At this time of year a lot of people assess where they want to be in a year's time. I think politically for those of us on the left of politics, what happens in the next year is absolutely crucial to what direction politics takes for a very long time.
The right have dominated for a very long time now, even when we had a Labour government and even though we currently have a Democratic President. This year more than ever we can see how our right wing press is run like a protection racket, blackmailing and bribing our politicians. The day the press all turned on Clegg during the election was the funniest example of Tory bias. Will the people continue to tolerate a 'free press' owned almost entirely by 4 billionaires and headlines that reflect their tax averse priorities. In fact we must remember that even that is incorrect, because these wealthy people living abroad have no problem with high taxes on the lowest earners, as long as they at the top are left alone. So we head inexorably towards a US style tax system where the US median earner pays more than the average Brit yet gets no decent health service or state education system, let alone welfare. Rich people like money spent on defence and law and order, but hate pretty much everything else. They figure they are paying for other people's services - 60% of people get more back than they pay in. But what price a decent safety net even for those doing well?
So, the questions seem to be; how do we get the rich to pay their taxes and how do we reduce inequality? I think the answer for the left, is not just to represent the 99%, but to persuade the 1% that paying taxes is also in their interests. Even if the Occupy movement achieve nothing else, at least they have put inequality back on the agenda.
The big problems as I see it are; an overcomplicated tax and benefit system that annoys all and fails to achieve even the most basic aims of society. There is also talk of 'a culture of greed' both at the top and bottom of society, a media that feeds this selfish attitude and is corrupting and corrupted by the powerful elites in our political and judicial system. Inequality seems only to perpetuate itself unless something dramatic alters course.
So to the Labour party and Ed Miliband. First of all, Ed has to learn some hard lessons from the failure of new Labour to control the media and tame the very rich. Ed has to be prepared to go against what his focus groups tell him. He has to start taking real risks, he has to lead public opinion not just follow it. Because one thing is sure, opinions do change and you need to anticipate this before the media do. Yes, all Labour leaders have a lot harder job than any Tory, because the media will never be their friends and the concentration of media ownership especially with so much local media now in fewer Tory supporting hands is something that Labour have to tackle. That will not win them any friends and somehow it has to be done without Labour facing accusations of censorship or political interference. Here are my suggestions for what it is worth.
1. Vocally support the coalition where their policies lean to the left; so support Ken Clarke in reducing prison numbers, lowering sentencing and even fewer police numbers. Support the abolition of legal aid. Anything that is truly liberal. Not only will this guarantee attention from the media (obviously negative, but you never get positive attention anyway in the long run), it will strengthen the leftist rebels in the government and help schism. It will also show the public in no uncertain means that you will go against public opinion and demonstrate you as a strong liberal. Obviously this is a risk.
2. Defend Gordon Brown where you need to. Explain constantly that you reject in strong terms any indication that the deficit is "labour's fault". State that before the crisis hit Brown borrowed less every year than John Major did and also the obvious fact that the banking crisis has led every country to take on bankers debts and that that is the real reason for the crisis and not spending on essential public services. We still spend less than most of Europe on health and education etc.
3. Back the strikes and back the occupy movement and do it with real conviction. Explain however that you are for the 100% not the 99%. Even the wealthy 1% can benefit from the social cohesion and economic efficiency that reducing inequality will bring. Explain in detail how you are going to radically alter the tax system, how you will tax the 'bad' and exempt the 'good'. So expect tax cuts for R&D, wealth creating income and profit. Taxes that the big guys/companies no longer seem to have to pay anyway. Taxes will focus on 'unearned' speculative income and land values and taxes that cannot be avoided. Also tax will have to become more redistributive, so regressive taxes like VAT and council tax will have to be reduced if not abolished. A 2% land value tax and 0.05% financial transaction tax will raise enough revenue to fund a small citizen's income for all equivalent to dole. This would remove one benefit trap as dole is paid regardless of unemployment. Miliband should also reinforce the view that ALL means testing is bad, much cheaper to have universal benefits that avoid the stigma of testing all. The Tories and Lib Dems will come for bus passes and winter payments first but then what next; the NHS? If they want to make the rich pay more then up their taxes - much easier and more efficient and without putting any stigma or hassle on the poorest.
Anyway, happy xmas and new year to you all. Here's hoping some of this becomes true in 2012, but I'm not holding my breath.
PS. Also just to mention once again that the all 17 countries will remain in the Euro. Reading the media you would think the Euro breaking up is a certainty, but as I have explained before, devaluation is only a short term help and setting interest rates is over-rated as you still have to follow the big countries rates anyway.
PPS. What this government is doing to our electoral system is disgraceful. Not only did we reformers lose the referendum on AV, but the Tories are making the present system more undemocratic by removing 10 million from the registered rolls by making it harder for them to register and removing the legal requirement. So the 2015 boundaries will be bigger, more remote from voters and ignore 3.5m unregistered adults of voting age. In 2020 this will rise to 10m unregistered voters rights removed by enlarging their constituency. The job of MPs in poorer areas with these massive number of adults without a say will be even harder. Won't affect any Tory MPs though as the poor never vote for them anyway.
29 December 2011
12 December 2011
Why The Euro Will Not Collapse.
I didn't explain clearly in the last post why I think the Euro will survive, so here goes.
The Euro is a political project first and an economic one second. This is both a strength and a weakness. It is a weakness because there will always be a reluctance for individual nations to commit financially to the project. So the stability and growth pact was broken - even Germany and France failed to stick to the rules on borrowing, yet alone the 'club med' countries.
There was never a recognition (or large enough central fund to redistribute) that could cope with very different economies, cultures and languages. This was always going to restrict the mobility of labour needed to allow for a single market/currency zone. But it is also a strength because ultimately when it comes to the choice between a united Europe or a fractured one, from Italy to France, Germany to Spain they will choose the former. Germany certainly played a brinkmanship game over funding Greek debt but it had too much to lose by any country leaving.
And that is the crunch, leaving the Euro wouldn't solve any debt problem. Yes they could devalue but the power to set your own interest rates is overstated. Interest rates would still follow the major economies anyway (that is why from the US to EZ to UK rates only vary 0.5%. The costs of leaving the Euro would be astronomical. The markets may wish for a Euro crash, but it just ain't going to happen. Cameron has just bet the UK economy on a Euro collapse. Both him and his Daily Mail, Murdoch Tories are going to be sorely disappointed and every Brit except perhaps a few hedge fund managers are going to suffer as a result.
The Euro is a political project first and an economic one second. This is both a strength and a weakness. It is a weakness because there will always be a reluctance for individual nations to commit financially to the project. So the stability and growth pact was broken - even Germany and France failed to stick to the rules on borrowing, yet alone the 'club med' countries.
There was never a recognition (or large enough central fund to redistribute) that could cope with very different economies, cultures and languages. This was always going to restrict the mobility of labour needed to allow for a single market/currency zone. But it is also a strength because ultimately when it comes to the choice between a united Europe or a fractured one, from Italy to France, Germany to Spain they will choose the former. Germany certainly played a brinkmanship game over funding Greek debt but it had too much to lose by any country leaving.
And that is the crunch, leaving the Euro wouldn't solve any debt problem. Yes they could devalue but the power to set your own interest rates is overstated. Interest rates would still follow the major economies anyway (that is why from the US to EZ to UK rates only vary 0.5%. The costs of leaving the Euro would be astronomical. The markets may wish for a Euro crash, but it just ain't going to happen. Cameron has just bet the UK economy on a Euro collapse. Both him and his Daily Mail, Murdoch Tories are going to be sorely disappointed and every Brit except perhaps a few hedge fund managers are going to suffer as a result.
11 December 2011
The odds that the Euro will collapse are virtually zero.
Even the bookies are giving odds of 3-1 against and we all know they take no risks. The truth is a Tory leader has been here before. Knowing that a European bloc off its coast cannot be ignored but by wishful thinking just hoping it will be a failure and go away. We walked away from the Treaty of Rome. But eventually we realised that of you can't beat them better join them. Only on the inside could we at least shape the direction of this monster devouring our power and influence.
As an anonymous French diplomat said; Cameron is like a guy who wants to attend a wife swapping party but refuses to bring his wife. So the EU is dead, or to be precise now only has one member, the other 26 will form the super EU. Cameron is hoping that his hedge fund buddies are safe, but even in putting these elite few who constitute less than 1% of GDP, he is going to prove disastrous. A financial transaction tax will stabilise markets from their destructive behaviour. When Cameron realised he had no allies he could have set the level very low, rather than the higher level we will eventually have to accept. This whole episode will prove to be very costly for all of us in the UK. Cameron has sold us down the river.
As an anonymous French diplomat said; Cameron is like a guy who wants to attend a wife swapping party but refuses to bring his wife. So the EU is dead, or to be precise now only has one member, the other 26 will form the super EU. Cameron is hoping that his hedge fund buddies are safe, but even in putting these elite few who constitute less than 1% of GDP, he is going to prove disastrous. A financial transaction tax will stabilise markets from their destructive behaviour. When Cameron realised he had no allies he could have set the level very low, rather than the higher level we will eventually have to accept. This whole episode will prove to be very costly for all of us in the UK. Cameron has sold us down the river.
07 December 2011
Labour Will Struggle Unless They Shoot Down Deficit Lie.
It doesn't matter how right Labour are proved about the Coalition's slash and burn approach to the deficit if people believe that the deficit was Labour's fault in the first place. As Cameron and Osborne persist in destroying public services under the guise of responsible deficit reduction, the economy is going into a downward spiral. Reduce demand by sacking hundreds of thousands in the public sector and far from stimulating the private sector, it not surprisingly drags it down. And without growth, the deficit won't go down either. Labour will win the argument that the Tories and their Lib Dem sidekicks have cut too fast and too drastically. Labour might even win the argument that this was an ideological decision. But they will struggle to win support if people believe the deficit was created by Labour in the first place.
It actually wouldn't be that difficult for Labour to argue their case, but strangely they have given up the ghost and allowed the media and government free reign to claim that Labour overspent so therefore we have to tighten our belts. On first inspection this sounds very plausible to most voters, but as soon as we consider some actual facts it quickly looks very absurd.
1. In 2008 when the financial crisis hit, both the Tories and Lib Dems were still claiming they would maintain Labour spending on public services. Strangely this fact has disappeared from the media. If they believe Labour had overspent why would they claim to match their spending?
2. Just before the banking crisis hit, the national debt was actually lower than Labour had inherited off the Tories at around 37%!
3. The financial crisis has hit the entire developed world, even the most die hard Tory would struggle to claim that Labour spending policies in one small country off Europe - i.e. the UK have affected the whole world. So to blame Labour for the crisis just seems wierd.
4. Finally, government debt only ballooned when it had to take on the private sector debt of the banks. You can blame Labour for not regulating enough, but the only voices advocating that were on the left, certainly not from the hedge fund bankrolled Tories.
Imagine if Labour had not increased spending AT ALL on public services in its 13 years in office. Well for a start I don't imagine that would have gone down well with voters who in 1997 were crying out for investment in health, education and the rest. But leaving that aside, the maybe 200 billion Labour might have saved in expenditure, would still only have made a small dent in the trillions of bad debt the banks had racked up by buying up US and other bad debt in casino style deals.
Which ever way you face it, the problem is not that Labour overspent on public services (we still spend less than the EU average). Yet that Labour spent too much on public services is what most people believe, and until that changes, Labour and Miliband are in real trouble. They have to be clear about this and absolutely refute it when the media and Tory led government try to pin the blame on them. It is rubbish and people need to be told.
It actually wouldn't be that difficult for Labour to argue their case, but strangely they have given up the ghost and allowed the media and government free reign to claim that Labour overspent so therefore we have to tighten our belts. On first inspection this sounds very plausible to most voters, but as soon as we consider some actual facts it quickly looks very absurd.
1. In 2008 when the financial crisis hit, both the Tories and Lib Dems were still claiming they would maintain Labour spending on public services. Strangely this fact has disappeared from the media. If they believe Labour had overspent why would they claim to match their spending?
2. Just before the banking crisis hit, the national debt was actually lower than Labour had inherited off the Tories at around 37%!
3. The financial crisis has hit the entire developed world, even the most die hard Tory would struggle to claim that Labour spending policies in one small country off Europe - i.e. the UK have affected the whole world. So to blame Labour for the crisis just seems wierd.
4. Finally, government debt only ballooned when it had to take on the private sector debt of the banks. You can blame Labour for not regulating enough, but the only voices advocating that were on the left, certainly not from the hedge fund bankrolled Tories.
Imagine if Labour had not increased spending AT ALL on public services in its 13 years in office. Well for a start I don't imagine that would have gone down well with voters who in 1997 were crying out for investment in health, education and the rest. But leaving that aside, the maybe 200 billion Labour might have saved in expenditure, would still only have made a small dent in the trillions of bad debt the banks had racked up by buying up US and other bad debt in casino style deals.
Which ever way you face it, the problem is not that Labour overspent on public services (we still spend less than the EU average). Yet that Labour spent too much on public services is what most people believe, and until that changes, Labour and Miliband are in real trouble. They have to be clear about this and absolutely refute it when the media and Tory led government try to pin the blame on them. It is rubbish and people need to be told.
02 December 2011
The Green Budget
The Greens have produced a draft budget for Brighton and Hove. They consulted all the political parties, trade unions and voluntary organisations and over 2000 members of the public. They have done the best they can making very tough choices when faced with an unprecedented 33% grant cut from the Tory/Lib Dem government. The largest cut that any local authority has had to face. The greens have published this budget early and in detail and plan to consult even more before finalising in February. This is unprecedented transparency, see their budget calculator here and see if you could have done better than the Greens.
Because a lot of council expenditure is either ring-fenced, locked into long term contracts with the private sector and because council tax is capped to a maximum 3.5% increase. A lot of in-house front line services had to be cut, there was no getting away from that. As Jason Kitkat of the Greens put it, to refuse to comply with government cuts would have meant Whitehall writing the budget. This is what the Tories and Lib Dems call local democracy! Some Localism. Some freedom.
So the local Tories backed by the Tory Argus have attacked the Greens for cutting services and increasing council tax. Obviously the Tories could have frozen tax and maintained services. Will people really swallow that sort of lie? We will find out on 22 December in Westbourne. As for the Argus - lets have an Argus type survey - "The Argus is a lying Tory rag that has completely misrepresented the Green budget. Bearing this in mind do you a: Think they are lying Tory bastards. or b: Think they are paragons of virtue and I will happily give them my wage packet this week to spend as they wish." Not surprisingly the Argus gets the survey results it wants with this type of questioning. The Greens have produced a myth buster to combat Argus lies.
A lot has been made of the Greens refusing the 1 year grant to freeze council tax, supposedly worth 2.5%. But as the Greens rightly recognised, this 1 year grant coupled with the cap on council tax increases would mean depriving the council of even more revenue next year, as any 3.5% increase next year would be from the lower 2010 base losing the council 8% overall and meaning a massacre of services. Precisely what the Tories want.
The Greens have hit parking (hooray!) but as they point out, it is still cheaper here than Lewes or Eastbourne (boo).
The 3.5% rise is below inflation and is one of the lowest increases in council tax since the formation of the city. So not a big increase at all.
The gall of Labour and Tories claiming they could do better is so depressing it is beyond parody. It is appalling that lying is now the chief political tactic to combat the Greens. I hope this tactic is punished heavily by the people of Brighton and Hove. First up, Westbourne where another Tory can be thrown out and replaced with a Green - vote Green on December 22nd.
Because a lot of council expenditure is either ring-fenced, locked into long term contracts with the private sector and because council tax is capped to a maximum 3.5% increase. A lot of in-house front line services had to be cut, there was no getting away from that. As Jason Kitkat of the Greens put it, to refuse to comply with government cuts would have meant Whitehall writing the budget. This is what the Tories and Lib Dems call local democracy! Some Localism. Some freedom.
So the local Tories backed by the Tory Argus have attacked the Greens for cutting services and increasing council tax. Obviously the Tories could have frozen tax and maintained services. Will people really swallow that sort of lie? We will find out on 22 December in Westbourne. As for the Argus - lets have an Argus type survey - "The Argus is a lying Tory rag that has completely misrepresented the Green budget. Bearing this in mind do you a: Think they are lying Tory bastards. or b: Think they are paragons of virtue and I will happily give them my wage packet this week to spend as they wish." Not surprisingly the Argus gets the survey results it wants with this type of questioning. The Greens have produced a myth buster to combat Argus lies.
A lot has been made of the Greens refusing the 1 year grant to freeze council tax, supposedly worth 2.5%. But as the Greens rightly recognised, this 1 year grant coupled with the cap on council tax increases would mean depriving the council of even more revenue next year, as any 3.5% increase next year would be from the lower 2010 base losing the council 8% overall and meaning a massacre of services. Precisely what the Tories want.
The Greens have hit parking (hooray!) but as they point out, it is still cheaper here than Lewes or Eastbourne (boo).
The 3.5% rise is below inflation and is one of the lowest increases in council tax since the formation of the city. So not a big increase at all.
The gall of Labour and Tories claiming they could do better is so depressing it is beyond parody. It is appalling that lying is now the chief political tactic to combat the Greens. I hope this tactic is punished heavily by the people of Brighton and Hove. First up, Westbourne where another Tory can be thrown out and replaced with a Green - vote Green on December 22nd.
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