In These New Times

A new paradigm for a post-imperial world

Posts Tagged ‘bankrupt Britain’

The Scottish referendum and the decentralization of Britain

Posted by seumasach on September 28, 2014

Cailean Bochanan

28th September, 2014

When Nicola Sturgeon spoke back in January of the inevitability of change whatever the outcome of the referendum and appealed to the “No” campaign to come forward with their proposals for further devolution to Scotland she must have known that a response would be forthcoming. All political parties had been focused for some time on the issue of the decentralization of the British state and the referendum was to be the cue for these ideas to come to the fore. However, from the point of views of both campaigns this issue was to become the elephant in the room that no one wanted to see. The “Yes” campaign , notwithstanding Sturgeon’s remarks, continued to insist that it was all or nothing for Scotland, that not only was further devolution not on the agenda but that a “No” vote would see the rollback of devolution already conceded. The “No” campaign evoked the enduring stability of the union and an era of innocence in which good old Great Britain was not about to be eviscerated. As a result, it was only when “panicked” representatives of the leading UK parties came to Scotland late in the campaign, following polls suggestive of a “Yes” vote, that it became evident to all that further devolution was indeed on the agenda. The “panicked” UK leaders, far from making up policy on the hoof, were, however, merely putting forward what they had always intended in an opportune manner which would give themselves credit post-referendum. They were also shoring up the position of Alex Salmond and the SNP post-referendum who could claim that their campaign and a surge in support had forced the hand of the Westminster establishment.
That major constitutional change was on the cards was made clear in a speech in April by Labour leader, Ed Milliband, a speech which was studiously ignored by everyone. In it he blamed overcentralisation for all Britain’s ills and promised to devolve power and spending to English cities and regions. He also revealed the real point behind this “bringing of power to the people” as the Tories like to call it:
“With power of this sort comes responsibility.
These changes will only bring new jobs, greater prosperity, if the towns and cities are willing to put the private sector at the heart of decision making.”
Welsh Conservative leader Stephen Crabb was to pick up on the same theme as he launched the pre-panic, Tory devolution response in July,:
“I am very comfortable with the way devolution is developing. It is quite an exciting landscape that is emerging for devolution. So fiscal devolution I see as particularly important because of strengthening accountability for devolved government.”
This, he thought, would help to “challenge socialist orthodoxy” citing the influence of leading Thatcherite ideologue,Lord Brian Griffiths, in his conversion to devolution.

Any doubts about major constitutional change were dispelled in Cameron’s speech following the announcement of the referendum result. He called for English votes on English issues, effectively a call for English devolution. It also launched the 2015 election campaign with a shot across the bows of the Labour as Cameron sensed blood and seized the moment when the Labour/Tory duopoly gives way to a Tory/SNP axis which could dominate Britain for a long time to come. Labour’s hesitancy regarding English devolution doesn’t mean they won’t support it: they have no choice, but they wish to delay it beyond the next election. If Milliband has written their suicide note in the above mentioned speech they can be forgiven for pacing the room in a state of high agitation before finally putting the bullet through their head.
The British ruling class have embarked upon a major transformation of Britain. Milliband’s speech gives an indication of what they have in mind. The essence of this change is more easily grasped within the context of US politics and the politics of the Republican right. The goal is the end of Big Government. As Britain heads towards another crisis resembling that of 2008 it will face similar dilemmas to those they faced then. In 2008 they bailed out the banks without taking control of them. This time overwhelming popular pressure could force their hand and result in nationalization. Similar pressures could lead to renationalization of the utilities and even land and the housing stock. These measures are unacceptable and dangerous to the post-Thatcherite oligarchy. By devolving spending and tax raising powers to the regions they are vetoing that particularly noxious, in their view, outcome. Admittedly, the state is bankrupt anyway but they will not be presiding over the bankruptcy of Britain with the tax-payer as the priority creditor, the state taking on our assets and our debt to our international partners being resolved through intergovernmental negotiation as I have been proposing for some time. Instead, they will proceed through “the market”.
It could be objected that there is little left to privatize. But Britain’s privatization programme is really just a corporate welfare scheme whereby public funds are transferred to private companies. The companies would not otherwise be making money. This process is inordinately expensive to the British state and is not sustainable. The British state will then withdraw its largesse and as it does so foreign states or their agencies will take its place. This process is already well underway as James Meek has documented and is about to accelerate dramatically. The British oligarchy instead of going down for a very, very long time have opted to be bought out by the Chinese and retired to the Cayman Islands.
It is a great irony that the “yes” campaign regard further devolution as a well earned consolation prize and continue to shout betrayal in the form of its non-implimentation. They have been joining in the fun too, dancing on the the grave of the Labour Party but it is also the grave containing the corpse of their neo-Keynesian spending strategies. The active component of the “yes” campaign is basically on the left, contemptuous of Scotland’s national status except when referring to it, hilariously, as “one of the richest nations on earth”, and these heady days have been like the last faint echo of Blair’s, 1997 “Things can only get better” surge, before we finally sink into the abyss. So they’re celebrating their own demise too: it’s just one internal contradiction too far.
That the coming crisis of Western imperialism will have a neo-liberal solution is at first sight dismaying but it has its logic. I was a struck by the insistence of a Chinese academic, speaking at at Glasgow University’s Confucius Institute, on the resolution of Britain’s debt and current account deficit with China via the market. What, I thought, did we have to sell back to them. Not much, but we can let them relocate factories which produce for our market to Britain. That way, they don’t have to accept sterling fiat money in payment and we can start to correct our trade deficit. That is definitely win-win. They can also facilitate this by taking control of our utilities and building other essential infrastructure. Finally, they can take over our banking system, after its major shareholders and creditors have taken the hit,opening up control of a significant portion of Britain’s land and real estate for re-industrialization. The British government has already taken us some way down this path and we have signed a formal strategic partnership with China and are now proud issuers of Renminbi-denominated UK government bonds. Other sovereign wealth funds will, of course, participate. Just as free-market ideology furnished us with a cover for imperialism in the 18th and 19th century, so it now provides a cover for a policy for end of empire. This is anxiously sought by the Chinese and the Global South and their investments will not be just about profit but drawing the sting out of Anglo-American imperialism. In exchange for life-saving inward investment Britain will de facto renounce its imperial or hegemonic project and become a neutral, demilitarized state. Perhaps Scotland could become a Chinese concession just as we once had concessions in China. That would be poetic justice and leave us staring survival in the face.
The constitutional transformation will go through and it will also be as many have pointed out a dog’s dinner. But the goal is purely negative from the point of view of the British oligarchy: to veto Big Government. However, it contains other potentialities as Gerry Adams, leader of Sinn Fein was quick to grasp when he pointed out that, despite the “no” vote, “the British state is not static”. Britain is not suitable for federalisation and the regionalization of England is a completely synthetic agenda which is being foisted on a reluctant people. Hence another irony: the “No” vote may be the real “break up of Britain” agenda. The constitutional agenda compromises Britain’s sovereignty and at a certain point when all the wars and tumult of empire are a fading memory that issue of sovereignty will return and, in all likelihood, resolve itself as four sovereign nations in these islands.

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UK banks ‘still vulnerable to global shocks’

Posted by seumasach on June 13, 2014

The idea of bailing out the banks in perpetuity is totally devoid of realism. Neither the pound sterling nor the British people would survive such a policy. The only answer is to allow the banks to fail, to put them through bankruptcy.

HITC

Britain’s financial sector remains vulnerable to further global shocks and the Bank of England must be ready to rescue banks that run short of funds, Threadneedle Street warned on Thursday.

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China’s poorest beat our best pupils

Posted by seumasach on February 18, 2014

The terrible truth about educational levels  is another aspect of contemporary Britain which we refuse to confront along with the real state of our banks, our infrastructure, our industrial base, our public health and so on.

Telegraph

17th february, 2014

British schoolchildren are lagging so far behind their peers in the Far East that even pupils from wealthy backgrounds are now performing worse in exams than the poorest students in China, an international study shows.

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US banks no longer ‘too big to fail’

Posted by seumasach on October 13, 2013

America’s biggest banks are now in a position to go bust without state intervention, the Bank of England’s deputy governor declares

Telegraph

12th October, 2013

The deputy governor of the Bank of England has declared an end to the era of taxpayer bail-outs for the world’s giant lenders.

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Our global banks – still too mighty to control

Posted by seumasach on September 15, 2013

Liam Halligan

Telegraph

14th September, 2013

Lehman Brothers filed for bankruptcy on September 15 2008. The resulting financial meltdown led to the first global recession in living memory, so causing countless job losses and widespread human misery.

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The very ugly truth about RBS

Posted by seumasach on June 23, 2013

James Ferguson

Money Week

19th June, 2013

I wanted to talk to you today about a topic that is on everyone’s lips at the moment: the re-privatisation of RBS. Because I think there is a disturbing story here that is not being widely reported in the mainstream press. And it goes right to the heart of the economic problems that Britain will face over the next few years. It certainly affects your investments.

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Falling exports confirm demise of UK economy

Posted by seumasach on April 9, 2013

“The volume of total UK exports fell again in February 2013 from January, so that export volumes have fallen by 7.5pc since the start of the year,” the ONS said.

It started badly and has now fallen away. Since the wealth supposedly generated by the financial sector will turn out to be a mirage only the real economy really matters. But falling exports despite a low pound confirms its near non-existence. Meanwhile imports hold up since we are completely dependant on them for our everyday survival.

Manufacturing rebound calms triple dip fears

Telegraph

9th April, 2013

Manufacturing output rose by 0.8pc, double economists’ forecasts, following January’s disastrous, weather-affected 1.5pc collapse.

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What did Thatcher achieve?

Posted by seumasach on April 9, 2013

Cailean Bochanan

9th April, 2013

The amazing thing about all the discussions about Margaret Thatcher’s legacy is the insistence of so many that Thatcher revived Britain. Yet we are living through the Thatcher legacy now and it looks very much like a nation falling apart: to the spectacle of de-industrialization, which she pioneered, we now have the dismal and depressing sight of the collapse of the high street and the return of begging as a livelihood. What can explain this contradiction?

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UK: a balance of payments crisis looms

Posted by seumasach on March 28, 2013

Britain resembles Cyprus in many ways. It is also dependent on its financial sector and its financial sector is also bankrupt and as what’s left of the real economy implodes the accumulation of bad debt accelerates. The solution is also similar: write down most of the debt and renegotiate Britain’s international status with a view to rebuilding the real economy through incoming investment.

Fasten your seat belts – a balance of payments crisis looms

Jeremy Warner

Telegraph

27th March, 2013

Whatever happened to the holy grail of a more balanced UK economy? Britain has been living substantially beyond its means for more than thirty years now. Spending more than we earn long pre-dated the Labour years. And it’s getting worse, not better.

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Euroland breaks definitively with QE

Posted by seumasach on March 26, 2013

It’s either the banks or the real economy and Europe has just outlined a new approach completely divergent from that of the Anglosphere. In US/UK the survival of the banks is a categorical imperative and the means to achieve this is bailout without end via QE or money-printing. This statement from Europe signals that the banks are to allowed to go under or rather, implicitly,  a new banking system, Euroland regulated and subordinate to general economic development is to created. This is a welcome development and any Anglo-Saxon schadenfreude regarding the inevitable pain accompanying it will prove to be misplaced. The QE approach is painless only to the banks: it has already seriously depleted deposits and can only lead to falls in both the pound and the dollar with devastating consequences for economies based on importing essential goods.

Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief

Telegraph

25th March, 2013

The new policy will alarm hundreds of thousands of British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.

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RBS plans cuts to investment bank in push to stem losses

Posted by seumasach on February 24, 2013

The bankrupt banks continue to be a drain on the UK economy- bailout time is approaching. Any further bailout, overt or covert, must be resisted and the only other alternative, bankruptcy proceedings effected

Telegraph

24th February, 2013

The Royal Bank of Scotland is to reduce the size of its investment bank by as much as £30bn and cut hundreds more jobs as the taxpayer-backed lender attempts to head off growing government pressure to close down the controversial division.

The lender will announce that it will reduce the size of the investment bank’s balance sheet, as well as scaling back the amount of capital allocated to the business and continuing its redundancy programme.

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