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Shadow cabinet members refuse to serve in posts Corbyn might well not offer, citing economic policies they clearly haven’t read

john mcdonnellSo 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.

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Better to harness society’s idle resources while removing the mechanisms of corporate malfeasance

yeomin noonSo writes Yeomin Yoon, Professor of Finance and International Business, who teaches international finance, financial and economic analysis and a course in global business at Seton Hall University in New Jersey.

His educational philosophy is that every class is to some degree a class in ethics.

In the FT he recently discussed the advent of the electronic marketplace which currently offer shopping carts, e-catalogs, and support services such as order placing, payment and fulfilment.

The electronic markets supplanting companies as the organising force behind economic exchange will probably bring more benefits than costs to society, in his opinion:

Reduce corporate tax breaks, subsidies and political pressure

“The expected demise of corporations as the dominant economic institution driving exchange should be welcomed, as it would reduce corporate political pressure which distorts democratic processes; and corporate welfare in the form of tax breaks and subsidies deforming the course of the economy.

“Adam Smith, who warned in The Wealth of Nations that “negligence and profusion” would inevitably result when businesses are organised as corporations, would applaud the onset of a more automated economy — one that better harnesses society’s idle resources while removing the mechanisms of corporate malfeasance”.