Category Archives: Power structure

There’s nothing wrong with People’s Quantitative Easing

It’s fashionable among the economic scribes to deride Corbyn’s advocacy of what he calls People’s Quantitative Easing (PQE) as though it were somehow illiterate.   In fact it is an entirely sensible policy.   Conventional QE operates via the central bank buying bonds in the financial markets, thus transferring newly-created money to banks, hedge funds and other investors.    The effect is therefore to boost the prices of bonds, shares and other assets, making the rich richer.   The theory then is that this wealth effect should stimulate the economy as the investors who have been enriched by selling assets at high prices to the Bank of England spend some of their profits on the high streets or employing servants or investing in new businesses.   It is clearly a very indirect and extremely inefficient way of  stimulating an economy.   Both Tory and Labour governments have spent £375 bn in using this device with very little to show for it since we still have the slowest recovery for over a century.

A better alternative – though not the best – would be ‘helicopter money’.   Or slightly more realistically, send cheques of £20 a week to every man, woman and child as a sort of reverse poll tax.   Technically, if £375 bn were spent this way, these cheques could continue to be sent out every week for nearly 6 years since £375bn is roughly £6,000 per head when equally divided among the 64 million people of Britain.   That would indeed be a far, far quicker way of stimulating economic activity.   Since neither dropping money from helicopters or sending cheques every week to every household in Britain is very practical, a third alternative is to bypass the banks and, after full and detailed consultation with the CBI ansd TUC, invest directly in key industrial or manufacturing projects.

Tory trade union bill is spiteful, ideologically-driven & irrelevant

The Tories’ trade union bill, which had its second reading today in the Commons, is a bill of naked discrimination against the trade unions designed to severely cut funding for the Labour Party to try to entrench the Tories in power, as well as to make it virtually impossible to strike in certain industrial sectors.   However it’s worth quoting the two main purposes of the bill which the government itself pretends are its motives.   The first is: “to pursue our ambition to become the most prosperous major economy in the world by 2030”.   That is beyond satire.   The truth is that 7 years after the Great Crash averages wages are still 6% below pre-crash levels, productivity is flat, the FTSE-100 companies are not investing, and household debt is tipping £2 trillions.  The idea that after this bill we’re going to overtake the US and Germany within 15 years after a record like that is daft.

The government’s second reason for this bill is “to ensure hard-working people are not disrupted by little-supported strike action”.   The truth is, the number of days lost to strike action now is on average less than one-tenth of what it was during the 1980s.   Of far greater impact on the economy is the UK’s chronic under-investment in skills – something the unions themselves want to work with the government to fix.   The bill, while obnoxious, is irrelevant to Britain’s real problems.

The tube workers aside, only the teachers and firefighters have caused any real national concern since 2010, and even then they usually did so for just a day at a time.   And frankly, even the RMT’s resistance against plans to keep the Underground running all night isn’t that unreasonable.   Night shifts are unsociable, unhealthy and potentially dangerous where they lead to over-tiredness.   And it’s worth noting that private sector workers were responsible for more stoppages in 2013 than those working in the public sector.

But the central point here is that the government seems to believe that whenever a strike occurs, it’s always the fault of the workers irrespective of what the employer does.   The majority of employers may well be decent or reasonable, but there’s still a distinct minority who are intransigent or behave badly.   The last thing that workers want to do is go on strike, but when they have genuine, reasonable and pressing demands over such essential issues as job losses, safety problems and pay, and those demands are swept aside often with little or no negotiations, they have no alternative but to take industrial action, and then to pillory and penalise them rather than bad management, as the Tories and the Tory press automatically do, is utterly wrong and unfair.

The worst feature of the bill is making it almost impossible to take industrial action even in such conditions.   If for example 1,000 members are entitled to vote, the bill would require 400 members to vote in favour, but if the ballot achieved a 50% turnout, then it would require the sup[port of no less than 80% of those voting members.   That is frankly prohibitive, as it is intended to be.

251,417 votes. Wow!

With 4 contestants in the running, to achieve 60% of the leadership vote in the first round is an outright landslide.   Jeremy Corbyn has secured a higher percentage than Blair got in 1994.   Even more significant, Corbyn’s electorate at 554,272 was more than double Blair’s, and no less than 76% of them actually voted, a higher percentage turnout than Blair got.   And another pointer to the overwhelming inspiration that Corbynmania achieved – no less than 160,000 volunteers were recruited to the Corbyn campaign – far, far bigger than in any similar campaign in the past.   This is a seminal day in British politics, marking the coming together of the two great conditions needed for transformational change – radical new ideas and a burgeoning social movement on the scale required to push through major change.

Why did it happen?   The defining moment for today’s denouement was the catastrophic crash of 2008-9, from which 7 years on there is still no sustainable recovery in sight.   It represented the unambiguous bust of the free-wheeling unfettered capitalist business model which had prevailed in the Western economies over the last 3 decades since Thatcher and Reagan.   The essence of this dominant ideology was: leave it all to the markets and let government get out of the way.   It was supposed to be self-regulating and efficient; it was neither.    Worst of all, when it did crash, the Tories imposed all of the pain in remedying it on to the squeezed middle and the battered poorest while letting the bankers, the real perpetrators, off scot-free.   The roiling resentment of the public at this monumental injustice has finally burst out, and Jeremy Corbyn was the right man to articulate this at this moment.

The central demand is for an end to austerity.   Quite apart from the immiseration it has caused, it is the wrong policy for reducing the budget deficit and is being pursued for the wrong reasons (to shrink the State, as Osborne himself has told us).   The right way to cut the deficit is by expanding the economy, creating sustainable well-paid jobs and real sustainable growth, not by contracting the economy, and that steady expansion towards full employment is what Corbyn has made clear he stands for.   Alongside this major revival of British manufacturing industry, which is the only means to pay our way in the world and preserve our living standards, there needs to be tighter regulation of the banks to prevent another crash, a halt to privatisation of our public services, and an end to suppression of the trade unions.   All of those are very powerful reasons why an unprecedented number of people voted for Jeremy Corbyn – ane they were absolutely right!

Cameron misleads the Commons again

There are three big holes in the government’s defence of the drone killings of 3 British citizens in Syria in this last month.   One is the legality when under Article 51 of the UN charter every country has the right of self-defence, but any armed attack would have to be “imminent or actual”.   More specifically the need for pre-emptive self-defence must be “instant, overwhelming, and leaving no choice of means, and no moment for deliberation”.   That does no conceivably fit what happened.   Cameron told the Commons that Khan and Hussein, the two British jihadists killed, had been planning to attach public commemorations in the UK, and No.10 later specified VE Day in May and Armed Forces Day in June, long before the two men were killed in August.   On that basis the killing was clearly not within the law.

Second, there is the much more blatant fact that these killings defy the unambiguous vote of the Commons in 2013 rejecting UK bombing in Syria.   It is clear that Cameron intended at the end of July this year to recall Parliament which had just gone into recess in order to win a vote to start a UK bombing campaign in Syria, but at the last minute pulled back.   Then by September the abrupt rise of Jeremy Corbyn made it unlikely, or at least uncertain, that such a vote could then be won, so Cameron and Fallon decided to make the issue a prior settled one in order to get their way.   But this is a blatant abuse of Parliament for which the government should be expressly censured.

A third very serious gap in the government’s handling of this episode concerns the legal advice received by the PM and National Security Council from the government’s Law Officers.    Jeremy Wright, the attorney general, has been keeping a very low profile, and it is crucial that that advice, and the reasons for it, should now be fully disclosed, both regarding these drone killings already executed and any that might organised in future.

Cameron never answered any of these charges in the House, but concentrated instead on his own agenda (as he always does, irrespective of the questions asked).   That was to try to demonstrate his readiness to take tough action against ISIS and to win plaudits from the more bloodthirsty parts of the press.   But above all, he should not be allowed to get away with operating drone killings as a matter of policy without any parliamentary sanction.

It’s about the fundamentals, silly

The basic reason that the leadership election has been so disappointing, until Jeremy Corbyn came on the scene, was that it was stuck on issues (insofar as it was stuck on any issues at all) that, while certainly important, did not have the makings of a vision.   Even when Corbyn prompted the others to produce some actual policies, they were not the real thing.   Andy Burnham was right to praise land value tax and above all the need to integrate social care within the NHS, and Yvette Cooper was absolutely right to demand that Britain takes its proper share of Syrian refugees where the government response has been callously dehumanised.   Bully for her.   But these are not the fundamentals, and only Jeremy Corbyn seems to have grasped what this election is really all about.

it is about how the world (because it concerns far, far more than just Britain) should respond to the most momentous event since 1945.   That is the biggest financial/economic crash for nearly a century, the slowest recovery since the Great Depression, and the longest run of prolonged austerity (and far from over) since the 1870s.     The City, the corporate business elite and the Tories (and to a lesser degree the Blairites from Blair downwards) regarded this as a glitch from which business-as-usual should return as soon as possible.   They believed the underlying structure was sound, the ideology was right (i.e. de-regulation of finance, unfettered capitalism, glorification of the market, privatisation of all industries and services wherever possible, and suppression of any counter-force and in particular the trade unions), and removal of governments from the action was the best way to promote efficiency and growth.   But not only did they believe it then, they still believe it when the evidence against it is now overwhelming.

The ultra-liberal business model has manifestly failed.   It has led to an intensely fragile global economy, indeed to secular stagnation as Lawrence Summers has rightly termed it, and over six years of grinding austerity have produced neither sustainable growth nor much deficit reduction.  We need some new ideas about the fundamentals, and only Corbyn seems to be offering them.   He opposes further austerity on the grounds that continually contracting the economy is incompatible with lasting growth.   He wants to rebalance the economy by large-scale public investment in industry and services, with the serious goal of full employment, paid for either by mandating the publicly-owned banks to prioritise investment in British manufacturing or by a direct injection of QE funding into industrial investment rather than via the banks or by requiring a fair contribution of the costs from the extremely rich, none of which would require any increase in public borrowing.   Instead of pursuing privatisation and outsourcing which has turned out wildly expensive and wasteful, he would seek to create a new settlement between State and markets where private markets have clearly failed, particularly in sectors like energy, housing, rail, water, pensions and banking, in a manner that optimised the public interest rather than just maximised money-making.   And much more.

Umunna’s partial olive branch

In his speech yesterday Chuka Umunna appeared to be offering from the Blairite faction of the PLP an olive branch of reconciliation.   If this is the correct interpretation, it is a useful and welcome one, although he made it conditional on Jeremy Corbyn showing flexibility on EU, NATO, Trident renewal, and tax (unspecified).   I don’t remember Blair, when he won the leadership in 1994, offering flexibility on policy in order to gain support from potential front-bench members of the PLP, having won.  My memory is that, come 1997 in particular, we were all told to knuckle down and loyalty was the order of the day.   But let that pass.   The key point is that he emphasises solidarity and agrees, what is obviously true, that the vast majority of the hundreds of thousands who have joined Labour in recent weeks are not entryists, but have done so because they are animated by Labour values.

That is helpful, and if Corbyn wins, we should certainly respond in kind, though not by acceding to veiled threats of non-co-operation as though certain persons are  indispensable, though certainly not either with intimations of a purge – even if again that is exactly what Blair and Mandelson organised via consolidating control of parliamentary selections and making huge efforts behind the scenes to replace large numbers of centre and left MPs with preferred Blairite alternatives in the run-ups to general elections.

But Umunna still does not quite get it.   Defending New Labour, he argues that “It is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability”.   He seems not to recognise that New Labour actually did the precise opposite.   It increased inequality, restricted civil liberties, centralised power, and prioritised wealth-creation over sustainability.   He doesn’t seem to grasp that it was for reasons such as these that the country does not want New Labour back.   And that’s quite apart from the Iraq war, paving the way for the almighty crash of 2008-9, the despised culture of spin and manipulation with which Blair poisoned political communciation, and Blair’s rancid love of money-making.

Umunna still can’t get it that this Blairite agenda is really not wanted.   It’s a failed and busted business model which, given Labour’s unprecedented majorities between 1997-2010, was a massive wasted opportunity.   If Corbyn wins and Umunna and his Blairite friends show reliable loyalty to the new leader, then the party can co-operate well.   But nobody is indispensable.

 

Blair is living in a state of deluded denial

There never was a truer example of ‘when you’re in a hole, stop digging’.   His article in the Observer today is a gift to his opponents, but it does even more damage to himself.   He reveals himself as increasingly deserted even his previous closest followers, an utterly broken man watching everything he stood for swept away before his eyes.   He has gone from opposition to delusion, from hysteria to denial.   But what is perhaps most disturbing of all is that he can’t, as he himself candidly admits, understand why the Corbyn earthquake is happening.   He just blankly refuses to acknowledge the passionate resentment which he and New Labour created by laying the foundations for the financial crash of 2008-9 and making the squeezed middle and brutally punished poor pay for it, by taking Britain without any constitutional approval into an illegal was with Iraq, by introducing into politics the hated regime of spin and manipulation , by indulging now his squalid lust for money-making, and by clearly having no more overriding desire than to strut the world with Bush.

He describes his opponents as trapped “in their own hermetically sealed bubble”, when that applies exactly to himself.   If what he says were really true, why has the Labour electorate swelled to over 600,000, 50% larger than he managed even at the height of his pomp when so many were glad to be rid of the Tories on 1st May 1997?   Why is he so unfeeling and unapologetic about aligning the New Labour alongside the Tories in pursuit of austerity from 2010 onwards, especially since Osborne’s policy (to shrink the State) has been so dramatically unsuccessful in reducing the deficit?   Why did he urge the Blairites to support the government’s welfare bill which opposed every tenet of the real Labour Party?   Why did he push for privatisation of the NHS and other public services?   Why did his acolyte Mandelson say “New Labour is “relaxed at people becoming filthy rich”, and proved it by letting inequality balloon to even highe heights than under Thatcher?

So after doing all those things, how does he expect Labour members and the country to treat him?   After a 20-year temp;orary iruption of hi-jacking the party down a route utterly alien to its founders, in order to ingratiate himself with corporate and financial leaders on their terms, how can he imagine that anyone wants him back?   He has a lot to learn, less egoism, more humility.

Packing the Lords has become plaything for patronage & consolidating power of PM

Cameron’s decision to toss another 45 peers, mostly party hacks, into the Lords is really shameful.    The motivation is to remove any obstacles to the swift and easy transmission of government business.   Since the whole purpose of Parliament is to hold the Executive (the government) to account, it is truly scandalous that the leader of the Executive has untrammeled tights to appoint whatever number of new peerages will defeat this purpose.   This is a serious source of corruption at the very heart of government.   I certainly strengthens the case for an independent Parliamentary Ombudsman who could make a formal statement, as presidents do in other European countries, condemning what he/she believes is a constitutional abuse designed to sidestep the proper working of Parliament, as well as giving MPs and indeed members of the public the opportunity to make a formal protest.

There are several other aspects too to this sordid affair.   Of the 45 new peers, 32 are former politicians and 7 used to work in the party machines, making a total of 85%.   Moreover, of the 189 peers created between the two elections of 2010 and 2015, no less than 68 had been elected politicians and 26 had been political staff – that is fully half of the new intake.   The Lords is increasingly becoming a repository for Westminster bubble insiders, including those most recently rejected by electors at the polls just 3 months ago.

It’s also becoming a repository for donors to the Tory party.   Of course it has been accepted ever since the time of Lloyd George, the arch peerage salesman, that the selling of honours was illegal.   But is there much difference between an outright sale and making a large contribution to Tory party funds and then waiting for the Tory party hierarchy to reward such generosity?   It doesn’t always happen of course, but an academic stidy has shown that giving large sums of money does have a remarkably positive effect on the donor’s talents being recognised.

Then there the numbers.   There are now 828 members of the Lords and if MPs are added there is grand total of Westminster legislators of 1,476.   Cameron said before the election that he would cut both the number and cost of parliamentarians.   What he has done in practice is the exact opposite – he has appointed new peers at a faster rate than any PM since life peerages began in 1958, even more than Blair.

Packing the Lords with cronies is a shameless way for the PM to extend his patronage and secure compliance as well as smoothing the way for an uninterrupted legislative programme.   Having lost votes in the Lords over devolution, the EU referendum and EVEL (English votes for English laws), Cameron is determined to stop that happening again.   That he has the idiosyncratic power to do so only exposes how drastic is the need for radical Lords reform.

Parliament should have power to force Duncan Smith to resign over WCA deaths

The report that in just over 2 years up to  February last year no less than 2,380 disabled claimants died within 2 weeks of being assessed as fit for work and then having their benefit either reduced or stopped altogether, is beyond shocking.   It is arguably the most damning statistic yet of the sheer callousness and brutality of this government towards the most helpless victims in our society.   But there are further profound issues behind this dreadful story.   The most important issues are holding to account those who are responsible for this utter tragedy and even more important still, the power to stop this lethal policy in its tracks.   On both there is at present a vacuum.

Iain Duncan Smith by any measure of integrity ought to resign, but he almost certainly won’t.   And Parliament should have the power to trigger an immediate emergency debate, in this case demanding the policy be suspended until there had been a rapid inquiry into the work capability assessment with recommendations (if that is the result) that the policy be stopped or drastically changed, and the government if it lost the vote should be obliged within (say) 3 months to implement the recommendations in full.   Neither of these power currently exists, and it would require an almighty change in the whole process of government accountability for these powers to be granted, or rather forcibly extracted from the Westminster establishment.   A few of us however are laying plans for a Commission on Parliamentary Democracy and Constitutional Reform to bring this about.

There is another ugly side to this story.   Some of us have been demanding these figures for a very long time.   I myself initiated a debate in the House 3 years ago in response to the death of a constituent in just these circumstances.   The DWP refused in answer to PQs to give the figures, almost certainly at the instigation of IDS.   It is highly significant that we only now know the figures as a result of a Freedom of Information request which the DWP rejected, but the Information Commissioner to his credit overruled that block.   The DWP then had the gall to argue that they had always intended to publish the figures anyway!   Moreover the Information Commissioner’s ruling was delivered in April, and still it has taken the DWP 4 months to implement it, no doubt waiting till the dog days of August to release the information to try to ensure its minimum impact.

This is a terrible shameful example, not only of human cruelty to the severely disadvantaged, but of the complete breakdown in morality of the Cameron/Osborne/IDS government.   We now need that Commission on Parliamentary Democracy very badly.