This comment on a Seaumus Milne pro-New Labour piece sums up my view:
This is becoming a mixture of tedious and annoying. We get it. The Guardian editorial line will be 'vote Labour'. This endless variations on the theme of 'only Labour can bring about major change and protect the vulnerable' is as tired as it is untrue.
Electoral reform would be a progressive move but what New Labour offer - after 13 years - is a vote on AV, a system that will give Labour an even bigger share of the seats with even less votes. Labour and Conservatives are united in their opposition to STV.
Getting rid of Trident would be progressive, but they aren't suggesting that. Labour agrees with the Conservatives on keeping Trident.
Reining in the banks and separating out investment and high street banking would be progressive, but Labour doesn't suggest it. Once again, on this, they agree with the Conservatives.
Strangely, the one party that does break with the consensus on STV, Trident, banking and more besides is the Lib Dems.
If Labour loses - and loses big - there is a real opportunity for two things. Firstly, an end to the archaic voting system. That would mean the Tories are unlikely ever to achieve a majority again.
Perhaps even more importantly, the party that threw the working class in the dustbin because they were no longer useful to them would be consigned to history themselves. Polly tried to warn of the possible epoch-making defeat that Brown could lead Labour into, but there are too many mice and not enough men in Labour these days. Nobody would move against him.
Seamus knows it, and everyone else knows it. If Labour finish third in this election, the party's over. New Labour is a photocopy of the Tories - economically neoliberal, slavishly following the American military lead. There's no point to them any more.
If Labour are moved out of the way, there is at least recognizable ideological clear water between the Tories and Lib Dems. Sorry, but it's not enough to say "Oh sure, they bombed Iraq, swapped saliva with the City, shredded civil liberties but hey look - their tax proposals are mighty progressive." FFS, they've had 13 years to implement radically progressive tax structures. And the truth is, thanks to Gordon 'An End To Boom And Bust' Brown, there's so little money to play with that everyone's going to have to be taxed more and paid less.
The Guardian's 'vote Clegg, get Cameron' line smacks of the same desperation as the Telegraph's 'vote Clegg, get Brown' tactic. It's an attempt by both camps to scare people back into traditional voting patterns.
Labour isn't progressive. Nobody's buying that particular line of bullshit anymore. If Labour come third, genuine progressives will rejoice, because the party that promised progression and enacted Toryism will be on their way to oblivion.
Thursday 29 April 2010
Wednesday 28 April 2010
Thursday 22 April 2010
Comment on Goldman Sachs article
I commented on this Seth Freedman piece
Any company that can turn 50% of its turnover into cash profit for its 'partners' must, by definition, be doing something evil, or immoral, or whatever you want to call skimming billions from the capitalist system without contributing anything.
I will repeat that so everyone gets it - in a normal year - GS takes 50% of its revenue as profit. That is not possible for a business engaged in legitimate activity. A good rate of return is 10%. Marx once said that a capitalist will wade knee deep in blood for 300% profit. GS are wading at least ankle deep. Of course they are not alone in doing this, but 'investment banking' is nothing of the sort. It is vampire banking, and if Seth can't see this, he is blind and needs to go and read some history and some Marx, or some other non-orthodox economist if he prefers.
In any normal industry, a 50% plus rate of profit would lead to a massive influx of players which would bring down the average rate of return as the fees or costs of the industry fell due to competition. But in an oligopoly new players can't enter.
Also - all this talk of breaking up the banks is nonsense. Capitalism will always lead to concentration of capital. This is not new. Companies merge, gettaken over or go bankrupt. Breaking up the banks will just start this processs over again. Of course you can impose a maximum market share on any one bank -as in media - but this will not work long-term. As long as there is money to be made, the bankers will push for this limit to be removed until the government swings back in their favour.
No, money and credit is a public good. Why should banks get to lend it out at interest when it costs them little or nothing to create it. All money nowadays is fiat anyway -it has no intrinsic value since we went off gold and the debt expansion model took off a century ago. Banks should be nationalised, or held in trust under a strict public obligation to serve the common good by providing security and credit for individuals and businesses.
Of course banks charge interest as a risk premium. Fair enough, except that in an unequal society people with money get interest from their assets and need do nothing for it - they can leave it on deposit which is guaranteed by the government and their bank. People without money have to borrow from banks at interest, often just to pay their bills. So money is continually transferred from poor to rich. Brilliant!
There is a lot of what they call arbitrage going on which enables the financial wizards to milk assets by interest differentials - they get money cheap and sell it expensive. Ultimately if the investment banks make billions but create no value, they must be taking that value from the rest of society - sometimes just by borrowing from the future by saddling companies they takeover with a pile of debt, or in the case of Greece, an entire country....
Any company that can turn 50% of its turnover into cash profit for its 'partners' must, by definition, be doing something evil, or immoral, or whatever you want to call skimming billions from the capitalist system without contributing anything.
I will repeat that so everyone gets it - in a normal year - GS takes 50% of its revenue as profit. That is not possible for a business engaged in legitimate activity. A good rate of return is 10%. Marx once said that a capitalist will wade knee deep in blood for 300% profit. GS are wading at least ankle deep. Of course they are not alone in doing this, but 'investment banking' is nothing of the sort. It is vampire banking, and if Seth can't see this, he is blind and needs to go and read some history and some Marx, or some other non-orthodox economist if he prefers.
In any normal industry, a 50% plus rate of profit would lead to a massive influx of players which would bring down the average rate of return as the fees or costs of the industry fell due to competition. But in an oligopoly new players can't enter.
Also - all this talk of breaking up the banks is nonsense. Capitalism will always lead to concentration of capital. This is not new. Companies merge, gettaken over or go bankrupt. Breaking up the banks will just start this processs over again. Of course you can impose a maximum market share on any one bank -as in media - but this will not work long-term. As long as there is money to be made, the bankers will push for this limit to be removed until the government swings back in their favour.
No, money and credit is a public good. Why should banks get to lend it out at interest when it costs them little or nothing to create it. All money nowadays is fiat anyway -it has no intrinsic value since we went off gold and the debt expansion model took off a century ago. Banks should be nationalised, or held in trust under a strict public obligation to serve the common good by providing security and credit for individuals and businesses.
Of course banks charge interest as a risk premium. Fair enough, except that in an unequal society people with money get interest from their assets and need do nothing for it - they can leave it on deposit which is guaranteed by the government and their bank. People without money have to borrow from banks at interest, often just to pay their bills. So money is continually transferred from poor to rich. Brilliant!
There is a lot of what they call arbitrage going on which enables the financial wizards to milk assets by interest differentials - they get money cheap and sell it expensive. Ultimately if the investment banks make billions but create no value, they must be taking that value from the rest of society - sometimes just by borrowing from the future by saddling companies they takeover with a pile of debt, or in the case of Greece, an entire country....
Tuesday 20 April 2010
Who paid Obama's election campaign
This table of campaign contributions to the Obama election fight must be born in mind in relation to the financial crisis and its handling and bailout.
Goldman Sachs was the second biggest contributor with its employees handing over nearly $1m to the campaign.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=n00009638
Goldman Sachs was the second biggest contributor with its employees handing over nearly $1m to the campaign.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=n00009638
Monday 19 April 2010
US government goes after Goldman Sachs
Goldman Sachs is facing investigation over dodgy deals. This is really big news.
As this commenter says, perhaps a bit optimistically, Obama needs to clear out the Augean stables - but Goldman are all over the Government. The arms of the octopus surround Obama and the US government.
Goldman Sachs might not survive - if a forensic accounting could be done, probably none of the major banks (GS is more like a hedge-fund, even though Geithner gave them a bank charter and access to the Fed's discount window, FDIC insurance and funds at near-zero interest rates) would survive. As Matt Taibi has argued, Goldman has been behind virtually every financial crisis the US has experienced since the Civil War. In John Kenneth Galbraith's "The Great Crash", a chapter that documents Goldman's contributions to the Great Depression is titled "In Goldman We Trust". As the instigator of crises, it has truly earned its reputation.
Obama should start his house cleaning with the Treasury department. Rubin, Summers and protégé Geithner (and his hired hand Mark Patterson, Goldman's lobbyist who became chief of staff of the Treasury) and Hank Paulson should be banned from Washington; and Rattner (former NYT reporter who tried to bribe pensions funds when he worked for the Quadrangle Group and served as Obama's 'car czar' and is now likely to face lawsuits), and Lewis Sachs (senior advisor to Treasury, who helped Tricadia to make bets identical to those made by Magnetar and Goldman), and Stephen Friedman (Goldman senior partner who served as chairman of the NY Fed), and NY Fed president Dudley (former chief US economist at Goldman) must all be sent home. Actually, anyone who ever worked for a financial institution must be banned from Washington until we can reform and downsize and drive a stake through the heart of Wall Street's vampires.
The Obama administration should immediately revoke Goldman's bank charter. Even if the firm is completely cleared of illegal activities, it is not a bank. There is no justification for provision of deposit insurance for a firm that specializes in betting against its clients. Its business model is at best based on deception, if not outright fraud. Why not use the powers of eminent domain to take back Goldman's shiny new government-subsidized headquarters to serve as the offices for 6000 newly hired federal government white collar criminologists tasked with the mission to pursue Wall Street's fraud from the Manhattan citadel of the mighty vampire squid? If Obama is serious about reform, that would be a first step.
As this commenter says, perhaps a bit optimistically, Obama needs to clear out the Augean stables - but Goldman are all over the Government. The arms of the octopus surround Obama and the US government.
Goldman Sachs might not survive - if a forensic accounting could be done, probably none of the major banks (GS is more like a hedge-fund, even though Geithner gave them a bank charter and access to the Fed's discount window, FDIC insurance and funds at near-zero interest rates) would survive. As Matt Taibi has argued, Goldman has been behind virtually every financial crisis the US has experienced since the Civil War. In John Kenneth Galbraith's "The Great Crash", a chapter that documents Goldman's contributions to the Great Depression is titled "In Goldman We Trust". As the instigator of crises, it has truly earned its reputation.
Obama should start his house cleaning with the Treasury department. Rubin, Summers and protégé Geithner (and his hired hand Mark Patterson, Goldman's lobbyist who became chief of staff of the Treasury) and Hank Paulson should be banned from Washington; and Rattner (former NYT reporter who tried to bribe pensions funds when he worked for the Quadrangle Group and served as Obama's 'car czar' and is now likely to face lawsuits), and Lewis Sachs (senior advisor to Treasury, who helped Tricadia to make bets identical to those made by Magnetar and Goldman), and Stephen Friedman (Goldman senior partner who served as chairman of the NY Fed), and NY Fed president Dudley (former chief US economist at Goldman) must all be sent home. Actually, anyone who ever worked for a financial institution must be banned from Washington until we can reform and downsize and drive a stake through the heart of Wall Street's vampires.
The Obama administration should immediately revoke Goldman's bank charter. Even if the firm is completely cleared of illegal activities, it is not a bank. There is no justification for provision of deposit insurance for a firm that specializes in betting against its clients. Its business model is at best based on deception, if not outright fraud. Why not use the powers of eminent domain to take back Goldman's shiny new government-subsidized headquarters to serve as the offices for 6000 newly hired federal government white collar criminologists tasked with the mission to pursue Wall Street's fraud from the Manhattan citadel of the mighty vampire squid? If Obama is serious about reform, that would be a first step.
Friday 16 April 2010
Parallels between Thailand and Venezuela
As in Venezuela, Thailand's political polarisation is colour coded, with the poor and working class 'Red Shirts' demanding new elections against the urban middle class 'Yellow shirts'. The Res shirts support populist policies of Shinawat Thaksin, the disgraced former PM who is in exile after being removed by the Army, while in Venezuela the Reds overcame their own army's coup attempt in 2002, thereby keeping their populist president in power. Thaksin was a business, whereas Hugo Chavez was an army colonel. So the parallels do break down. Chavez is a socialist, Thaksin a capitalist. It is harder to know where the mass of Red Shirts stand on the political spectrum, and there is the broader issue of the 2 countries' political cultures. I know a little more about Venezuela's history than Thailand's. The divisions in Venezuela are social and racial with the poor tending to be mixed race or black and the rich white. Thailand's history is ancient, while Venezuela was populated by indigenous tribes before the Spanish arrived 500 years ago. Since then it has had waves of migration and slaves brought from Afric, culminating in a mass migration from Italy and Spain since the 1950s. Due to its colonial history Venezuela is Catholic with strains of African religion fused to it through the culture of former slaves. The Thais were actually a Chinese people from Guangxi around 700. Its religions were Indian in origin - Hindu and Buddhist. The Thai Buddhist Kingdom of Ayutthaya established Buddhism as the state religion and also brought in a legal code. It came into contact with European traders from the 16th century onwards, and the Kingdom became very rich, with a capital of 1 million people. This contrasts dramatically with Venezuela which remained a Spanish colonial backwater exploited by the colonisers. Thailand was part of the Khmer empire until the 13th century when it established independence.
While the rest of South East Asia was colonised in the 19th century, Thailand maintained its independence, signing treaties with western powers. A military-led revolution overthrew the absolute monarchy in 1932 replacing it with a constitutional monarchy that has survived until today. Following independence from Spain in 1824, Venezuela was ruled by military strongmen until the revolutions of 1948 and 1958, when an era of democracy began.
The fight for democracy has been a common theme in both countries. Also the military played a prominent role in public life in both nations in the postwar period. Both were also stalwart allies of the United States since 1945. Thailand's neighbours Vietnam, Laos and China all became communist states in this period.
The fight for democracy in Venezuela did not end in 1958 as many people felt excluded by the two main parties who held an iron grip on power. In Thailand the army ruled intermittently until 1992 when civilian control was restored. However the history of Thai democracy has been unstable, and the tension with the military and elite control has continued with the election of Thaksin in 2001 and his overthrow in 2006. Meanwhile in Venezuela the Bolivarian revolution under Chavez continues with the goal of a peaceful democratic transition to socialism, not something the struggle in Thailand has yet to mirror. Class struggle has however played a part in both countries' political divisions in the last decade and this is where perhaps the parallels are strongest.
Anticommunism was a common theme in the politics of both countries. Thailand's neighbours fell to communism in the 1970s and the elite and middle class shifted to the right, fearing a communist takeover. In Venezuela, traditional links to Cuba were strong and like Thailand, a leftwing guerilla movement challenged the government from the 1960s to the 1980s. Both movements were defeated but the fear of Cuba's socialist revolution was strong in Venezuela's middle class. In Venezuela ex-guerillas moved into mainstream politics and influenced the rise of Chavez's Bolivarian movement. Interestingly, both venezuela and Thailand saw mass protests against the government in the late 1980s and early 1990s, with the military being used to violently suppress the protests. These massacres now form part of the popular consciousness in both countries. There was a failed coup in both countries in 1991/1992.
There are massive differences between the populism of Thaksin and the populism of Chavez. Thaksin's period of rule was characterised by a violent crackdown against crime with the police given free reign to go after criminals leaving thousands dead. Meanwhile in Venezuela violent crime has been an ongoing social problem, with the traditionally corrupt police doing little to stop it. However the government has tried to stop the torture and illegal shooting of alleged criminals.
Moreover, Thaksin continued neoliberal policies, including privatisation and trying to negotiate a free trade deal with the US. Yet rather than simple neoliberalism, Thaksin was a rightwing populist, carrying out some redistribution policies favouring the poor, and also whipping up resentment against the IMF and its structural adjustment programme for Thailand after the 1997 crisis, and so defying easy categorisation. Some have compared him to Vladimir Putin or Silvio Berlosconi. Like the Italian, Thaksin owned large parts of the media and used it to increase his star status.
In Venezuela, the private media was massively opposed to Chavez and even supported the coup against him in 2002. Now the government has the state media on its side, while most of the private media remain hostile. Moreover, Venezuela under Chavez turned decisively against neoliberalism, renationalising industry and bringing the state oil industry firmly under government control and using its income to fund anti-poverty and health projects.
For Chulalongkorn University's Pasuk Phongpaichit, what's important about Thai Rak Thai is its fusion of pro-business policies and programs for the poor-a combination she calls "neoliberal populism". This makes Thaksin closer to Berlusconi than Chavez, although whether this applies to Thaksin's supporters is worth exploring.
This blog is very informative!
While the rest of South East Asia was colonised in the 19th century, Thailand maintained its independence, signing treaties with western powers. A military-led revolution overthrew the absolute monarchy in 1932 replacing it with a constitutional monarchy that has survived until today. Following independence from Spain in 1824, Venezuela was ruled by military strongmen until the revolutions of 1948 and 1958, when an era of democracy began.
The fight for democracy has been a common theme in both countries. Also the military played a prominent role in public life in both nations in the postwar period. Both were also stalwart allies of the United States since 1945. Thailand's neighbours Vietnam, Laos and China all became communist states in this period.
The fight for democracy in Venezuela did not end in 1958 as many people felt excluded by the two main parties who held an iron grip on power. In Thailand the army ruled intermittently until 1992 when civilian control was restored. However the history of Thai democracy has been unstable, and the tension with the military and elite control has continued with the election of Thaksin in 2001 and his overthrow in 2006. Meanwhile in Venezuela the Bolivarian revolution under Chavez continues with the goal of a peaceful democratic transition to socialism, not something the struggle in Thailand has yet to mirror. Class struggle has however played a part in both countries' political divisions in the last decade and this is where perhaps the parallels are strongest.
Anticommunism was a common theme in the politics of both countries. Thailand's neighbours fell to communism in the 1970s and the elite and middle class shifted to the right, fearing a communist takeover. In Venezuela, traditional links to Cuba were strong and like Thailand, a leftwing guerilla movement challenged the government from the 1960s to the 1980s. Both movements were defeated but the fear of Cuba's socialist revolution was strong in Venezuela's middle class. In Venezuela ex-guerillas moved into mainstream politics and influenced the rise of Chavez's Bolivarian movement. Interestingly, both venezuela and Thailand saw mass protests against the government in the late 1980s and early 1990s, with the military being used to violently suppress the protests. These massacres now form part of the popular consciousness in both countries. There was a failed coup in both countries in 1991/1992.
There are massive differences between the populism of Thaksin and the populism of Chavez. Thaksin's period of rule was characterised by a violent crackdown against crime with the police given free reign to go after criminals leaving thousands dead. Meanwhile in Venezuela violent crime has been an ongoing social problem, with the traditionally corrupt police doing little to stop it. However the government has tried to stop the torture and illegal shooting of alleged criminals.
Moreover, Thaksin continued neoliberal policies, including privatisation and trying to negotiate a free trade deal with the US. Yet rather than simple neoliberalism, Thaksin was a rightwing populist, carrying out some redistribution policies favouring the poor, and also whipping up resentment against the IMF and its structural adjustment programme for Thailand after the 1997 crisis, and so defying easy categorisation. Some have compared him to Vladimir Putin or Silvio Berlosconi. Like the Italian, Thaksin owned large parts of the media and used it to increase his star status.
In Venezuela, the private media was massively opposed to Chavez and even supported the coup against him in 2002. Now the government has the state media on its side, while most of the private media remain hostile. Moreover, Venezuela under Chavez turned decisively against neoliberalism, renationalising industry and bringing the state oil industry firmly under government control and using its income to fund anti-poverty and health projects.
For Chulalongkorn University's Pasuk Phongpaichit, what's important about Thai Rak Thai is its fusion of pro-business policies and programs for the poor-a combination she calls "neoliberal populism". This makes Thaksin closer to Berlusconi than Chavez, although whether this applies to Thaksin's supporters is worth exploring.
This blog is very informative!
Thursday 8 April 2010
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