September 18, 2013

Grim Fairy Tales and Hard Times

Filed under: Debt,Money Creation,Politics,Poverty — ken finn @ 5:28 pm

Sitting comfortably for this tale of tales and tale of lies?

In this land and some far, far away The King has long been naked. While the tailors of the City spin their fabric of lies all are mesmerised by their charms. So skillful of  tongue their silken words have captured the keys to the citadels. In these days the herald plays only their tune while the minstrel mocks the boy who blows his discordant whistle. The wicked witch’s spell begun so long ago is nearly complete.

Skillful silken words… words to tangle the truth, to turn common man against common man and woman. To deflect and turn and turn until in a dervish confusion we accept the tale. And tales they are, as tall as edifices they construct to their own glory.

However hard our times are they are of our making for if I was to continue packing metaphor on metaphor most would spot the allusion.

We know the lies and we know the liars so how come we accept their grim fairy tales and accept the hard times. Hard times that will not go away. How can they? For those who created the problem, the bankers have not been made to change their ways and the debts their failure created will never be paid for by piling hardships upon the poor. The poor didn’t create the deficit and neither did they run up a debt that equals the entire global GDP many times over. We all bailed out the banks and we were promised a new start.

In the days and months following the crash we expected a new accountability and regulation of the banking system. Unimaginable amounts of tax payers money was poured into the banking system to help sustain it while a solution to the crisis could be mounted. At the expense of the real economy and our social programs money was diverted to save the banking sector. This liquidity designed to keep the system and the economy afloat was instead hoarded by the banks as insurance against a future crash. And it seems it could happen again as the London house price bubble would indicate that little has changed.

That opportunity for change it seems has passed. In the years before the crash the City insisted on light touch regulation and governments obliged. The whip was in the claw of the Golden Goose and the City’s importance to the UK economy was its shiny golden egg nesting at the centre of the European money markets. When the egg went rotten our governments should/could have acted. At that moment there was a perfect moment for democratically elected leaders to act, to take back the power and to regulate the banks. Instead they dithered and in a perverse turn around our governments now have had to come to heal. Our governments borrow money on the Bond Markets, IOU’s to the banks to fund day to day business and short falls in income. If the bankers don’t like a country’s policies they hike up the interest rates increasing government costs and the need for more austerity. No one likes the Greek shoes so policies are designed to please the markets.

The Robbin Hood tax, the breaking up of banks, tighter regulation, none of it can happen because the puppets in government have to perpetuate the fairy story, that the banking sector is good for us. Yet how can public sector workers, the sick and the poor be scapegoated for a banking failure of such a magnitude while the true villains of the piece go unchallenged?  I watch with despair as the spinners spin their lies with a growing confidence. Plain untruths are delivered unchallenged by the peddlers of the latest facts or news. Statistics that support the petty prejudices that turn citizen against citizen are bandied about with little or no basis in fact. Propaganda that would have passed muster in Joesph Goebbels ministry seems to enthrall the mainstream media in its willingness to toe the line.

What saddens me most is the evidence that the fairy story is taking root, the small minded campaigns that declare ‘I’m Proud to be British’ with their racist message hardly veiled or the way the skiver versus striver story plays out in the Internet comment threads or in the tabloids. We’re not in this mess because of immigrants, benefit claimants or the welfare state. Instead we live in a time when the greatest transfer of wealth is being carried out under our noses. There is no austerity for those who created the crash instead they get wealthier while we argue whether those with a spare bed should be penalised.

What can we do? Well, we must where ever we can have the discussions about the real reasons for austerity. We also have a stake in the banking sector through our ownership of RBS and a big chunk of LLoyds TSB. We don’t have to ask these banks to behave, we can tell them what we want them to do. Our banking system is flawed but we could have an alternative on the high street. The Royal Bank of Scotland could be transformed into a national network of banks that have to focus on their local needs and the needs of it’s owners, you and me. Let’s stop the government just selling it off at a knock down price to their mates. It’s ours, we paid for it and that’s the end of the story.

Ken Finn

January 23, 2012

The Cap Don’t Fit Duncan Smith

Filed under: Debt,Money Creation,Politics — ken finn @ 1:37 pm

I read this morning that Ian Duncan Smith has jumped on the criticisms of the Benefit Cap that will limit the amount available to the families of the un-employed. Claiming that the principle that it should always be more rewarding to work than claim benefit is one that everyone will support.

However it suggests that claimants are exercising a choice over whether to work or claim benefit, to in IDSs words work hard and commute long hours or presumably sit on their arses watching daytime TV. As if £35k jobs were in abundance! Im sorry but its the same old nonsense and distraction that runs well in the tabloids. It sets people against each other to obscure what lays at the heart of the problem; how money is created.

The Benefit Cap is about moving the un-employed out of high value city centre properties to reduce costs as the house price bubble that has continued grow even in tough times shows no signs of shrinking and bringing relief to the governments Housing Benefit burden. It is however a burden of their own making.

Why do property prices continue to rise when its plain that prices have moved beyond many peoples ability to buy? The answer has less to do with demand and more to do with where the money comes from in the first place.

The modern banking system has developed in such a way that 97% of all the money in the economy is created by Private Banks. Youd be wrong if you thought the Government or the Bank of England creates most of our money as the BoE prints around just a measly 3%.

Whats more banks dont need to actually have the money you apply for to extend you a loan or a mortgage. The bank just creates digital money out of thin air for you to make your purchase albeit a car, holiday or a home. Its simply a matter of creating numbers in your account.

As banks control how most of the money in the economy is used they inevitably choose the safest bet. Property for the banks is a no brainer Simple, automated credit checks enable decisions to be made quickly and if in the end the borrower cant meet the loan the bank can repossess. Consider for one moment the position of the bank in this scenario. The bank created the money for your mortgage out of thin air but if you cant keep up the repayments they get the very real asset that was your home!

In the last decade the money supply created out of property debt has ballooned dwarfing the money available to the productive economy. While banks have fuelled a property price boom the money made available to businesses continues to be rationed.

For years we have been fed the myth that rising property prices are beneficial, creating wealth, jobs and a sense of wellbeing. Looking around its not hard to see why weve been robbed. As property prices rise, essential but marginal businesses start to disappear. When the value of the village bakery is distorted by what it could fetch as a country home it soon becomes history together with pubs, petrol stations and independent stores. In towns, workshops and small industries disappear along with anything else that is more valuable as residential or commercial property. Historic places of work like wharfs and canal side workshops become waterfront properties. Rising property prices are as destructive of community as they are a sap on the productive economy stealing places to work and marshalling money away from the things that generate real prosperity and diversity.

In the past a blend of social and private housing ensured that even in cities there were necessary homes for key workers and the low paid who helped to fulfil necessary functions. Today, the Benefit Cap is just another step along the road that Margaret Thatcher began with the sale of Council Houses; from mixed communities of incomes, skills and backgrounds to segregation along the lines of ability to pay, to convenience for those with money and increasing commuting for those who cant.

The power to create a nations money supply endows the Banks with tremendous power and it is clear that they influence many government decisions including financial regulation. The banks have acted in their own interest for too long and clearly in way that has created many distortions in the way things are valued. Government cannot scapegoat scroungers, the work shy unemployed, immigrants or whatever else they can dream up to cover the reality that they are complicit in a allowing private corporations to create our money.

There is an alternative way and I would urge you to begin to understand the monetary system its not as complex as they would have you believe. For real change to come about depends on how much our current government has vested in maintaining the status quo the level of privilege, wealth and connections in the current administration suggests that change wont come easy!   Ken Finn

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March 7, 2011

Taking Peston to pieces on tax

Filed under: Debt,Economic Growth,Politics — ken finn @ 6:44 pm

Taking Peston to pieces on tax.

George Monbiot reported on a tax heist by this government which was dissed by the BBC’s Robert Peston… The above is a good rebuttal

The original by George, ‘A Corporate Coup Detat’ is a compelling read – Read it Here

October 19, 2007

Their Shame or Ours?

Filed under: Debt — ken finn @ 11:30 pm

 Name our Shame

I’ve started seeing more DVLA ’don’t pay your tax you don’t use your car’ wheel clamps on the street.  There doesn’t seem to have been much of an outcry at this rather draconian response to non-payment of road fund licence. Surprising since following a clamping the DVLA move fairly quickly to crushing the vehicle.

The motoring organisations seem to support this heavy handed approach taring all non payers as criminals who need to be removed from the roads and or society. In days gone by I can imagine being in the situation of being without the cash to tax a vehicle but having to use it till the money comes in. An offence perhaps but does this kind of poverty warrant the seizure and destruction of a vehicle and further impoverishment?

And what is the natural progession of this kind of ‘name and shame’ justice? How about non payment of council tax, will offenders return home to find themselves barred from their home? Will they have days to find the cash or see their home auctioned to pay back tax and charges? It seems possible.

Mostly the people who clamour for such measures are the least likely in society to ever find themselves prey to the attention of a ballif. If they only knew!

Not so long ago I rented my home to someone who should have paid the council tax as part of the agreement, but he missed a couple of payments. He paid the arears but it was too late, the debt had been placed into the hands of the council’s debt collection agency. I became involved in an attempt to resolve the situation but I quickly realised that I was actually dealing with licenced extortionists. A £300 bill quickly became a £500 bill and rising! The baliff was little more than a bad mouthed thug with the legal right to enter my home and remove anything of value and all the time the bill got bigger. He made his point very forcefully that unless he received money he would be back to seize goods whoever they belonged to. It was a nightmare.

Thankfully I identified a legal error in their proceedings and was able to stop them in their tracks but it was a close run thing.  And as there was no outstanding monies the case was closed.

It was an education in just how frightening debt can be and how unjust the system is for people who find themselves rightly or wrongly in the ‘recovery’ system. It’s also an example of how errors are made and how devastating the consequences can be.

It made me realise just how without compassion we have become for those who cannot afford to keep up the payments.