A Future That Works
NO2aTory/Liberal coalition - Vote with your feet for an alternative to a neo-liberal economy and neo-conservative state Yes2aLeftFront and a Red/Green Left Alliance
Monday 7 November 2011
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NO2aTory/Liberal coalition - Vote with your feet for an alternative to a neo-liberal economy and neo-conservative state Yes2aLeftFront and a Red/Green Left Alliance
Erst and Young ITEM Club's Autumn growth forecasts, reported here in the Sunday Times (£), predicted that the eurozone crisis in which Greece, Portugal and Ireland all left the euro could cut UK GDP by 4%, knocking its economy back six years resulting in a deep recession.
ReplyDelete‘‘There is a desperate anxiety in the financial community to say that unless governments give us lots of money and pay off our debts the world will come to an end - without being very specific about how it comes to an end. We are enthralled to the financial community as we were in 2007 and 2008. They are saying if you don't give us loads of money we will bring the world as you know it crashing down around your ears. To some degree they can do it, it's not an empty threat.
ReplyDeleteAs far as an ordinary British business is concerned if the Eurozone collapses new currencies are created and some go up and some go down. That's what happens. But the real impact is what happens in the financial sector and how that impinges on them. That's the story of 2007/08. It was the knock on consequences if you couldn't get a loan from your bank rather than a crisis in America. As in 2007-08 this is a financial sector problem and that sector will work very hard to make it into a problem for the rest of us one way or another. Until we tackle that culture, it will keep reoccurring.’’
(John Kay, economist and FT columnist)
David Cameron comes under pressure to spell out whether taxpayers will pay towards Eurozone bailouts, after it emerged that Britain could lend a further £35bn to the International Monetary Fund.
ReplyDeleteDanny Alexander the Liberal-Democrat Chief Secretary to the Treasury says ‘‘The IMF was a British invention. That's why we should be supporting it. No country in the global economy can be an island – we are in an interdependent world. We have to play a role as a global leader, as one of the largest economies in the world.’’
ReplyDeleteRight-wing Tory Eurosceptics have seized on a YouGov poll for the Sunday Times which showing that 55% of people agreed with the statement ‘‘Britain is not in the Eurozone and has its own problems. We should not contribute any money to help solve the debt crisis’’ with just 26% agreeing the statement ‘‘an economic crisis in the Eurozone would have a major impact on Britain's economy, and it should contribute money to help solve the crisis’’.
ReplyDeleteDeputy Prime Minister Nick Clegg says ‘‘I think it is in Greece's interest and also in the Eurozone’s interest, and therefore the United Kingdom's interest, not to see countries fall out of the Eurozone because it would have a huge domino effect which, let's be quite clear, would cost people's jobs and livelihoods here in the United Kingdom’’.
ReplyDeleteRecent arguments over the EU ignore the capitalist system
ReplyDelete‘‘When discussing the EU it is important to note that, while the Treaty of Rome (1957) was drawn up in the Keynesian era, the Treaty of Maastricht (1992) was drawn up under monetarism.’’
‘‘Since 1979 monetarism/neoliberalism has come to influence the non-Anglo-Saxon countries, hence the shift in the EU, but it shouldn't be forgotten who lead the way and that much of western Europe still lags well behind Britain in its adherence.’’
‘‘Since the meltdown in 2008, the right has sought to shift blame away from deregulation and the financial system and onto profligate governments.’’
http://www.morningstaronline.co.uk/index.php/news/content/view/full/111689
This surely demonstrates that capitalism is a global force and can only be resisted internationally as Lenin argued not nationally as Stalin thought.
ReplyDeletehttp://leftalternatives.myfineforum.org/sutra11595.php#11595
As the Eurozone debt crisis continues dragging in Berlusconi Italian government it becomes more and more important the Marxist Left parties of Britain unite with their European and Scandinavian counterparts. The cadres need to provide both theoretical and practical leadership if they are to have any relevance to the unfolding crisis of finance capital.
ReplyDeleteMarxist can provide both analysis of how capitalism works based on the writings of Marx and Lenin which have been developed and applied to capitalism in its current form by the likes of David Harvey, Joel Kovel and John Bellamy Fosters. The latter could see the crisis of 2007 coming when neo-liberal and neo-conservative theoreticians, economists and politicians were saying nothing like it would happen and that they were applying outmoded models to capitalism in the 21st century.
Theoretical analysis including a revaluating the theories of Nikolai Kondratiev enable Marxists to see the dialectics of history and understand the present better. It’s vital that an alternative to the logic of neo-liberal/neo-conservative capitalism and its imperialist manifestation, globalization succeeds, whether this is its highest stage of capitalist development and its final stage or not needs to be confronted.
ReplyDeleteThe Marxist parties of Britain, Europe and Scandinavia can adapt the theory and practice of Marx and Lenin to the dialectical reality of our material situation in the 21st century. Marxist have always argued that crises are inherent within the very nature of the capitalist system and point out the capitalist elite are increasing their real wealth as well as increasing their share of the wealth whilst others fall into the lower petti-bourgeoisie or become part of the proletariat which is just a part of the nature of the system.
Marxist need to look at the early work of Karl Marx in the Economic and Philosophical Manuscripts of 1844 and John Bellamy Fosters reassessment in Marx’s Ecology materialism and nature, Joel Kovel’s the enemy of nature the end of capitalism or the end of the world? and Ecosocialism or Barbarism by Michel, Lowy, Jane, Kelly and Shelia, Malone as well as his later work Capital.
The British and European Left parties and in particular as a Marxist the Marxist Left parties need to work more closely so that they can collaborate on tactics of resistance and the fightback against the logic of neo-liberalism and neo-conservatism. The Stalinist concept of building socialism in one country may have been possible sixty or seventy years ago but the hegemonic consensus for international finance capital and globalization mean that isn’t the case in the 21st century.
Alistair Darling the former Labour chancellor says of the Euro crisis ‘‘This is far worse than the banking crisis of 2008 in its seriousness and, if it is not solved by Christmas, I think the whole of the euro will break up.’’ His warning should be taken seriously because as chancellor he had a leading role in preventing the British banking system from collapsing. Alistair Darling says that ‘‘In 2008 we were facing a banking crisis. Now we are facing an economic crisis, and if it gets worse it will turn into a banking crisis that will worsen the crisis’’ adding that ‘‘We are seeing government after government introducing austerity programmes to protect themselves from the markets’…. That is why the G20 should have been focusing on how to achieve growth – but it did not, and we may now pay a very heavy price’’.
ReplyDeleteThe Confederation of British Industry which represents 240,000 employers has today cut its growth forecasts for the economy. The CBI has downgraded estimates after continued uncertainty in the Eurozone, and the resulting weaker prospects for exports and investment which have led to a marked drop in business and consumer confidence. The CBI now forecasts quarter-on-quarter GDP growth to be flat in the final quarter of the year and 0.2% in the first quarter of 2012.
ReplyDeleteLabour Treasury spokeswoman Rachel Reeves says ‘‘These forecasts are worrying for families feeling the squeeze, businesses on the edge and young people out of work. They should spur the Chancellor to take urgent action to get our economy moving in his autumn statement.’’ Adding that ‘‘What is happening in Italy and the Eurozone will clearly have an impact on our economy, but out-of-touch ministers need to understand that our recovery was choked off a year ago well before the crisis of recent months’’.
Chief Executive of HSBC Stuart Gulliver warns of that ‘‘The sector faces significant headwinds. The continuing macroeconomic, regulatory and political uncertainty, particularly in Europe, adversely affected our industry's performance in the quarter’’ from the Eurozone crisis as yields on Italian government bonds go above the 7% danger level.Gulliver says if the single currency collapsed it could cause a ‘‘deep recession’’ and that there was a ‘‘frustration, confusion and a fear factor’’ about the situation in the markets.
ReplyDeleteStuart Gulliver stressed that the HSBC exposure to the Eurozone crisis was small in the context of a $2.7tn balance sheet. The bank has just been designated as one of the 29 banks in the world that is ‘‘too big to fail’’, a globally significant financial institution ‘‘G-Sifi’’. About 5,000 jobs have been axed across the HSBC group since the first quarter and Gulliver has unveiled plans to cut 30,000 roles to save $3.5bn over the next three years.
The Dow Jones index has just fallen by 409 points to 11761 a 3.3% decline. If it finishes that low, it'll be the biggest daily fall since August.
ReplyDeleteDow Jones Industrial Average
ReplyDeletehttp://www.djindexes.com/averages/
FTSE 100 Index
ReplyDeletehttp://www.londonstockexchange.com/exchange/prices-and-markets/stocks/indices/summary/summary-indices-chart.html?index=UKX
German DAX
ReplyDeletehttp://www.bloomberg.com/apps/quote?ticker=DAX:IND
EURO STOXX 50 tumbled 2.59%, France's CAC 40 dropped 2.26%, while Germany's DAX 30 declined 2.97%
ReplyDeleteThe FTSE 100 closed down 123 points at 5445
ReplyDeleteThe Bank of England Governor Mervyn King says the Eurozone debt crisis is the ‘‘single biggest risk’’ to the British economy as the Bank cut its quarterly growth estimate to 1% for 2011 and a greater chance of the economy shrinking in the first three quarters of 2012. Adding that failure to meet the challenges in the euro area will have significant implications for the British economy.
ReplyDeleteChief UK economist at Capital Economics Vicky Redwood says ‘‘Even the bank's downgraded growth forecasts still look optimistic to us we expect zero growth next year’’. The bank cited weak global growth in particular in the Eurozone as one of the key developments which influenced its decision to boost QE by a further £75 billion last month, increasing its total asset purchases to £275 billion.
The Bank of England also indicated that there was a real threat of a second credit crunch in Britain, as turmoil in stock markets have triggered by uncertainty over the Eurozone and global economy have impacted banks access to funding.
World Bank warns of an increased likelihood of recession
ReplyDeleteThe World Bank has warned that the crisis in the Eurozone will lead to a sharp slowdown in growth in rich and poor countries this year and could spiral into a rerun of the 2008-09 recession saying that the world had ‘‘entered a very difficult phase characterised by significant downside risks and fragility’’.
The forecasts reflects the slowdown in the global economy in the second half of 2011, which was already evident in weakening trade flows, declining capital flows to developing countries and lower commodity prices. The bank said the Eurozone was already in recession and was likely to contract by 0.3% this year.
There was a risk, the bank said, of the crisis in the Eurozone and weaker growth in developing countries reinforcing each other at a time when the ability of policymakers to respond to a downturn was much diminished compared with three years ago. The World Bank report says ‘‘In particular, the willingness of markets to finance the deficits and maturing debt of high-income countries cannot be assured. Should more countries find themselves denied such financing, a much wider financial crisis that could engulf private banks and other financial institutions on both sides of the Atlantic cannot be ruled out. The world could be thrown into recession as large or even larger than that of 2008-09’’.
The co-ordinated global response to the 2008-09 slump saw interest rates slashed, money created through quantitative easing, public spending increased and taxes cut. ‘‘Monetary policy in high-income countries will also not be able to respond as forcibly as in 2008-09, given the already large expansion of central bank balance sheets….Among developing countries, many countries have tightened monetary policy, and would be able to relax policy (and in some cases already have) if conditions were to deteriorate sharply’’.