Shadow cabinet members refuse to serve in posts Corbyn might well not offer, citing economic policies they clearly haven’t read
So writes MP John McDonnell in the Guardian. Mr McDonnell is author of the superb book, ‘Another World is Possible: a manifesto for 21st century socialism’, a challenge to New Labour that put forward a set of new ideas, principles and policies. He adds:
“As people wake up to the prospect of Jeremy Corbyn actually being able to win the Labour leadership, the reaction has become increasingly hysterical, especially from elements of the Labour establishment”
McDonnell notes that the ‘near panic’ is especially evident in its response to the counterproductive strategy outlined by Corbyn’s team of economic advisers, whose rebukes to Labour supporters have simply made them more determined to work for beneficial change. He continues (summarised):
The vast majority who didn’t cause the economic crisis shouldn’t have to pay for it
“Let me make it absolutely clear that Labour under Jeremy Corbyn is committed to eliminating the deficit and creating an economy in which we live within our means . . . (but) we don’t believe that the vast majority of middle and low-income earners who didn’t cause the economic crisis should have to pay for it through cuts in tax credits, pay freezes, and cuts in essential services.
“We believe we can tackle the deficit by:
- halting the tax cuts to the very rich and to corporations,
- making sure they pay their taxes,
- and by investing in the housing and infrastructure a modern country needs to get people back to work in good jobs.
“We accept that cuts in public spending will help eliminate the deficit, but our cuts won’t be to the middle-and low-income earners and certainly not to the poor.
“Our cuts will be to:
- the subsidies paid to landlords milking the housing benefit system,
- to the £93bn in subsidies to corporations,
- and to employers exploiting workers with low wages and leaving the rest of us to pick up the tab.
“All the factors that caused the 2007-8 crisis are currently reappearing on the scene – frozen or low incomes, low productivity, asset inflation especially in housing, a hands-off government turning a blind eye to loose credit expansion and City speculation, and a growing debt bubble.
“Just like 2007 all it needs is a spark like Northern Rock to set things off again. The rehypothecation taking place in the bond markets could be the trigger this time, when the US starts unwinding its quantitative easing programme”.
Alongside deficit elimination, the Corbyn campaign is advocating a fundamental reform of our economic system
“This will include:
- the introduction of an effective regulatory regime for our banks and financial sector;
- a full-blown Glass-Steagall system to separate day-to-day and investment banking;
- legislation to replace short-term shareholder value with long-term sustainable economic and social responsibilities as the prime objective of companies;
- radical reform of the failed auditing regime; the extension of a wider range of forms of company and enterprise ownership and control including public, co-operative and stakeholder ownership;
- and the introduction of a financial transactions tax to fund the rebalancing of our economy towards production and manufacturing.
“Public ownership does have an important role to play, but this will be through smart forms of 21st-century common ownership and control. For example, rail will be renationalised, but with a form of joint management involving workers and passenger representatives. Energy would be socialised from below by the massive expansion of renewable energy production and supply by local communities, local authorities and co-ops on the successful German model, removing the monopoly of the big six energy companies.
“Politicians have patronised and talked down to us all when it comes to our economy, but ordinary working people have to manage on incomes significantly lower than the likes of George Osborne and his friends in the City. They could teach the bankers and many commentators a thing or two about managing a budget responsibly. Given the opportunity, we will use the sound common sense of our people.
Professor of Accountancy Prem Sikka gives visibility to the hand of power, institutions and politics, arguing that life can be lived differently and in a fulfilling way. He says: “Millions of people don’t need to suffer in a world of plenty. I always live in hope”. His five tips are summarised here:
Some six years after the banking crash, the UK taxpayer is still providing £977bn of loans and guarantees (pdf) to support the ailing banking sector. The reform process is painfully slow. The banking reform bill currently going through parliament (pdf) has grown from 35 pages to 170 pages, but still does not deal with the flaws that led to the crisis.
Public pressure for a tougher approach is growing, with figures including the Archbishop of Canterbury demanding firmer government action. The chancellor, George Osborne, should at the very least do the following five things. On their own, they won’t necessarily solve the deep-seated crisis in our financial institutions, but they would provide the direction for deeper reforms.
1. Think outside the ringfence
Introduce a statutory separation of retail banking from speculative banking and not just the weak “ringfence” he is proposing . . .
2. Hold banks responsible for losses
Withdraw limited liability from speculative banking. Merely separating the banking arms is not enough because banks use monies from savers, pension funds and insurance companies to finance their gambling habit . . .
3. Make them balance the books
Force banks to address their gross undercapitalisation. Barclays has gross assets of £1,500bn against capital of just £63bn. A decline of just 4.22% in the value of its assets could wipe out its entire capital . . . a healthy capital adequacy ratio of at least 12.5%, and higher, should be aimed for.
4. End fat-cattery
Risk capital should be built by clamping down on executive pay. No executive should receive more than 10 times the minimum wage until the required capital levels are reached . . .
5. Crack down on the auditors
Bring in a fundamental overhaul of the auditing of banks. Big accounting firms, acting as auditors of banks, are supposed to be the eyes and ears of financial regulators, but the lure of profit is too strong. Almost every ailing bank received a clean bill of health (pdf) from its auditors who received millions of pounds in auditing and consultancy fees . . . Unlike the present situation, the financial regulator should have unhindered access to all data held by the auditors.
Read the full account here: http://www.theguardian.com/commentisfree/2013/nov/26/five-tips-for-george-osborne-on-banking-reform
Next, Prem Sikka and others write to protest about the relationship between the British Parliament and the City of London Corporation.
The Brummie Aggregator site today led to an article by George Galloway in which he refers to the Chancellor’s determined attempt to “rehabilitate and turbo-charge the very economic model of neoliberalism that has come crashing down”.
He indicts Osborne, Cameron, Clegg, Blair and Brown who embraced the Thatcherite revolution ‘with abandon’ and colluded in cutting loose “the leviathans of the boardroom” from any moorings binding them to society.
Politics now – great heat and clatter about differences that amount to so little:
“It is policed by an army of spin doctors with focus groups and caution masquerading as radicalism, all aimed at winning the ear of powerful elite and the votes of a diminishing part of the electorate.
“In one sense, it has become an anti-politics – the administration of things, not the transformation of lives.
“Instead, we stand at a new threshold where politics – the big political choices about the future of our society and planet – is back . . .
“Out there,” where so few politicians dare to tread, the feelings of despair and rage are not only palpable, they are expressed in an idiom that is profoundly political.
“People have noticed that one by one central pillars of the Establishment have been shown to have feet of clay and boots filled with cash”.
Mr Galloway cites:
- the MPs’ expenses scandal, which has left an indelible mark
- the defenestration of Murdoch
- the Libor scandal and other banking outrages
His call for ‘democratic insurgency’ across our country doesn’t convince some, so other descriptions of alternative paths would be welcomed.
To read the full article click here.