27 Feb 2015

Another cartoon


26 Feb 2015


23 Feb 2015

Cartoons

There have been some really good cartoons doing the rounds on Twitter lately.

9 Feb 2015

Why the Wealthy Escape UK Tax in One Graphic






Tax evading criminals
stealing from the NHS 
stealing from schools 
stealing from pensioners

3 Feb 2015

Merchantilism and the Vilification of the Poor

This article "Merchantilism Six Centuries of Vilifying the Poor" strikes me as extraordinarily important in understanding the attitudes of Neoliberals. I hope I will be forgiven for quoting a big chunk of the author's text.
"Mercantilism states that a country will grow richer by increasing its net exports. To achieve this goal, the original mercantilist writers recommended that wages be kept at the subsistence level, not just to minimise the direct cost of labour, but also to maximise the pressure on workers to work. They believed that workers were lazy and had to be coerced to work... It was observed that as wages increased above the subsistence level workers tended to reduce their work hours and to lower their productivity... Subsistence wages not only helped to make the workforce more productive but also helped to maintain peace and order in society. Thomas Mun’s view, written in 1664, that “penury and want do make a people wise and industrious” summed up the prevailing attitude of his day." - David Spencer 
This highlighting of the attitudes towards the poor helps to make sense of the attitudes on display on our current government. To be poor is definitely equated with being lazy in their eyes. Never mind that they have relied on inherited wealth and privileged access to get where they are; never mind that the wealth of the UK's plutocrats all traces back to exploitation of the colonies and slavery; never mind that low paid jobs often leave the worker dependent on government handouts in order to afford their rent (effectively landlords are subsidised by the government to keep rents high). Never mind that working people's jobs keep getting made redundant and that the demand for manual skill is continuing to drop leaving poor people facing mindless drudgery.

One trick that the Victorians did not have was cheap food laden with fat, sugar and salt that means that the poor are often fat and unable to think clearly. Nor did they have the ability to manipulate sources of information in the way that the media do today. The constant sense of danger and outrage cultivated by "news" outlets helps to create a sense that we need the authorities to protect us, even when it is them that oppress us. No, we don't live under Stalin or the Stasi, but the velvet collar is still a collar.

1 Feb 2015

Debt Jubilee in Croatia.

The government of Croatia has stepped into help an estimated 60,000 of Croatia's poorest people. They have decided to forgive debts that have led to more than 300,000 bank accounts being blocked for non-repayment. In other words they are having a debt jubilee. The scheme has criteria:
"Their debt must be lower than 35,000 kuna ($5,100), and their monthly income should not be higher than 1,250 kuna ($138). Those applying for the scheme are not allowed to own any property or have any savings." Independent
 The debts are not just owed to banks, but also to utilities and other companies. In a country of 4.4 million people the targeted debt amounts to an estimated $4.11 billion.

The Inde quotes one economist as saying that businesses will think twice before lending to poor people again. And he says it as though it is a bad thing. But of course poor people are nuts to borrow money. The debt repayments become an intolerable burden and causes them on-going hardship. Making it more difficult to borrow is a good thing. So many of the recent economic problems have been caused by lending money to people (and countries) who could not afford it to service the debts.

Debt is a way of mining the future 
for wealth. But it means that 
eventually we have no future. 

The relief from debt will free up money in poor households. Instead of a large proportion of their income going to lenders, it will start going back to shops. The poor spend most of their income. The boost in retail will have a ripple effect, increasing profits, and tax revenues. As an economic stimulus package this is quite a sensible move. The effect might be quite small, but it ought to make a difference.

31 Jan 2015

Greece and the Money Lie

"The German chancellor Angela Merkel has ruled out debt cuts for Greece, saying Athens had already been forgiven billions of euros by private creditors and banks." So go the headlines. The Germans are acting like they stand to lose money if Greek debts are forgiven. This is a big lie. The money loaned to Greece was created out of thin air by banks. They charge rent on that thin air, which is the only real money that changes hands.

What those banks stand to lose is not money, but a revenue stream. The Banks themselves have been bailed out to the tune of trillions of pounds resulting from massive losses caused by malpractice and malfeasance. They don't pay tax on the rent they earn and they aren't lending to local business, so none of the rent goes back into the European economy.

The whole thing is a farce. Greece is on track to become a third world country. Merkel fiddles while Europe burns. The Germans are not prudent, they are stupid. We've seen Germans blindly following an ideology before, you'd think they'd have learned their lesson. We can only hope that the new government holds its nerve and tells Merkel to get stuffed.

UPDATE. An article by Francis Coppola reinforces the point. So Whose Problem Is Greek Debt, Anyway? She says "all but about 11% of the bailout money went straight back to the holders of Greek debt by one route or another"


So the money loaned to Greece to help with its debt problem, went straight back to the lending institutions. Almost none of it went to improving the situation in Greece.

However Coppola believes that the problem is not so much the debt as the austerity requirements which make it impossible for the Greeks to pay back the loan. She also thinks that Greek debt is everyone's problem, that the new Greek government is in a much stronger position than people seem to realise, because were they to default on loan payments and exit the Euro, it would signal the end of the Euro. 

15 Jan 2015

Govt Surplus

I'm reading Steve Keen in Forbes. One of the points seems to be that running a sustained government surplus means the government taking more from the public than it gives back in services. This is not even sensible Neoliberalism!

If the government sector is running a surplus then the private sector will have to operate with a deficit, either by running down sayings, or running up debt or some combination of both.

See also Savings, Debt and the Deficit.