Author Archives: Lin

Immigration

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Most of us do not see the brutal parallel universe at the heart of the mainstream economy. But in the Fens, it has been highly visible – along with the transnational organised crime running a part of it. This has made people very angry. Now they want out of Europe – more than two–thirds of voters in Wisbech’s parliamentary constituency said in a 2014 survey that they would favour the UK leaving the EU.

The scene that plays out at the BP garage each day is not simply about migration or the human cost of cheap goods or isolated rogue operators. It is the manifestation of a profound social and economic change that has been enacted in little more than two decades.

From the late 1980s on, new technology allowed employers to eliminate much of the financial risk from their end of the chain. Supermarkets, for example, only reorder stock when a customer buys an item and its barcode is scanned, generating an instruction to their suppliers to replace it by the next day. Orders can double or halve within 24 hours, so workers to process and pack the goods are called in at short notice. This reduces costs and increases profits, since businesses no longer have to keep inventory or pay for full employment. Instead they have outsourced labour provision to agents or gangmasters. Agriculture and food processing pioneered this lean approach to business, but its zero-hours practices have spread to other sectors – to care homes, catering and food service, hotel work, cleaning, construction, and personal services such as nail bars and car washes. …

Blaming immigration rather than the forces that drive it, local people have turned to politicians who promise to curb it. In 2013, Ukip won all four Wisbech seats in the county council elections. There have been tense anti-immigration protests in the town. Both communities felt under attack – eastern Europeans remember how a gang of local teenagers beat up two members of their community in 2006. English residents I met were quick to say that they no longer felt safe or at home in their own town. …

Liberalising trade rules and financial flows has enabled the free movement of goods and capital across Europe – and, with them, people. But while World Trade Organisation rules prescribe global hygiene standards in minute detail, they are largely silent on the social and labour conditions in which the goods are produced.

A complex web of small rules widely obeyed – from paying your tax to insuring your car, to giving workers proper breaks – are the threads that weave a democratic social contract and a protective state. Many people in Wisbech have become more rightwing, in protest at what they see. The collapse of totalitarian structures of state control in former-Soviet eastern Europe has combined with a shrinking of state in the west. This shrinking of the state has created the vacuum into which organised crime has rushed.

The gangsters on England’s doorstep
http://www.theguardian.com/uk-news/2016/may/11/gangsters-on-our-doorstep

 

 

 

 

A new politics for Labour?

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On one level, new narratives around the economy, social security and immigration are really welcome. However, critically, little advance has been made on democracy and pluralism – or a strategy to fundamentally transform how politics is done, who by and with whom. The UK is made up of myriad communities, with differing levels of power, and a new politics is one in which every voice is heard. The whole Corbyn wave was a demand for a new politics – more networked, plural and bottom up. Instead tribalism, factionalism and parliamentarianism still dictate Labour’s Westminster mood. John McDonnell’s call at the weekend for Labour to back Proportional Representation is vital, but that still demands the Tories are defeated. The Labour Party can aim for a majority, but the reality is that it will have to talk to the Lib Dems about seats in the South West; do a deal with the Greens in Brighton to ensure Green votes go to Labour elsewhere; in Wales work with Plaid Cymru to see off UKIP and in Scotland talk to the SNP about federalism – especially now the rejuvenated Tories could pick up parliamentary seats in 2020. Labour has promised an all party Constitutional Convention and now need to deliver it. Worryingly, there have been no announced plans or process to reform the Labour Party itself and bring it into the 21st century. Will this be enough to hold on to those new members who expect a new politics?
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Helicopter money – Inflation – Deflation

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The only powerful argument against helicopter drops is the one that Heise and Hamada stress – the political risk of overuse. If monetary finance is no longer prohibited, politicians might use it to curry favor with political constituencies or to over-stimulate the economy ahead of an election. Hamada oddly suggests that proponents of monetary finance ignore this risk; but in my own IMF paper, and in Bernanke’s recent blog post, it is a central concern.

History provides many examples of excessive monetary finance, from Weimar Germany to the many emerging economies where governments have pressured central banks to finance large fiscal deficits, with high inflation the inevitable result. So a valid argument can be made that the dangers of excessive monetary finance are so great that it should be prohibited entirely, even if in some circumstances it would be the best policy.

But a valid argument is not necessarily a convincing one. After all, other policies to support demand growth, or a failure to implement any policy, can be equally dangerous. It was deflation, not hyperinflation, that destroyed the Weimar Republic. Hitler’s electoral breakthrough of 1932 was achieved amid rapidly falling prices.

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“Modern corruption has a white face”

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But it is peanuts compared to the much bigger sums that are raked in by the lawyers, accountants and other silky advisers who base themselves in the City of London and use Britain’s network of crown dependencies and overseas territories in Jersey, Guernsey, the Caymans and the British Virgin Islands.

Until the UK stops encouraging, advising and facilitating guilty men and women looking to stow their shady cash offshore, corruption will continue to flourish.

Modern corruption is a suit in a Panamanian office, who takes that general’s billions and sends it on to a private bank account, no impertinent questions asked along the way. It is the Mayfair estate agent who sells that multimillion-pound townhouse to an oligarch. It is that accountancy firm in the City that fills out the paperwork structuring the rich man’s affairs so that the money goes through one of their far-flung branch offices to wind up in a trust in the tax-free zones of the Caymans or the British Virgin Islands.
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Thoughts on the Local Elections 2016

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“When it comes to assessing Labour’s electoral fortunes, Corbyn is treated with all the due process of a 17th-century woman accused of witchcraft and dunked in a river. If she drowns she’s innocent; if she floats she’s guilty and condemned as a witch. Either way the verdict is never in her favour,” wrote Gary Younge.

localelection2016

It was widely predicted before the election that Labour would lose 150 plus seats in the local elections in the England, according to the polls at the time; some even went as far as 300 seats. In the end, the Labour not only lose far fewer seats – one quarter less than the Conservatives – but also hold on to the same number of councils. Labour did not just hold to key councils, such as Southampton, Harlow, Crawley, Worcester, Redditch, Derby, Hastings, Cannock Chase, Carlisle and Nuneaton where the local MPs are conservatives, but actually increased its share of the vote in the majority of them. It is true that Labour failed to gain seats in contrast to what happened in the 2012 local election under Ed Miliband, but it is more to do with Ukip. Ukip was a much less significant force in 2012; this time their performance was strong while the Conservatives were lacklustre. People did protested against the Conservative government’s incompetent rule and its austerity but not all the votes went to Labour.
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Beltwayland: The heartland of the military-industrial complex class

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For them, a two-front war and Washington’s newly enlarged national-security state, much of which is hidden in plain sight, have ushered in a 21st-century gilded age only replicated in America’s few, most privileged enclaves. As Lofgren explains:

It is common knowledge that Wall Street and its inflated compensation packages have remade Manhattan into an exclusive playground for the rich, just as tech moguls have made San Francisco unaffordable for the middle class. It is less well known that the estimated $4 trillion spent since 9/11 on the war on terrorism and billions spent on political campaigns ($6 billion on the 2012 elections alone) have trickled down so extravagantly to the New Class settled around Washington’s Beltway that they have remade the landscape of our capital.

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Bitcoins energy waste

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Another hard thing to ignore is the amount of energy used by miners. As bitcoin has got more popular – not civilian-popular, but nerd-popular and cutting-edge-capitalist-popular – the mining process has had more and more computer power thrown at it. The process is wasteful, since most of the mining, most of the time, is by definition unsuccessful, because only one miner wins the race. As Vigna and Casey point out in Cryptocurrency, by the middle of 2014, the bitcoin network, which

was then producing 88,000 trillion hashes every second, had a computing power six thousand times the combined power of the world’s top five hundred supercomputers … And just two and a half months later, it had almost trebled to 252,000 trillion hashes. The world has seen nothing like this level of computational expansion. That’s why some doomsayers are predicting that if bitcoin continues on its present path, the planet faces an environmental catastrophe. Continue reading →

Arms sale for ‘peace’

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The chairman of BAE Systems has claimed his company’s weapons sales encourage peace, as he responded to questions from peace activists who infiltrated the arms maker’s shareholder meeting.

Sir Roger Carr was forced on the defensive by a salvo of questions probing BAE’s dealings with Saudi Arabia, which is currently at war in Yemen. According to a UN panel, Saudi forces have conducted “widespread and systematic” attacks on civilian targets. Continue reading →

The great PFI swindle

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In 2011, the independent researchers Jim and Margaret Cuthbert showed the
scale of the returns to investors when they analysed three hospital contracts
for Hereford Hospital, the Edinburgh Royal Infirmary, and Hairmyres in East
Kilbride.2 Shareholders are predicted to make truly astronomical gains. Equity
of just £100 invested in rebuilding Hairmyres Hospital is projected to
earn £89 million in dividends over 30 years, while half a million pounds of
equity in the new Edinburgh Royal Infirmary is expected to win dividends
of £168m and a £1,000 equity in Hereford will yield £555.7m. These high
rewards are contractually protected and underwritten by government. The
Cuthberts’ analysis of internal financial projections for six PFI schemes show
investors are expecting to recoup 12 times more than they invested. The UK
Government has ignored these findings and there has been no major enquiry.

Using investors’ own projections, the Cuthberts calculated how much profit
was predicted from the six schemes and found that £42m of “subordinate debt”
invested by the companies building the six schemes was predicted to yield £517m. The profits on the £717,297 put in as equity by shareholders were projected to reach £350m.

Click to access TJF_2015_11-1.pdf

Click to access c_invest-JimandMargaretCuthbertsubmission1.pdf

 

Tax Justice Focus – The Corruption Issue

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As Guest Editor David Whyte (How Corrupt is Britain?) comments in his editorial:

“We are overwhelmed by the scale, frequency and variety of corruption cases in Britain, from police manipulation of evidence, to over-charging in out-sourced public contracts, by way of cash-for-access scandals involving prominent politicians and price fixing, market manipulation and fraud in key sectors of the economy.”

TJN has long held the view that Britain is at the forefront of the global supply side of corruption.  Ten years ago TJN’s director John Christensen slammed the Transparency International Corruption Perceptions Index for corrupting perceptions of corruption, arguing that:

“The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and licit economies.”

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The Arms Trade Treaty won’t stop controversial arms deals

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The Arms Trade Treaty won’t mean an immediate end to controversial arms deals like Canada’s $15 billion sale of light armoured vehicles to Saudi Arabia, says the United Nations disarmament chief.

Kim Won-soo, the UN’s High Representative on Disarmament Affairs, offered that assessment in an exclusive interview with The Canadian Press following his Monday meeting with Foreign Affairs Minister Stephane Dion. Continue reading →

Anti-China TPP rhetoric is wrong

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“As we speak, China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk.”

Actually this is not the way the economy works. If China reduces trade barriers with other countries in Asia, allowing the region to grow more rapidly, then it should also make the United States more prosperous. The region would be a bigger source of demand for U.S. exports and a more efficient provider of goods and services to the United States. That was exactly the logic of the Marshall Plan that helped to rebuild West Europe after World War II. Greater economic integration in the region, even if engineered in part by China, is something that the United States should applaud, not fear. Continue reading →

What is Neoliberalism?

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I know what I mean when I (occasionally) use the term neoliberal. Neoliberalism is a political movement or ideology that hates ‘big’ government, dislikes any form of market interference by the state, favours business interests and opposes organised labour. The obvious response to this is why ‘neo’. In the European tradition we could perhaps define that collection as being the beliefs of a (market) liberal (although that would be misleading for reasons I give below). The main problem here is that in US discourse in particular the word ‘liberal’ has a very different meaning. As Corey Robin writes, neoliberals

would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.” Continue reading →

The conservatives

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What most interested Nixon strategists, who were looking for ways to win by recovering the American center, was the idea that the electorate could be viewed along what Free and Cantril labelled the “ideological spectrum” and the “operational spectrum.” The voices of strongly ideological conservatives had been heard for decades, expressing antipathy toward modern times in general and to what were seen as the “encroachments” of the welfare state. At the same time, they wanted to keep in place encroachments like Social Security and Medicare. Operational conservatives, though, had moved from simple hostility and suspicion to a wish to abolish such popular programs. Yet a “startling fact” emerged: four of ten of those who qualified as conservatives on the ideological spectrum counted as liberal on the operational spectrum. That pointed to a big problem with the Goldwater campaign, where the operational conservatives were in charge.
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