Thursday, 31 March 2011

The Biggest Lie in British Politics

By Johann Hari

British politics today is dominated by a lie. This lie is making it significantly more likely you will lose your job, your business, or your home. The lie gives a false explanation for how we came to be in this crisis, and prescribes a medicine that will worsen our disease. Yet it is hardly being challenged.

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to eradicate our deficit rapidly. Only that will restore “confidence”, and therefore economic growth. Every step of this program is false, and endangers you.

Let’s start with a fact that should be on billboards across the land. As a proportion of GDP, Britain’s national debt has been higher than it is now for 200 of the past 250 years. Read that sentence again. Check it on any graph by any historian. Since 1750, there have only been two brief 30-year periods when our debt has been lower than it is now. If we are “bust” today, as George Osborne has claimed, then we have almost always been bust. We were bust when we pioneered the Industrial Revolution. We were bust when we ruled a quarter of the world. We were bust when we beat the Nazis. We were bust when we built the NHS. Or is it George Osborne’s economics that are bust?

Our debt is not high by historical standards, and it is not high by international standards. For example, Japan’s national debt is three times bigger than ours, and they are still borrowing at good rates.

David Cameron claims that, despite these facts, they need to cut our debt by slashing our spending because the bond markets demand it. If they do not obey, then our national credit rating will be downgraded, and we will have to pay much higher interest on our debt. But here’s the flaw in that plan. That’s not what the bond markets say. Not at all. Professor Paul Krugman, the Nobel Prize-winning economist whose predictions have consistently proved right through this crisis, says Cameron is conjuring up “invisible bond vigilantes” who “don’t exist.” Who is the bond market really punishing? It’s the countries that cut too fast, and so kill their economic growth. The last two nations to be down-graded were Ireland and Spain, who followed Cameron’s script to the letter.

It turns out that cutting our debt rapidly doesn’t cause an increase in “confidence” and so save the economy. Professor Krugman mocks this idea by calling it “The Confidence Fairy,” and goes through the historical record to show she doesn’t exist. Cutting doesn’t create fairy-magic. No: it has a very different effect.

Here’s what we learned during the Great Depression, when our view of economics was revolutionized by John Maynard Keynes. In a recession, private individuals like you and me, perfectly sensibly, cut back our spending. We go out less, we buy less, we save more. This causes a huge fall in private demand, and with it a huge fall in economic activity. If, at the very same time, the government cuts back, then overall demand collapses, and a recession becomes a depression. That’s why the government has to do something counter-intuitive. It has to borrow and spend more, to apply jump-leads to the economy. This prevents economic collapse. Instead of spending a fortune on dealing with mass unemployment and economic break-down, with all the misery that causes, it spends the money on restoring growth. Keynes called it “the paradox of thrift”: when the people spend less, the government has to spend more.

Wherever it has been tried, it has worked. Look at the last Great Depression. The Great Crash of 1929 was followed by a US President, Herbert Hoover, who did everything Cameron demands. He cut spending and paid off the debt. The recession grew and grew. Then Franklin Roosevelt was elected and listened to Keynes. He ramped up spending – and unemployment fell, and the economy swelled. Then in 1936 he started listening to the Cameron debt-shriekers of his day. The result? The economy collapsed again. It was only the gigantic spending of the Second World War that finally ended it.

It is working now. There are enough countries in the world trying enough different economic solutions that we examine them like laboratories. which countries have come out of this recession fastest? They are the ones like South Korea, which have had by far the biggest stimulus packages, paid for with (yes) higher debt. Which countries have fallen furthest and shattered most severely? The ones that tried to pay down their debts immediately with huge cuts.

Indeed, there’s an irony here. It turns out that if all you do is fixate on paying your debt now now now, and so you smother your economic growth, you will end up not being able to pay your debts off anyway. That’s what just happened to our nearest neighbor Ireland, may she rest in peace. And it’s what has happened throughout British history. Professors Victoria Chick and Ann Pettifor conducted a detailed study of the last ten recessions, and they found that consistently “fiscal consolidation increases rather than reduces the level of public debt as a share of GDP.” Think of it this way. It’s as if tomorrow you became so panicked about your mortgage that you decided to pay it all off in one year, by ceasing to buy food and water. You get sick, and your house gets repossessed.

So debt isn’t the problem. Debt is part of the cure. The facts suggest need to spend more, not less, to get the economy back to life – and pay back the debt in the good times, when we will be able to afford it.

I am not a doctrinaire defender of the last Labour government. I think Tony Blair should be in prison, and Gordon Brown will be damned by history for his role in deregulating the banks – the real cause of this crisis. But to claim that this crisis was caused by Labour “racking up debt” is simply false. When the Great Crash hit, Britain had the second-lowest debt in the G7 club of leading economies. To react to a recession by increasing spending, and so keeping the economy afloat, is the only rational response. The real criticism is that they didn’t go anything like far enough, and now Ed Miliband’s Labour Party is now too cowardly to defy the false conventional wisdom and make the case for fiscal stimulus, instead promising merely slower, smarter cuts.

The real reason why David Cameron is imposing these massive cuts has nothing to do with the national debt. It is because he regards himself as, in his words, “the child of Thatcher”, and he wants to pursue her agenda harder and faster than she ever dreamed. He can do the difficult job of selling that to the British people if he wishes – but he should stop doing it on the basis of a swollen, suppurating lie.

For further updates on this issue, you can follow Johann on Twitter at and listen to his podcast here.

Sunday, 27 March 2011

New World Order Prepares to Protect Sirte Residents From Themselves

It would appear that the Libyan "rebels", actively assisted by Western air power, have retaken the towns of Ajdabiya, Uqayla and Brega from Libyan government forces.

Obviously it is always difficult to decipher through propaganda and counter-propaganda quite what the situation is, but it seems likely that the Western-backed insurgents do enjoy some popular support, quite possibly majority support, in these particular towns.

According to the BBC the triumphant anti-government forces now intend to advance on Sirte.

Sirte is, without any shadow of a doubt, a town in which almost all if not all of the civilian population are loyal to the government. This fact is even acknowledged by the Western media.

In effect then the next job on the list for the insurgents and the coalition air forces, whose role seems to have morphed seamlessly from one of "protecting civilians" into one of pro-actively softening up targets before they are attacked by "rebels", will be to "liberate" a town the civilian population of which has no desire to be "liberated".

Assuming the people of Sirte hold their nerve, what this means in practice is that the coalition air forces will need to attack and batter the civilian population of the town to such an extent that it weakens their capacity or their determination to fight off the insurgents who will, the moment is right, subsequently invade.

Which really does give the concept of "protecting civilians" a whole new meaning, doesn't it?

In order to prepare Western opinion for this, expect lurid "discoveries" of mass rape, pillage and baby-eating by Gaddafi supporters, civilian as well as military, over the next few days.

And expect the usual suspects to lap it up gratefully as they do every single time.

However, the encouraging news is that a recent poll showed 46% of the British people to be opposed to military action in Libya, against a smaller percentage in favour. This is in the face of the barrage of pro-war propaganda to which they are unrelentingly subjected by politicians of all the major parties and the national media.

What a blessing the Internet, which enables people to access information from all sources and reduces dependence upon official media, allowing thinking people to make their own minds up, has turned out to be.

Thursday, 24 March 2011

Thinking the Unthinkable

I am watching Ken Livingstone on Question Time as I type. The debate is still going on but he was right on the money on Libya and he was also impressive on the general direction of the present government.

I have to admit that I have begun to think the unthinkable, at least in respect of the upcoming London Mayoral election. Whether or not the Libyan campaign is over by then there will be others and having an anti-war voice in such a prominent position during the 2012 Olympics in particular could be immensely beneficial. Indeed it could well save many innocent lives.

If anybody thinks I am wrong, please use the Comments section below to tell me why.

Tuesday, 22 March 2011

US Struggles to Explain Difference Between Bahrain, Libya

Mullen's Surprisingly Honest Answer: Bahrain a Long-Standing Ally

by Jason Ditz

The Obama Administration’s rush to escalate Libya into a full-scale war, nominally as a reaction to the Gadhafi government’s violence against protesters, has put it in an awkward position. The violence was far from exclusive to Libya, and similar crackdowns are growing all the time in Yemen and particularly Bahrain.

Which leads to the inevitable question: how can the Obama Administration use Gadhafi’s crackdown on Libyan protesters as an excuse for war, while insisting Bahrain not only has the right to do the same, but has the “sovereign right” to invite Saudi Arabia et al. to join in on the fun?

It is a question that was raised on a number of stages over the weekend and tackled by a number of top officials, particularly Sen. John Kerry (D – MA), who insisted that Iran and Hezbollah were secretly to blame for the protests.

The most honest answer, however, came from Admiral Michael Mullen, who insisted that Bahrain “has been a critical ally for decades” but Libya hasn’t, and that in and of itself justified treating it as a totally different matter.

Bahrain’s opposition, for its part, has been urging the UN and the Obama Administration to put a stop to the crackdown. No one seriously expects this to actually happen, but other than Admiral Mullen’s unusual candor, no one seems willing to explain why.

Reproduced with acknowledgements to

Saturday, 19 March 2011

The Blood of Our Heroes is On Their Hands

Good news, the deficit has been cleared!

How else - at a time when our libraries are closing, our public services are being cut to the core and we are all being asked to tighten our belts - can we suddenly afford yet another military adventure in an oil-rich country under the guise of a "humanitarian" act? Last time it was non-existent WMDs, now we have a new concept - the ceasefire that only applies to one side!

That's right, the UN resolution on Libya forbids government forces from engaging civilians, but makes no reference to aggressive acts by anti-government forces (whom we keep being told are unarmed but who nonetheless initially succeeded in occupying half the country within the space of a few days and who now seem to have tanks and an air force).

This means in practice that opponents of the regime are free to attack government forces with impunity but if those government forces defend themselves against attack by the "rebels" - who are civilians - then they are in breach of the UN resolution and will provide an instant excuse for the US and its clients to intervene and force regime change in yet another sovereign state.

Is there anyone left anywhere in this country who is still mug enough to buy this crap?

We may have a different Prime Minister, from a different party, but the forces whose role it is to direct a deeply sinister and secretive international strategy would appear to remain in place.

The blood of every heroic British serviceman and woman who loses their life for the government under the false flag of "democracy" is on their hands.

From time to time I am asked why I never joined any of the British establishment's politicial parties. I'm sorry, but I need to be able to sleep at night.

Monday, 7 March 2011

Opinion: Liberals Shouldn't be Scared of Murdoch

By Matthew Green

Trying to stop Murdoch from consolidating his hold on BSkyB was always going to be difficult. That is mainly because the case for stopping him was rather weak in the terms that governments are allowed to intervene in such matters. Murdoch already has practical control; he does not dominate the total television market, with the BBC and ITV still strong. The case rested on the proposition that he would further dominate the news market as a whole. But what really drove the campaign against Murdoch was fear and loathing. Liberals should have no difficulty with the loathing side of this, against the organisation that created Fox News, but this does not constitute grounds for intervention.

The fact is that Murdoch does not have a monopoly of hateful rightwing propaganda in the UK. He’s in stiff competition with the Mail, the Express and the Telegraph. And he does not have a monopoly on dodgy journalism, where the Mirror joins the list. It is these organisations that should fear him, and they were a strong part of the campaign to stop his takeover of BSkyB. Liberals can be much more sanguine: he’s not really after our part of the market.

But we do have to swallow a hard fact. An awful lot of people in our country will pay good money to read right-wing rubbish. Murdoch is exploiting this fact, not creating it. Promoting liberal values is about making stronger arguments. Press regulation needs to be firm; we must protect the independence of the BBC. Who owns BSkyB is a pretty secondary issue.

Reproduced with acknowledgements to Liberal Democrat Voice

Lib Dem Urges RBS and Lloyds Shares Giveaway

By Andrew Bryson

Senior Liberal Democrats want the government to give away billions of pounds of its shares in Royal Bank of Scotland and Lloyds Banking Group to the general public.

The radical idea would see most of its stake in the banks shared between 46 million adults on the electoral roll.

A floor would be set so the shares could not be sold until they had passed the price paid by the government.

Individuals would only keep any gains made above that floor price.

The government spent £65.8bn buying shares in the banking giants.

It owns 83% of RBS and 41% of Lloyds.

The idea is set out by Stephen Williams, Liberal Democrat MP for Bristol West, in a pamphlet for the think tank Centre Forum.

He said: "There is a danger that when the banks return to the private sector, it is business as usual. There is a general feeling in this country that we need to get something positive in return for the bail-out.

"This plan would recoup the public's investment and allow the taxpayer to get the benefit from any increased value in the banks."

Under the proposal, shares would be deposited in individual trading accounts.

Mr Williams told the BBC how he saw the plan working: "Every citizen would have the same rights as shareholders at the moment, so they'd have the rights to get the company annual report. They could turn up at the AGM.

"What might happen, for instance, is there could be shareholder associations set up of citizens who own these shares, who will put pressure on the banks to change their behaviour. Banks and all other companies are meant to be owned by their shareholders and to respond to their shareholders' wishes."

Popular appeal

At current prices, every adult would receive shares worth just under £1,000.

Each account would be set up with a default option to sell the shares over two or three years, although individuals could opt to hold the shares for longer.

The idea may have popular appeal - but it was not conceived by politicians.

The city firm Portman Capital devised the model for the Liberal Democrats as a way round some of the problems the government could face in a traditional share sale.

Privatisations in the 1980s saw shares offered at a big discount.

That tempted institutional investors to buy in, but led to criticism the government was "selling the family silver" off too cheaply.

In 2008 and 2009 the government injected approximately £45.5bn into RBS by buying shares, and £20.3bn into Halifax Bank of Scotland, which was taken over by Lloyds.


UK Financial Investments, which manages the public's stakes in the banks, is currently expected to sell them through conventional means.

That is likely to include placing the shares with pension funds and sovereign wealth funds, as well as offering them to retail investors.

UKFI is likely to have to stagger the sale of the shares over a number of years in order to get the best price so that the market has time to absorb the huge amount of shares on offer.

The shares are currently trading a few pence below the government's "break even price" of 51p for RBS shares, and 74p for Lloyds.

Toby Fenwick from Portman Capital says the shares suffer from an "overhang" - a situation where the market knows a lot of shares are likely to be sold and consequently depresses the share price.

"Under the current scenario there is one seller with a very big stake to unload and the market knows its break-even price," he said.

"A share distribution would create a new scenario with tens of millions of sellers each with a small stake and no incentive to sell below the 'floor'."

The idea is backed by Mr Williams and Lord Dick Newby, the Liberal Democrats' Treasury spokesman in the House of Lords.

It is not official Liberal Democrat policy, although the party's ministers are understood to be sympathetic to exploring whether the idea would work.

A source close to Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said: "No decision has been taken about how or when this issue is going to be dealt with. But this is a welcome contribution to the debate."

Reproduced with acknowledgements to BBC News

Saturday, 5 March 2011

One Down, Three To Go

I watched the webcast of the all-important meeting of Borough Council on Tuesday night, where the annual budget for the London Borough of Hounslow for the financial year 2011/12 was set.

Actually I watched most of the meeting. Having planned to watch the whole thing I initially forgot about it, perhaps betraying my declining interest in some of these things, and tuned in at about 8.15. My guess is that the substantive debate would have begun about fifteen minutes or so before that time.

My first sense was one of amusement not only at how seamlessly the poachers had apparently morphed into the gamekeepers, but at how equally untroubled the former gamekeepers seemed to be in playing the role of poachers.

During the Conservative/ICG administration of 2006-2010 (the last eighteen months or so of which could more accurately have been described as the Conservative/Chief Officer administration due to the fact that unelected employees were quite shamefully permitted to engage in open warfare with the junior partner in the coalition) the Labour opposition criticised the administration for making cuts to services, and the administration would defend its savings on the grounds of necessity. Now the roles were reversed, and the Conservative opposition lobbied passionately for the retention of essential frontline services such as the Chiswick Day Centre whilst the Labour leadership flitted between making light of the closure of such facilities for the vulnerable and blaming the government for making them do it.

Some of the faces were familiar. Councillor Adrian Lee, now Deputy Leader of the Conservative Group, can be relied upon to amuse and entertain whilst delivering his damning verdict about the shortcomings of "the party opposite". Councillor Gerald McGregor always does angry and indignant very well. Some references to the shameful closure of John Aird House in Brentford during the previous Labour administration of 2002-2006 had Labour reeling for a while, and the Deputy Leader of the Council Ruth Cadbury made a brave but wholly unconvincing defence of this particularly callous decision. For all their protestations about being there for the poor and needy the record in Hounslow shows quite clearly that said poor and needy are more likely to be picked off by a Labour administration that takes advantage of their vulnerability and relative defencelessness than by any other.

But I also sensed that not only had Labour regrouped and taken back "control" of the local authority, but also that the Group had much more about it than it had during its days in opposition. It had more professionalism, more competence, and exuded more of an authority than it had done during those (for them) lean and chaotic times.

More than this, to me it exuded more of a sense of responsibility. It was visibly less arrogant than it had been during those bad old days, when it had seemed to preen itself with its belief that it was in opposition solely because the electorate had lacked the sophistication, wit and intelligence to recognise the party's higher being and its general wonderfulness.

The Mayor handled the meeting very well, and fairly too, giving the opposition every chance to engage. The Leader of the Council, Jagdish Sharma, is always gentlemanly and magnanimous in his delivery. As I have said elsewhere, I was particularly impressed by Isleworth ward councillor Ed Mayne, whose frequent contributions were made with a confidence and coolness that belied his age and inexperience as he accepted and generally fended off the challenge from some quite senior Conservatives. I don't know if it sounds perverse of me to say this in the light of the fact that he won one of "our" seats in Isleworth, but I felt a strange sense of pride in the fact that an Isleworth councillor was performing so well. It is my view that Ed may well be leading the Labour Group in the not too distant future, that is if he doesn't go onto higher things before he gets the opportunity.

Comfortable in Opposition

My endearing memory though is of how comfortable, some would say natural, the Conservatives looked in opposition. They are invariably a good opposition, always challenging and probing, some of them making their case with eloquence and finesse. I have been taken to task for saying it before but I repeat my belief that many of them would appear happier being the minority party on a council comprising only "proper" councillors than they were when having to share power with a group of interlopers from the community who had dared to gatecrash the cosy set-up that had existed before the ICG kicked its way onto the scene. In this outlook they and Labour actually have a lot in common.

In a strictly local context the Labour councillors seem to understand already that the secret to their continued success lies in engaging and trying to win around the hardcore active community that abandoned their predecessors for the ICG, not without good reason I should add, in most cases probably a decade or so ago. Meanwhile said predecessors continue to try to undermine their efforts via the local internet forums, betraying a bitterness towards Labour's new kids on the block that almost equals their bitterness towards us.

These are interesting times. I don't envy the task of the current administration as it looks to find the £42m that it still needs to chop from the budget over the next three years in order to meet the shortfall from central government funding.

Far from being the irritant that some of our politicians would seem to consider it, the community has a more important role than ever to play in ensuring that the administration resists the temptation to look to our libraries and community facilities for some of that saving. If our new crop of politicians want to work with us, rather than against us, in that endeavour then the imperative for us to want to take their seats and do the job ourselves diminishes.

Thursday, 3 March 2011

No Representation in Lieu of the People?

Despite my relative lack of interest in national and international politics these days I do find myself pondering the current troubles in Libya.

As a leading National Front activist in the late 1980s I was an avid admirer of Colonel Muammar Gaddafi (or "Qathafi" as my erstwhile comrades and I liked to spell it at the time, lending us a sense of affected superiority). Where there was a suggestion that his regime was anything short of perfect, for instance his arming of terrorists, I simply ignored the evidence.  In that way I was able to able to maintain a rose-tinted picture of revolutionary perfection throughout.  So ghettoised and unpopular was the NF at the time that it considered Gaddafi and the Ayatollah Khomeini to be desirable sources of political respectability!

Those who find comfort in the traditional view of extreme nationalism in the UK as being motivated only by race hate and driven by a political worldview which sits conveniently to the right of the most hardline Conservatives on the "political spectrum" would be confused by this infatuation with a Libyan revolutionary who includes the word "Socialist" in the title of his "State Of The Masses".

But in fact Gaddafi and his Green Book was one of the many ideological affectations embraced by the very eccentric version of the NF of which I was a member circa 1987-1989, and of all those in the party I was probably at the time his most devoted enthusiast.

So I occasionally have to remind myself that my view of the world has altered radically since those bad old days if I am to take an objective view of the events of the last few weeks over in the "Splaj".

The essence of Gaddafi's ideology is that he believes power to lie with the masses and not with centralised government, and that those who speak for those masses do so as delegates rather than as representatives. No Representation in Lieu of the People is a slogan than reoccurs throughout his seminal work.

I have to admit that I retain a great deal of sympathy for this as an ideal. Nonetheless it would seem to be the case that the practice has deviated from the principle rather a lot, and much though Gaddafi would have us (and himself) believe that he is a mere symbol of the Green Revolution and that he wields no executive power of his own, the actuality is almost certainly entirely different. The replacement of most of his conventional army with an "armed people" may avoid giving off an appearance of a military dictatorship but one suspects that, as on Animal Farm, some of the guardians of the Revolution are in fact more equal that others.

All the same it is quite alarming to listen to the news in the UK and to realise just how little the commentators at the BBC and Sky actually understand, or affect to understand, about Libya.

We are told that the army has gone over to the protestors, with the implication that this must inevitably spell doom for the Gaddafi regime. But rarely is there any hint of an understanding of what little importance the men in uniform actually have in a country in which everybody is armed and where power comes through committees of civilians.

We are told that nobody is supporting the government, and yet it would appear not only to be holding the capital but also launching counter-attacks against cities that have fallen into the hands of anti-government forces, albeit today's attempt to retake Brega transpired to be something of a damp squib.

We are told that the strength of the rebels in Benghazi makes a final and decisive incursion into Tripoli an inevitability, rather ignoring the inconvenient fact that the two cities are several hundred miles apart with a desert in-between and that the rebels have no transport.

We are told that the Libyan government has launched air strikes against its own people, a truly despicable thing to do if it is true. The Libyan government insists it is not true, as of course it would, but the Russians who have been monitoring the situation by satellite are saying the same thing.

The real difficulty that arises when trying to understand what is going on in Libya is that nobody seems to be telling us the truth. Gaddafi, absurdly, has tried to suggest that Al-Qaeda is behind the uprising when a cursory glance at the demonstrators will tell any observer that these protests are not the product of an upsurge of Islamism. Quite the opposite in fact - the hand of the United States and its Western allies suggests itself, which would explain the rather peculiar demand that Gaddafi should stand down after having been partially successful in resisting uprisings of a kind that brought down the leadership in both Tunisia and Egypt. It is the cry of an outside party that has seriously botched its attempt to overthrow a sovereign state and wants to destroy the evidence as quickly as it can.

One considers, but not for too long, whether David Cameron and his government would resign and hand over power to the students should they ever decide to replace fire extinguishers with guns, and single-issue protest with revolutionary intent. We all know that in such an event the response of our government - like that of the Libyan government or indeed any other government when faced with the same situation - would be to suppress the uprising ultimately by using any means necessary.

Of course, whatever lies behind the upheaval the people fighting on the streets of Libya against the regime are not Americans and they are not Israelis. The sincere aspirations of the Libyan protestors would appear to be freedom and democracy and if, perhaps a little arrogantly, we are to assume that our version of democracy is entirely good and that Gaddafi's is entirely bad, we should see this as a positive. But a US-sponsored revolution would, given the choice, replace the current regime with something that was more US- and Israel-friendly, which in turn would provide massive political ammunition to the Islamists who wait in the wings.

Whichever way one looks at it, it is not pretty. As I see it there are three possible outcomes for the immediate future:

1. A bloodbath as pro-government forces use their superior firepower and strategic advantage to reassert control.

2. A "two nation" solution, at least in the short term, with the government remaining in control of a smaller Libya governed from Tripoli and the rebels governing themselves independently from Benghazi, possibly under the protection of the UN, the US and/or the Arab League, or

3. Military intervention by the US and its allies to finish the job they began without (incredibly) any proper knowledge of how Libya operates, resulting in illegal regime change openly imposed by invading powers a la Iraq.

Whichever it is to be, I truly hope that it can be done with quickly and with as little innocent blood shed as is humanly possible.