Posts Tagged ‘ politics ’

Why Greece is stuck between a rock and a hard place

Greek debt wasn't that much higher than the Eurozone average

Greek debt wasn’t that much higher than the Eurozone average

Yes, Greek governments have managed the country poorly, there is a lot of corruption and it is difficult to collect taxes. However, before the 2008 crash, their government debt-to-GDP ratio was ok (or at least, not in crisis).

When Greece joined the Euro, the banks decided that Greek debt now had the same risk as German debt, and lowered interest rates accordingly.

When the crash happened, German and French banks found themselves hugely exposed to bad Greek debt. They had mispriced the odds of a default. In order to save their banks, the German and French governments turned the debt to their banks into a debt to their governments.

So the banks got bailed out, but the money did not reach the Greek people.

The creditors decided that to pay back its debts, Greece must run a budget surplus. This is very bad economics. The cuts knocked 25%-30% off Greece’s GDP – more than the German army managed in the 1940s. The Troika’s economic predictions assumed a recovery that never happened.

As a result Greece has less capacity to pay back its debts than it did at the start of the crisis. In fact, as currently structured, it cannot pay back those debts.

Interest Rate Convergence

Interest rate convergence before the Euro

Nonetheless, the Greek government has offered to continue to run a large surplus. They insist however on making their own choices about the balance between cuts and tax rises to accomplish that. The creditors insist that there must be cuts to pensions and a freeze in the minimum wage.

Greece’s biggest problem is that it is a net importer. Within a currency union, that means that Germany (with its export surplus) will get richer and Greece will get poorer and more indebted.

The only solution is fiscal transfers from importers to exporters. In the past (before the Euro), this happened by devaluation – the Drachma, and Drachma-denominated debt, periodically lost value. In the US, it happens by federal spending – New York’s trade surplus pays for Mississippi’s welfare and military bases.

Thing is, New York can’t exist without Mississippis, and Germany can’t exist without Greeces. One man’s trade surplus is another man’s trade deficit.

For an in-depth look at the economic problem (and the ideologies behind it), check out Mark Blyth’s excellent Google Talk:

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Caught by #clypegate ? How to make a Data Protection complaint

Introduction

#clypegate

The Labour Party has issued a “dossier” to journalists of “abuse” by SNP members on twitter. Labour may have broken Data Protection law, and this post describes how, if you are in the dossier, you can make a complaint against the Labour Party to the Information Commissioner, for free. There are sample letters at the bottom.

Before I start, I’d like to say to all the people in the dossier: even if you’ve said something you shouldn’t have, we have all done that at least once. You have the movement’s solidarity. Nobody should be abusive on Twitter, and in some cases maybe the party will need to send you a reprimand.

But I know most of you are ordinary, decent people who have had one or two angry moments highlighted and sent to newspapers with the ability to broadcast their own to abuse to hundreds of thousands of people. You don’t deserve that.

Possible grounds for complaint

I am not a lawyer: this blog post contains my own and others’ opinions and is not in any way legal advice.

There are three grounds for complaint that jump out at me:

1) According to Tim Turner (you should read his full post), you can complain on the grounds that the use of your data was not “fair” – Labour do not have a right to collect data on you and then distribute it to third parties in secret.

2) Also according to Tim Turner, to use your personal data, Labour require one of: “consent, a contract, a legal power or obligation, to be protecting vital interests, or a legitimate interest.” In his view, none of these conditions is met.

3) In my view, the leak of the document breaches the requirement that your data should be processed securely.

How to complain

Only the Information Commissioner can say for sure if there has been a breach. It is well worth asking him to investigate.

1) Call 0303 123 1113, the Information Commission helpline. They can advise you on your rights and the complaints process.

2) Write to the Labour Party to complain (sample letter below), as the Information Commission requires you to do this:

The Labour Party
Labour Central, Kings Manor
Newcastle upon Tyne NE1 6PA

3) If you are not satisfied, send a letter to the Information Commissioners for the UK and Scotland (sample letter below):

UK

Information Commissioner’s Office
Wycliffe House Water Lane
Wilmslow
Cheshire
SK9 5AF

Scotland

The Information Commissioner’s Office – Scotland
45 Melville Street
Edinburgh
EH3 7HL

Sample letter to the Labour Party

[Your full address]
[Phone number]
[The date]

The Labour Party

Dear Sir / Madam,

Information rights concern
[Your full name and address and your twitter handle from the dossier]

I am concerned that you have not handled my personal information properly.

Personal data about me was included in a “dossier” provided to the Scottish press by your employee Blair McDougall. I believe this information may have been mishandled as:

1) It was not a fair use of the data. The Labour Party does not have a right to collect and process information on individuals and distribute it in secret.

2) The Labour Party does not have my consent, a contract with me, a legal power or obligation, is not protecting vital interests, and does not have a legitimate interest in processing and distributing this data.

3) My data was not held securely, and was leaked on the public internet.

I understand that before reporting my concern to the Information Commissioner’s Office (ICO) I should give you the chance to deal with it.

If, when I receive your response, I would still like to report my concern to the ICO, I will give them a copy of it to consider.

You can find guidance on your obligations under information rights legislation on the ICO’s website (www.ico.org.uk) as well as information on their regulatory powers and the action they can take.

Please send a full response within 28 calendar days. If you cannot respond within that timescale, please tell me when you will be able to respond.

If there is anything you would like to discuss, please contact me on the following number [telephone number].

Yours faithfully
[Signature]

Sample Letter to the Information Commissioner

[Your full address]
[Phone number]
[The date]

The Information Commissioner

Dear Sir / Madam,

Information rights concern
[Your full name and address and your twitter handle from the dossier]

I am concerned that the Labour Party have not handled my personal information properly. I have reported this to the Labour Party, and am not satisfied with their response. I request that you urgently investigate this potential data protection breach.

Personal data about me was included in a “dossier” provided to the Scottish press by their employee Blair McDougall. I believe this information may have been mishandled as:

1) It was not a fair use of the data. The Labour Party does not have a right to collect and process information on individuals and distribute it in secret.

2) The Labour Party does not have my consent, a contract with me, a legal power or obligation, is not protecting vital interests, and does not have a legitimate interest in processing and distributing this data.

3) My data was not held securely, and was leaked on the public internet.

Please find attached my letter to the Labour Party.

If there is anything you would like to discuss, please contact me on the following number [telephone number].

Yours faithfully
[Signature]

Labour have played the race card

“Yvette Cooper says an independent Scotland would need immigration rise of a million to fund pensions” screams the Daily Record headline. Yvette Cooper, the shadow home secretary, a member of the Labour leadership. Speaking in the traditionally Labour-supporting Record, Scotland’s second biggest-selling newspaper.

Image

This is simply incredible. At the end of a week when UKIP launched billboards claiming that European immigrants are coming for our jobs, one of the most senior members of the Labour shadow cabinet comes to Scotland and tells us we’ll be swamped with Poles if she doesn’t get her way. To add insult to injury she spins the actual number – just 24,000 immigrants a year from all sources including England – as a million, by adding up every year from now to 2051.

There have been Poles living in Scotland for centuries, Yvette. There’s a Polish club near my flat in Glasgow that was founded in 1954 because so many stayed here after we fought together against fascism. As long ago as 1650, there were 30,000 Scots living in Poland. We’re not scared of a few Poles.

I try to avoid demonising my political opponents. After the independence referendum, we’ll all have to get along, whichever way the vote goes. But this is unacceptable.

Not content with opposing free health and education, Labour ‘s leadership has now introduced race into Scottish politics. They are legitimising and wielding racist rhetoric in a country that hardly votes for the right wing parties.

Scottish Labour tried to tack left by supporting the public sector strikes in 2011, but came a cropper when Ed Miliband declared “These strikes are wrong!” (again… and again… and again). With tacking left ruled out by London, they are now tacking right. Hard right.

Surely every decent soul in Labour, and I know there are many, must be outraged. You can’t stay silent on this, guys – Yvette Cooper has consciously aped Nigel Farage’s dog-whistle race politics.

How Money Changed Everything

Originally published on Wings Over Scotland.

We all know there’s something strange about Britain. Germany and China have their factories, France and Japan their nuclear power plants. America has Google and Apple and the world’s largest navy. But how is it that Britain, a country that closed its mines and shuttered almost its entire manufacturing industry, is still a major world economy?

infra

The answer is Britain’s best-kept economic secret. It links Grangemouth, the obscene cost of housing in London, the Royal Mail sell-off, Channel Island tax havens and George Osborne’s disregard for the poor, and explains why an incomprehensible financial crisis triggered by bad American mortgages led to the closure of municipal libraries and swimming pools across the UK and a programme of permanent austerity.

And more to the point, it explains why only London, not Scotland or Wales or Yorkshire or Wearside, matters to the British political class today.

Our story begins in the years after WW2. The great British economist John Maynard Keynes and his American counterpart Harry Dexter White built a new international financial system designed to prevent a repeat of the Great Depression of the 1930s. This system made it difficult to move money between countries.

As late as the mid-1980s, there were strict limits on carrying cash out of Britain. The effect was that money moved into a country had to stay in that country, encouraging investors to pick long-term profitable enterprises like manufacturing over short-term speculation in the stock market and housing. It also gave governments the freedom to tax the rich (the very top rate in the UK was over 90% for most of the 50s and 60s, and 83% as recently as 1979) and invest that money in health, education and industry.

London bankers hated it, and set about undermining the system. From the 1950s, Midland Bank (now part of HSBC) began to make trades in London in US dollars. The Bank of England chose not to regulate these trades, and the so-called Eurodollar market was born – a completely unregulated banking system. By 1997, 90% of all international loans were made through this system, with London at the heart of it all.

Governments were forced to compete with this unregulated, untaxable system. Thus, London fired the starting pistol on a race to the bottom that dragged down tax rates and worker’s rights across the world. The wholesale deregulations under Thatcher (the “Big Bang”) and Blair merely completed the process.

Through British-controlled tax havens such as the Channel Islands and the Cayman Islands, London cast a fishing net over the world financial system. If you’re a speculator building a business empire on debt, like Grangemouth owner Jim Ratcliffe, the British Overseas Territories are probably where you borrow the money, and London itself, particularly the property market, is where much of the profits probably end up.

The tax haven system helps to explain Grangemouth’s suspicious-looking £10m-a-month losses. If you own a petrochemical plant, you can under-price its products, resulting in no profits and no taxes in the host country. You sell to a subsidiary in 0% tax Bermuda, and that subsidiary sells on at an inflated price to yet another subsidiary, say a chemicals plant in Europe. All the profit is apparently made in a small accountant’s office offshore, where you pay no tax on it.

Another trick is to make a big loan from your tax haven subsidiary to your petrochemical plant – the loan repayments won’t count as profits. By 2012 the global network of tax havens and unregulated banks, called the shadow banking system, was worth somewhere between $67 trillion and $100 trillion – more than the value of all goods and services produced in the entire world that year.

It was this system that transmitted a crisis in the American mortgage market to every country in the world in 2008. London is at the centre of the whole system. Its financial fishing net of dependencies and ex-colonies holds over half the world’s bank deposits. In 2009, the UK received financial inflows of an astonishing £195 billion from the Channel Islands and the Isle of Man alone.

(That’s more than the entire GDP of Scotland, despite the islands having a combined population of less than 250,000 and little in the way of industries.)

And as easily as that, we answer our question. Despite vast debts and a crippling deficit, the UK remains a major economy because it’s the world’s (dodgy, tax-avoiding) banker. Grangemouth, the Post Office and the NHS no longer matter to London because where a normal country needs industry, infrastructure, and a healthy, educated workforce, London only needs bankers and people to serve lattes to bankers (that’s the rest of us). London property prices are so comically deranged because houses in London aren’t a place to live, they’re an asset for storing funny money from Russian oligarchs and Middle Eastern oil men.

The notion of a Labour victory at Westminster in 2015 turning around this fundamental nature of the British economy is a farcical one. The party is every bit as in thrall to the City Of London as the Tories are. But next year Scotland has a unique (and final) opportunity to escape from it. We can reindustrialise around renewable energy, and be a normal country again rather than one built on a gigantic financial swindle.

We should of course pity the English regions, Wales and Northern Ireland, and the poor of London, all of whom are trapped in the madness. It’s lucky we’re planning a liberal immigration policy, and have lots of room.

Would independence have protected Grangemouth?

Today has been a comprehensive defeat for the employees of Grangemouth, a site through which about 10% of Scotland’s GDP (1% of the UK) passes, and which itself contributes 1.2% of Scottish GDP*. Unite the union have agreed to wage cuts, pension cuts, and a three year no-strike guarantee. That will place downward pressure on wages across Scotland.

This is the same union that won a strike over pensions just two years ago. What changed?

GRANGEMOUTH_2700282b

That the union were “Led into an ambush” seems about right. No one can blame the workers and their shop stewards for not wanting to lose their jobs, or to fight a protracted strike over Christmas, with no certainty if they would ever return to work. They were forced to ask themselves whether Ineos was serious about liquidation – that is, sacking the workers and selling off the assets.

Ineos would have happily fought a long strike or liquidated the plant, using its deep pockets to outlast the workers if necessary. A company like Ineos probably can’t be beaten without international trade unions. Their interest was not so much in cutting wages right now, but in breaking the confidence of the workers and their union.

A combination of economic necessity and public pressure put nationalisation on the table in Scotland but not at Westminster. The Scottish government played down the idea of nationalisation, but never absolutely ruled it out. The Westminster government described the situation as “regrettable” and took little action. The Scottish government is not allowed to borrow money – it has to balance its books each year.

That makes it very difficult, perhaps impossible, to nationalise the plant, which is expected to be loss-making over the short term and highly profitable after 2022. Ineos’ cooperation would have been necessary to continue running the plant, and the Scottish government would have been forced to buy the physical plant out of liquidation and rehire the staff. An independent country would be able to compulsory-purchase the whole plant, for “appropriate compensation”.

With the full powers of independence, nationalisation would have been at least a plausible outcome, which would have tremendously strengthened that hand of the trade union. Perhaps under independence, we wouldn’t be staring defeat in the face today.

* I have been unable to identify the primary sources for these figures, but they seem to be generally accepted in the press.

My Complaint to BBC Question Time

You can make your own complaint here: http://www.bbc.co.uk/complaints/complain-online/

Question Time tonight is in Edinburgh, and has an audience of 16- and 17-year-olds, on the grounds that they will be voting in the Scottish Independence referendum. Independence is clearly a key issue that will be discussed – this edition of the programme has been billed as such.

The panel apparently consists of six guests, four who are against independence, one who is in favour, and one neutral. This is an unacceptable level of bias for a BBC programme.

This is also the week before a by-election, in Aberdeen Donside. As such it is especially important that the major parties in Scotland be represented.

In particular, the Scottish Green Party have only had one appearance on Question Time since the inception of the Scottish Parliament. Contrary to a statement by your spokesperson, they are an entirely separate organisation to the Green Party of England and Wales.

There is clearly room for the Scottish Green Party, given that this is a panel of six. It is hard to understand why they would be excluded, while Nigel Farage makes his third appearance of the year.

Neither Mr Farage nor Mr Galloway’s parties have any representation in Scotland. At the last test they managed 0.91% of the vote and 0.35% of the national vote, respectively, as compared with the Scottish Green Party’s 4.38%.

In future, please ensure a balance between pro and anti independence panellists, and accurately represent the Scottish political landscape when broadcasting from here.

the Telekommunist Party?

Originally published on my tumblr.

Recently Dmytri Kleiner, author of the Telekommunist Manifesto, raised the question of the party in relation to hacker-communism:

Who wants to be a Telekommunist?

What would being a Telekommunist mean to you? What would make you feel like and identify as a Telekommunist? What would make you embrace and promote Telekommunism? What would you like to do on behalf of Telekommunism?

This is a hard problem; one of the core challenges for socialist organisation. Various solutions have been attempted to the problem, most famously Leninist vanguardism, but also including the anarchist Especifismo school of thought and others.

The problem is that we know that mass movements are formed around struggle – most enduringly, the Trade Union movement – but also know that they always risk capture by the ruling class. Therefore we believe that it is vital that mass movements are guided by solid political-economic theory, that they are connected to the history of the working class, and that they carry forward the dream of a fairer, freer society.

In recent years Marxist hackers have begun to apply a materialist analysis to developments in information technology. A lack of economic knowledge in hackerdom has set us back some way; Kleiner’s observation that capitalism requires centralised web services is a brilliant bit of thinking, but if the hacker community was more used to thinking of economics as a power game then such thoughts would be common currency and Facebook would not have been such a horrible surprise.

So there is a clear need for Marxist hackers to band together in order to educate, agitate and organise our fellow geeks. Too often the hacker movement falls into thinking that technology alone can transform society, and is caught out of position when bricks-and-mortar politics intervenes.

The hacker movement is in many ways a classic mass movement founded on struggle. There is a difference of economic interest between technology workers (especially those who love to build and tinker) and the owners of technology companies. From that contradiction emerged not only a movement, but an entire subculture. As such, the usual questions around Communist parties apply here.

Leninist vanguardism would be very unpopular, and is inappropriate to the age we are in. Gramscian cultural hegemony is a far stronger model. In this model, Telekommunists would focus on education, agitation, and working with and within the institutions of hackerdom. The first tactical steps would be the formation of multiple think tank style groups to signal boost the agreed messages.

The word “communist” is problematic, because while on the one hand it links us to a vital tradition of thought, it is also completely off-putting to all the people who (quite reasonably) understand it to mean Stalinism. “Telekommunisten” is a pun on the old East German telephone company. Amusing as that may be, it doesn’t translate at all to English and has proved a barrier to adoption; even my Communist friends have been skeptical of reading the Manifesto on account of its odd name.

This article is more of a question than an answer itself; I look forward to the discussion ahead.

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