Blinkered Brown Is Stuck In The Past

The striking picture of refinery workers has become so iconic, posters should be made, rolled up and slapped around Brown's chops. Will that man ever wake up to reality?

Today last Davos Man had the gall to admit he hasn't a clue how to fix the economy. History, Brown said, offered "no clear map" of how to deal with it. Rubbish. If he hasn't a clue he could try reading JK Galbraith, or move over and let someone else have a go. 

Talk about living in the past! The government is clinging onto false boom years policies, while the economy crumbles around its ears, bringing thousands of jobs down with it.  

Start by supporting workers in times of deep recession and override neo-liberal EU trade and employment agreements. Warning about the perils of protectionism was fine for the 'boom' years but fall on deaf ears during times of bust and mass unemployment.

The wave of strikes across the country came as Brown struts around the World Economic stage, repeating his hollow promise to do his best for jobs while his ill-advised "British jobs for British workers" is thrown back in his face.  

Look at the lessons of history. Anxiety over jobs has turned to anger and spilled over in mass protests, expressing the fears of working people, as the recession exposes the truth about the state of the bankrupt economy. 

Rhetoric and angry polemics mask a deep and disturbing underbelly of uneasy unrest which is beginning to surface. 

Refinery protests are showing a nasty side with mounted police, dogs and riot squads standing by and nationalist movements milking the unrest to whip up support. Industrial unrest can so easily turn to civil disorder and a stand-off with political police. 

For years the government has encouraged crucial and strategic industries to sail off into foreign hands, allowing the wealth created to go with it. Banks have been allowed to sail into Galbraith's "wild blue yonder" with taxpayers cash. 

A free market has been allowed to get out of control, leaving the country plundered by big foreign firms and on its knees, while the government turned a blind eye to cheap, exploited foreign labour. 

Now the country has lost control of all its key industries, they are ripe for exploitation and the chickens are coming home to roost. 

Just exactly what is 'Labour' about a New Labour Party, which has abandoned its workers and left them to rot, more bothered about forcing them to fit into its global market ideas, rather than protecting their interests. All with the tacit support of a new breed of trade union officials who'd rather cosy up to their pals in government.

Over the 'boom' years, growth in employment has been deliberately concentrated in the City financial market, emerging 'new' industries and a pool of low skilled, low paid workers to do the dirty work in poor conditions, while the manufacturing base was left in ruins. 

Cheap credit and a debt-ridden culture bred a false consumer which mirrored the 'boom' before the US Great Depression. Here it allowed the government to recklessly pursue its neo-liberal trade and employment policies, driven by an obsession with an ever expanding and controlling EU. 

Short-term contracts, agency work, subcontracting and fewer workers rights are all part of the downside of that good times policy. 

Those times are over. The false security of mortgaged homes and easy, cheap credit to plug the income gap has evaporated. 

A government stuck in the past cannot offer real alternatives. The recession should be an opportunity for a great leveller. The obscene gap between rich and poor must be halted. Tougher regulation is needed to end the ruthless exploitation of low paid casual slave labour. 

Jobs should be protected and created in strategic and vital industries and manufacturing by bringing them back into full short-term public ownership until the recession eases. And stop borrowing billions.

Both the Tory right and Labour left are calling for a radical rethink over the economy and the working backbone of the country, albeit from different political perspectives. Neither want a return to the bad old 'boom' days and in that respect they are singing from the same hymn sheet. 

Stuck in the middle and stuck in the past is the sad, tired spectacle of Brown and the New Labour Project, floundering around, clinging on to power with failed, out-dated policies and ignoring lessons of history, until a very bitter end. 

Picture: The Bearfacts, engineering construction workers website

UPDATE: William Hill has Brown now 5/2 to jump or get the push in 2009. Green shoots of an early election?

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Cable Needs Fire In His Belly

A dire warning the economic crisis could drag on for a decade has been delivered by the LibDems Vince Cable, warning tougher action is needed. But his borrowing solution has glaring omissions - government waste and squandered billions. His economics need political bite.

The gentleman of economics delivered a well-reasoned way out of the economic mess in today's Independent. But his grounding is still in New Labour, politically steered by Blair-boy Clegg. 

Dancing around the political dancefloor, Cable wrestles with the politician's dilemma – "Do we try to be positive and risk misleading people through complacency; or do we tell it like it is and risk adding to the fear and financial panic?"

Put simply should we be taken in by the government and the BBC"s 'Downturn' spin or ITV News 'UK Recession'. 

The Orange Party is in no doubt. Come clean and shout it from the rooftops. And as Cable says: "On balance, it is better to be straight."

Straight is not something that springs to mind after Monday's farcical Budget. That's led Labour MP, Frank Field, to conclude: "The package therefore raised some fundamental questions about the government competence in running a crisis economy."

The liberal economist, JK Galbraith, does spring to mind as Cable suggests precedents can be found in history for a way out of the crisis. 

Current interest rate cuts are not nearly enough to kick-start the economy. They must come down further and indeed they will. 

Tax cuts must be seen as fair. Cut taxes for the low paid funded by removing tax relief, allowances, tax loop holes and tax breaks which fund the lavish lifestyles of the wealthy, rather than the government's "tokenistic higher rate".

But it is on the issue of borrowing, which Cable reckons is necessary to prevent a further downward spiral, where the Orange Party would take serious issue. 

There's no need to borrow a penny more. Cut back on government waste, ridiculous schemes which squander billions and you have all the savings you need. Here the LibDems need to inject serious politics into economics. 

Make a start. Pull all troops out of the hugely expensive wars in Iraq and Afghanistan, scrap the despised ID cards, scrap Trident, the failed NHS computer system and meaningless government quangos. Do the maths, add up the savings. There would be money to spare.

There is no need for a squeeze on the public sector if the cash is spent wisely and sensibly. And those savings will allow public spending for where it really matters. Spending on schools, hospitals, social housing and public transport. 

Though ignoring the massive £33 billion off-balance sheet PFI debt, Cable does put his finger on the key to a way out of the current economic mess. The banks or rather the way money is lent. 

The present £37 billion bank bail-out was sold as part-nationalisation, when it was nothing of the sort. As Tony Benn said, you cannot have it both ways. True nationalisation is the answer, bringing full state control, responsibility and accountability. 

The government cannot walk away from direct responsibility, warned Cable. "It must take seats on the boards of leading banks, not to micromanage them, but set strategy." 

At the moment, as Galbraith said, government bail-outs with taxpayer's cash just allows the banks and financial institutions to "sail into the wild blue yonder".

The pain of deep recession will be most obviously felt by those facing house repossession and loss of jobs, Cable points out. Easing that pain should be top priority. 

The LibDems are moving in the right direction economically, thanks to Cable. Politically, they still have a long way to go, if Cable economics are to be turned into political votes. 

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Benn's Public Banks The Only Solution

Labour grandee, Tony Benn, has called on the government to put the banks into public ownership. Power has switched from parliament to the City. Brown's doomed £500 billion bank bail-out is the final straw. 

The City now calls the shots and voters will see through it. On this issue, the Orange Party is more than happy to nail its colours to his mast. 

It has been observed here on a number of occasions how New Labour has cosied up to their pals in the City. 

Now, when times are tough, like Bush in the US, the answer has been to throw them more taxpayer's cash and borrow billions getting the country deeper in debt. The piper is calling the tune.

There's plenty of life in the old Labour dog yet. In June, Benn delivered a masterclass in politics over civil liberties. Now Benn's argument, over public-ownership, is a simple one and he makes the point forcefully: 

"The trouble is that the Prime Minister and the American President have been relegated to mere spectators, commenting on what has happened, and whose only role is to dish out more and more taxpayers’ cash."

Benn argues for public ownership of the banking system and the reason is accountability, sadly lacking in current economic policy.

Strategic public services such as the army, police, fire service, health care and education are still, in the main, in public ownership, despite New Labour's best efforts to sell them off. Why should the banks be any different. The seeds have already been sown with a nationalised Northern Rock.

For ordinary people, banks are somewhere you can trust to look after your hard earned cash. And somewhere to go for a loan without fear of being ripped off. That's a public service. 

"I have concluded that a publicly owned and accountable banking system would be better for Britain and judging from the way opinion is moving, I suspect that those views would appeal to people from right across the political spectrum," said Benn.

His view is shared by LSE economics professor and former MPC member, Willem Buiter, who believes nationalisation may be the only answer to restore confidence, as a temporary solution.

Liberal economist, JK Galbraith, referred to here on a number of occasions, doesn't call for public ownership but his acute analysis of the failed banking system in the years after the Great Depression has prophetic warnings of the doom ahead. 

And support for Galbraith comes from a seemingly unlikely source. Jeff Randall writing in the Daily Telegraph is firmly of the belief that Galbraith got it right: 

"His analysis of the greed and self-delusion that led to the unravelling of America’s stock market and the subsequent Depression is undimmed by time ... Replace 1929 with 2008 and the story, I’m afraid, is eerily familiar: a speculative orgy, crescendo, climax and crash. As this plays out, important people – business and political leaders – rely on “the power of incantation” to keep the rest of us calm. Their efforts are doomed to fail."

Brown is keen at the moment to spin the banking "crisis" for his own political ends. Blair developed a notorious "taste for war". Brown, a taste for the City. Both leave a bitter taste in the mouth.

As the devil in the detail of Brown's bank bail-out is exposed and share prices crash on the stock market, Benn's answer - fully accountable public ownership - is looking increasingly like the only realistic solution.

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£500bn Bail-Out Won't Work For Us

An eye-watering £500 billion is being pumped into the UK banking system, interest rates cut by half a percent. Both measures prop up the banks. Neither will curb soaring inflation, rising unemployment or people struggling with insurmountable debt. These are measures for the City and by the City. As the banks sail off into the 'wild blue yonder', the legacy of this monumental bail-out will be with us for years to come.

Brown and Darling may have written their own suicide note as, in the months ahead, the true scale of the bail-out hits home. 

The subdued response in the commons from all Parties said it all. Generally, they took it lying down. 

The government spin has been swallowed hook, line and sinker, with few stopping to think of the dire consequences. Talk of part-nationalisation with a £50 billion taxpayer stake is a disturbing prospect. 

But Northern Rock was nationalisation. This is not. Taxpayer's cash is being used to buy preference shares in the banks. Control still remains with the shareholders with no publicly accountable voice on the board.

£450 billion (of which £350 billion is 'new' money) will be available for bank borrowing and guarantees. That cash will have to be borrowed on international markets, blowing any fiscal golden borrowing rule out of the water. At a time of tightening our belts the government is doing just the opposite. 

It saddles the UK with colossal debt for years, decades to come. Borrowing such a huge sum comes with strings attached. No one, not the IMF, is gong to lend cash without commitment to tighten the belt - and that means cuts in public services and public spending. 

Cutting interest rates may get thing going - for the banks - making it easier for them to lend to each other through the inter bank lending rate. But the Bank of England has, until now, been reluctant to cut interest rates. 

There's a price to pay. Any big cut means higher inflation and higher unemployment. That concern has been thrown out of the window.

No-one has stopped to ask how we got into this sorry state. All the attention is focussed on the struggling banks. Who gives a toss about the banks. They and bad government caused this mess in the first place. 

The spin now is of bold, decisive action by the prime minister and his chancellor. Like Bush in the US, they are using the current financial disaster to make themselves look good and dig themselves out of a hole of their own making.

Borrow cash by all means - to kick start the economy - particularly to invest in manufacturing which has been decimated by the government, relying instead on an economy based solely on the financial world of the City. 

If the government was bothered about people, not their pals in the banking world, they would have taken the simple step of guaranteeing all savers deposits, as in Ireland and tacitly by Germany. That would not cost a penny and only kick in if a bank folded. 

Cash would only be used for people genuinely struggling as they come off the fixed term loans and mortgages. Others will have to face up to the harsh truth that they borrowed money too cheaply, without any checks and now, unlike the government, have to pay the price of reckless borrowing. 

In the US, Bush has pumped $700 billion of taxpayers cash in the banking system and the Fed billions more. It is having little effect. Treasury secretary, Hank Paulson, is today warning that some banks will still fail. The same could happen over here. 

People want jobs, affordable housing and tax cuts to help them through the hard times. The country needs a strong manufacturing base. The measures announced yesterday simply benefit banks not people.

As liberal economist, JK Galbraith, observed:

"For now, free at last from all threat of government reaction or retribution, the market sailed off into the wild blue yonder."

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