spicy, dusty, beery and a clear smell of urine.
For all of the visual triumph of the City’s gleaming towers, you can’t hide the smell of our society’s failings. Not soon after that bridge, smells become more predictable, more regular. The sweet milky and nutty air of coffee shops. Fogs of sushi vinegar. Musty, spicy colognes for him. Floral and fruity perfumes for her.

Other areas of the city also have their own distinctive signatures. Neighbourhoods like New Cross are cursed by having a heavy road running through a very narrow space. This both washes smells away and clouds them out with heavy particulate matter. But when you get out of New Cross Gate station, there’s no missing the heavy fog of jerk chicken cooked on an oil drum. Again, the mere presence of this smell is a testament to the homemaking efforts of migrants in the last century. On a sunny day, with your eyes closed, it could be Kingston, Jamaica.

But it is also a quintessential smell of south east London, and part of an atmosphere that a broad range of people are deeply attached to. Which is to say, the smell has vastly different connotations than that of fried chicken. Like herring in the 19thcentury, and possibly fish and chips in the 20th century, fried chicken is amongst the least favourite smells of older, whiter and generally more middle-class Londoners. With the growth of gentrification in London’s hitherto poorer areas, it is also one of the smells most frequently reported to local councils.
New Cross is also well known as a village of students, artists, outsiders and hedonists. As a consequence, the pubs are well used daily, and late in to the night. Even those that have been recently spruced up, New Cross House, the Rose Inn, by 11pm smell like the dives of yesteryear. Spilt beer, stale antiperspirant, sweat and overpowering urinal cakes, all amplified since the smoking ban. And by the morning, they all smell of the pine, lemon and chlorine carried on the steam of cleaners’ mops.

In New Cross, located on the flood plains of the Thames don’t forget, it is also not uncommon to catch the smell of damp which saturates the area’s older brick work, and permeates the clothes left to ‘dry’ in it. Perhaps the most evocative smell in New Cross, however, is that of the launderette. Starchy, floral linen. Such a common presence in the past decades of the city, and still a quintessential smell of cities in Asia. It is through such smells that our experience of the everyday connects us to other places, and other times.

We regularly critique, comment upon and historicise the visible architecture of the city. We campaign for facades of historical or aesthetic import, and against the impositions of ugly buildings. Rarely, however, do we think seriously about the olfactory atmospheres of the city. If we did, maybe we could tell better stories about who we are today.

Maybe we could protect the atmospheres that are valuable to us, to our communities, and actively engage with the increasing re-odourisation and manipulation of smells that takes place as part of the production of New London. Maybe we could start to notice a bit more what was going on right beneath our noses.

Dr Alex Rhys-Taylor, Goldsmiths’ Department of Sociology
http://londonist.com/2015/02/would-london-make-sense-without-smell.php

Royal Nazi Salutes Hero

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Yesterday’s leaked film footage from 1933 or 1934 of the Queen Mother and her young daughter, the Queen, giving a Nazi salute alongside the future Edward VIII, was not an aberration as some commentators within the mainstream media have claimed. As Craig Murray posited:

It is completely untrue that its racism, totalitarianism and violence was unknown in 1933-4. They knew what they were doing. Nazi sympathies were much more common in the aristocracy than generally admitted. Their vast wealth and massive land ownership contrasted with the horrific poverty and malnutrition of the 1930’s, led the aristocracy to fear a very real prospect of being stood against a wall and shot. Fascism appeared to offer social amelioration for the workers with continued privilege for the aristocrats. 

The fact that the picture emerged in the public domain is clearly an embarrassment for the Royal’s a decade after Harry was photographed wearing a Nazi SS uniform at a fancy dress party. Just as the media are portraying this latest embarrassment as an aberration, so to were the British Crown when they described King Edward VIII as a black sheep in relation to his support for the Nazis which prompted his subsequent abdication to the throne in 1938. In reality:

the British monarchy, and the City of London’s leading Crown bankers, enthusiastically backed Hitler and the Nazis, bankrolled the Fuhrer’s election, and did everything possible to build the Nazi war machine, for Britain’s planned geopolitical war between Germany and Russia. Support for Nazi-style genocide has always been at the heart of House of Windsor policy, and long after the abdication of Edward VIII, the Merry Windsors maintained their direct Nazi links.

The person on the other end of the camera filming the Nazi salutes was the husband of the late Queen Mother – King George VI who shortly before Germany invaded Poland, sent Hitler a birthday greeting. In 1970, George’s brother, former King Edward VIII, remarked: “I never thought Hitler was such a bad chap.” When Edward made this remark it was widely known that Hitler and the Nazis had directly and indirectly killed more than 40 million civilians and soldiers.

Prince Philip, who was recently filmed swearing at photographers during a photo shoot with war veterans recently and who has probably never been corrected or challenged by anyone in his entire life, not only trained in the Hitler Youth curriculum, but his German brothers-in-law, with whom he lived, all became high-ranking figures in the Nazi Party.

In May last year, Prince Charles provoked a diplomatic row by comparing Russian President Vladimir Putin to Hitler. This is particularly ironic considering the well-established fact the British royal family was cozy with the real Hitler back in the day.

Greenwashing And The Collective Corporate Opposition to Environmentalism

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The greenwashing of products and lifestyles can be seen as an illustration of how corporate strategies attempt to pacify criticism of unethical corporate decision-making strategies. These strategies are intended to divert public attention away from unethical environmental practices and thus seek to legitimize decisions that would otherwise expose corporations to intense public scrutiny. The Transnational Resource and Action Centre, for instance, highlight how corporations continue to pay lip service to eliminating fossil fuel use whilst using renewable energy investments to give themselves a ‘clean and green’ image.

Has society become more environmentally-friendly and ethical over time or are the masses more susceptible to the public relations techniques adopted by big business whose actions undermine the science that informs the environmental cause? The fact that human actions have resulted in a planet that is warmer now than it has been in the last 100 years and that the public appear to be indifferent to the likely catastrophic consequences, would suggest that corporate greenwashing is indeed shaping public opinion away from the core mass consumerist and economic causes towards issues of displacement activity.

The following commentary involving an incident at a British shop, posted to the Neil Young Times by an anonymous writer, highlights the extent to which this greenwashing propaganda supports the above hypothesis:

Checking out at the store, the young cashier suggested to the older woman that she should bring her own shopping bags because plastic bags weren’t good for the environment. The woman apologized and explained, “We didn’t have this green thing back in my earlier days.”

The cashier responded, “That’s our problem today. Your generation did not care enough to save our environment for future generations.” The old woman replied: “You’re right — our generation didn’t have the green thing in its day. Back then, we returned milk bottles, pop bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled.

We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull. But we didn’t have the green thing back in our day.

“We walked up stairs, because we didn’t have an escalator in every shop and office building. We walked to the grocery store and didn’t climb into a 300-horsepower machine every time we had to go two blocks. But she was right. We didn’t have the green thing in our day.

“Back then, we washed the baby’s nappies because we didn’t have the throw-away kind. We dried clothes on a line, not in an energy gobbling machine burning up 220 volts — wind and solar power really did dry our clothes back in our early days. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing. But that young lady is right. We didn’t have the green thing back in our day.

“Back then, we had one TV, or radio, in the house — not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the county of Yorkshire . In the kitchen, we blended and stirred by hand because we didn’t have electric machines to do everything for us. When we packaged a fragile item to send in the post, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap.

Back then, we didn’t fire up an engine and burn petrol just to cut the lawn. We used a push mower that ran on human power. We exercised by working so we didn’t need to go to a health club to run on treadmills that operate on electricity. But she’s right. We didn’t have the green thing back then.

“We drank water from a fountain or a tap when we were thirsty instead of demanding a plastic bottle flown in from another country. We accepted that a lot of food was seasonal and didn’t expect that to be bucked by flying it thousands of air miles around the world. We actually cooked food that didn’t come out of a packet, tin or plastic wrap and we could even wash our own vegetables and chop our own salad. But we didn’t have the green thing back then.

“Back then, people took the tram or a bus, and kids rode their bikes to school or walked instead of turning their mothers into a 24-hour taxi service. We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn’t need a computerized gadget to receive a signal beamed from satellites 2,000 miles out in space in order to find the nearest pizza joint. “But isn’t it sad that the current generation laments how wasteful we old folks were just because we didn’t have the green thing back then?”

‘Their Skin Is Their Sin’

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The United States has less than five per cent of the world’s population but nearly a quarter (twenty-two per cent) of the world’s prisoners. The prison population of that country is 2.2 million which is nearly one per cent of all American adults – that’s nine in every one-thousand.

Thirty-seven per cent of prisoners are black – which is thirteen per cent of the population. White men have a one in seventeen chance of going to prison in their lifetime compared to a one in three chance for black men (1).

These figures represent a real racial divide in America’s criminal justice system.

In Baltimore on April 12, 2015, Freddie Carlos Gray, Jr., a 25-year-old African-American man was arrested by police then taken to the local police station in a van. One week later he was dead. The officer driving the van was charged with second-degree murder, and others were charged with crimes ranging from manslaughter to illegal arrest (2).

For former prisoner Eric Lockett, police racism in Baltimore is a systemic problem. Since the months following Freddie Gray’s murder there have been no signs of any easing of racial tensions between the police and the black community in Baltimore. As far as the African-American community is concerned, it’s a case of “business as usual”, he says.

According to Lockett crime in the city is not indicative of an African-American problem but rather a “poor problem…where their skin is their sin.”. This reflects the fact that a disproportionate amount of the poor in America are African-Americans’ whose disproportionately high levels of criminality is linked to their disproportionately high levels of poverty.

What all this appears to indicate is that America’s extraordinarily high prison population and the criminal justice system that oversees it, is a cash-cow for big business (3). For an illustration of the criminal ties associated with the prison industrial complex, you don’t need to go any further than the detention centre built in the era of Abraham Lincoln in the east of Baltimore where a culture of racketeering, drugs and money laundering is said to have been endemic (4).

In 1971, African-American Eddie Conway was convicted of murdering a police officer and the prison in east Baltimore was where he served his sentence. Conway says “the prison turns out a lot of angry people that bring their anger back into the community.”

Despite the racial tensions and the disproportionate amount of poverty within the African-American community that breeds it in places like Baltimore – in addition to the disproportionate crime levels of those African American’s who are imprisoned as a result of it – there appears to be no serious commitment by the Obama administration to reform the U.S criminal justice system.

One has to ask the question to what extent is the lobbying power of the major corporations’ that constitute the prison industrial complex undermining the potential for reform?

References:

1. https://en.wikipedia.org/wiki/Race_and_crime_in_the_United_States

2. http://www.nytimes.com/2015/05/02/us/freddie-gray-autopsy-report-given-to-baltimore-prosecutors.html?_r=0

3. https://en.wikipedia.org/wiki/Prison%E2%80%93industrial_complex

4. https://www.fbi.gov/baltimore/press-releases/2013/nineteen-new-defendants-including-14-correctional-officers-indicted-on-charges-of-federal-racketeering-in-baltimore-city-jail-investigation

The ‘Marxist’ Venture Capitalist’s Vision To Save The World

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“Inequality and the rise of a super rich elite is undermining the foundations of capitalism. The trappings of capitalism could be swept away by the pitchfork of revolution unless capitalism is fundamentally re-imagined”, so says American venture capitalist Nick Hanauer,

In an interview with the BBCs Stephen Sakur as part of the Hard Talk series of programmes, one of America’s wealthiest individuals argues that capitalism as currently configured is not working. The thing that drives Hanauer on is status not money:

“I’m not driven by money but by the need to be king of the hill. If capitalism doesn’t change fundamentally, it will destroy itself. If you allow wealth to concentrate in fewer and fewer hands over time, in the end it cannot be good for anybody, particularly people like me”, he says. “You show me a highly unequal society and I’ll show you a police state or a revolution.”

According to Hanauer, the notion that in ‘go get’ societies like the U.S people are able to crawl out of the clutches of poverty is true. However, there are limits: “Aspiration is a good thing”, he says, “But aspiration in the absence of opportunity creates resentment, anger and violence. The idea that if the disenfranchised are given more incentives they would magically become software engineers or Wall Street executives isn’t true.”

For Hanauer, the problems are more fundamental: “If we don’t get inequality under control then it’s likely to lead to war – a similar pattern that followed the last period of massive inequality between 1925 and 1940. The most capitalist thing you can do to prevent war is to build up the middle class. From a capitalists perspective, although it may seem a good idea in the short-term to impoverish the typical family, in the long-term it’s a catastrophe.”

Although Hanaeur posits that as an economic system capitalism has been beneficial to millions of people and “is the greatest system ever produced for lifting people out of poverty”, he nevertheless accepts it’s flaws. It fails, for example, to sufficiently “knit together agreements” thereby undermining the potential for a more equitable and sustainable distribution of the wealth that growth brings:

“In my state”, he says, “since 1990, close to 100% of growth has been accrued to just 1% of the top earners. People are beginning to get angry and increasingly less patient with a system that rewards nearly all of the benefits of growth to a tiny minority at the top.”

According to Hanauer, the crisis of capitalism is more acute than ever before and its problems are exacerbated by any lack of purpose which capitalism encourages: “Because we are social creatures, the only thing that gets to define society is our capacity to cooperate. In the absence of a shared purpose, people will not cooperate at which point the society will dissolve”, he says.

“Trickle down economics – the idea that the money of people who become rich – permeates down to the poor, is nonsense. How can it be anything other than nonsense given the fact that inequality is on the rise and socioeconomic mobility is in reverse? I’m not arguing against capitalism but simply saying that there are ways to optimize it – to make it better for everybody.”

Hanaeur is clear that his argument isn’t intended to be a moral one: “I’m not saying that we capitalists should pay workers more because we feel sorry for them, But the more they get paid, the better it will be for venture capitalists like me. The more money ordinary folks’ make, the greater the opportunity people like me have to innovate, create enterprises and sell them stuff. The better they do, the better I do”,

Hanauer then goes on to make the contention that the converse isn’t true: “A thriving middle class causes growth, not the other way round”, he suggests. “You can’t drive a consumer-based economy – which our economies are based on – with only the extreme wealth of the few. What we need to do is to boost the minimum wage in the U.S to 15 dollars an hour.”

Hanauer then goes on to imply that capitalism needs to be further controlled through a system of planned and coordinated regulation:

“Capitalists have the idea that THEIR things will be bought by everybody else as a result of higher wages paid by OTHER capitalists. But this logic of paying higher wages to staff to help improve business activity more generally, doesn’t seem to apply equally to them since they will insist on paying THEIR OWN workers next to nothing thereby not absorbing the costs themselves. The simple truth is, if a higher minimum wage was introduced universally, not only would it be affordable, but something like 40% of American’s would be able to buy more products from everybody thus benefiting all capitalists across the board. Business is challenged today because fewer and fewer people are able to buy things.”

As far as the possibility of change in the future?:

“Most American’s have accepted this bankrupt idea of how you create growth in capitalist economies. If you think that wealth trickles down from the top; if you think that the rich are the wealth creators, and if you think that the more rich people you have the more jobs you will create, then the notion that the introduction of a high rate of tax for rich people makes no sense. However, if you reject that false idea of how capitalism works and you accept a more realistic 21st century notion that the more workers earn, the more customers’ businesses have and the greater the level of jobs that will be created, then you will understand that it’s part of a feedback loop in which everybody wins. The battle ahead is to change the parameters of debate around these things. At the moment we are on the wrong track.”

http://www.bbc.co.uk/iplayer/episode/b05ndjm9/hardtalk-nick-hanauer-venture-capitalist

Dung Of The Devil: Share Buy-Back’s

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Speaking to grassroots organizers in Bolivia on Thursday (July 9), Pope Francis made headlines for using the phrase “the dung of the devil” in reference to today’s world economy. “Today”, he said, “the scientific community realizes what the poor have long told us: harm, perhaps irreversible harm, is being done to the ecosystem. The earth, entire peoples and individual persons are being brutally punished. And behind all this pain, death and destruction there is the stench of what Basil of Caesarea called “the dung of the devil”. An unfettered pursuit of money rules.” (1).

He continued:

“The service of the common good is left behind. Once capital becomes an idol and guides people’s decisions, once greed for money presides over the entire socioeconomic system, it ruins society, it condemns and enslaves men and women, it destroys human fraternity, it sets people against one another and, as we clearly see, it even puts at risk our common home” (1).

Perhaps the Pope had the stench of economic short-termism – personified by share buy-backs – in mind when he made his comments. Certainly, the consequences for the planet and people resulting from their impacts are potentially catastrophic.

The policy by which the CEOs of major corporations buy back their own shares resulting in the particularly rapid and unsustainable rush towards feathering their own nests at the expense of everybody else, is a relatively recent phenomenon. These unscrupulous but legal business practices are predicated on short-term planning decisions that usually trump any commitment to long-term investments in other areas of the business. Instead, these giant corporations use their huge influx of cash to buy back shares in their own companies. This subsequently increases the short-term value of the stock of these companies. They then reap bigger bonuses because their remuneration is tied to the value of these stocks.

All the money that we, the tax-payers, poured into the banks on the premise that the money accrued would be lend to small businesses, was in reality kept by the elite bankers. These bankers then bought back stocks in their own banks with the money resulting in a jump in the value of these banks. As their values increased so did the amount of bonuses for those at the top. This is because these bonuses are reliant on the value of the stock.

The practice of stock buy-back essentially destroys the long-term future health of the companies’ that the CEOs, who grab the bonuses in order to feed their immediate greed, are being paid to run. This is a reflection of what is happening in society at large. In other words, humanity is in effect plundering the resources of the planet so as to satisfy the insatiable appetite of the elites – and to hell with the consequences.

This is not a small problem but an extremely huge one. For instance, in America the top 500 companies spent a massive 95% of their operating margins (profits) on their own shares or in dividend payouts to their own shareholders. In more rational times, the kind of sums previously described were spent on things like research and development, investing in new products and the training of new staff for the long-term health of the company. But hardly anybody appears to be remotely interested in anything long-term anymore. Buy-backs are on course to exceed 100% of profits. At that point major corporations and banks will be borrowing money to buy their own shares. As the share price increases, the elite within those organisations will receive even larger bonuses.

This is not how it’s meant to work. Stocks are supposed to be issued to companies in order to increase future growth – that’s the whole point of them. But with buy-backs the opposite is happening. Capitalism has been transformed from a system in which it was possible for the masses to engage in the game of money where the potential to win was real so long as you took part. Now the game is rigged whereby only a handful of have’s are able to grab even more for themselves while the public pot of cash for the rest of humanity continues to shrink.

Larry Fink, head of Black Rock, is the biggest asset manager in the world. He shifts 4.6 trillion dollars of other people’s money. As a leading capitalist, he is clearly wise enough to grasp that the modern brand of capitalism that buy-backs typify, represents the rope to capitalism’s hangman. This is a man who presumably knows a thing or two about the destructive impact of buy-back’s. This is what Fink had to say:

“The effects of the short-termist phenomenon are troubling both to those seeking to save for long-term goals such as retirement and for our broader economy. “Such moves”, he says, “were being done at the expense of investing in innovation, skilled work forces or essential capital expenditures necessary to sustain long-term growth” (2).

What Fink describes is akin to a farmer eating the seeds that he needs to plant during the following years crop. He’ll feel full now, but next year he’ll starve. Except in business the management won’t be there when the results of their short-termism are realized – instead, they’ll likely be lying on a beach in the Bahamas.

Larry Fink’s critique of share buy-back is beginning to gain traction with other leading capitalists, most notably Nick Hanauer who has grasped the necessity of government regulation to prevent companies buying their stock back. Hanauer defines the strategy of stock buy-back as:

“Plain and simple stock manipulation – a pernicious gain of generating increasing amounts of money for people at the top while giving short shrift to employees and the country as a whole. Thirty years ago, corporate CEOs earned thirty times the average wage, now it’s three-hundred to five-hundred times. This practice of buy-backs is at the heart of it” (3).

This is how the elite constantly get richer while at the same time refusing to pay their staff a living wage which the rest of us help top up. Many leading capitalists (Hanauer is one of them) agree with politicians’ from the left like Jeremy Corbyn who insist there needs to be a substantial increase in the minimum/living wage across the board to counteract the public underwriting of those CEOs who pay poverty pay while simultaneously enriching themselves through stock manipulations.

Progressive capitalists like Fink and Hanauer don’t argue for a substantial increase in the living/minimum wage and for regulations to prevent stock buy-backs because they are altruistic, rather they recognize these actions are necessary in order to save capitalism from itself.

References:

1. http://www.news.va/en/news/pope-francis-speech-at-world-meeting-of-popular-mo

2. http://www.nytimes.com/2015/04/14/business/dealbook/blackrocks-chief-laurence-fink-urges-other-ceos-to-stop-being-so-nice-to-investors.html?_r=1

3. https://www.youtube.com/watch?v=5ebh-v_mVPo

Dead Labour

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Following Harriet Harman’s admission that the purpose of the Labour Party is to outflank the tories at the expense of any allusion to principle, she might have just put the final nail in the coffin of the party, That said, the heart of the beast hasn’t stopped beating quite yet and it could be revived if leadership contender Jeremy Corbyn comes to its rescue by winning the forthcoming battle.

Harman’s claim that she would not oppose Tory benefit cuts was only surprising in the sense that she was being frank about it. Should Labour die and what remains of the corpse align themselves with the Greens and other progressives, the English people will be reliant on the SNP coming to their aid on their behalf.

Just as the bankers are now in a stronger position than they were prior to Syriza in Greece coming to power as a result of the former’s usurping of national Greek sovereignty, so too will the Tories should Corbyn lose..

In challenging the Osborne/Harman narrative, what used to pass as positively centrist, is now regarded as dangerously revolutionary, particularly when the issue of raising taxes for the rich is concerned..This is what Corbyn had to say to Sky’s Adam Boulton yesterday evening:

Corbyn:

“I think we have made a mistake on giving so much ground to Osborne, particularly on the treatment of young people in the budget and treatment of people in larger families. Why should the third and subsequent amount of children be penalized depending on the random date in which they happen to be born?

Boulton:

“Why should the tax payer support larger families”?

Corbyn:

“We have a system in which even Thatcher signed a European convention protecting the rights of the child. What number were you”?

Boulton:

“I’m playing devils advocate. This is only going to be introduced for future families and that they have a choice as to how many children they have. Surely encouraging families to have a smaller amount of children must be a good thing.”

Corbyn:

“I agree. But they don’t need encouragement. People having small families happens anyway. The average family size over the last 50 years has come down. But because of the idea that there are some large families, that children should be penalized for being born, is simply not right. We could cut rising welfare expenditure by capping rents thus saving on housing benefit and improving drastically the living wage thereby undercutting the subsidising of low pay paid through benefits – a system that currently works to the advantage of large multinationals like Tesco. We need to pay people more so the tax yield is greater and the economy does better. It’s a win-win situation.”

Boulton:

“How are you going to pay for it”?

Corbyn:

“We have to raise the taxes of the wealthiest. Over the last few years, child poverty has increased, homelessness has increased, the use of food banks has increased and overcrowding in houses has increased. So we need a different and more humane approach to welfare.”