27 Nov 2015

George Osborne's Use of Non-linear Warfare

A pattern has emerged in how the Chancellor announces policy. First he seeds the media with stories of massive changes, usually cuts in spending. An uproar erupts in the media. Then key policies he announces on the day are different from those he first talked about. As this video outlines, the way politics is being run these days draws on ideas from the conceptual art world in order to confuse the electorate into inactivity.

Adam Curtis on Charlie Brooker's 2014 Wipe.

What George Osborne seems to be doing is drawing on a concept, outlined in the video, invented by one of Vladimir Putin's advisors, and known as non-linear war. By feeding contradictory information to the media Osborne not only keeps his opposition off guard but be confuses analysts. So for example in the recent budget statement he forced through massive cuts in government spending on local services and welfare, but the media were focussed on small increases in spending for the NHS and Police where cuts had been flagged.

This can work partly because of a pattern in how the media reports politics. Firstly the government put out a press release about a forthcoming announcement, often with the full text of what will be said. This is duly reported in the form "the Chancellor will say...". Then they report on the day  "Today, the Chancellor said..." . And finally the next day they report it in retrospect usually with some commentary.

This works fine if the three instances are all saying the same thing. But Osborne plays the system by shifting his position.
  • Tomorrow I will make swinging cuts so the government can live within its means.
  • Today I am making some cuts though less than announced and some increases
  • Yesterday I increased government spending based on projected revenue increases. 
In point of fact the Autumn Statement contained some of the largest cuts in government spending in history. Local governments will be slashing budgets for libraries and other local services. We've already seen David Cameron lobbying his local Council against cutting services despite shrinking budgets. The basic amenities will begin to collapse over the next few years.

If we are to live within our means, as Mr Osborne argues that we should, then the time to announce spending increases would be after government revenues had actually gone up, not on the basis of predictions that are wrong more often than not. However, he is able to leverage these predictions to produce wildly conflicting statements and thus wrong foot any critics of the government. Now he can meet accusations of the negative impact of cuts by saying "what cuts?". In any case the idea that the national economy is like a household budget is another piece of misinformation.

Another feature of the government's use of non-linear warfare is their repeated misuse of statistics, which I have logged here: Conservatives caught making up statistics. Flooding the media with misinformation helps to maintain confusion - the focus goes to the accuracy of the figures rather than the policies. That is if the media bother to follow up on the misinformation at all. A lot of the time the UK media simply reproduce government press releases with no effort to check facts. 

Throughout the last government we saw the Tories repeating the statement that Labour grossly overspent and caused the financial crisis - this meme is repeated endlessly in the comments sections of the UK's online newspapers. On the left-wing papers there is a constant stream of right-wing trolls repeating this and other government propaganda. What we get from the Tories is lies and more lies.

In fact the Labour government did what George Osborne did this week - they spent projected rises in income, based on projections and 20 years of almost uninterrupted GDP growth because of the massive boost to GDP from deregulating the finance industry. Unfortunately, not only did that income not materialise, but the world's banking system started to collapse and required propping up. It was the latter than accounted for the bulk of increased government spending right at the end of Labour's time in office. But Labour themselves were totally ineffective at communicating this and remain so. It boggles the mind that Labour have simply conceded the field when it comes to economy and allow the Tories to make all the plays. It seems like even Labour belief the Tory propaganda about the economy!

The end result of all this conflicting information is that we are confused about the facts, bewildered by the stories in the media, and unable to make good decisions about what the government is doing. The information we get is deliberately confusing because that leaves George Osborne in power as we are unable to be decisive. This is the man who desires to be Prime Minister after David Cameron, who has already admitted that he will not contest the next election. 

The government is at war with the electorate - a non-linear war that leaves them free to arrange the country to suit them and their cronies. Middle-England is convinced that this is the best of all possible worlds even though they are losing all their local services in the process. Poor England know it is not good because they seem to be paying for the bulk of the cuts. And all the while the 1% are getting wealthier. CEO salaries continue to buck the trend and rise. Those local council cuts will almost certainly not affect executive salaries. It's a kind of class war, but not coming from the proletariat, but from the plutocrats aided and organised by middle-managers.

10 Nov 2015

Conservatives caught making up statistics

Ministerial Code of Conduct: 1.2.c.
It is of paramount importance that Ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity. Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister;
Once again our Prime Minister is in the news for using dodgy statistics. This is a regular story in the British press, but no one ever seems to connect up the stories. So, what follows is the beginnings of a list of news stories about the Conservative (and Labour) leaders being caught out lying and using dodgy statistics. Just for the record.

Nov 2015
David Cameron's 'Unofficial' Migration Stats On EU Migrants Rubbished By Experts. Huffington Post

Oct 2015
David Cameron REFUSES to answer if he lied about Lord Ashcroft’s ‘nom dom’ tax statusVox Political 

Jeremy Hunt could be SACKED for 'misleading' public over weekend hospital deaths. DAVID CAMERON could be forced to sack Jeremy Hunt after the health secretary allegedly misled Parliament - and the public - over weekend hospital death figures. The Tory minister has continually said 11,000 extra deaths occurred in 2013-2014 as a result of admission to hospital over the weekend - but has omitted the next part of the research report he is quoting which says "to assume they are avoidable would be rash and misleading". Express

Mar 2015
David Cameron's numbers problem: From NHS spending to immigration caps – how the Tories can't get their figures straight. Five stats that show you shouldn't always take the Conservatives at face value - Independent.

Oct 2014
Cameron 'rebuked' over debt claims. David Cameron has been handed another thinly-veiled rebuke by the statistics watchdog for claiming that Britain has been "paying down its debts".
Labour lodged a complaint about the Prime Minister's loose use of language after he used his Tory conference speech to hail progress in turning round the country's finances. - Daily Mail

Sep 2014
David Cameron strongly rebuked for making false claims about immigration. In July, the Prime Minister wrote in a newspaper that “while most new jobs used to go to foreign workers, in the past year more than three-quarters have gone to British workers”. Newspaper watchdog the Press Complaints Commission ruled his claim was “baseless”. It added: “The statistics to which the PM referred had been significantly misrepresented.” Mirror

Aug 2014
David Cameron has been rebuked for claiming that the majority of new jobs created last year were taken by UK nationals when figures for new jobs are not collected by the official statistics body. - Guardian

Feb 2014
Coalition rebuked again by UK Statistics Authority- this time on flood defence spending
Statistics head Andrew Dilnot says a Treasury graph on infrastructure left readers with "a false impression of the relative size of investment between sectors". - New Statesman
George Osborne rebuked for boasting he halved £1.7bn EU surcharge. Treasury committee stops short of saying chancellor misled parliament by claiming he won the bill reduction when the surcharge was halved by the UK’s automatic rebate. Guardian

June 2013
Senior Conservative ministers have been rebuked for attempting to cover up Government statistics showing one of their key housing policies is not working. - Independent

May 2013
Duncan Smith rebuked by ONS for misuse of benefit statistics. The claim that 8,000 people moved into work as a result of the benefit cap is "unsupported by the official statistics", says the UK Statistics Authority. - New Statesman. Also "Lies, damned lies and Iain Duncan Smith" examines the pattern of lying. - Guardian
"Grant Shapps rebuked by UK Statistics Authority for misrepresenting benefit figures. Yet another Conservative politician is caught making it up." - New Statesman.

Apr 2013
Iain Duncan Smith "Around 1 million people have been stuck on a working-age benefit for at least three out of the past four years, despite being judged capable of preparing or looking for work."
"As The Guardian, and separately, Full Fact, explain here, that claim relies on an extreme sleight of hand." - The Economist

Feb 2013:
“David Cameron has received a reprimand from the official statistics watchdog over his claim that the government was "paying down Britain's debts". - Guardian

Dec 2012
Osborne “The good news is that we are in government after 13 years of a disastrous Labour administration that brought our country to the brink of bankruptcy.” - Conservative Party website
The UK was never at risk of bankruptcy. Office for Budget Responsibility chief Robert Chote dismisses the “danger of insolvency”. New Statesman.

"The UK Statistics Authority upheld a complaint by Labour about government claims the NHS budget had increased in real-terms in the past two years. The watchdog found the best-available Treasury data suggested real-terms health spending was lower in 2011-12 than in 2009-10 " - BBC

Oct 2012
“David Cameron has been corrected by the Treasury’s own forecaster over claims that cuts in public spending are not reducing economic growth. The Office for Budget Responsibility told the Prime Minister that it does believe that cutting public spending will reduce economic growth in the short term” - Huffington Post
Andrew Dilnot, Chair of the UK Statistics Authority, has today expressed ‘concern’ about claims made by the Department for Education (DfE) on the UK’s supposed slump in international school achievement league tables. - Full Fact

Apr 2012
The home secretary [Theresa May] is under fire for failing to comply with a high court order to bring an asylum seeker who is in hiding in Azerbaijan back to Britain. The Border Agency forcibly removed the man, a Turkish national, from the UK in March despite a court order being issued before he boarded the plane preventing officials from deporting him. - Guardian

Jan 2012
Iain Duncan Smith and the Department of Work and Pensions have been accused of publishing misleading immigration figures that were "highly vulnerable to misinterpretation". - Huffington Post 

Feb 2010
The chair of the UK Statistics Authority has told shadow home secretary Chris Grayling he "must take issue" with claims made by the Tories. 
He warned they were "likely to mislead the public" if they compared two sets of statistics without explaining they were collected in different ways. - Sky News

See also the UK Statistics Authority list of correspondence with the govt. http://www.statisticsauthority.gov.uk/reports---correspondence/correspondence/index.html

10 Jul 2015

Why Do The Poor Not Revolt?

The question of why the poor don't do something about rising inequality in the UK came up on Twitter today. To my mind the comedian Simon Evans got to the heart of the matter when he responded to Russell Brand's call to revolution. So I've been posting this clip. Many a true word was said in jest.

8 Jul 2015

How Money is Created

One of the things that seems to be very difficult for people to grasp is the idea of how money is created. So I noted that we see a lot of German people complaining that their tax euros have been lent to Greece. But that money lent to Greece does not come from tax dollars, or savings, or Germany's wealth. The loans create entirely new money. And when the loan is repaid that money ceases to exist.

The Bank of England was one of the first central banks to create money in this way - from the time it was created in the 17th century. Staff from the  Bank’s Monetary Analysis Directorate have prepared a paper explaining this form of money creation. They note:
"Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."
 It is vitally important that we understand this. Part of the problem in 2007 was that banks had made too many loans and created too much money. When the sub-prime mortgage scam erupted what happened was that many people defaulted on their loans at once. It was not capital that was wiped out in this situation, it was the revenue stream of the rent that people were paying for the loan. We call this "interest" but it is a form of rent, especially in relation to the other products of the factors of production: wages from labour; and profit from capital. Rent is what is paid for use of a resource. And banks certainly see the loans they make as assets. So some companies, such as Lehman's brothers found their revenue stream curtailed. This meant that although Lehman's had many assets (loans) they did not have enough money coming in (rent) in order to pay their own creditors. So they went bankrupt. But that meant that rent the bank was paying also suddenly stopped.

The other reason it's important to understand the creation of money is that it is the rationale behind the idea of the Debt Jubilee. If the money of a bank loan was simply created out of nothing, and will return to nothing when it's paid off, then forgiving such a debt costs nobody anything. Except that the revenue stream gets cut off or reduced. Since a default amounts to the same thing, but creates all kind of illwill and political tension it is better to get ahead of it and arrange debt relief. This has happened many times in Europe.

You would think that any creditor with half a brain would be happier with some repayment than none. So a deal to repay less or slower would be preferable to a default in which there is no repayment. But this is not what we are seeing happening in Greece. The ECB and EU are demanding all or nothing. And if nothing they plan to force Greece out of the Eurozone (which as far as I can tell is illegal, because there is no provision for it in the treaty establishing the EZ).

But this view of money creation helps to explain why Greece's creditors don't have much to lose any more. They have been using the last five years to ensure that their income stream from rents on imaginary money is securely coming from elsewhere. So that when Greece defaults it won't cause a contagion of the kind that happened in the USA in 2007. Had they been concerned about the loss of revenue from Greece any more they would be more willing to negotiate. They literally have nothing to lose. And they also know that if they renegotiate the repayment schedule with Greece other nations, where their revenue streams come from, might also want to renegotiate. And there are a lot of countries overburdened with debt and implementing austerity programs that were the condition for the loans.

Understanding how money is created is a basic piece of information for intelligent participation in civil life. Lack of understanding is currently being preyed upon by Neoliberal governments to create narratives that promote their interests over the interests of the citizenry. We're being lied to on a regular basis.

5 Jul 2015


The Greek people voted resoundingly against the imposition of yet more austerity today. A great day for democracy.

Neoliberal governments are creating and exploiting systematic misrepresentations of the economics to gain leverage over citizens. For example. A lot of people keep talking about German tax payers bailing out Greece as though their taxes are being sent to Greece. They are not. The German taxpayers have not spent a single cent on Greece. Indeed they have profited from the crisis through interest payments on the outrageous loans foisted on Greece. The money going to keep Greece afloat has been printed by the ECB. It was created especially for this purpose. And in fact 90% of the money loaned to Greece so far has gone directly to French and German banks. So what is happening is that the ECB is using Greece as a proxy to bail out it's own banks. And blaming the Greeks for being lazy or recalcitrant. Not only a lie, but a mendacious conspiracy to deceive and defraud.

All of last week the ECB and the head of the IMF were illegally campaigning for the removal of the rebelling but honest government, in the hope that they could get the dishonest but compliant government back.

But Syriza have turned this around and the new IMF report backs them up. I am gladdened to see Neoliberalism lose a major battle (since they don't seem to acknowledge things like global economic meltdown as a problem). A victory for the people.

Now bring on debt relief for Greece. And for the poor everywhere!

Greece vs the Neoliberals.

The struggle over the economy of Greece, with the elected government on one hand, and the powerful unelected Neoliberal organisations, the European Central Bank, the International Monetary Fund on the other, along with the quasi democratic European Commission, is gripping stuff. I so want to see the Greeks take back control - even though this will not provide a miracle cure. I so want to see the tide of Neoliberalism turn!

Greece's finance minister at  London Conference of 1953
signing a treaty agreeing to cancel 50% of Germany's debt 

There have been some excellent articles on Greece and Europe recently. Amongst my favs are
  • Frances Coppola. (3.7.2015) The Road To Grexit. Forbes.
  • Frances Coppola. (29.6.2015) The Day The Euro Died. Forbes.
  • Alex Andreou JUNE 30, 2015. Where is My European Union? Sturdy Blog
  • Alex Andreou. (03 July 2015) How Europe Played Greece. Byline

3 Jul 2015

The Alternative To Neoliberalism

Steve Keen on the problems of Neoliberalism and some ideas that the political left need to adopt to counteract the standard Neoliberal economic narratives. 

2 Jul 2015

The Ten Commandments of Neoliberalism

  1. liberalize trade; 
  2. privatize public services; 
  3. deregulate business and finance; 
  4. shrink big government; 
  5. reduce taxes on business; 
  6. encourage foreign investment; 
  7. constrain unions; 
  8. expand exports; 
  9. minimize inflation; 
  10. enforce property rights. 

It replaces "love they neighbour" as the Golden Rule, with "See yourself as an enterprise and your neighbour as the competition."

Derived from What is Neoliberalism?