Tuesday, May 29, 2012

Why Germany will lose export earnings if Greece leaves the Euro

German and British politicians and IMF officials are fond of talking to the Greeks as if they were doing them a favour by offering any debt write down or bail out at all, even on the extreme austerity terms they're offering - and that Greeks can take it or leave it.

The dominant view seems to be that Germany and other northern EU members were doing Greece a favour by letting it into the EU and the Euro-zone, or that Greece is so backward or corrupt that it should never have been allowed in to either. This is very far from the truth. In fact Germany gains massive amounts of trade income as a result of weaker economies' membership of the Euro.

Greek membership of the EU and the Euro-zone has actually boosted German exports to Greece and to the rest of the world massively - and if Greece leaves the Euro German exports both to Greece and to countries outside the EU will fall and so German export earnings will fall.

With Euro currency zone membership the first reason is that before the Euro was introduced as a common currency the German Deutschmark was worth many Greek drachma. This meant that German exports were too expensive for most Greeks to buy, so they would be more likely to buy cheaper products made by Greek or other producers or companies. With the introduction of the Euro the price of German exports was effectively lowered, so Greeks bought more German products, increasing German exports and export earnings.

The second reason is that the value of the Euro is based on the average economic strength of the entire Euro-zone, making it worth less than the Deutschmark, which had a value based on the very strong German economy. As a result, with the introduction of the Euro, German exports to countries outside the EU also became cheaper to buy for consumers in other countries - once again leading to an increase in German exports and export earnings.

If Greece leaves the Euro the crisis will likely spread to, at the least, Portugal and Spain - and possibly to Ireland and Italy, meaning all those countries might leave the Euro. They would then return to their own, weaker, currencies, effectively increasing the price of German exports to buyers in those countries and reducing German exports.

On top of that each weaker economy leaving the Euro will increase the value of the Euro, meaning exports from Germany and any other remaining Euro-zone countries worldwide will rise in price to buyers in other countries, reducing exports for Germany and any other remaining Euro-zone countries.

With EU membership the reason is free trade between a relatively strong developed economy and a barely developed one. German and British and French industries and companies built up over centuries of protection and subsidy before World War Two and decades of investment (including the lion's share of Marshall Plan aid) after it, are free to export to Greece and Portugal and Spain with no barriers up to protect Greek or Portugese or Spanish industries and companies or allow them to develop.

The Graph at the top of the page is from Antonio Fatas' post on Insead blog

IMF Director Christine Lagarde orders Greeks to pay their taxes while doing nothing to close down tax havens either as French Finance Minister or head of the IMF

IMF head Christine LaGarde's orders to Greeks to do their duty and pay their taxes ring pretty hollow coming from a woman who is the former French Finance minister. In that role she did pretty much nothing to close down tax havens in the EU (Switzerland, the Channel Islands, etc) or former French or British colonies and dependencies; and as head of the IMF she has done pretty much nothing in that regard either. Unless she's willing to close down the tax havens to stop the wealthiest and big banks and firms from avoiding tax, she has no leg to stand on in telling ordinary Greeks to pay theirs. Most of them already do. (1)

(1) = Guardian.co.uk 28 May 2012 'Christine Lagarde's Greek comments provoke fury', http://www.guardian.co.uk/world/2012/may/28/christine-lagarde-greek-comments-fury

Wednesday, May 23, 2012

The Real Lockerbie bombers must be unable to believe their luck that the witch hunt against Megrahi is still letting them get off with mass murder even after he's dead

The real Lockerbie bombers, whoever they are, must be unable to believe their luck that they are still not even facing any charges for their criminal act of mass murder, due to most politicians and much of the media continuing witch-hunting Megrahi even after his death. This is helping governments deny Scottish and British relatives of Lockerbie victims from getting the truth which they are demanding, by helping the Scottish and British governments deny them an independent public inquiry.

Megrahi is still routinely labelled a 'mass murderer' or 'convicted Lockerbie bomber' by many politicians and much of them media, despite his trial having been a show trial that Stalin would have admired. There was no jury (1). Key evidence - the timer fragment - was tampered with and probably fake according to witness and timer manufacturer Edwin Bollier. Bollier also says the fragment he was shown in court had a brown circuit board, while those he sold to the Libyan government had green circuit boards (2).

Witness Tony Gauci - who identified Megrahi as the person who bought clothes said to have been found in a suitcase surviving the plane crash - was paid $2 million by the US government to identify Megrahi as the man who bought them ; and had seen photos of Megrahi in magazines before doing so (3) - (4).

Scots Law Professor Robert Black (who helped negotiate the establishment of the trial), UN observer Dr Hans Kochler and Dr Jim Swire, whose daughter Flora died in the bombing, are among the many reliable neutral observers present at the trial and appeals hearings who say they were shams and that Megrahi was innocent (5) - (7).

Kochler said the trial verdict made no sense based on the evidence, while the appeal hearing (in which Megrahi was denied an appeal) was more like an intelligence operation than a legal process and also"a spectacular miscarriage of justice" (8) - (11).

Black has written that "for the judges to be satisfied of all these matters on the evidence led at the trial, they would require to adopt the posture of the White Queen in Through the Looking-Glass, when she informed Alice: "Why, sometimes I've believed as many as six impossible things before breakfast." In convicting Megrahi ... this is precisely what the trial judges did. I am absolutely convinced that if the evidence had come out in front of a Scottish jury of 15 there is absolutely no way he would have been convicted." (12)

Theories that should be investigated

There are three theories plausible enough to warrant investigation.

Iranian revenge for the killing of 290 Iranian airliner passengers by the USS Vincennes?

The first is that the bombers were Palestinian and Lebanese terrorists contracted by Syria's government for Iran's Ayatollah Khomeini after he vowed revenge for the killing of 290 Iranian civilians when the US navy warship the USS Vincennes entered Iranian waters during the Iran-Iraq war (in which the Reagan administration was allied to Saddam Hussein) and shot down an Iranian Airbus airliner earlier in 1988 (13) - (14).

This would be embarrassing to the US government and it's allies because it highlights a massacre of civilians by their own forces, whether deliberately or , more likely, accidentally through sheer recklessness and carelessness in starting a battle that could have been avoided and not using their radar system properly (15).

If this did lead to the Lockerbie bombing in revenge it would also show that terrorist attacks are not always random or based on irrational hatred, but sometimes acts of revenge for the murder of other civilians by the US government and it's military.

It was also the original line followed by the first British police investigations into Lockerbie, but rapidly reversed after a phone call to Margaret Thatcher from President Bush senior in 1989. Bush would go on to enlist Syria as an ally against Iraq in the 1990 Gulf War and secure Iran's neutrality in it (16) - (20).

Gaddafi's revenge for US airstrikes using planes refuelling in the UK in 1986?

The second is that Gaddafi ordered it as revenge for US bombing attacks on Tripoli in 1986, in which the planes involved used British airbases with to refuel (with the permission of British Prime Minister Margaret Thatcher). The bombings killed dozens of people including Gaddafi's adopted daughter but fai (21) - (22).

Cover-up of CIA drug trafficking involvement from the Middle East to Europe,
similar to that from central and Southern America in the 1980s as part of Iran-Contra?

The third is that the CIA bombed the flight to kill operatives who were about to reveal their involvement in Middle Eastern heroin trafficking. Former US Defence Intelligence Agency operative Lester Coleman says some CIA and DEA (US Drug Enforcement Agency) agents' bags were never checked when they flew through Frankfurt or London Heathrow airports (23) - (24).

This would explain how the bomb, which the prosecution claimed was in Megrahi's suitcase, managed to get through airport security without being detected.

John Ashton and Paul Foot’s investigation found that Jim Wilson, a farmer whose farm was near Lockerbie, found a suit-case containing bags of white powder which he suspected were drugs among the debris on his land. He was not called to give evidence at the trial. The name on the case was not on flight's passenger list. On the night of the bombing two bus loads of FBI agents arrived the same night at the site. Residents reported that they had a coffin on one of the buses. Scottish doctors and police had tagged 59 bodies. Only 58 were ever mentioned by the FBI and the prosecution. According toe Coleman the 59th body was Major Charles Mckee - a US intelligence agent who was about to blow the whistle on a deal with Lebanese drug traffickers. (25).

This may sound far-fetched unless you know about the part of the Iran-Contra scandal which involved the CIA and US military intelligence, using Latin American drug smugglers' planes to fly guns to the contras, with the purchase of the guns funded by the CIA taking a cut of the profits from cocaine smuggling into the US in the same planes. This was authorised by senior members of the Reagan administration in order to get round the congressional Boland Amendment which banded any US government funding of arms for the contra terrorists. This has been established by congressional inquiries and investigations by American academics - and it was going through the 1980s - with the Lockerbie bombing happening in 1988 (26) - (28).

This third theory is strengthened by the fact that the US government, after recieving a warning phone call, warned many of it's employees not to get on the flight, but did not warn McKee nor other governments or members of the public (29).

The truth did not die when Megrahi did : Give Scottish and British Lockerbie relatives the Independent Public Inquiry they demand

Whether one of the above theories is the truth or something else entirely, we should give the relatives of Lockerbie victims the independent public inquiry which they are demanding, deserve and are being denied by politicians of every major party in Scotland and Britain (30).

By an independent public inquiry I mean one in which the inquiry is given governmental authority and powers, but it's powers, remitt (the evidence it can consider, questions it can ask and conclusions it can draw) and who heads it are all decided by the Scottish and other British relatives of those killed at Lockerbie.

The truth being embarrassing for politicians and judges is not a good enough reason to deny it to the families.

The governments and politicians and judges for whom an end to any questions about Lockerbie would avoid embarrassment ; and those in the media who have chosen to parrot the government line might prefer to claim that the truth about Lockerbie was lost when Megrahi died , but it was not and will not be.


(1) = BBC News 20 May 2012 'Lockerbie questions remain following Megrahi's death', http://www.bbc.co.uk/news/uk-scotland-south-scotland-12191604

(2) = Observer 02 Sep 2007 'Vital Lockerbie evidence 'was tampered with'', http://www.guardian.co.uk/business/2007/sep/02/theairlineindustry.libya

(3) = Herald 03 Oct 2007 'Revealed: CIA offered $2m to Lockerbie witness and brother', http://www.heraldscotland.com/revealed-cia-offered-2m-to-lockerbie-witness-and-brother-1.866400

(4) = BBC News 28 Aug 2008 'Lockerbie evidence not disclosed ', http://news.bbc.co.uk/1/hi/scotland/south_of_scotland/7573244.stm ; '...Tony Gauci, who picked al-Megrahi out in a line-up, had looked at a magazine photograph of him just four days before he made the identification. BBC TV programme The Conspiracy Files: Lockerbie has now seen documentary evidence that Scottish police knew this was the case. That information should have been passed to the defence, but the disclosure did not take place. '

(5) = Professor Robert Black's 'The Lockerbie Case' blog, http://lockerbiecase.blogspot.co.uk/

(6) = Dr Hans Kochler , http://en.wikipedia.org/wiki/Hans_K%C3%B6chler%27s_Lockerbie_trial_observer_mission

(7) = Lockerbietruth.com - The website of Dr Jim Swire and Lockerbie researcher Peter Biddulph, http://www.lockerbietruth.com/

(8) = Independent 21 Aug 2009 ‘Hans Köchler: I saw the trial – and the verdict made no sense’, http://www.independent.co.uk/opinion/commentators/hans-kchler-i-saw-the-trial-ndash-and-the-verdict-made-no-sense-1775217.html

(9) = BBC News 14 Mar 2002 ‘UN monitor decries Lockerbie judgement’, http://news.bbc.co.uk/1/hi/1872996.stm

(10) = The Firm (Scottish lawyers’ magazine) 10 Jun 2008 ‘UN Observer to the Lockerbie Trial says ‘totalitarian’ appeal process bears the hallmarks of an “intelligence operation”’, http://www.firmmagazine.com/news/901/UN_Observer_to_the_Lockerbie_Trial_says_%E2%80%98totalitarian%E2%80%99_appeal_process_bears_the_hallmarks_of_an_%E2%80%9Cintelligence_operation%E2%80%9D_.html

(11) = Report on the appeal proceedings at the Scottish Court in the Netherlands (Lockerbie Court) in the case of Abdelbaset Ali Mohamed Al Megrahi v. H. M. Advocate by Professor Hans Köchler, international observer of the International Progress Organization nominated by UN Secretary-General Kofi Annan on the basis of Security Council resolution 1192 (1998)

(12) = ‘The Lockerbie Case’ 21 Aug 2009 , http://lockerbiecase.blogspot.com/2009/08/this-shameful-miscarriage-has-gravely.html (blog written by Professor Robert Black)

Sources - Iranian revenge for killing of 290 Iranian airliner passengers by the USS Vincennes?

(13) = NYT 15 Jul 1988 ‘Iran Falls Short in Drive at U.N. To Condemn U.S. in Airbus Case’, http://www.nytimes.com/1988/07/15/world/iran-falls-short-in-drive-at-un-to-condemn-us-in-airbus-case.html

(14) = Newsweek 13 Jul 1992 ‘Sea of Lies : Sea Of Lies : The Inside Story Of How An American Naval Vessel Blundered Into An Attack On Iran Air Flight 655 At The Height Of Tensions During The Iran-Iraq War-And How The Pentagon Tried To Cover Its Tracks After 290 Innocent Civilians Died’, http://www.newsweek.com/id/126358

(15) = See (14) above

(16) = Guardian 31 March 2004 ‘Lockerbie's dirty secret’, by Paul Foot, http://www.guardian.co.uk/uk/2004/mar/31/lockerbie.libya

(17) = Paul Foot (1989-2001) ‘The Great Lockerbie Whitewash’ in Pilger, John (ed.) (2005) ‘Tell Me No Lies’, Vintage/Random House, London, 2005, pages 214-254

(18) = Sunday Times 01 Jul 2007 ‘Unpicking the Lockerbie truth’, http://www.timesonline.co.uk/tol/news/uk/article2009603.ece (19) = Guardian 07 Apr 1999 ‘Lockerbie conspiracies: from A to Z ; Based on a 1995 Guardian investigation by Paul Foot and John Ashton’, http://www.guardian.co.uk/uk/1999/apr/07/lockerbie.patrickbarkham (20) = Guardian 29 Jul 1995, SECTION: THE GUARDIAN WEEKEND, Page T22 ‘INSIDE STORY: BODY OF EVIDENCE’, http://leninology4.blogspot.com/2007/06/paul-foot-john-ashtons-1995.html

Sources - Gaddafi's revenge for US airstrikes using planes refuelling in the UK in 1986?

(21) = Bovard, James (2003) ‘Terrorism and Tyranny’, Palgrave-MacMillan, NY,2003, Chapter 2, pages 24-26

(22) = Geoff Simons (2003) ‘Libya and the West’ Center for Libyan Studies, Oxford, UK, 2003,Chapter 7, pages 131-134 of hardback edition

Sources - Cover-up of CIA drug trafficking involvement from the Middle East to Europe, similar to that from central and Southern America in the 1980s as part of Iran-Contra

(23) = Coleman, Lester K & Goddard, Donald (1993) ‘Trail of the Octopus: From Beirut to Lockerbie - Inside the DIA’

(24) = Guardian 29 Jul 1995, SECTION: THE GUARDIAN WEEKEND, Page T22 ‘INSIDE STORY: BODY OF EVIDENCE’, http://leninology4.blogspot.com/2007/06/paul-foot-john-ashtons-1995.html

(25) = See (24) above (26) = Cockburn, Alexander & St. Clair, Jeffrey (1998), ‘Whiteout – The CIA, Drugs and the Press’, Verso, London & N.Y , 1998, Chapters 12 & 13 (27) = Scott, Peter Dale & Marshall, Jonathan (1998) ‘Cocaine Politics – Drugs, Armies and the CIA in Central America (1998 edition)’, University of California Press, Berkeley, London & Los Angeles, 1998 (28) = http://en.wikipedia.org/wiki/Oliver_North#Involvement_with_drug_trafficking (this is a wikipedia entry but provides reliable sources - including the Kerry report - a congressional inquiry into links between drug traffickers, the contras and the CIA - and FBI investigations)

(29) = See (24) above

Sources - Give Lockerbie relatives the Independent Public Inquiry they demand

(30) = Herald (Scotland) 22 May 2012 'Lockerbie families vow to force public inquiry', http://www.heraldscotland.com/mobile/news/crime-courts/lockerbie-families-vow-to-force-public-inquiry.17660141

Saturday, May 19, 2012

Why Greece will be forced to leave the Euro unless it's offered a better deal ; the other problems with the EU and the Euro ; and the mass starvation they are distracting us from

(If this article is too long for you to read as a blog post see my website version with contents links between different sections)

Greece's keep the Euro, reject austerity option?

Greece has the option of rejecting the austerity bail-out package and disowning it's debts, while keeping the Euro as a currency, with or without remaining Euro-zone governments' permission. First Minister Alec Salmond similarly plans to keep the pound as a currency if Scotland becomes independent, based on many countries using the US dollar as their currency (1).

Despite the myth that defaulting on large debts leads to instant bankruptcy for debtor countries, South Korean economist Ha Joon Chang's book '23 Things they don't tell you about capitalism' notes numerous examples of indebted countries defaulting on their debts and immediately finding new creditors willing to lend to them (2).

This option might result in even worse austerity problems than the bail-out package in the short term though and might lead to the same end result of Greece leaving the Euro unless the bail-out package is renegotiated to reduce the austerity element, increase the stimulus element and crack down on tax havens to increase tax revenues for Greece and all other governments.

The remaining Euro zone countries could try to force Greece to drop the Euro by blanket trade sanctions, but that might lead to currency crises in Portugal, Spain and even Ireland and Italy, with the Euro zone ending up restricted to Northern and central Europe.

There is the possibility that some politicians and voters in Northern European countries might prefer this, but it would hurt their exports. Germany's exports have increased massively as a result of the Euro. This is because while the Deutsch mark was very high in value due to Germany's strong economy, making German exports expensive (as international trade involves currency exchanges), the Euro's value is based on the average strength of the economies of the entire EU and so is lower in value than the Deutsch mark. This made German exports cheaper to buy in other countries and so more competitive against their rivals exports (and against goods produced in the countries Germany exports too.) (3)

A Northern and central Europe only euro-zone, composed of stronger economies, would mean the value of the Euro would rise, making exports from Euro-zone countries more expensive for consumers outside the Eurozone (in countries using currencies other than the Euro), so reducing orders for and sales of those exports.

The problem with Greece keeping the Euro without a Eurozone agreement

More likely, Greece might run out of money if it tried to remain in the Euro without the agreement of Eurozone governments, as it's government can't print Euros - only the European Central Bank (ECB) can - and the ECB is mostly under the control of the German and French governments as the two largest economies in the Eurozone.

That could force Greece to return to the drachma as a currency.

A return to the drachma?

The drachma, based on the weak Greek economy, might well fall further in value at least in the short term due to the crisis.

This would have the effect of increasing the cost of all Greece's imports - most importantly fuel (especially oil, gas, coal and refined petrol), with Greece relying on imports for two-thirds of it's energy requirements (4).

That would certainly hurt the Greek economy, but would it hurt it any worse than EU (or Eurozone) governments' austerity measures and enforced sell-off of it's remaining assets at the bottom of the market (including state owned utilities which could bring in revenue if the economy recovered)?

A Greek government after the second elections in June might decide it wouldn't.

However it would also allow Greece to print it's own money and would make it's exports more competitive (it's problem being that it doesn't export enough at the moment and would need to export far more).

This could also (in the longer term, once it re-stabilised) allow Greece to invest more in e.g solar power to reduce its dependence on energy imports.

The need for Germany to allow Greece to re-negotiate the bail-out deal

German Chancellor Angela Merkel says agreements made must be honoured, but those agreements were made without any democratic consultation of the Greek people, with the elected Greek Prime Minister ( George Papandreou ) forced to resign when he suggested a referendum on the bail-out deal (5). He was replaced with an unelected bureaucrat Lukas Papademos, who had previously been vice President of the European Central Bank (which issues the Euro).

If there had to be referenda for countries to join the Euro, why wasn't there one an agreement to impose austerity for the majority in Greece, especially when austerity has shown itself to be counter-productive?

So why shouldn't 17% of Greeks have voted for Syriza, the Green-socialist anti-austerity coalition? And why shouldn't over 20% of them be saying they'll vote for it in the emergency repeat elections in June? (6) (Though the centre-right pro-bail-out deal New Democracy was ahead of Syriza in one poll it's apparent poll lead was within the margin of error of the poll ) (7).

Syriza may be unrealistic in demanding no austerity measures whatsoever - some cuts may be necesary - but it is right that there is no democratic legitimacy to the bail-out deal imposed by Euro-zone and EU governments so far; and right that the level of austerity demanded is counter-productive and unfair (as well as letting the richest Greeks off with tax avoidance through tax havens while the rest suffer.

Syriza has every right to use it's existing electoral mandate and any votes it gets in the new elections to demand a renegotiation of the terms of the bail-out deal. Stimulus measures such as public works and government funded infrastructure building and training programmes may well be necessary.

Austerity taken to the current extremes chokes off any chance of the economic growth that Greece requires to be able to pay off it's remaining debts. This only benefits Greece's creditors, primarily Eurozone governments and big US, British, German and French banks, who can continue to farm the Greek population for interest payments as long as they remain in debt (8). Is it a co-incidence that allowing tax havens also benefits them? Or that forcing the sell off of state utilities on the cheap benefits them and investors from Northern Europe and the US?

Given a fair deal Greeks might well be able to stay in the Euro - polls show most would prefer to.

Merkel's statements have already begun shifting towards suggesting there could be a bigger stimulus element to the bail-out package, which is encouraging (9).

(Merkel also suggested to the current caretaker Greek Prime Minister that the new Greek elections should be accompanied by a referendum on whether to stay in the Euro - which the PM said he could not as a caretaker government did not have the authority.) (10)

Why Greeks feel oppressed by larger countries :
the history

The reason that many Greeks feel oppressed by larger countries is that for centuries to present, they have been. Since gaining their independence from the collapsing Ottoman Empire in the 19th century they were invaded and occupied by German forces in World War Two.

After Greek Communist partisans kept several German divisions occupied for most of the war, the 'liberating' British forces' and regular Greek military's reward to them was to shell thousands of Communist demonstrators and partisans with artillery with Churchill's approval in 1944.

This was followed by a civil war from 1946-1949 in which the US and British governments backed the Greek military against Communist groups. Communists and suspected communists were hunted down and persecuted for decades.

Under the US backed military government of the 'Colonel's regime' from 1967 to 1974, the assassination, jailing, torture or disappearance of anyone critical of the ruling military was commonplace, with CIA assistance.

President Lyndon B Johnson responded to the complaints of the Greek ambassador to the UN about US operations in Greece and Cyprus in 1967 by saying "Listen to me, Mr. Ambassador! Fuck your parliament and your constitution! America is an elephant. Cyprus is a flea. Greece is a flea. If those two fleas continue itching the elephant, they may just get whacked by the elephant’s trunk, whacked good.… We pay a lot of good American dollars to the Greeks, Mr. Ambassador. If your prime minister gives me talk about democracy, parliaments, and constitutions, he, his parliament, and his constitution may not last long."

So many Greeks see the current crisis as more of the same - few people have been killed (some demonstrators by police), but so far they have had larger countries governments imposing 'agreements' on them without any democracy.

The myth of laziness and corruption as the causes of under-development

German, British and French politicians have found it convenient to allow the myth that Greece's debt is mainly due to Greeks being lazy or corrupt. South Korean economist Ha Joon Chang points out that in the early 19th century, when Germany and Japan were less industrialised than France or England, Japanese and Germans were seen as lazy and backward. Chang comes to the conclusion that rather than changed culture resulting in development, cultural changes come about as a result of development, which is why people in poor, undeveloped countries are stereotyped as lazy. A society riddled with bribery is similarly usually the result of poverty and lack of economic and governmental development, rather than a cause of it (11).

James Steadway, chief economist at the New Economics Foundation, found figures suggesting Greeks on average retire older than Germans - and work 50% longer hours (12).

Tax avoidance and Evasion which increases government deficits and debts is facilitated by tax havens - why no EU or member state action on this?

While there was too much tax evasion in Greece, EU member governments have not closed down the tax havens which continue to facilitate tax avoidance and evasion by big banks, firms and the wealthiest across the EU and the world. Switzerland is a favourite tax haven for wealthy Greeks and Greek companies, while Greece's creditors include banks like the US based Goldman Sachs and the British based Royal Bank of Scotland, both of which, like most of the UK's FTSE 100 companies, are heavily involved in tax avoidance through tax havens (13) - (15).

This is surely a form of corruption on a grand scale - especially when parties in government are receiving large donations to party funds for election campaigns from the billionaires, banks and firms using the tax havens - and former government ministers involved in regulating (or more often de-regulating) industries end up on the boards of companies their department or government regulated.

The need to recycle the trade surpluses of stronger economies into developing weaker ones

Many economists (e.g Will Hutton and former World Bank economist Joseph Stiglitz) say the Eurozone's major weakness is the lack of any sufficient regional development fund to even out the inevitable trade imbalances between strong economies like Germany's and weaker ones like Greece, Portugal and Spain. A sufficient fund would act to recycle a large part of the trade surplus money of countries like Germany into investment in the weaker economies like Greece (16) - (17).

The insufficiency was exacerbated by the redirection of regional development funds from Portugal, Greece, Spain and Ireland to new member states as the EU expanded eastwards, arguably too fast, without referenda in the existing member states and without any EU minimum wage.

This is just as true of the EU as a free trade area as it is of the Euro-zone as a single currency area.

The US is a huge country made up of many states with significant differences in the strength or weakness of their economies, but this is moderated by large infrastructure and investment projects in poorer states by the US Federal Government.

Why complete free trade plus a single currency across countries at hugely different levels of development can't work

South Korean economist Ha Joon Chang's book 'Bad Samaritans' has something relevant to say here too. His book takes numerous historical examples to show that the British, US and other developed economies built up key industries over centuries by subsidising them and protecting them from the imports of foreign rivals. Only once they were strong enough to defeat any competition internationally did their governments become advocates of free trade - and even now advocate it for developing countries (and make it a condition of aid and trade deals) while often subsidising and protecting their own industries. Similarly foreign investment does not create growth first, but is attracted by building up a strong economy by publicly funded infrastructure and investment (18).

So is the EU free market and Eurozone project one that makes it impossible for weaker economies to ever develop their own industries when forced to open their markets to imports from stronger economies built up over centuries of protectionism? Does the Euro make things even harder for them by making the more developed economies' exports even cheaper? Should exceptions be made on the bans on protectionism and state subsidies for some of the industries of the weaker economies in the EU (just as poorer developing countries outside it desperately need to be allowed to protect and subsidise their agriculture and industries to develop them without being penalised by losing aid or trade deals as a result)?

Without these kind of exceptions being allowed for weaker economies, their electorates may end up concluding that they will be less badly off out of both the euro currency zone and the EU itself.

Contrary to Germany's image of itself as paying to bail out irresponsible Greeks, the current system gives all the benefits to the wealthier countries in the EU and the euro-zone with the costs largely paid by the poorer ones.

While this is true of trade between relatively developed nations of different economic strengths and levels of development within the EU and the developed world, it all holds even more true for trade between the developed countries and the almost entirely undeveloped former colonies in Africa and much of Latin America and Asia.

The need to resolve the developed world crises in order to deal with much bigger ones -
the starvation, hunger and lack of clean drinking water crisis in the developing world and the energy, resource and climate change one worldwide

Germany and the other strong economies in the EU should offer these kind of concessions in order to end the crisis quickly and move on to dealing with far more serious crises - such as the hundreds of millions of people in other parts of the world who are going without enough food to eat and without clean water to drink - and the coming catastrophic energy, resource and food crisis if we don't reduce our wasteful over-use of energy and resources.

Oxfam estimate that a billion people or one in seven of the world's population can't afford enough to eat each day for themselves or their children - a problem made worse by the rising price of food partly due to the rising price of fuel for transporting it, while the UN and other experts estimate between 800 million and 4 billion (probably more like 4 billion) have no access to clean drinking water, resulting in them suffering illness and often death from water borne diseases (19).

You can sign an avaaz petition which will be handed to G8 and other government's leaders at the G8 summit demanding they act to provide food security for the growing numbers of hungry people here.

The focus on developed world debt and currency crises is distracting from the need for the upcoming G8 summit to deal with those two major problems that result in millions dying each year from starvation, under-nutrition and lack of clean water.

The developed world crisis are relatively minor by comparison and only affect the majority here due to huge inequality, plus tax havens letting the wealthiest and big banks and firms avoid paying massive amounts of tax with the collusion of governments and politicans, plus rampant deregulation and the failure to re-regulate. Even with all that few people are starving or going without clean water here, though some are going hungry or dying of cold.


(1) = Scotsman 27 Jan 2012 'Alex Salmond: ‘Chancellor would bite our hands off to keep the pound’',
; 'However, Mr Salmond said there were 67 countries in the world that were using another nation’s currency, “either in formal or informal monetary unions at the present moment”, while remaining independent.'

(2) = Ha Joon Chang (2010) ‘23 Things they don’t tell you about capitalism’, Allen Lane, 2010

(3) = Business Insider 20 Nov 2011 'Why German Taxpayers Should Be Forced To Bail Out Italians And Greeks',

(4) = Trading Economics 'Energy imports; net (% of energy use) in Greece', http://www.tradingeconomics.com/greece/energy-imports-net-percent-of-energy-use-wb-data.html

(5) = guardian.co.uk 06 Nov 2011 'Eurozone crisis: Greek PM George Papandreou to resign', http://www.guardian.co.uk/world/2011/nov/06/greece-george-papandreou ; 'The socialist prime minister has faced growing calls to step down at home and abroad since shocking markets and world leaders with an ill-timed decision, announced last Monday, to put the 27 October bailout agreement to popular vote. After being publicly dressed down by French President Nicholas Sarkozy and German Chancellor Angela Merkel, the 59-year-old politician was forced to back down and shelve the referendum plan...'

(6) = Wall Street Journal Online 16 May 2012 'Greece's Radical Leftist Syriza Secures First Place- Poll', http://online.wsj.com/article/BT-CO-20120516-711097.html

(7) = Bloomberg 17 May 2012 'New Democracy Moves Ahead of Syriza, Greek Poll Shows', http://www.bloomberg.com/news/2012-05-17/new-democracy-moves-ahead-of-syriza-greek-poll-shows-1-.html

(8) = Bloomberg 23 Feb 2012 'European Banks Take Greek Hit After Deal', http://www.bloomberg.com/news/2012-02-23/rbs-reflects-greek-debt-damage-with-credit-agricole-days-after-aid-accord.html ; On US banks see (12) below

(9) = guardian.co.uk 17 May 2012 'German stance on Greek crisis softens as eurozone fears mount', http://www.guardian.co.uk/world/2012/may/17/germany-greek-crisis-eurozone

(10) = Guardian Business Blog 18 May 2012 'Eurozone crisis live: Row after Angela Merkel 'suggests Greece holds euro referendum'', entries for 6.15pm BST and 6.23pm BST, http://www.guardian.co.uk/business/2012/may/18/eurozone-crisis-stock-markets-greece-spain#block-31 and http://www.guardian.co.uk/business/2012/may/18/eurozone-crisis-stock-markets-greece-spain#block-32

(11) = Ha Joon Chang (2007) ‘Bad Samaritans’, Random House, London, 2008 , Chapter 9 'Lazy Japanese and Thieving Germans'

(12) = New Economics Foundation (NEF) 16 Feb 2012 'Greece should reject the Troika and default on its own terms', http://neweconomics.org/blog/2012/02/16/greece-should-reject-the-troika-and-default-on-its-own-terms by James Meadway, Senior Economist, NEF

(13) = Bloomberg 06 Mar 2012 'Goldman Secret Greece Loan Shows Two Sinners as Client Unravels', http://www.bloomberg.com/news/2012-03-06/goldman-secret-greece-loan-shows-two-sinners-as-client-unravels.html

(14) = Scotsman 18 May 2012 'Greek debt deal set to cost RBS £825 million' http://www.scotsman.com/news/international/greek-debt-deal-set-to-cost-rbs-825-million-1-2154674

(15) = Guardian 11 Oct 2011 'Tax havens and the FTSE 100: the full list', http://www.guardian.co.uk/news/datablog/2011/oct/11/ftse100-subsidiaries-tax-data

(16) = Observer 13 May 2012 'This crushing debt trap threatens to bring down the whole of Europe', by Will Hutton , http://www.guardian.co.uk/commentisfree/2012/may/13/will-hutton-euro-in-danger

(17) = guardian.co.uk 05 May 2010 'Reform the euro or bin it', by Joseph Stiglitz (former World Bank economist, also quoting nobel prize winning economist Robert Mundell) , http://www.guardian.co.uk/commentisfree/2010/may/05/reform-euro-or-bin-it-greece-germany

(18) = Ha Joon Chang (2007) ‘Bad Samaritans’, Random House, London, 2008 , Chapter 2 'The Double life of Daniel Defoe - How did the rich countries get rich'? ; also Chapters 3 & 4

(19) = BBC News 13 May 2012 'Harrabin's Notes: Safe assumptions' , http://m.bbc.co.uk/news/science-environment-18020432

Thursday, May 10, 2012

Clegg and Cameron and their parties are the ones who are too dependent on state hand-outs - not Scotland, Wales, Northern-Ireland and the North of England ; and their austerity policies (welfare for rich party donors at everyone else's expense) are preventing us getting out of debt

Could someone tell the Prime Minister and Deputy Prime Minister, that they are patronising hypocrites when they try to tell the people of this country - apparently including the whole of Scotland, the North of England, Northern Ireland and Wales according to Nick Clegg - that they can't afford to fund our supposed dependency on welfare any more ; and liars or delusional when they tell us their policies are reducing our debts and our deficit.

At their public relations press conference at a tractor factory in Essex the other day, Cameron and Clegg helpfully explained that they had no choice but to cut the deficit by any means necessary to get us out of debt.

Never mind that their so-called austerity policies - welfare for the richest, cuts for the the majority, (including those who need it most - the disabled, unemployed, poor and pensioners) have pushed us back into recession, unemployment over 2.6 million (with the short term fall of 35,000 soon to be wiped out again by a longer term rise to an estimated 2.85 million by the end of the year). Just to top it off they've actually actually increased the trade deficit (value of exports, minus value of imports) by almost £1 billion between January and February this year alone , by making the vicious circle of falling demand and rising unemployment that happens in a recession worse by sacking so many teachers, doctors, nurses and lecturers and by denying benefit to or cutting benefits for the disabled, unemployed, pensioners and working people on low incomes. Given all that any fall in the budget deficit will be short term and soon reversed without a change in policy (1) - (4).

(For instance the abolition of almost all tax credits has more than cancelled out any benefits to those working on low incomes from raising the starting rate for paying income tax to £8,000. While the 50p tax rate for the richest was cut, the starting rate for the 40% tax rate was lowered, so hitting middle and upper middle earners harder too. ) (5) - (7) (I have to admit here to having been wrong in supporting replacing tax credits with a higher starting rate for income tax)

Deputy Prime Minister Nick Clegg also explained (at the tractor factory) that Scotland, the North of England, Wales and Northern Ireland had all become too dependent on state hand-outs and that this "gravy train" was fine during the boom times but that we couldn't afford it any more.

(Watched this live on the BBC's News 24 , but can't find a complete transcript of it nor a complete video online)

Cameron and Clegg are paid with taxpayer money and dependent on throwing public money and lives to banks, arms companies (including as they sell arms to dictatorships killing Arab Spring democracy protesters), the PFI and PPP contractors, privatised rail operators and the pointless Afghanistan war and the Olympic circus like there's no tomorrow ; while allowing the recipients of taxpayers' money to avoid taxes themselves through tax havens. This gets them donations to their election campaigns from the recipients of these subsidies and tax breaks - big banks, firms and billionaires donating to party funds (8) - (10).

What have Cameron or Clegg ever done for the people of Scotland, Wales, the North of England, Northern Ireland, or the UK as a whole, in return for their £130,000 plus state funded annual salaries - five times the median wage - other than rob us to pay donors to party funds, while pretending that we simply don't understand that whatever's best for them and their donors must be what's best for everyone? (which is a pathetic fallacy based on a false assumption of identity of interests.) (11)

That's apart from the fact that London gets immensely higher levels of public spending on the infrastructure required for a strong economy (particularly transport) than any other part of the UK - and that the heads of the City of London's financial sector are the ones who caused the crisis and recession and who are paying themselves obscene bonuses with taxpayers' money. We are all now paying for the City of London's financial sector - and the Channel Island, Man , Belize and Cayman Island tax havens which caused the financial crisis and will cause another unless they're shut down (12).

Even the banks that didn't get bailed out were only saved from falling like dominoes as banks did in the 1929 Great Crash in the US by the majority of taxpayers paying for the bail-outs. The Conservative party's funding from banks, hedge funds and the rest of the financial sector has increased to at least 50% of all donations to their party's funds (13).

That explains why they cap benefits for people who desperately need the money but not bankers' bonuses for people who already have hundreds of times more than they could possibly need - and why the government hasn't made any serious attempt to close down the tax havens (just some window dressing) or re-regulate the financial sector. It also suggests that when the Conservatives say "we're all in it together" they really mean that they and their billionaire, banker and oil and arms company pals are all working together to rob everyone else.

Come the next general election this pair of public welfare recipient, dependent, hypocrites' days of living off the state and off of people who actually do work that benefits others, while contributing nothing themselves, will be coming to an abrupt end.


(1) = BBC News 25 Apr 2012 'UK economy in double-dip recession', , 'The UK economy has returned to recession, after shrinking by 0.2% in the first three months of 2012.A sharp fall in construction output was behind the surprise contraction, the Office for National Statistics said.A recession is defined as two consecutive quarters of contraction. The economy shrank by 0.3% in the fourth quarter of 2011.'

(2) = ONS Press Release 16 April 2012 'Labour Market Statistics, April.', http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/april-2012/index.html , 'The unemployment rate was 8.3 per cent of the economically active population, down 0.1 on the quarter. There were 2.65 million unemployed people, down 35,000 on the quarter. This is the first quarterly fall in unemployment since the three months to May 2011.

(3) = BBC News 04 May 2012 'High unemployment to do 'permanent damage' to UK', http://www.bbc.co.uk/news/business-17942814 ; 'The UK unemployment rate will rise from its current 8.3% to almost 9% by the end of this year, doing "permanent damage to the UK's productive capacity", a think tank has said.The National Institute of Economic and Social Research (NIESR) said that the persistent weakness in the economy was "unprecedented".'

(4) = ONS Press Release 12 Apr 2012 'UK Trade, February 2012',
http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/february-2012/index.html , 'The deficit on seasonally adjusted trade in goods was £8.8 billion in February, compared with the deficit of £7.9 billion in January.'

(5) = Independent 27 Dec 2011 'Britain's poorest hit by £2.5bn 'stealth tax' , http://www.independent.co.uk/news/uk/politics/britains-poorest-hit-by-25bn-stealth-tax-6281832.html , 'Tax cuts for low and middle-income families in April will be dwarfed by hidden reductions in tax credits, according to a study for The Independent.

The analysis found that the £1bn of tax cuts in April will be outweighed by reductions of more than £2.5bn in the complex tax-credit scheme.'

(6) = Independent on Sunday 18 Mar 2012 'Working poor left out in the cold as benefit U-turn targets better-off ', http://www.independent.co.uk/news/uk/politics/working-poor-left-out-in-the-cold-as-benefit-uturn-targets-betteroff-7576431.html

(7) = DirectGov Budget 2011 Tax Changes, http://www.direct.gov.uk/en/nl1/newsroom/budget/budget2011/dg_wp195609

(8) = Campaign Against the Arams Trade - Export Credits,

9) = guardian.co.uk 09 Jul 2011 '300 schools to be built with £2bn PFI scheme', http://www.guardian.co.uk/education/2011/jul/19/300-schools-built-private-finance-scheme

(10) = Guardian 09 Mar 2012 'Olympic Games risk going over budget as cost hits £11bn, say MPs', http://www.guardian.co.uk/sport/2012/mar/09/olympic-games-budget-cost

(11) = www.parliament.uk 'Frequently Asked Questions: MPs ',

(12) = BBC News 18 Dec 2011 'Transport spending 'skewed towards London', http://www.bbc.co.uk/news/uk-england-16235349

(13) = Bureau of Investigative Journalism 08 Feb 2011 'Tory Party funding from City doubles under Cameron', http://www.thebureauinvestigates.com/2011/02/08/city-financing-of-the-conservative-party-doubles-under-cameron/

Monday, May 07, 2012

Independence for Scotland will be pointless if we destroy our country with incinerators, fracking, deregulation and government acting in the interests of billionaires and big firms who only want short term profits at everyone else's expense

Unfortunately I didn't get enough votes to be elected ( I got 246 first preference votes and 353 votes - about 6% of those cast , including 2nd and 3rd and 4th preferences before I was eliminated). Not bad on 3 weeks campaigning and a budget of £600. (I was standing as a candidate to be a councillor in the Clydesdale West ward of South Lanarkshire Council).

I'd like to thank everyone who voted for me and campaigned for me and everyone who took the time to talk to me while I was canvassing. I will pass on all the issues you raised to the four candidates who were elected Councillors for the ward - Eileen Logan (Labour) , Lynsey Hamilton (Labour), David Shearer (SNP) and Pat Lee (SNP).

I want to thank retiring SNP Councillor Ian Gray for leading opposition to the incinerator on the planning committee and all the other councillors who voted against it, plus the AGADI organisers and volunteers and objectors and the Lanarkshire Green Party who also continue to campaign hard against it.

Though I was against Conservative councillor Alex Allison's vote in favour of the incinerator and have little time for his party or it's policies, residents in Crossford told me he worked hard for them on other issues, before losing his seat in this ward in the recent election.

I'd also like to congratulate Independent candidate Ed Archer, who was elected a councillor in neighbouring Clydesdale North ward, centred on Lanark; and who is also opposed to the incinerator and to the wind farm at Cartland.

I will be among many people launching campaigns to demand to know why the SNP Scottish Government, led by Alec Salmond, are not using the huge powers they have over council decisions, through control of around 80% of councils' budgets, to get Dovesdale and other wasteful, expensive, toxic, incinerators closed down and replaced with recycling and anaerobic digestion plants - and ditto on stopping fracking and on opening old railway stations (including in Law, where many residents asked for this).

The Scottish Government have demanded a Council Tax freeze from local councils in return for granting them funding (unwisely in my view) and could use the same kind of pressure to get Dovesdale and other Incinerators closed.

They have stepped in to over-rule local council planning decisions on Donald Trump's white elephant golf course (built over an SSSI full of endangered species and also including attempts to force people out of their homes by bully-boy tactics).

Residents in Kilncadzow tell me the Scottish Government also granted appeals to allow wind farms to be built at Kilncadzow and Cartland within 500 metres of peoples' houses, after the local council for once listened to residents and refused planning applications in each case. (Like the residents i'm in favour of turbines sited correctly - but not that close to houses.)

So Salmond and the SNP Scottish Government will intervene to help billionaires and big firms do things that are wrong and harmful, but not to cut funding to South Lanarkshire Council until it closes a toxic, over-priced incinerator? If so what's the difference between them and the other big party leaders?

I love my country and it's people. Alec Salmond and the other big party leaders say they love them too (whether they define them as Scotland or Britain). If you love your country and it's people why would you expose them to over-priced, deadly, wasteful incinerators ; to fracking which will poison our fresh water supplies (an increasingly valuable commodity worldwide with shortages growing in much of the worldwide) and our air and people ; and why would you over-rule local residents and councillors to let arrogant, incompetent billionaires like Trump get their way?

If you really love your country Alec, prove it. Close down the incinerators. Stop the fracking. Open the old railway stations. Regulate the banks. Listen to the people, not to big firms and billionaires who only want short term profit for themselves.

I'll also campaign for independence for Scotland when the referendum comes - i'm all for it to keep us out of Iraq, Afghanistan and maybe more Falklands and Iran wars and financial crises caused by deregulation in which ordinary people die or suffer for the profits of arms and oil firms and banks, and the careers of politicians; plus getting rid of tax havens that impoverish the majority to avoid the wealthiest and big firms paying their share.

But independence will change nothing if we become an independent Scotland destroyed for it's people, because it's run for big business and billionaires' short term profits at the expense of suffering for the vast majority. That would be no better than being part of a UK which is being destroyed in the same way.

Independents, Greens and socialists may not have been able to beat the big parties yet, but by god, if you big party leaders are in office and keep behaving like you are now we'll point up your hypocrisy constantly enough in one campaign after another (at elections and between them) that you'll have to change to more decent policies or else risk losing to one of the other big parties- and then do the same to whichever big party is in next until we get decent policies from them or else win ourselves and bring decent policies in ourselves.