Banksters are “socially-useless” shocker!

Lord Turner is the head of the FSA (that’s the Financial Services Authority, not the Food Standards Agency).

If the Tories win the next election, he’s toast and so is the FSA which will be abolished, its powers returned to the Bank of England.

So that’s probably why he’s giving strong views on taxing banks – the kind of talk that gets frozen out of polite society in the City, I expect.

The kind of reforms Turner suggests could save the capitalists from their chaotic system – but would hurt them in the short term by imposing costs to implement the regulation of apparently speculative or dangerous activities.

Transnational corporations are lobbying against proposed EU regulations on derivatives which would require deals to go through a clearing house.

In the UK, however, there’s nothing tough planned for the transnationals. The government might be talking up food sovereignty, the transition to low-carbon manufacturing, and so on, but there’s no plan to put the casino-capitalists on a diet.

Response to Turner’s views are revealing:

The Chancellor, Alistair Darling, asks what would replace the City as a source of employment and tax revenues. So, at least he’s willing to consider alternatives if laid out before him.

The Shadow Chancellor has remained silent. For obvious reasons. No one would believe a Tory Chancellor would crack down on big business.

London’s buffoonish Mayor, Boris Johnson, is perhaps the only UK politician willing to leap to the defence of the City.

An unnamed London banker is quoted in the FT as saying “It is just illogical to want to shrink one of your most important industries,” unless it happens to have led to the destruction of all your other industries, I suppose… He goes on to say: “If you want to turn London into a Marxist society, then great.”

Yes, comrade. Great! Full marks for hyperbole.

“Saint” Vince Cable of the Lib Dems has welcomed what Turner has said, stating that that “competitiveness” arguments cannot be used to defend the status quo:

“If you are engaged in behaviour that is dangerous to the wider British economy, it is right some sectors may have to contract,”

However, Nick Clegg, the Liberal leader, has said that taxation would be unworkable as a way of shrinking the City as global agreement would be required.

It was interesting to observe President Nicholas Sarkozy of France revealing his tough plans for reform to bank remuneration – which will only be implemented if there’s a global agreement. Which in political terms, is a win-win deal. If the rest of the world says non, he wins; if the rest of the world says oui, he wins.

What changes do I suggest, then?

Well, given that the financial services sector could not exist without the taxpayer support that has been given, the government should ensure that restructuring takes place with the following modest reforms:

* Voluntary redundancies only, and terms and conditions respected for the pay and pensions of bank staff on low- to middle-incomes. Workers in the financial services industry should not be made to pay for the greed of their employers.

* Executive pay, pensions, and other benefits should be capped at all financial institutions – even those in which the government has no shareholding. If executives want to flee elsewhere, let them – there are plenty of talented people willing to take their place and be justly rewarded.

* To prevent future banking crises, the nationalised banks should be mutualised rather than be privatised. Mutual financial institutions – the credit unions, building societies, and Cooperative Bank – have served their members/customers and behaved responsibly.

Tory councils cut services as demand surges

More and more working people are having to use more and more public services as the capitalist economy crumbles. Unemployment is in the millions, underemployment too.

Unlike the bankers and big businessmen, we can’t afford to hire financial advisers and accountants to help us deal with our problems, and if we lose the roof over our heads, we’re out on the street or a friend’s sofa – we can’t swan off to our second, third, or fourth home…

We need advice on housing and benefits, provided by local councils.

Unlike the bankers and big businessmen, we don’t have yachts or our own island to retreat to when we want to relax.

We might take a walk in the park, lend some books from the library, or visit the leisure centre to use the gym or have a swim in the pool – all provided by local councils.

Across England, Tory councils are preparing to slash spending, just when working people need help the most. Instead of boosting employment, Tory councils are ready to add to the dole queues. (But this won’t mean cuts in taxes – in fact, they’ll have to go up to help bailout bankers!)

Rather than expell these wreckers for the chaos they are planning, the Tory leadership in parliament is watching these councils and using their examples to draw up spending cuts top implement if they form the next government.

Yesterday the shadow chancellor, George Osbourne, claimed the Tories were a “progressive” party. Lord Mandelson responded by claiming this was laughable. Truly, this was two bald men fighting over a comb…

Stimulus-pocus

The recession is deeper than we thought, the central bankers say.

No shit? Gee, these guys are at the cutting edge. I wonder how they found out – perhaps they saw the unemployment lines…

Their solution is simple – keep interest rates at a record low and erm, print more money.

How much, you ask?

Oh, say another fifty billion pounds…

Quantitative easing. It sounds clever, but that doesn’t butter parsnips.

Why do I get the feeling that the only thing QE is stimulating is the profits of the banks?

Okay, so the bailed-out banks have reported losses – but things are going great for the remaining banks (their investment arms at least!)

As for the real-world stimulus mesures, like the car scrapage scheme and the reduction of value-added tax, these will not be extended.

Why do I get the feeling quantitative easing will be given another go?

Save Vestas!

First a report from Workers Climate Action, who have displayed tremendous solidarity in their efforts to assist the struggle of Vestas’ employees:

On Friday 3 July, Workers’ Climate Action and the Cowes Trades
Council held a public meeting attended by around 100 people, to oppose
the closure of the Vestas plant, Britain’s only wind turbine factory,
on the Isle of Wight.

Two months ago, Vestas announced over 500 job cuts and is seeking to move production to the USA

The room was packed with workers from the factory as well as people
from the wider community. By the end of the meeting, there were people
seriously discussing the tactic of a factory occupation to save jobs
and force much-needed investment in wind energy. How did this come
about?

The Isle of Wight is, for the most part, staunchly Conservative,
with very little history of class struggle or environmentalism. It has
one Labour councillor, no branch of any left group, and an apparently
inactive Green Party branch. The previous campaign to save jobs at
Vestas was very small, based mainly on a Facebook group and a petition
had ground to a halt, lacking direction and the confidence to take
radical action.

A small number of activists from Workers’ Liberty heard the news of
the closure began getting in touch with people on the Island three
weeks ago. We managed to get a hold of the few local trade unionists
from the Trades Council. Most of these turned out to be past retirement
age, but many with militant histories.

As impressed as these old heads of the labour movement were and as
glad as they were to see a bunch of energetic young people having come
down to set up a campaign, no one expected it to go anywhere. The
wisdom was that this was a workplace that had never been unionised, the
closure had been announced, the ball was in motion; we should try by
all means but that we shouldn’t get too disappointed if we got nowhere.

Despite this, we went out and simply stood outside the factory
waiting for people to come out of work, we had no leaflets other than
the basic WCA ‘Climate Change is a Class Issue’ one. As the workers
went past we got chatting, heard stories of people having to move house
as a result of the redundancies and various attempts over the years to
get trade union recognition met with victimisations and sackings.
People felt betrayed, many of them young, many had thought that this
was an industry with a future, many genuinely felt they were doing
their bit to save the planet. All this was down the drain.

People were pissed off, all that was lacking was the sense that
anything could be done to do anything, to fight back, we decided at
that point to try and pull together a meeting. We got the Trade’s
Council to sort the venue, came back to London and knocked up a leaflet.

We then mobilised a small but diverse group of Workers’ Climate
Action activists (environmentalists, socialists, and anarchists) from
across the country to come down.

We spent a week intensively building for a public meeting. We
leafleted the gates of the two factory sites at least twice a day, did
stalls in the main towns, and constantly spoke to people about their
concerns – the impact of the closure on jobs and the local community,
environmental concerns, the poor state of health and safety at the
Vestas plants, and raised the appropriate political questions – who
should determine how jobs are provided and how energy is produced? How
should the transition to a low carbon economy be achieved? What is to
be done about harsh management practices, job losses, and factory
closures?

Working in a political environment not usually best suited to
revolutionary politics, we found that our concern for jobs and the
environment was immediately taken on by the many of the hundreds of
people we spoke to.

Not only are Vestas management cutting jobs, they are also a highly
exploitative employer. In the tradition of post-fordist management,
they sought to generate a high turnover of employees to prevent
unionisation, and to prevent the workers from building up significant
redundancy packages. The air conditioning in the factories is
inadequate, many workers contracted contact dermatitis, an allergic
reaction to the resin used in moulds, and the company operates an
unofficial ‘three strikes and you’re out’ disciplinary procedure, as
well as regularly denying workers days off and sick days for no good
reason. The exploitation of the worker for profit provides us with an
analogy for environmental exploitation and degradation.

We succeeded in talking to the local media, including BBC radio
Solent, the Isle of Wight County press, and Meridian News, and we were
able to voice ideas like the just transition to a low carbon economy,
and democratic workers’ control of industry in forums where they had
not been heard in a long time.

Using contacts made during the Visteon occupation, we persuaded the
former convenor of the Enfield Visteon plant, Ron Clarke, to speak at
the public meeting. Ron spoke about the experience and the tactics of
occupation, telling the gathered crowds that physical control of the
factory was the only way to bargain with the bosses. The experience
gained by the Visteon workers, and their resounding success provided a
galvanising example of what can be achieved if workers take action and
stick together.

We encountered problems and obstructions from all the usual sources.
Just before the public meeting, a police inspector phoned the secretary
of Cowes trades council, informing him that the Workers’ Climate Action
had published a piece exhorting Vestas workers to chain themselves to
machinery. This was, of course, a lie. The police were, nevertheless,
very visible outside the public meeting.

In addition to this, many of the speakers brought to the public
meeting by the local trades council revealed themselves to be
bureaucrats. They told workers to simply join UNITE and get official
recognition, but were disdainful about the idea of occupation. These
business unionists and social partnership bureaucrats brought little to
the campaign, but they certainly alienated a lot of workers with their
elitist talk of letters written to ‘Lord Mandelson’.

Despite the politically questionable character of the meeting, we
managed to get workers and people on-board to expand the campaign
further into the factory and the local community. The Socialist Workers
Party and Socialist Party are already organising public meetings in
Southampton and Portsmouth with speakers from Workers’ Climate Action
and workers themselves. A protest in the centre of Newport is planned,
with the possibility of a happening outside Downing Street in London to
put pressure on the government.

National groups are expressing an interest in getting involved, and
we are following up contacts in Denmark, where Vestas have their
headquarters, with a view to encouraging solidarity actions. Watch this
space, and the Workers’ Climate Action Website (www.workersclimateaction.co.uk) for more information as it comes in.

Our actions to oppose the Vestas closure will demonstrate that,
though energy and enthusiasm are essential to achieve results, we must
also, as Lenin says ‘be able at each particular moment to find the
particular link in the chain which you must grasp with all your might
in order to hold the whole chain and to prepare firmly for the
transition to the next link; the order of the links, their form, the
manner in which they are linked together, the way they differ from each
other in the historical chain of events, are not as simple and not as
meaningless as those in an ordinary chain made by a smith.’

Already messages of solidarity are pouring in via email
(savevestas@googlemail.com), and a motion will be circulating around
trade unions who wish to offer their support to the Vestas workers. The
campaign is already snowballing, but it must be held in mind that this
situation could be brought into existence anywhere – at Corus, or in
the car industry, or at Nortel where 2,000 redundancies were announced
today. Go to where jobs are being lost, talk to a few workers,
collaborate and draft a leaflet, call a big meeting. Raise the
experience of Visteon. Raise the possibility of direct action: it can
be done.

Workers Climate Action are holding an organising meeting in
Cambridge on Friday 17 July. Come and get involved. The WCA website
should have more details soon.

And this weeks’ The Socialist reports on the situation on the Isle of Wight:

Save jobs at Vestas wind turbine plant

Over 600 workers at the Vestas factory on the Isle of Wight are on the brink of losing their jobs after the company announced they intend to move production of wind turbine blades to America. The workers have been offered an insulting redundancy package of less than £1,000 and at a public meeting last week a call for action was raised.

Ben Norman, Portsmouth Socialist Party

The meeting, called by the Isle of Wight trades council and a local campaign group called ‘Workers Climate Action’, was attended by around 150 people, made up of Vestas workers and local residents.

The ideas raised by the seven speakers, none of whom were Vestas workers, varied enormously. Members of ‘Workers Climate Action’ called for immediate direct action and factory occupation. Speakers from the trades council simply urged workers to join their local union.

These demands are not enough, especially as the factory bosses do not recognise the trade unions. Members of the Socialist Party raised the need for a clear programme of demands to accompany coordinated action and urged both the meeting organisers and the workers to learn the lessons of Lindsey, Visteon and Linamar.

The job losses at Vestas are not unique on the Isle of Wight. There has been a 15,000 increase in the number of people forced to claim unemployment benefit since last year.

Currently the island is the lowest wage economy in the UK. Closure of a factory of this size would be a disaster for the entire Island.

The workers of the island will not find allies in the bosses or even in their elected MPs.

Tory MP Andrew Turner effectively turned his back on the workers by saying: “My job is not to solve this problem!”

The representative from SEEDA, the regional development agency, said that although they have a budget in excess of £169 million, there was no will to use it to save Vestas jobs.

One member of the trades council even announced that they had written to Peter Mandelson to petition him to save the plant.

We say that the answer will not be found with Lord Mandelson or an unelected government quango.

We pledge our support to and call for clear demands for the workers of Vestas, including:

  • No to job cuts.
  • Re-invest in the factory – Keep production going.
  • Full trade union recognition.
  • Take the factory into public ownership under democratic workers’ control and management.
  • Form an action committee to take the campaign forward.
  • Organise a demonstration on the Isle of Wight as soon as possible to build solidarity for the Vestas workers.

Labour’s recession is far from over

The big story of the past week, along with the preceeding resignations by Blairite ministers trying to topple Brown?

Millions of Labour supporters stayed home; two fascists won seats in the European parliament on a reduced turnout. Yes, their vote fell, but they won seats because of the low turnout.

I won’t give you the obligatory post dedicated to how and why they made a breakthrough. Oxygen of publicity and whatnot.

So, Brown’s clinging on, having ceded more power to Lord Mandelson, who is now virtually deputy Prime Minister – and unelected, like many in the reshuffled Labour cabinet. Having faced down the parliamentary party in a stage-managed meeting, Brown’s hoping that an economic recovery will save his premiership.

Darling, in situ as Chancellor, despite rumours the PM wanted to replace him with Ed Balls, warns against complacency in seeing “green shoots” of recovery. As well he might, he knows how much government spending will have to be directed towards those made unemployed. Oh, and the banks – mostly owned by the public these days – they aren’t lending to our manufacturing base…

Mandelson, negotiating with the new owner of Vauxhall, is unable to guarantee jobs will stay in the UK. So much has been devoted to bailing out the banks, there’s not much room for manuoevre – not unless there’s another radical change in approach.

A senior Tory let slip that they intend to cut spending by 10% on all but health, education, and international aid, if they win the next election. To Labour’s cries of “Tory cuts!” – the nearest they get to a class analysis of Her Majesty’s Opposition – the reply comes, from both the Tories and the corporate press, that Labour is committed to 7% spending cuts across the board.

As Ann Pettifor has pointed out, to cut spending in the next few years will be a disaster for an economic recovery:

As things stand, any fragile signs of economic recovery will quickly be crushed by the failure of government to intervene and spend at an appropriate level. Instead, government cutbacks will impact with considerable force on the fragile economy, and will hurt the middle and working classes. As the year proceeds many will discover the true, and often pitiful value of their pensions, and will be hurt by cuts in services and job losses in the public sector. This will hamper recovery and deepen, if that is possible, the alienation of British voters from the Labour government.

And don’t forget, this is the woman who was writing about the debtonation before it began.

She continues in the same article to outline the blades which may slice through any “green shoots”:

Foreign direct investment could fall globally by 45% this year, according to the same report, and corporate profits will decline by 20-25%. Global trade is down 25%, and the EIU predicts trade will be down by 10-15% by year end – the worst figure since 1945.

In April this year, consumer prices turned negative in the US, the UK, Germany and Japan. This may be good news for consumers, and may help lower food prices for the poor, but it is not good for the economy as a whole. Businesses cannot profit from negative prices, so they are bankrupted and lay off employees. The rocketing numbers of unemployed (whose plight is seldom taken seriously by orthodox economists) will cut back on borrowing and shopping and may even default on loans. This is not good news for the productive sector of the economy, and it’s very bad news for the banking sector. Banks have still not fully de-leveraged the debts on their balance sheets. Now, thanks to rising unemployment, non-performing loans are “set to rise sharply around the world over the next 12-18 months” according to the EIU. This is very scary, if one considers that there are still $600tn of liabilities in the form of derivatives on balance sheets out there – backed up by a mere $38tn of so-called credit default swaps (in reality a form of insurance on derivatives).

More banking trouble, in other words…

Pettifor concludes:

Nothing has been done to restructure the global economy and limit financial imbalances – including Anglo-American deficits and the Chinese surplus. Indeed these matters were not even discussed at the last G20 summit. Big, reckless money continues to be made from currency speculation, just when the global economy requires currency stability.

We – employees, consumers, investors and borrowers – have been misled and fooled by the economics profession and finance sector for years before this crisis. As a result of our gullibility, we lost $60tn of wealth in the past year. We would be wise now to dismiss their vain efforts at confidence-boosting, and instead rest our judgments on the real world economic outlook.

Back to politics, word is that Balls and Darling are split on how to present the supposedly “inevitable” cuts in public spending.

Hardly confidence boosting!

As far as this modest blogger can tell, the debate isn’t on what to cut, but on when to admit the cuts are coming.

In the leadership challenge that never was, the unions didn’t bark – despite the looming cuts and failure to aid the car industry. For sure, a change of leader – even to someone more in touch with the needs of ordinary people – would bring forth a general election at the worst possible time. With MPs expenses hanging in the air, Labour voters are unlikely to show up at polling stations and register support for the party any time soon.

For the Labour grassroots, there’s no difficulty in choosing between Trident, PFIs, the Afghan war, ID cards – or investing in a new generation of social housing, a Green New Deal, and helping workers to stay in their jobs. However, there’s no means by which the party’s grassroots can influence policy; even the parliamentary party has a tough time defeating unpopular measures, like Royal Mail privatisation, which hasn’t yet been ditched.

According to opinion polling, most voters agree Labour has abandoned its traditional supporters and believe that the Tories are most interested in helping out the rich. So what gives with the BNP victories, then? Well, it’s worth remembering that the Green vote was up – they campaigned on job creation through a Green New Deal to invest in energy efficiency and renewable energy industries, all very practical. But if your main themes are not echoed in the media, it’s difficult to get ahead. The upcoming by-election in Norwich could see the Greens win their first MP, should the support be forthcoming.

In the meantime, I’m wondering exactly where this announcement by John McDonnell will lead:

If we go beyond November without real change visibly under way, what hope is left of Labour not only remaining in government but also surviving as an effective political force at all?At that stage the only responsible act in the long-term interests of our movement would be to offer a real change in political direction by mounting a challenge to the political leadership of the party and letting the members of the party decide. Let me give notice now that this is the path I will take. If this route is blocked again by MPs failing to nominate, then the alternative is Labour MPs making it clear at the next election that they stand on a policy platform of real change as “change candidates”.

Of course, they will be standing as Labour candidates but binding together as a slate of candidates committed within Labour to advocating a change programme, setting out the policy programme they will be advocating as a group and supporting in parliament if elected. Only in this way can we demonstrate to the supporters that want to come home to Labour that there is the hope and prospect of change.

I can’t see a policy debate being tolerated, not without the capitalist media emptying another bucket of shit over the heads of New Labour and calling for a Cameron coronation. Hence the talk of the Blairites toppling Brown without recourse to either the PLP, the members, or the unions – with the Cabinet nominating one of its ranks to become party leader and PM.

So, the question is, will McDonnell and co. defect to form a new workers’ party? If not, will parties like the Greens back this new “change candidates”?

Waterford Wedgewood’s new owner plans to outsource jobs

The company should have been given over to its workers, without whom the company is nothing. The old bosses had failed, the workers should have been given a crack of the whip – the British and Irish governments could have helped turn the firm into a workers’ cooperative. But no, both states are structured to help the rich get richer, not to keep workers in good jobs.

Now most of them will be sacked – their jobs going where the wages are cheaper, all part of the “free” trade “free” market race to the bottom. The rest will no doubt be called upon to take pay cuts – all to restore the profitability of the firm for its new owners.

We all face this situation – the fear that if our jobs aren’t exported our wages will stagnate. But if we were the owners, we wouldn’t be trying to squeeze profit out of ourselves – we’d be trying to make a living, not a killing!

This candid article is from the Financial Times, and I’ve put the pertinent information in italics and bold:

The new owner of Waterford Wedgwood plans to use the fabled but struggling ceramic and crystal tableware brands as a platform for acquisitions after cutting costs and transferring production of all but the most prestigious products overseas.

Michael Psaros, co-founder of KPS Capital Partners, said that his strategy for turning round the lossmaking company was to cut costs by streamlining its back office operations and shift more production to cheaper countries.

“It is all based on costs and we are not assuming any revenue growth to achieve profitability,” said Mr Psaros, who completed the purchase of the major assets of Waterford Wedgwood out of receivership last night. “We intend for Waterford Wedgwood to be an acquisition platform in this industry and we’re prepared to invest very significant capital in helping to grow the hell out of the business.”

The deal transferred 3,800 staff and many Waterford Wedgwood assets out of receivership, such as its Staffordshire china factory and visitor centre, and its biggest brands, including Royal Doulton and a licence to make Vera Wang pottery.

New York-based KPS, which specialises in buying troubled companies, will invest €100m (£94m). The company will be “virtually debt free”, after leaving €800m of debt and pension liabilities in receivership. The deal involved operations in 10 different countries, including the US, Japan, Australia and Singapore.

KPS is not buying any assets in Ireland except the stock of products. Mr Psaros said 173 of the 480 staff in Ireland would continue to work, but they would be employed by the receivers, not the new company. A consortium of local Waterford-based businessmen are in talks with the Irish government to fund construction of a new crystal factory in the area. Mr Psaros described the existing factory as “a dinosaur manufacturing plant”.

Mr Psaros said the company was already moving its Waterford crystal production to Germany and Slovakia, and its Wedgwood and Royal Doulton china production to a factory in Indonesia. But he said “it didn’t do it fast enough”.

“We are going to accelerate transfer of activity from the UK to Indonesia,” he said. “Indonesian labour is 85 per cent cheaper than the UK. But the real works of art and highest-end products will still be done in Barlaston.”

A bonus question: are you having a laugh?

As David Cameron urges us to have faith in the capitalists who have ruined our economy, Mark Steel squeezes a few laughs out of the sorry affair of greed and corruption:

The real point about a minister saying this is the worst economic crisis for 100 years, is it shows they haven’t got a clue. That figure was plucked out of nowhere, unless there was a really dreadful crisis in 1909 that no one ever noticed before. Maybe the minister’s just seen Mary Poppins, and the scene where the bank goes bust, he thinks is footage of a real financial crash.

So his next statement to Parliament will be “In order to steady the financial markets we are proposing tuppence tuppence tuppence a bag, feed the birds, tuppence a bag. THAT is the sound economic sense that can rescue our banks, rather than the ill-thought-out soundbites from the party opposite.”

Why not say it’s the worst for 2,000 years, when the great crash of 9AD was caused by the gross overvaluation of aqueducts? Or the worst for 65 million years, when the Jurassic currency disaster led to bankers throwing themselves from the top of brontosaureses, followed by the eventual disappearance of all dinosaurs, despite the Prime Minister having boasted: “We have finally put an end to the cycle of evolution and extinction.”

Next week a minister will announce that the Bank of England has revised its forecasts, and instead of the crisis getting as bad as diarrhoea, as it first thought, it now expects it could be as bad as gastroenteritis, and the IMF believe it could even reach the point where it’s like one of those days when it’s coming out of both ends at once. But with careful fiscal handling this should be easing by the last quarter of 2010.

You have to admire the front of these ministers for saying anything at all about what’s happening, given they insisted for years there would never ever again ever be a cycle of boom and bust.

Similarly an army of experts assured us on a daily basis that this boom couldn’t possibly crash like previous booms because this boom was still going on whereas all previous ones had ended, and previous booms were founded on a manic belief that wealth could go up and up without any basis in reality, whereas this one was built on the sound footing that everything really is somehow suddenly worth twice as much so TAKE AS MUCH AS YOU CAN RIGHT NOW IT CAN’T EVER STOP!!!

For example, one of the bankers questioned yesterday said it was “not possible to envisage” the banking crash. But in every office, every pub, every launderette, there were people who managed to envisage exactly that. If Gordon Brown had got them to write his chancellor’s speech, so that it went: “The bubble’s got to burst sometime. I mean, you can’t base an economy on pretending everything’s doubled in value, and who’s going to pay for these bankers’ bonuses – WE are, that’s who. I commend this budget to the House,” he might not be in his present trouble.

Instead the people who couldn’t possibly envisage what was obvious are allowed to carry on. To be fair, ministers have expressed their annoyance at the bankers’ bonus system, so presumably there will now be a series of adverts in which a furtive banker buys a boat, while the camera zooms in to his sweaty face and a voice says: “Banking cheats – we’re closing in.”

One answer may be a review of how this bonus system came about. As if the Government’s making out it’s only just heard about it and they’re as outraged as everyone else. Maybe Brown will make a statement to the nation in which he says: “HOW much do they pay themselves? Well no WONDER we’re in a pickle, you just wait ’til I get my hands on them.”

But New Labour urged and encouraged every aspect of this corporate avarice. It was defined from the beginning by characters like Mandelson making speeches such as: “In the modern Labour Party we are relaxed about those who express an insatiable and pathological desire for self-enrichment at the expense of our fellow man that borders on the truly evil.”

They grovelled to every banker, and now they want to set up a review to see how that happened. If only Karen Matthews had thought about it, she could have said: “Instead of going to jail, why don’t I set up a review to see how I kidnapped my own daughter,” and got herself six months’ work.

Peter Taafe continues on this theme in the latest edition of The Socialist:

When John ‘Two-Jags’ Prescott – a willing participant in the New Labour project that spawned these financial creatures – inveighs against the bankers and calls for a public campaign against the proposed bonus payouts of £1 billion at Royal Bank of Scotland (RBS), it indicates the mass rage on this issue.

Prescott even mentioned the ‘C word': “This is raw capitalism and this country rejects it”! Correct! But didn’t he serve in the government alongside Gordon Brown and Tony Blair which supported and did everything to strengthen neo-liberal “raw capitalism”?

When questioned on Newsnight, he wasn’t able to answer the accusation that it was him and his government that helped to create this situation. They promoted ‘performance related pay’, though for the bankers with the perversion that no satisfactory performance was even necessary.

Vince Cable, the Liberal Democrat spokesperson, pointed out that following the bursting of the ‘South Sea Bubble’ speculation in 1720, a parliamentary resolution proposed that bankers be tied up in sacks filled with snakes and thrown into the river Thames!

However it is guaranteed that the parliamentary committee that is ‘interrogating’ bankers this week will be full of ‘sound and fury signifying nothing’.

Alistair Darling and Gordon Brown are intending, under the enormous pressure that has built up, to introduce some curbs. But so far they have not even proposed what Barack Obama has suggested for the US, a ‘cap’ of $500,000 on the pay of what he has correctly described as the “shameful” US banking fraternity who want federal bailouts.

Economic abyss

In fact, the proposal is $500,000 too much. The overwhelming majority of the American people on the edge of an economic abyss clearly believe they shouldn’t get a cent.

In reality, all capitalist politicians are only proposing minimal action because of the public clamour against the greedy bankers. Obama remains firmly within the framework of the capitalist system; “we do not disparage wealth” (of the rich) he has said.

Their dilemma was summed up by Barney Frank, the chairperson of the US House of Representatives Finance Committee, who said of America’s bankers: “People really hate you. And they are starting to hate us because we have been hanging out with you. You’ve got to help us deal with that”.

The argument that RBS, which has received £20 billion from us, the ‘taxpayers’, ie the working and middle classes, must pay at least £500 million in bonuses because of “contractual obligations” is completely spurious.

This in a week when The Guardian has revealed that so-called ‘British’ companies, including banks like Barclays, use tax avoidance schemes to prevent payment of anything between £3.7 billion to £13 billion to HM Revenue and Customs.

Prescott also correctly stated that “these bankers would have been on the dole” if RBS had been allowed to go to the wall. He fulminated: “No ifs, no buts, don’t pay the bonuses”.

Amen, says every worker and middle-class person in Britain facing the burden of this crisis. The problem is how to carry out Prescott’s laudable aims. The government is once more merely proposing a delaying mechanism, another “review”.

Headed by a failed banker

Moreover, this is to be headed by a failed banker from the tottering investment bank Morgan Stanley, who himself has taken multi-million pound bonuses – a classic case of the proverbial “poacher turned (tame) gamekeeper”.

Neither Prescott nor the MPs on the House of Commons committee foresaw the pernicious effect of the work of the financial plutocrats and the breathtaking arrogance of them daring to suggest that they continue to profit from their past misdeeds.

But socialists and Marxists did. Tommy Sheridan, for instance, when Brown himself knighted Fred ‘The Shred’ Goodwin, declared: “It’s an absolute outrage that this man is to receive a knighthood for ‘services to the community’ when all the community has received from him is low wages and unemployment” (Daily Mirror). Tommy’s reward is to be pilloried and dragged once more, this time with his wife, before the capitalist courts in a case he has already won once!

Moreover, this was at a time when Jeff Randall of the Daily Telegraph was hailing Goodwin as a “world-class banker” and another characterised him as a “genuine business hero”. The whole of the ‘business community’, and all of the three major capitalist parties, were in reality on their knees singing hosannas to the City of London and the financial ‘wizards’.

Osborne and Cameron, the Tory leaders, would have us believe they and their party are innocents in all this. In fact, the roots of this crisis were created by their party when led by Mrs Thatcher and her massive ‘big bang’, the deregulation of finance capitalism. The result has been a huge polarisation of wealth which has ended in a devastating economic crisis and the ‘big bang’ of mass unemployment. The economic forecasting think tank ITEM now says that three and a half million workers could be ‘out on the stones’ in Britain, with one and a quarter million of this horrendous figure being under the age of 25.

This whole sorry bunch of capitalists, rooted as they are in a system that elevates the lust for profit over social need, cannot be expected to take effective action against their ‘own’, the bankers, other than to trim one or two fingernails. Why in any case do bankers under capitalism ‘need bonuses’ for super-exploiting the rest of us? They are on stratospheric salaries already. Managers, for instance, as late as the 1980s took home perhaps 20 times the average wage of their workforce, a managerial wage which was too high even then. Today, when the average wage is put at £25,000 a year (not an hour), their ‘remuneration’ is on average 275 times this figure and some receive a lot more than this.

And what is the net result of this? An anonymous cabinet minister told The Guardian: “The banks are f***ed, we’re f***ed, the country’s f***ed”. But not as much as the working class and the poor because they are the ones expected to carry the can. Therefore we must demand not a penny in ‘bonuses’ for bankers, both in the ‘nationalised’ and the private sectors.

But how can this demand be enforced? Darling the Chancellor says “commercial interests” are best at running the banks. Really? After 30 years when they have had the full ‘freedom of the park’ and have consequently wreaked havoc? Nationalisation, not in the capitalist, pro-boss way but in a democratic socialist fashion, is the first step in beginning to use the economic levers of power to benefit the majority, working and middle class people. Then Northern Rock for example, which has been bailed out by us and expects to dole out £8 million in bonuses to its executives while turfing workers out of their houses, may begin to act in the interests of ordinary working-class people.

Open the books

A precondition for effective action is to open the books of the banks. The argument that “bonuses need to be paid for specialised staff” is so much hooey. An average bin worker, car worker, steelworker or teacher, especially if they came together collectively in democratic committees controlling the banking industry, could do a lot better than these bankers, who did not even understand what they were doing with their financial alchemy.

A democratic form of organising a nationalised banking sector would draw in bank workers and other workers and their representatives, delegates of small business people, homeowners, etc. The organisations that represent working people, the trade unions, should be involved, as should ‘consumers’, including mortgage holders.

But, argue the opponents of nationalisation, “there would be a flight of capital”. The capitalists will always seek to sabotage measures they think are against their interests. The way to deal with this blackmail is to introduce a state monopoly of foreign trade, as a means of controlling all imports and exports including capital. Bold action is required, not tinkering, if a new road of prosperity and hope is to be opened up to the British people.

* Not a penny to the bankers in ‘bonuses’!
* Open the books to inspection by committees of workers, householders, consumers and small business people!
* No compensation to the financial ‘wizards’ who have ruined the economic position of Britain and with it the lives of millions!
* For a socialist, democratic, nationalised banking and financial sector.
* For a state monopoly of foreign trade.
* For a socialist plan of production democratically drawn up and implemented by committees of workers, trade unionists, small business people and consumers.

Above all, for the creation of a powerful movement now for a new mass workers’ party that can make these demands relevant and realistic for millions of workers who are looking for a lead.

Amen to that.

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