A couple of days ago, I listened with interest to the latest twist in the Labour Party Leadership Election saga - that the election should be postponed because too many people were joining the party and there were doubts about their intentions. What a great story or, more accurately, what a great spin. And it only serves to illustrate the fears that the Labour Party harbours about Labour's electability, should Corbyn become leader. But, at the same time, this illustrates the challenges facing any politician who espouses 'social' values.
In this context, its important to make the distinction between 'social' values and policies and 'socialist' values and policies. Socialist policies lie rooted in the 1960's and 1970's where labour was locked in an idealogical struggle with the representatives of capital and, in that struggle, neither faction truly benefited and everyone lost, particularly the broad swathe of the population who had to endure the three day week and the Morris Marina, both products of the struggle.
Today it's reasonable to suggest that wider society is better off (setting to one side the disparity in wealth between the haves and the have nots) and, as a consequence, society should be better able to invest in social policies, such as those espoused by Corbyn. But the political right are fearful of concepts such as 'social responsibility' and will do anything to denigrate anyone who promotes such values and herein lies the threat to Piers Corbyn.
Corbyn isn't a wide-eyed Trot but the right (including Yvette Cooper, Liz Kendall and Andy Burnham) would want you to believe that he is. The right suggests that Corbyn seeks a return to the confrontation of the 1960s and 70s and they need to represent him that way in order to move attention away from his 'social' policies.
If nothing else, Corbyn represents a return to dialogue and discourse, something that has been sadly lacking from the British political scene for the past three decades. The dominant political view since Thatcher is that unshackled free market capitalism underpins everything. Corbyn questions that wisdom, and rightly so, particularly in light of the financial crash of 2008. In that regard, Corbyn observes that nationalisation was the only thing that saved the banking sector from total collapse so maybe selective nationalisation might not be such a bad thing after all.
Privitisation hasn't been the roaring success that some might wish to suggest. 30 years after it was privatised, BT still owns much of the telephone infrastructure in the UK. Yes, there are other service providers (Vodafone, Orange, 3, EE, etc etc) but they all sit on top of BT's infrastructure. The same goes for the rail network and, most interestingly, for London's municipal administration. St. Margaret so loathed the Greater London Authority that she dismantled it, only for it to reappear in much the same form under the Mayor's office.
Speaking personally, I hope that Corbyn gets the chance to have an intelligent debate about the nature of our society, with particular attention to investment in our social fabric. The profit motive appeals to the basest of instincts and diverts capital away from investment and, yes, Corbyn will question the profit motive and scare the hell out of the City but maybe that is a good thing. Maybe our society, including industry and investment, would be better off were we to recognise that some infrastructure needs to be owned and run by us, for our own good. Maybe there is still a place for public health, public transport, public housing and public education and maybe Corbyn will remind us of that.
16 July 2015
'I blame Margaret Thatcher' is a favourite phrase of mine, used regularly for comic effect but with a vein of belief running through it. But I can't blame Margaret Thatcher for the fiscal rape of Greece, responsibility for that lies with the various EU leaders and lenders who are going to make the Greek nation pay for the mistakes of others.
Alexis Tsipras seems to me to be a principled leader with social, rather than socialist, values and, having been beaten into submission by the Eurozone bankers, he did make one significant statement. Tsipras claimed, and time will tell if this is true, that he had saved Greece from a 'sell off' of public assets and here is the link with the 'Spirit of Thatcher' which itself is rooted in the ideas expressed by Adam Smith.
At the start of the Industrial Revolution, Smith gathered together and organised a mercantile view of societies, a view which today is expressed by 'deregulated and unfettered free-market capitalism'. At root, Smith suggested that, to realise its true 'value' (in an entirely mercantile sense) everything should be owned by an individual, rather than a communal, entity. For example, 'common land' could not be exploited to its fullest (mercantile) potential until it was delivered into some form of individual ownership. Smith's proposal was that the 'inertia' caused by communal ownership i.e. many entities having a say, restricted the mercantile exploitation of any commodity. And, as we can see today, he was absolutely right. Couple Smith's core proposition with Thatcher's view that 'there is no such thing as society' and you have a complete absence of 'social responsibility' because 'collective responsibility' has disappeared, along with 'collective ownership'.
When your read a poisonous rag like the 'Daily Mail' you would think that the Greek people are a feckless, lazy, stupid, irresponsible nation but that view is far from the truth. The reality is that Greece has a long and illustrious history which has had a huge impact on social and cultural development throughout western societies. But what we see today, a debt laden society struggling to survive, is much more a creation of fiscal vested interests who were only too willing to lend far too much money to Greece when the 'good times were rolling'. And then, when confidence in 'the good times' finally ebbed and the reality of the global 'sub-prime' stupidity dawned on everyone, the reality that Greece could never repay the money it had been loaned finally became apparent. And, as is usual, the lenders are never responsible, only the borrowers, and the lenders send in the debt collectors who grab any assets they can lay their hands on, which brings me back to Tsipras' comment about avoiding a sell-off of public assets.
In the aftermath of the Eurozone's crass lending, now we have an attempted asset-stripping of the debtor nation. Grab anything that is in public ownership and sell it off, in the style of 'fire sales', to get anything you can for it and, usually, far, far less than it is worth. And through this cycle of irresponsible lending and resultant debt, do you realise Adam Smith's view of a world where everything is owned by some individual entity and through this, people and nations no longer think collectively in any socially responsible manner. The devil will, indeed, take the hindmost.
Posted by niall connolly at 10:18
13 July 2015
For the last few weeks we've been presented with the spectacle of the Eurozone leadership beating the shit out of the Greeks. Its just a shame that the selfsame institutions didn't act so tough back in 2007/8. At that time, the banking and financial institutions around the world were about to go down the dumper, all because they had put their own interests before those of the wider global economy. Venality and greed ruled the day and when it all went belly up, what happened? Taxpayers around the world stepped in and bailed them out. Not only that, the people who led the global economy into the mess walked away, usually with millions of £/$'s.
Just to remind you, have a look at the news headlines from the USA in September of 2008 and a review of the UK situation at the same time.
So I watch the cavortings around the Greek crisis and am breath-taken at the hypocrisy of the Eurozone leadership. Obviously its way, way easier to kick the shit out of Greece than it is to jail the idiots, many from the Eurozone itself, who handed Greece the money, with assistance from Goldman Sachs and probably many others.
Posted by niall connolly at 08:15
12 July 2015
As the Greece 'debt crisis' slowly unravels another story caught my eye and I have to admit I wasn't surprised by its contents. But, before I explain, let me repeat an old joke about accountants which goes:
A business wants to borrow money and the bank wants to make sure that the lending is secure so asks to see a summary of the business's accounts. The owner of the business goes to see his accountant and asks 'How do the accounts look?' to which the accountant answers, 'How do you want them to look?'.
So, back to Greece and a story in the Independent about Goldman Sachs (who else?) who reportedly made hundreds of millions of $ whilst advising Greece on their entry into the single currency. It seems that Goldman Sachs may have hidden the truth about the Greek economy behind a wall of complex deals allowing the Greeks to enter the single currency which, in turn, allowed Greece to borrow more.
Now, there are two sides to this story, if it proves to be true. On the one hand, Goldman Sachs may have lashed up some sort of story for Greece (which I am sure they will argue was completely within the rules) but the bigwigs in Brussels and the European Central Bank should also have done their due diligence and spotted the story-telling, but they didn't.
So who is the real author of the present shit-storm? I'd suggest that its the banking institutions and advisors who all make humungous amounts of money without any accountability. Sure, we all need to live within our means but the institutions need to play their part and regulate for stability. Instead of which, as before, making money in the short term trumps longer term stability. Greed and venality again.
Posted by niall connolly at 10:00
29 June 2015
I'm not a financial expert but I have always understood that declaring 'bankruptcy' was a mechanism which allowed a failed mercantile entity (let's call it Widgets Plc) to negotiate its way out of insurmountable debt. I believe that it works something like this: Widgets Plc trades in its marketplace and either takes on too much borrowing or trading conditions change - either way, Widgets finds itself unable to pay its bills. At that point one, some or all of the creditors (people or businesses who have traded with or lent money to Widgets Plc) move in and force Widgets into bankruptcy in order to realise some asset value in order to settle debt. Alternatively, the bankruptcy process can force Widgets into a restructuring which usually involves cost cutting, redundancies and refocussing of business activity. This second route is intended to allow some part of the reconstructed Widgets to continue to trade, but profitably, in order to pay off some or all of the debt at some future point.
But key to forcing bankruptcy is timing - lenders or trading partners need to act responsibly and before debt has reached a point where Widgets is guaranteed to collapse completely. In many cases, this doesn't happen and, when bankruptcy is declared, the assets realise far less than the debt meaning that, in the most extreme cases, creditors get only a fraction of what they are owed. Seen this way, bankruptcy can be seen either as a punishment for poor business methods or, on the other hand, as punishment for poor or inappropriate lending.
So, why does this subject interest me right now? The simple answer is 'Greece'.
From where I sit, Greece is a victim of both excessive lending and borrowing. Everything was fine until the global financial crisis of 2007/8 which was caused, not by the Labour Party (as David Cameron and the Tories would have you believe) but by the irresponsible lending practices of banks and banking institutions around the world. When the party stopped, everyone had a hangover and recovery has been both painful and slow. For those economies with something to sell or trade, recovery has been possible. Not so for those weaker economies, like Greece, who were lent money without thought or consideration of their ability to repay.
And now Greece wants to declare bankruptcy which, in advanced economies is a way of restructuring debt but, in this situation, bankruptcy will crystallise the level of debt and it may be that some of the lenders will not be able to survive the losses.
I don't know enough to predict an outcome but, if the Greek people are forced to endure more 'austerity' I can easily see a rise in Greek nationalism where wider European institutions and countries are blamed for the pain. And the Islamic State will look to exploit such an opportunity.
All because the banks can never be blamed for their own mistakes.
Posted by niall connolly at 09:14
1 June 2015
The ongoing saga of FIFA corruption has made me see Sep Blatter's position in rather a different light. FIFA's conduct has been gathering bad reviews for some years, as James Lawton's piece in the Independent from 2011 shows but I am quite sure that, if he's been smart, any investigation of Sepp will come up empty. The reason for that is that Sepp isn't in place in order to line his own pockets but in order to allow others to line theirs.
Have a look at other global sports, like cycling or motor racing or tennis, and you will quickly appreciate that the sport itself is just a front for the extraordinary amounts of money to be made in the background. And, to varying degrees, the people at the top of these sports are in place to make sure that the revenue stream isn't interrupted. That is the real story behind Sepp Blatter. Sepp is there not to put his own snout in the trough but in order that others can do so and the sport itself is just a vehicle to that end.
In motorsport, Bernie Ecclestone (not a man to be tangled with) has positioned himself rather better than Sepp in that Bernie and his close corporate associates are the gatekeepers to that particular global gravy train. They have first dibs on the money and its up to lesser mortals to grab the crumbs that fall from Bernie's table but those crumbs are pretty eye-watering and well worth grabbing. But Bernie isn't free from taint as his political donations and, more recently, trial in Germany showed.
Cycling was much the same before the Lance Armstrong catastrophe and the organising body of cycling was complicit in Armstrong's activities. The International Cycling Union, headed by Armstrong apologist Pat McQuaid, shut down its own investigation into Armstrong's activities. Why? Because no-one wanted to derail the gravy train through bad publicity. Again, its all about the money.
The problem, of course, is that greed and venality are powerful motivators, particularly when morality no longer plays any effective part in restraining the worst traits in human nature. Will Hutton writes about Blatter/FIFA in these terms and underscores the challenge that anyone or any corporation faces when attempting to address the issues.
And, in this discussion, I shouldn't forget our politicians because, the reality is that politics, like sport, is all about the money and, whoever is 'at the top', they are only there to make sure that the gravy train doesn't stop. If anyone in sport suggested de-regulation (i.e. getting rid of the rules) there would be an outcry but in politics, deregulation (as instigated by Thatcher/Regan) has become the dominating mantra. Cameron and Farage parrot this line when they attack Brussels (always under the guise of a perverted nationalistic self-interest). But underlying this is a determination to get rid of as many rules as possible in order that as much money can be made as possible without fear of retribution.
The trick, as with all such similar situations, is too make sure that the greed and venality doesn't become too obvious or too offensive because, as with Lance Armstrong, eventually some people find the courage to stand up and object. It may be that Sepp Blatter forgot to keep a lid on things and he might pay the price but be assured that any disruption in the revenue stream will only be temporary - there's just too much money to be made…………..
Posted by niall connolly at 11:00
30 May 2015
Globally, I hear people breathing a sigh of relief at the news that Ross Ulbricht has been sentenced to life in prison without parole. At last we can sleep peacefully in our beds knowing that Ross isn't going to be coming round to our place any time soon, if ever. But I also hear people asking, 'Who the hell is Ross Ulbricht?'.
Ross, if you didn't know, and I suspect that most didn't, is alleged to have run a 'dark web' (gasp!) site called 'Silk Road' where people bought and sold illegal drugs (gasp!). Not only that but he is alleged to have made £11M doing it (horror!). The authorities also claim that (shock!) six people may have died as a result of using drugs bought via 'Silk Road'.
Now I'm not defending Ross but I do find it odd that he should receive such harsh treatment when, for example, more than 6,000 people were killed in the USA in 2010 by handguns. The firearms industry in the USA suggests that they aren't responsible because they only make the guns, they don't use them and it is possible that Ross could have be protected by a similar defence.
Bringing the issue a little closer to home, I don't know anyone who bought cocaine via 'Silk Road' but I do know many, many people who were and are affected by the financial crash of 2007/8. And the story of the crash is shot through with criminality, fraud, deception, corruption and conspiracy, all laced with a good dollop of greed and venality. In comparison to the financial crash and the subsequent bailouts, Ross's wrong-doing pales into insignificance yet Ross is going to be banged up for the rest of his life and the bankers walk away with golden goodbyes.
What does this say about our society? It says, quite simply, that the wrongdoing of outsiders will always be punished where the wrongdoing of insiders will go unpunished.
Posted by niall connolly at 10:36