Opinion and observation on a world gone crazy

Joe Gill, journalist and game inventor from Brighton, UK

Friday 30 March 2012

The privatisation of everything - Tory Year Zero

From an excellent short history of privatisation that began in 1980 and appears to be reaching its final phase with the sell off of the last great public services - health, education, police, post office.

The Tories took office without a mandate, but with no lack of confidence. Their agenda, which had emerged since 2008, was to represent the crisis of global capitalism as a crisis of public sector spending. Having already privatised the Tote and announced the sell-off of Northern Rock, with other nationalised banks to follow, they have indicated that Royal Mail will be sold off, along with probation services, roads, large sectors of education and the NHS. Even sections of the police, traditionally an ally of the right, will be privatised. Outsourcing will be extended into every possible area.
But, as in the 1980s, the aim is not primarily to reduce public-sector borrowing. The Tories know that ongoing economic crisis is not just a fiscal or financial problem. The private sector is utterly stagnant. Globally, there are trillions of pounds being retained by corporations who see no viable avenue for profitable investment. US companies are holding on to $1.7 trillion, eurozone firms sit on 2 trillion euros, and British firms have £750bn doing nothing. Accumulation-by-dispossession is one way to get that money into circulation as capital. And while the Conservatives are not as ideologically confident as in the 1980s, the scale of their proposed privatisations suggests they expect to over-ride any opposition.
In historical context, privatisation seems to answer a number of dilemmas for the Tories. By spreading market incentives, it erodes the public sector basis for Labourist politics. By opening the public sector to profit, it gets a lot of capital into circulation. And by reducing the power of public sector workers, it suppresses wage pressures, thus in theory making investment more appealing. Above all, perhaps, in shifting the democratic to market-based principles of allocation, it favours those who are strongest in their control of the market, and who also happen to represent the social basis of Conservatism.

As one commenter put it:


British governments no longer represent the British people, they represent corporate interests. This presents us with a choice, either we accept what they are doing, let them get on with it and accept the consequences, or we make the country ungovernable.
 

Monday 26 March 2012

We were the future, now it is China

From an article by Martin Jacques - a new reality the western world finds hard to admit. It's not about liking everything about China's rise, but at least understanding the nature of this global revolution:

2008 ushered in a new era, the beginning of a Chinese world economic order. Until recently the US largely shaped globalisation but now China is increasingly assuming that role. Its most dramatic expression is trade. China will shortly become the world's largest trading nation. It imports huge amounts of natural resources and exports a massive volume of manufactured goods: in 2011, it overtook the US to become the world's largest producer of manufactured goods, a position America had previously held for 110 years. In 1990, there was hardly a country in the world for which China was its chief trading partner. By 2000, there were a few, but nearly all were in east Asia. By 2010 the list stretched around the world, including Japan, South Africa, Australia, Chile, Brazil, India, Pakistan, the US and Egypt. Imagine how long the list will be in 2020.
China is rapidly emerging as a great financial power. In 2009 and 2010 the China Development Bank and the China Exim Bank – which I would guess the great majority of Observer readers have never even heard of – lent more to the developing world than the World Bank. Just as the Rothschilds funded much of Europe's industrialisation in the 19th century, so these two banks are now doing the same on a far larger canvas, namely the entire developing world, comprising 85% of the world's population. Meanwhile, in late 2008, China began making the renminbi, hitherto a currency that circulated only in China, available for the settlement of trade. The HSBC has predicted that by 2013-15 half of China's trade with the developing world (which constitutes more than half of China's total trade) will be paid for in renminbi. It is the first stage in the process by which the renminbi will replace the dollar as the world's dominant currency.

Sunday 25 March 2012

Unreported direct democracy uprisings in Balkans

A brilliant analysis of the unreported uprisings that took place last year in Croatia and elsewhere in the Balkans, sparked by the desert of so-called 'transition' to full EU membership. Neoliberal reforms have brought privatisation, inequality, corruption and austerity to the region. Many there now wish to return to the so-called bad old days of communism, with free education, health and cheap housing.

Friday 16 March 2012

CIA asset told New York Times about 9/11 warnings - and was jailed

By Susan Lindauer, 9/11 Whistleblower  and Former U.S. Asset covering Iraq and Libya

9/11 denialists like to swear smugly that the official 9/11 story must be true, because the government could never keep such an important secret without getting caught.
Somebody would spill the beans, right? In fact, a number of us tried. Media watchers should savvy up, as the air waves get blitzed this weekend with 9/11 memorials. If the corporate media had done its job as a watch dog, the world would have got an earful reliable intelligence sources debunking the official 9/11 story.
Unhappily, the corporate media has been a co-conspirator in the 9/11 Cover Up from day one. They have actively abetted the government with its dirty work. Say a truth teller got arrested on the Patriot Act—like me— and locked in prison on a military base, while the public debate raged over 9/11 and Iraq without access to knowledgeable sources. The government could rely on corporate media to squash the story, while the Justice Department fought my demands for a trial, playing every dirty trick in the book to stop a New York jury from hearing testimony about 9/11 and Iraq.
My nightmare is described in Extreme Prejudice: The Terrifying Story of the Patriot Act and the Cover Ups of 9/11 and Iraq. It was a frightening ordeal with secret charges, secret evidence, secret grand jury testimony, and threats of indefinite detention on a Texas military base.
However the Patriot Act by itself was not enough to silence facts about the command failure before 9/11 or Iraqi Pre-War Intelligence. Over and over, friends and colleagues reached out to the corporate media, delivering independent confirmations about my 9/11 warnings, the Iraqi peace framework and my work on the Lockerbie case, which proved my status as an Asset. Supporters pleaded for the media’s help to expose the government’s manipulations, so I could get my day in court, and bring that truth to the people.
Over and over again, the corporate media in New York itself mounted a wall of silence to buttress America’s leaders.
Most New Yorkers and New Jersey residents would be appalled to discover that the worst media whore in the 9/11 Cover Up turned out to be the New York Times.
By May, 2004, the New York Times received no fewer than four confirmations of our Intelligence team’s 9/11 warnings to U.S. Attorney General John Ashcroft and the Office of Counter-Terrorism at the Justice Department. Confirmation was made six months before release of the 9/11 Commission report, when public discussion could have impacted the findings. Most importantly, a discourse of the facts about 9/11 would have educated voters before the November 2004 elections, holding leaders in Washington accountable to the people. For this reason, I offered to waive my Fifth Amendment rights under indictment, so the 9/11 Commission could take my testimony under oath.
Most critically, the New York Times gained two of those all important confirmations about the 9/11 warnings from  the CIA and the Defense Intelligence Agency. Both of my handlers, Dr. Richard Fuisz and Paul Hoven men freely volunteered our 9/11 warnings and the Iraqi Peace option to the New York Times. They also explained my work as a U.S. intelligence Asset engaged in the Lockerbie negotiations with Libya, and my role spearheading talks to resume weapons inspections with Iraqi Ambassador Dr. Saeed Hasan. The journalist, David Samuels, called me excitedly, after the interviews.
You read that correctly. The CIA and Defense Intelligence Agency both gave information about the 9/11 warnings to the New York Times, expecting the newspaper to alert its readers of the command negligence before the attack. The New York Times’ readership was most personally impacted by the tragedy, after all. They made an effort to inspire discussion while the 9/11 Commission was hearing testimony.  The New York Times acquired two more confirmations of our 9/11 warnings from Dr. Parke Godfrey, a highly respected computer science professor of York University in Toronto, and my brother, John Lindauer of Los Angeles.
That took guts for the Intelligence Community. By this time, writing was on the wall that Republican Leaders would punish anyone who spoke against them.
One would expect the New York Times to rush to press with such a hot story. Think about it: a long-time U.S. Intelligence Asset, second cousin to President Bush’s Chief of Staff, Andrew Card warns about 9/11 and has full knowledge of Iraq’s cooperation with the 9/11 Investigation— then gets arrested on the Patriot Act, after requesting to testify before Congress.
Wasn’t that newsworthy?  Not according to the editors of the New York Times. Instead of objectively reporting independent confirmations of the 9/11 warnings and properly identifying me as an Asset, the New York Times engaged in gross public fraud. They abetted the government in concealing information of critical significance to the paper’s home town. They manipulated the people of New York City into believing the CIA gave no advance warnings of 9/11 at all. While the American public screamed for impeachment, the New York Times blocked information that showed President Bush and Attorney General Alberto Gonzalez engaged in active public deception. The people were left believing the government had simply made mistakes before 9/11 and the Iraq War.
In other words, the New York Times acted like an old whore, clinging to GOP leaders like a last client, seeking assurances of her waning attractiveness to the public.
When one of Washington’s most stellar attorneys, Brian Shaughnessy, forced the Court to grant my request for a single, pre-trial hearing—four years after my arrest— Parke Godfrey delivered shocking testimony about my 9/11 warnings less than a thousand feet from where the World Trade Center once graced the New York skyline.
Yet again, New York Times reporter, Alan Feuer, fraudulently and libelously invented a phony lead sentence: “She stuck her tongue out at the prosecutor.”  And the New York Times parroted the Justice Department’s line that “half a dozen psychiatrists” had declared me incompetent to stand trial—a blatant deception. Ignoring a morning’s worth of testimony, Feuer suggested that I was a “religious maniac,” something  hysterically funny to everyone who knows me. There’s no reality contact in the one and only psychiatric report that postulated such claims. (That single evaluation was presented by the Justice Department’s psychiatrist and tossed by the Bureau of Prisons in the first hour of my arrival at Carswell).
If the New York Times had scratched the surface in its reporting, journalists would have recognized the Justice Department was running what’s called “a psy-op” designed to hide a major government deceptions from voters. A quick examination of the record would have revealed that half a dozen psychiatrists had challenged the Justice Department, and declared me fully competent in all areas of life. Even psychiatrists at Carswell Prison acknowledged I suffered “no evidence of hallucinations,” “no depression.” They said I socialized well, posed “zero behavioral problems.” Weekly reports stated consistently that I was “cooperative, smiling, with good eye contact.”
Notably, psychiatrists at Carswell Prison ruled out delusional disorder, citing first-hand observation, witness interviews, and diagnostic testing.
The slightest attention to witness testimonials would have exposed the whole public fraud. Yet the New York media carefully ignored evidentiary testimony that exposed the 9/11 warnings and denied symptoms of mental instability. While my attorney, Brian Shaughnessy, protested for my right to a trial, the New York media assured the public that the Court finding was “gift wrapped for my defense.”
Casting journalists as “controlled opposition–” might be overly generous given these circumstances, since it implies they have any backbone at all. Alas, most of them don’t. They whine for pity for their low ratings. Then they let government officials write their news scripts in exchange for political access.
Hey, it’s a tough job defending the official story of 9/11. You have to overcome janitorial crews, fire fighters and emergency rescue teams who all reported hearing explosions pop through the towers. They had to ignore damage to the front lobby— windows that exploded before the first plane hit the building.
You have to ignore what your own eyes see—a neat, clean controlled demolition of the Towers, which dropped free-fall into a pile of thermatic dust— and fires that burned under the Towers until December, months after jet fuel would have gasped its last flame.
Airplanes crashed into the Towers that day, sure enough. However I can testify myself the U.S. had significant advance warnings about the airplane hijackings, back to April and May, 2001. The decision to go to War with Iraq, in the aftermath of the terrorist strike, was already made “at the highest levels of government above the CIA Director and Secretary of State.”  I know that firsthand, because I was instructed to deliver that message, precisely worded, to Iraqi diplomats, and to demand “any fragment of actionable intelligence that would pinpoint the attack.” And I did so.
Iraq had no intelligence. However, the CIA’s advance knowledge of the conspiracy and advance threats against Iraq created powerful motivation and opportunity for a separate orphan team, domestic or foreign, to wire the Towers with military grade explosives.
The New York media never investigated reports that security cameras in the parking garage had photographed mysterious trucks/vans arriving at the World Trade Center at about 3 a.m and departing at 5 a.m, before Type AAA personalities arrived to start their days on Wall Street. The vans were different than the janitorial trucks, in make, model and decal. They arrived at the World Trade Center from August 23 to September 3.
Those are important missing pieces of how the 9/11 tragedy unfolded. Myself, I have concluded that airplane hijackings were used as a public cover for a controlled demolition of the Twin Towers and Building 7. From that point, it’s up to explosives experts to determine the of sorts materials applied to the detonation.
I won my freedom when the blogs and alternative radio took up my cause. In a practical sense, 9/11 marked the changing of the media guard. And it proved the internet boasts some fine journalists of its own, like Michael Collins and radio host Bob Tuskin at The Intel Hub.
No thanks to the government’s top dogs at the New York Times. But perhaps that’s not fair. A dog would have shown more loyalty to the people of Manhattan and New Jersey.
                                                     ##END###
9/11 Whistleblower, Susan Lindauer was a U.S. Intelligence Asset covering Iraq and Libya at the United Nations from 1995 to 2003. She is the author of Extreme Prejudice: The Terrifying Story of the Patriot Act and the Cover Ups of 9/11 and Iraq. Her five year indictment on the Patriot Act ended without a Trial five days before President Obama’s inauguration.

From Wikipedia:
Lindauer was arrested on Thursday, 11 March 2004 in Takoma Park, Maryland and charged with "acting as an unregistered agent of a foreign government". The indictment alleged that she accepted US$10,000 from Iraqi intelligence services in 2002. Lindauer denies receiving the money, but admits taking a trip to Baghdad.[1] She was released on bond on March 13, 2004, to attend an arraignment the following week.[2] In 2005 she was incarcerated in Carswell Air Force Base in Fort Worth, Texas, for psychological evaluation then moved to the Metropolitan Correctional Center in Manhattan.[10]
In 2006, she was released from prison after Michael B. Mukasey ruled that Lindauer was unfit to stand trial and could not be forced to take antipsychotic medication to make her competent to stand trial. In 2008, Loretta A. Preska of the Federal District Court in New York City reaffirmed that Lindauer was mentally unfit to stand trial.[4][11]
On January 16, 2009, the government decided to not go ahead with the prosecution saying "prosecuting Lindauer would no longer be in the interests of justice."[3][12]

Sunday 11 March 2012

John Carter is good fun

John Carter is not as bad as some people say - in fact, I enjoyed it. I love a good sci-fi romp, particularly where they carry swords and bolt actions rather than lazers. The blend of sci-fi and western is also a hit as I am a lifelong western fan. The opening scene of insect-like flying machines battling it out over the red planet were worth the entrance fee alone. It's not just the fantastic design, scenery and special effects, but the joys of watching a load of British actors camping it up in face paint like they have turned up for a Greek themed fancy dress party.



Carter has the same appeal as the 1980 remake of Flash Gordon, which remains a classic of camp sci-fi. You didn't take it seriously, but it is seriously good fun. Carter lacks the tongue in cheek humour of Flash Gordon. But Dominic West and James Purefoy are pretty good stand-ins for Brian Blessed and Timothy Dalton. Carter is all braun, as was Flash Gordon. The plot barely makes sense - who are the bloody Therns, and why does everyone have such silly names? Well, that's actually all Edgar Rice Burrough's fault. The film at least keeps faith with the spirit of the 1930s Saturday morning serials, and turn of the century pulp fantasy - and that is why it works for me.

Economist joins in calls for China to abandon state capitalism

The Economist - that bastion of free market ideology - has run a whole issue on state capitalism, something I've been writing a lot about recently. The evocative front page image has Lenin smoking a cigar. Its editorial says the following:

State-directed capitalism is not a new idea: witness the East India Company. But as our special report this week points out, it has undergone a dramatic revival. In the 1990s most state-owned companies were little more than government departments in emerging markets; the assumption was that, as the economy matured, the government would close or privatise them. Yet they show no signs of relinquishing the commanding heights, whether in major industries (the world’s ten biggest oil-and-gas firms, measured by reserves, are all state-owned) or major markets (state-backed companies account for 80% of the value of China’s stockmarket and 62% of Russia’s). And they are on the offensive. Look at almost any new industry and a giant is emerging: China Mobile, for example, has 600m customers. State-backed firms accounted for a third of the emerging world’s foreign direct investment in 2003-10.
With the West in a funk and emerging markets flourishing, the Chinese no longer see state-directed firms as a way-station on the road to liberal capitalism; rather, they see it as a sustainable model. They think they have redesigned capitalism to make it work better, and a growing number of emerging-world leaders agree with them. The Brazilian government, which embraced privatisation in the 1990s, is now interfering with the likes of Vale and Petrobras, and compelling smaller companies to merge to form national champions. South Africa is also flirting with the model.

State capitalism’s supporters argue that it can provide stability as well as growth. Russia’s wild privatisation under Boris Yeltsin in the 1990s alarmed many emerging countries and encouraged the view that governments can mitigate the strains that capitalism and globalisation cause by providing not just the hard infrastructure of roads and bridges but also the soft infrastructure of flagship corporations.
So Lee Kuan Yew’s government in Singapore, an early exponent of this idea, let in foreign firms and embraced Western management ideas, but also owned chunks of companies. The leading practitioner is now China. The tight connection between its government and business will no doubt be on display when the global elite gathers in the Swiss resort of Davos next week.
The Economist goes on to point out the familiar free market claims that state capitalism is inefficient and cannot match free market innovation. It also makes clear that state capitalism is not necessarily friendly to western multinationals, and that, really, is the point as far as The Economist is concerned, Because the real threat of state capitalism is to western multinationals' ability to make big gains in emerging markets. Until recently they were able to do this, but state capitalism in China, Russia or South America curtails their activities and rents. This is the wake up call that The Economist is making. This is not just a fad, these state-backed giants are not going away anytime soon. So the US/EU model of capitalism, already in crisis, faces a hostile environment, with state companies muscling in on their terrritory, at home and abroad. I say good luck to them. The advantages of state capitalism, that it can work for longer term socio-economic goals, rather than just shareholder returns, are not made clear by The Economist. But they are one reason why it is a powerful  model of the rising powers of the early 21st century. These are uncomfortable times for the neoliberal free marketeers.



Saturday 3 March 2012

Zero rated bank accounts - a hidden £60 billion subsidy to banks

Figures from the Bank of England show that since the run on Northern Rock in 2007, average interest rates have fallen from 3.47% to 0.99%, with £108 billion in savings receiving zero interest (compared to £22 billion in 2007). And this when inflation has been above 4%. This adds up to £60 billion in lost interest to savers in the last 3 years - equivalent to £1000 for every man woman and child in the UK. So in addition to the £120 billion bailout by Gordon Brown, there is another £60 billion bailout by UK savers.

This revelation comes as the European Central Bank lends European banks another 500 billion euros, on top of £500 billion lent in December, at the extremely low rate of 1%. Anyone been offered 1% on a loan lately? Thought not. Being a bank must be a wonderful thing! The more calamitous your performance, the more money the goverment throws at you. And it doesn't say anything about your failure to lend, or the fact that you only lend at extortionate interest rates. One wonders how much more money can be thrown at the banks before someone in power comes out and says that 'saving the banks' has not been worth the candle.

When will it be recognised that banks don't 'create' wealth? Their only function is as a place to deposit savings, and as a source of loan capital, which they 'create' whenever they offer a loan to a person, company or government. That loan is fictitous capital - it only becomes real when a productive activity makes it so. However since 2008 banks have not been adding money to the economy at all. They have absorbed billions more than they have lent. The rest of society has been pouring money into the banks in order to restore the balance sheets that were destroyed by years of reckless lending and speculation.

Presumably when Gordon Brown, that old socialist, agreed to bail out the banks he believed he was 'saving' the economy from a catastrophe. But isn't what has followed in the last four years been a catastrophe? It certainly has for Greece. We keep on giving money to the banks, and they keep on taking. Anyone tried to get a mortgage or loan lately? Notice how the banks charge a massive premium in interest rates over the rates they themselves borrow at from the central bank. They are making huge returns on the money they lend to householders and companies. May be the rates for big borrowers are better than those for individual borrowers. But I know from friends and associates how expensive it is to borrow right now.

What does this mean? It means that society is funding banks, not the other way round. How long will we continue to do this before it is recognised that the western banking system does not work, that it is a legalised form of fraud? We should not be trying to re-create what existed in 2007 or even in 1987. We need to go back further than that, or perhaps, much better, create something new - banks that we own (or at least have a golden share in) and which are mandated to serve the public, social development, and productive economic activity. Not just their overpaid managers and shareholders. The private banking system is an emperor without clothes with a politician standing in front of it carrying a tin can for donations in one hand while using the other to cover up its private parts.

Friday 2 March 2012

World Bank urges China to sell off state enterprises

The World Bank still believes privatisation and 'market reforms' are the route to economic success. This is depite the crisis in the western market economy in the last four years, which has hardly dented its belief in neoliberalism. A new World Bank report is urging China to sell off most of its state owned enterprises in order to join the top league of high income nations by 2030. 

China needs to change if it is to join the top league of wealthy nations by 2030, according to a road map for reform set out in a near-500 page document produced by the World Bank. It calls for major market reforms throughout the economy and, in particular, a fundamental restructuring of China's State-owned enterprises (SOEs), which dominate the key strategic industrial sectors, reports China Daily.
The report sets out six strategic directions for China: making the transition to a market-led economy, including structural reform of SOEs; accelerating the pace of innovation; seizing the opportunity to "go green" so as to ease current environmental stresses; developing a better social security and healthcare system; strengthening the fiscal system and ensuring better funded local authorities.

Much of this, like lmproving health and social security and developing its green industries are undoubtedly good ideas. But the one that has grabbed the headlines is reform of the SOEs, which control half of the industrial assets of the country. They dominate most of the major industrial sectors and range from the big banks such as Bank of China, through oil companies like Sinopec to airlines such as Air China. Many of the larger ones have shares listed on major stock exchanges around the world but are regulated by the State-owned Assets Supervision and Administration Commission (SASAC).

The report repeats the line that China will soon or later face the same kind of crisis that has hit western economies and Japan. So-called 'reform' is the answer, apparently. This seems strange, because privatisation and liberalisation were tried in Japan, Europe and Latin America in the 1980s and 1990s. The results included rising inequality, asset booms followed by busts and debt crises. It further doesn't make sense because the period of dramatic income growth that brought the high income societies of today in the West and Japan was the 1950s to 1970s. Wages in the US have stagnated since the mid 70s as capital has taken a growing slice of the cake. This has happened in the UK and to a lesser extent in Europe since the 1990s.


One of the key recommendations of the China 2030 report is the need for greater innovation.
Bernhard Hartmann, managing director of management consultants A.T. Kearney in Greater China, says this is true particularly in heavy industries such as chemicals in which he specializes.
He says there has been innovation in China's major heavy industries in recent years but it would be a mistake to believe, as the report suggests, that exposing SOEs to market forces would necessarily make them more innovative.
"What China needs to do is design world-class companies out of its SOEs. These would be companies which could take on the likes of BASF," he says.
"There is a danger of assuming that this can only be achieved by some market-led approach. This is very much a Western mindset. It could be achieved through the existing structures."
It is a fallacy that privatisation / liberalisation are the cornerstone of development to an advanced economy from middle incomes ($5000-$10,000). Japan and South Korea used a model of state-led development and capital controls to transition from middle to high income from the 1960s to 1980s. Neither country allowed foreign multinationals to buy up their major industries. When Japan liberalised its capital market in the late 80s it ended in a massive market crash and a decade of stagnation.

Clearly the ideology of neoliberalism is alive and well at the World Bank. China is not the Soviet Union in the 1980s - it already has a thriving market economy, but it is a mixed economy with the state holding the commanding heights (as Leninists used to call them). This has served China very well for decades. Why would they abandon that now? Britain sold off its major industries in the 1980s and 1990s - and closed a lot of it down, putting millions on the dole. This was supposed to lead to a new era of enterprise and wealth. Instead we lost our industries and suffered an unsustainable banking and housing boom and a massive rise in social inequality. China would be wise not to follow this path - if it follows World Bank advice it will hand its economy over to asset strippers.