Monthly Archives: March 2014

Ukrainian Hypocrisy

Whatever the rights or wrongs of recent protests and military intervention in Ukraine and The Crimea, one thing that is becoming clear is that Western Financial Institutions have been heavily involved with all sides from the start – supporting corruption, raking in money, and pursuing profit for themselves with no care for either the lives of ordinary people, or the dangerously de-stabilising effects on the region.

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Yanukovych: As corrupt as they come, but couldn’t have done it without Western help.
Picture © premier.gov.ru

Ostensibly the main reason for the overthrow of Yanukovych was his massive corruption and theft of billions of dollars from the Ukrainian state ($70bn is estimated to have gone missing over the last 3 years, leaving Ukraine virtually bankrupt). These allegations were borne out by subsequent investigations, with even Putin stating that Yanukovych’s corruption was unacceptable. Western governments of course condemned Yanukovych, supported his overthrow, and consequently put themselves on a collision course with Putin’s Russia. However the hypocrisy of this is that it was Western Financial Institutions who facilitated Yanukovych’s corruption in the first place. For example it now transpires that his mansion, so shocking to ordinary Ukrainian people in its grandeur, was in fact one third owned by a UK shell company (ie a company whose true owners remain anonymous) and two thirds owned by an Austrian Bank (again the beneficial ownership being unknown). Further investigations of the paper trail of Ukraine’s missing billions leads to financial operations in various notorious tax havens including the British Virgin Islands, the Dutch Antilles, Liechtenstein, Panama, Austria, and of course, and not surprisingly, the City of London.*

So on the one hand we condemn Ukrainian corruption, while on the other hand it is our own Financial Institutions who facilitate and benefit from it. (This is a story being played out the world over, with every corrupt tyrant knowing their stolen money is safe with us.)

Now the world teeters on the brink of a cold war, or even a shooting war, while the financiers are still pulling all the strings and making sure they benefit no matter who wins. Recent discussions on sanctions against Russia were shown in their true light, when an official was filmed going into a government meeting with a document saying that no measures should be taken which would ‘close London’s Financial Centre to Russians.’ With over 50% of Tory party funding coming from the City of London it’s clear who’s setting policy here.

Yanukovych was bad, Putin’s Russia is corrupt and violent, but as long as our leaders continue to play a double-game, putting their own financial ambitions ahead of everything else, nothing will change, the world will remain dangerous, and it is ordinary people, in all countries, who will continue to pay the price.

* http://www.independent.co.uk/news/uk/crime/exclusive-ukrainian-assets-owned-or-used-by-ousted-president-viktor-yanukovych-hidden-behind-trail-of-firms-with-links-to-uk-9161504.html

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Divide and Rule

STOP PRESS 20/10/14: This week the Social Integration Commission reported that our society is becoming ever-more divided between the rich and the poor. It said this trend was leading to more gated communities, higher crime, and racial ghettos; and that although this situation should never be allowed to occur, it was happening because successive governments were ignoring the problems of poverty and increasing inequality. http://www.mirror.co.uk/news/uk-news/rising-crime-racial-ghettos-price-4466671 Already in some appartment blocks in London there are separate entrances for the rich and the poor. http://www.dailymail.co.uk/news/article-2714809/The-poor-door-Block-flats-separate-entrances-property-owners-housing-association-tenant-neighbours.html

STOP PRESS 2/10/14: At the Tory Party Conference this week it has been announced there will be pension changes which will enable the very wealthy to pass on even more of their inheritance to their children, and tax cuts which will disproportionately benefit the well-off: all of which will be funded by a freeze on benefits and continuing Austerity. The Tories are cynically continuing to bribe their so-called ‘core’ voters, with no concern for the hardship they will cause to everyone else.

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George Osborne: A good budget – if you’re already well-off. Picture © M. Holland

This week’s budget has laid the ground for where our political parties, and indeed our society, is headed over the next few years. The budget was actually very well put-together, if the objective of the Tory Party is simply to secure enough votes to get itself elected again, and not to create a better society for us all.

In our current – deeply flawed – political system, all a party needs to do to get a majority in parliament, and so form a government, is secure about 37% of the vote. There are two ways they can do this – either produce a manifesto which they believe is good for the country as a whole, and hope that 37% of the people agree with them; or produce a manifesto that specifically benefits around 35-40% of the population, and let the rest go hang. Guess which option the Tories are going for? As the party of the well-off they  have produced policies which benefit wealthy pensioners (scrapping annuities); people with lots of spare cash (making ISA’s more attractive); and of course the usual round of tax breaks for businesses. At the other end of society – people whose votes they don’t care about – they’re pushing ahead with benefits caps and of course the whole agenda of Austerity.

Free-market Capitalism inevitably leads to ever greater inequality and consequently an ever more divided society. Therefore as time goes on any political party which supports this economic system, will have to decide which part of our divided society it caters for (as it becomes impossible to produce policies which benefit everyone), and ignore the needs of everyone else. The Tories are inevitably targeting the wealthiest end of society. Some people might say they have always done this but that’s actually not true – Margaret Thatcher for example secured her massive majorities on a wave of Tory working class votes (something unlikely to be repeated now). Some people may look to the Labour Party for answers, but unfortunately, despite making favourable noises occasionally on things like energy prices, fundamentally they support  our current economic system, and therefore nothing will really change with them either (in fact they actually agree with the Tories on most economic policies anyway, and also don’t forget that people voted for Blair as a replacement for the Tories last time and look where that led!) The fact is nothing is going to get any better until we change our entire democratic and economic system, and that’s not going to happen with any of the main political parties or current batch of politicians. We need change, and only an upswelling of popular discontent will bring it.

For more on the inherent problems of the free-market capitalist system click here. And for more on how we might be able to start changing things for the better click here.

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A Tidal Wave of Inequality

Figures out this week show just how divided our society is becoming, a trend which is ever more extreme and shocking. It was revealed yesterday – by Oxfam* – that the 5 richest families in the country have as much wealth between them as the poorest 20% (12.6m people). This came hot on the heels of a report in January – also by Oxfam – that the 85 richest people in the world have as much wealth as the poorest 50% (that’s the poorest 3.5 billion people). It’s actually difficult to comprehend such vast figures, though they clearly show just how very wrong our society has become.

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Land near Buckingham Palace forms a large part of the Grosvenor Family Wealth. Photo by DAVID ILIFF. License: CC-BY-SA 3.0

There are many different reasons for such vast wealth accumulating in the hands of a few: inherited land wealth (The Duke of Westminster’s family and the Cadogan family); buying up natural resources (the Reuben Brothers); or just being successful businessmen (the Hindujas and Mike Ashley’s family) but one thing is certain – in our current system of ‘free market’ capitalism and light-touch government regulation, such vast treasures of wealth will never filter down to the population at large, as the wealthy will continue to use all means at their disposal to keep it to themselves. That means a mixture of employing lawyers to exploit legal loopholes, using every tax-avoidance measure they can think of, using off-shore tax havens to stash their cash away and out of the sight, and using a mixture of lobbying and party-funding to ‘buy’ favourable regulation from their friends in government. While they do that the rest of the population continue to suffer Austerity and poverty, which has now got so bad that, for the first time ever, more working households are living in poverty than workless ones.

Any right-thinking person knows what’s going on is wrong, but not everyone realizes just how corrupt is the system which sustains it. All our main political parties are in on this, and until we get rid of them nothing, sadly, is going to change. For some ideas of how we can instigate change click here.

* http://www.theguardian.com/business/2014/mar/17/oxfam-report-scale-britain-growing-financial-inequality

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A Sick Society

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Nurses: Not as valuable to society as bankers apparently. Picture © goodcatmum

So today it has been announced that because of continued ‘Austerity’, public sector workers will this year only get a 1% pay-rise – a cut in real terms with inflation at 2% – and because of particular financial problems at the NHS, 600,000 nurses and other essential NHS staff will not even be given that.* It’s funny isn’t it, how the government places little value on essential public services, and does its best to run them down, while at the same time, and in thrall to the City of London, George Osbourne fights tooth-and-nail to oppose EU legislation that may curtail bankers’ bonuses. So bankers are more valuable to this country than nurses? Really? Never mind they only make money for themselves, and never mind they were the cause of this huge financial mess in the first place (necessitating a tax-payer funded bailout that’s cost this country £1.3tr – that would have paid for a lot of nurses!)

No, with more than half its funding coming from the City of London, the Tory Party’s allegiances lie with the bankers; while being idealogically opposed to public services, they are doing everything they can to run down the NHS and convince us it’s no longer financially viable. However the NHS is only in financial difficulties because the Tories made it that way, due to the creation of Trusts and the insanity of PFI financing*. Vast amounts of cash are also getting lost in the privatisation of NHS services (often going to companies that are providing financial support for the Tories), while it’s also worth noting that due to the belief in ‘free-market’ economics, yet more NHS money gets wasted paying the salaries of ‘fat-cat’ administrators, with no fewer than 2,400 of them earning more than the Prime Minister!

The fabric of our society is being destroyed while we watch, and unless we can get  ourselves a government not corrupted by the power of money it can only get worse.

For more on how Party Funding is corrupting the political process, including NHS policy, click here.

* References:

NHS Pay: http://www.mirror.co.uk/news/uk-news/nhs-refused-paltry-1-pay-3239888

The Insanity of NHS Financing: http://radicalsoapbox.com/hospitals-in-intensive-care/

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Fat Cats Return

As the government claims the economy is heading into a recovery, it seems the fat cats at the top of the heap see this as an opportunity to increase their pay and once again lap-up as much wealth as they can for themselves, regardless of how poor their performance may have been, and regardless of what everyone else might be forced to go through in the name of Austerity.

Firstly Barclays*, which has been rocked by several recent scandals including Libor fixing, Foreign Currency fixing, and customer mis-selling, is nevertheless paying out £2.4bn in bonuses to its top staff this year, which means that 481 of its staff now earn over £1m/year each, including 8 on more than £5m/year. It is also introducing special ‘allowances’ of up to £1m for 1000 of its senior staff, in order to circumvent the EU cap on bonuses. All this despite their profits falling 32% last year.

Meanwhile over at Lloyds Bank*, which is 33% owned by the taxpayer, they are similarly introducing special ‘allowances’ to avoid the bonus cap, which means 27 of their top staff now take home over £820,000 each, including chief-exec Antonio Horta-Osorio who is getting paid no less than £4.9m this year.

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The Co-op: Ethical investors have been left bitterly disappointed by recent events at the bank.
Picture © Mtaylor848

Even more outrageously the Co-op*, long beloved by many customers as an ethical alternative to a corrupt banking system, also now seems to be succumbing to greed, and is introducing massive pay increases for its top staff, despite recent scandals and the fact the bank is currently in dire financial straits. Even though they lost around £2bn last year and are being forced to lay-off 5,000 staff, their new chief-exec, Euan Sutherland, is set to receive a £3.66m pay package this year, which is a massive increase on last year when his predecessor, Peter Marks, was paid a ‘mere’ £1.3m. Seven other top execs are to be paid over £½m/year, more than double what they were paid last year.

And over at British Petroleum*, which is still recovering from the massive Gulf of Mexico oil spill, Chief Exec Bob Dudley saw his pay triple last year to £5.2m, along with similarly huge increases for several other top execs.

As is so familiar now, these corporations all justify their massive pay increases with arguments about ‘market rates’ and ‘paying for talent’, never mind that ‘market rates’ never seem to apply to the rest of society where ordinary people are forced to suffer Austerity, and never mind that these people get their huge pay packets whether they’re talented or not. It’s all a big con, with fat cats lapping-up the wealth and the rest of society footing the bill. Free-market theories can only ever create an increasingly unequal and unfair society, and will continue doing so until people decide they’ve finally had enough, and get rid of our corrupt economic and political system. For more on the fundamental flaws of ‘free market’ economics click here.

*References: http://www.dailymail.co.uk/news/article-2574024/Lloyds-boss-Antonio-Horta-Osorio-gets-900-000-shares-allowance-year-salary-potential-bonus-bank-looks-sidestep-new-European-rules-capping-payouts.html and http://www.dailymail.co.uk/news/article-2576662/Co-Operative-Group-pay-chief-executive-3-5m-pay-bonuses-year-job-despite-1-5bn-hole-banks-finances.html and http://www.theguardian.com/business/2014/mar/06/bob-dudley-chief-executive-bp-triples-pay

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Housing Nightmares

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Kensington: Inner London areas are increasingly only affordable to the super-rich. Picture © Yaanch

As the housing crisis continues, and more and more ordinary people are forced to leave areas where they can no longer afford to pay the astronomical rents, we hear that at the other end of society, the mega-rich are flocking to live in London in ever-greater numbers, as it becomes their destination of choice.* Research just released (the Wealth Report  by Knight Frank) has revealed that London is now the top city in the world for so-called UHNWI’s (Ultra High Net Worth Individuals – people worth more than $30m), coming ahead of even New York and Hong Kong. Despite policies of Austerity being inflicted on the majority of the population, London’s attraction is largely due to the very favourable tax regime for very wealthy people (so much for the government’s claim that ‘we’re all in it together’). The effect of all this money coming in to the London property market is to drive prices ever-higher, forcing up rents (which have increased 10% in the last year alone), and inflicting even more financial pain on the working population, as well as making it harder for those surviving on benefits.

Maybe if the government paid more attention to the daily struggles of ordinary people, rather than providing tax breaks for its wealthy buddies, the living standards of the majority of the population of this country might actually start to improve.

For more detail on how the housing crisis is affecting this country click here.

* References:

http://www.standard.co.uk/news/london/londons-3bn-ghost-mansions-foreign-investors-are-using-capitals-finest-homes-as-reallife-monopoly-pieces-9128782.html

http://www.thedailybeast.com/articles/2014/03/05/wealth-report-london-not-new-york-is-world-s-greatest-city.html#url=/articles/2014/03/05/wealth-report-london-not-new-york-is-world-s-greatest-city.html

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Our Never-Ending Spiral of Decline

Anyone who believes the government line that the alleged turn-round in the economy will lead to better living conditions for all, has failed to understand the nature of our free-market economic system.  Last week we heard how the bonus culture has returned with a vengeance for bankers and other top-earners, but this week we hear that local councils – under the cosh financially and having to make £2bn of cutbacks this year – are scrapping many basic public services, or only making them available to those who can pay*. So today we learn that Portsmouth Council is going to start charging for children in care, and will also now charge for dealing with rat infestations (so presumably poor people will soon be heading back to the rat-infested slum conditions of previous centuries ). Luton council is going to start charging for some types of domestic waste removal, while Copeland council is increasing cremation fees.

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Pest control – no longer a basic public service, will soon only be available to those who can pay.
Picture © Edal Anton Lefterov

At the same time a BBC Panorama investigation (program available on BBC Iplayer) has discovered that  more than a third of councils in England and Wales are now being forced to subsidise foodbanks, to deal with the increasing levels of food poverty as a result of the government policy of Austerity.  So while at the top of society the good times are back and the prices of champagne and  other luxury goods soar (last week it was announced that Britain has overtaken Germany as the biggest European buyer of Ferraris, and is now second only to America in world sales), in the lower levels of society ordinary people continue to suffer. Unfortunately this is all the inevitable consequence of a free-market economic system, and things will only get worse unless we take a long hard look at our society and alter the way we do things. For a fuller picture of what our society will look like if we don’t change course pretty soon, click here.

* http://www.dailymail.co.uk/news/article-2571888/Thousands-families-face-inflation-busting-rises-parking-pest-control-year-one-council-planning-charge-parents-children-care.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

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