Showing posts with label Barack Obama. Show all posts
Showing posts with label Barack Obama. Show all posts

Friday, 12 January 2018

The British extreme-right sure do seem to hate Britain a lot


Donald Trump's staggeringly dishonest Twitter rant about cancelling his trip to London triggered a gleeful display of quintessentially British piss-taking on Twitter via the #ICancelledMyTripToLondon hashtag.

Trump lied that he was cancelling his trip to London because Barack Obama and the Democrats supposedly did a deal to move the US Embassy to a new location, but the plan to move out and sell off the old embassy was actually drawn up in 2008 by the Republican George W. Bush administration.

Everyone could see that Dotard had just made up a ridiculous lie to cover for the fact that he's afraid of facing the large public protests the British people would undoubtedly put on against his near constant stream of bigoted rhetoric.

Here are a few of the more amusing examples.




What could be more British than ribbing someone after they've huffed off in a strop?

Well there are many on the British extreme-right who clearly feel a much stronger affinity for Donald Trump than they do for their own nation, because they were so upset at people taking the piss out of their beloved right-wing idol that they set about trying to hijack the #ICancelledMyTripToLondon hashtag to humourlessly denigrate Britain, and especially London.










It's absolutely remarkable how much hatred and denigration is being aimed at Britain and it's capital city by this extreme-right rabble.

It's even more remarkable that this odious hate mob have the absolute cheek to pose as pro-British patriots, and even use British and English flags in their Twitter handles and biographies.

It's beyond obvious that this disgusting mob hate their own country with a passion, because not only do they openly and shamelessly denigrate Britain, they've also attempted to hijack a quintessentially British display of ribbing with their displays of hateful and pathetically humourless extreme-right ranting.


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OR

Saturday, 26 November 2016

They don't hate dictators, they hate disobedience


Fidel Castro came to power in 1959 after the Cuban revolution forced the brutal US backed dictator Fulgenico Batista to give up and flee the country.

The US were absolutely furious that their puppet dictator had been deposed so they orchestrated the disastrous Bay of Pigs invasion attempt, attempted to assassinate Castro on dozens of occasions and imposed severe economic sanctions on the people of Cuba.

Castro was committed to socialist principles like universal health and education, and despite the severity of the US trade embargo, Cuba achieved the highest literacy rate of any country in North or South America and developed an extraordinarily successful universal health care system.

It is undeniable that Castro achieved great things, but it's also undeniable that he ruled as the leader of a single party state where political dissent was routinely crushed. Of course it was necessary for their own survival that the Cubans rooted out US backed agitators. Had they meekly done nothing then Castro would soon have been overthrown and replaced with another appalling right-wing US backed dictator (just like the fate of so many other left-wing governments in Latin America). But the necessity of cracking down on US efforts to undermine, destabilise and destroy the Cuban government doesn't excuse all of the repression that went on.


On the one hand Castro achieved miraculous things under extremely difficult circumstances, but on the other hand his regime was repressive and intolerant of dissent.

One of the most interesting things about the social media reactions to Castro's death is the way that so many people have divided themselves into two tribalistic camps, with few people prepared to admit that Castro was a fascinatingly enigmatic character who achieved great things, but who had many flaws too.

Many social media reactions have praised Castro without alluding to any of his failings, while other people have set themselves up as voluntary "Batistabots" with an absolute determination to raid Castro tributes with their efforts to paint Castro as a savage dictator and nothing more (regardless of the fact that the dictator who preceded him was clearly very much worse).

This behaviour is interesting for several reasons. One interesting aspect is the fluidity it demonstrates in right-wing political correctness. We all remember the howls of outrage from right-wingers when people tried to point out Margaret Thatcher's toxic political legacies after she died. Yet given the outpourings of gloating, hatred and gleeful celebration from right-wingers over Castro's death, it's clear that this mandatory "respect for the dead" that right-wingers wouldn't shut up about back when Thatcher died clearly only extends to right-wing demagogues like Thatcher, and not to anyone else.

Another interesting point is the way that right-wingers have used statements of condolence to the Cuban people to attack their political opponents. If a politician is even vaguely left-wing the right-wing attack dogs have been hounding them over their statements of condolence.

Barack Obama is only a left-winger if you're looking at him from a rabidly right-wing perspective. He surrounded himself with Wall Street bankers for his eight years in the White House, he strongly resisted financial sector reform, he oversaw the continued widening of the inequality gap, he pushed hard-right corporate power grabs like TTIP and TPP on the rest of the world, and he was a huge friend to the military-industrial complex.

Here's an extract from Barack Obama's condolence message:
"At this time of Fidel Castro’s passing, we extend a hand of friendship to the Cuban people. We know that this moment fills Cubans - in Cuba and in the United States - with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation. History will record and judge the enormous impact of this singular figure on the people and world around him ... we offer condolences to Fidel Castro's family, and our thoughts and prayers are with the Cuban people."
That's hardly controversial stuff, but it hasn't stopped wave after wave of right-wingers from attacking Obama, or anyone else who dares to utter anything short of a hateful and divisive Trumpian rant about how completely terrible Castro was and how Cuba needs to cave in to US imperialism at the first opportunity.


These attacks contrast interestingly with the absolute wall of silence from right-wingers when David Cameron paid glowing tribute to the brutal Saudi Arabian dictator Abdullah bin Abdulaziz in January 2015.

You'd have to be suffering an utterly delusional lack of perspective to imagine that Fidel Castro was in the same league as Abdullah bin Abdulaziz when it came to repression. 

Saudi Arabia is a deeply misogynistic Islamist theocracy where women aren't allowed to drive or even leave the home without a male family member to escort them. In Saudi Arabia people are sentenced to death for "crimes" such as being an atheist, being homosexual, or calling for more democracy in the kingdom.


Here's David Cameron's glowing tribute to this savage dictator (who just happened to be the leader of a country that spends £billions per year on British weapons).
"I am deeply saddened to hear of the death of the Custodian of the Two Holy Mosques, His Majesty King Abdullah bin Abd Al Aziz Al Saud ... He will be remembered for his long years of service to the Kingdom, for his commitment to peace and for strengthening understanding between faiths ... My thoughts and prayers are with the Saudi Royal Family and the people of the Kingdom at this sad time. I sincerely hope that the long and deep ties between our two kingdoms will continue and that we can continue to work together to strengthen peace and prosperity in the world."
The idea of Abdullah bin Abdulaziz as having a commitment to peace and the strengthening of understanding between faiths is bizarre enough, but painting Saudi Arabia as a global peacemaker is completely ludicrous given that Saudi Arabia finances terrorist organisations all over the world.

Abdullah bin Abdulaziz was a disgusting man who headed one of the most violent and repressive regimes in the world, yet right-wingers didn't see fit to criticise Cameron's glowing tribute to this appalling dictator.

The contrast couldn't be sharper, and it tells us something interesting about the right-wing psyche. These people don't hate dictators because they're dictators, otherwise the howls of outrage over David Cameron's glowing praise for Abdullah bin Abdulaziz would have been far louder than their furious condemnation of anyone who dares to express condolences over Castro's death.

These people don't hate dictators, they hate disobedience. It doesn't matter how brutal and ideologically extreme the dictator is, as long as they stay loyal to the interests of wealthy elites in the UK and US, they get a total free pass on their human rights abuses, misogyny, homophobia, lack of democracy, war crimes and blatant corruption.

However if a dictator dares to stand up against the interests of wealthy elites in the UK and US then the hatred is unbridled, even if it should be absolutely clear that the dictator is nowhere near as bad as "allies" like the Saudi Arabian regime.



 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.




OR

Wednesday, 9 November 2016

The surveillance states in Britain and the US are now in the hands of maniacs


When people warned of the dangers of the ever more intrusive surveillance state and the growing indifference to international law and human rights amongst the political elites in the UK and US those elites and their cheerleaders scoffed at us. "Trust us" they said, pointing their fingers at bogeymen like Islamist extremists and paedophiles to justify their construction of an all-seeing surveillance state that would have made the East German Stasi turn green with envy.

Somehow the UK has now ended up with Theresa May's appointment as Prime Minister by a tiny band of Tory party elitists. As Home Secretary she was responsible for the introduction of all kinds of illiberal monstrosities. When the Snowden leaks revealed the massive scale of illegal data-trawling by the British secret services, she quickly helped them to cover up the lawlessness of their actions with the introduction of DRIPA. In 2013 she trashed the concept of open justice by introducing secret courts where a person can have their fate decided in a courtroom they're not allowed to enter, on charges they are not allowed to know based on evidence they are not allowed to see.

Not only has Theresa May enacted these appalling attacks on our traditional rights and liberties, she's keen as mustard to do more. She's been pushing her free-speech destroying "counter-extremism" measures to silence and intimidate innocent people who have committed no crime whatever. She's also been pushing her freedom-destroying "snoopers' charter" to allow the secret services to continue the mass trawling and retention of the private communication data of millions of innocent people. She's also spoken out time and again against British people having human rights, and is as keen as mustard to tear up our human rights and replace them with a set of allowances for the "lower orders" drawn up by her and her elitist Tory chums.

Across the Atlantic things are now even worse than Britain. Barack Obama spent his two terms in office overseeing the spread of the surveillance state, continuing George W. Bush's catastrophic interventionist foreign policies and massively expanding the US drone warfare programme.

Now that the American public have rejected the appallingly uninspiring "more of the same" Wall Street stooge of a presidential candidate the Democratic Party elite foisted on them, this horrifying military and surveillance state infrastructure has been handed over to a bigoted and mentally unstable maniac.

For hundreds of years people have been warning about the dangers of allowing the state to scrap our rights and liberties in order to supposedly ensure our safety. In 1755 the US founding father Benjamin Franklin said that "those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety", but people have failed to heed the warnings and we now find ourselves in a situation where these extraordinary new surveillance powers have fallen into the hands of a pair of dangerous maniacs.

In Britain Theresa May is determined to set the precedent that she can rule as dictator-in-chief by attempting to bypass parliament completely in order to make up the law of the land to suit herself. She's already proven her extreme dictatorial tendencies as Home Secretary, and now she's determined to grab as much political power for herself as she can get away with so that she can run the UK as a hard-right autocrat.

In the United States things are even worse. Donald Trump's fascistic proposals to impose religious purity tests at all US borders demonstrate his complete and utter contempt for the US constitution, and he's actually on record as saying "I wish I had that power. Man, that would be power" when asked about having the power to hack his political opponents (a crime that resulted in Richard Nixon being the only President in history who was forced to resign in disgrace).

What is more is that both of these blatant extremists have access to the nuclear launch codes. Theresa May has already bragged to parliament that she would willingly incinerate 100,000 innocent men women and children in a nuclear fireball if she wanted to, and 22% of Trump supporters voted for him despite thinking that he would trigger nuclear Armageddon if elected President!


The idea that the state is a force for good that would never abuse its military and surveillance powers in order to secure the interests of powerful elites was always an utterly naive fantasy - even at times when our political leaders weren't a deranged right-wing authoritarian and a bigoted and mentally unstable demagogue - but the warning was always there. Opponents of the ever expanding military-security complex have always argued that those powers were bad enough in the hands of any government, but that things could always easily get a lot worse upon the election of some lunatic or other.

And now look what's happened.


 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.




OR

Sunday, 4 November 2012

A letter to American voters

Dear American voter,

I'm English and I'm going to share my opinion on American politics. I know how much you are going to appreciate it; after all us Brits are the true experts in sham "democracy". Our "democracy" is even more crude and unrepresentative than yours.

Our "democracy" is so unrepresentative and anti-democratic, in England it is the unwritten law that "democracy" must be written in inverted commas. Our upper house is like your Senate but totally unelected. Can you believe that? How would you feel about an unelected senate?

In the past. Lords of the manor simply inherited their seats in the upper house by virtue of being the sons of their wealthy landowner fathers, hence the name; House of Lords. Nowadays nearly everyone that sits in that undemocratic place is a direct appointee of the executive. 11 UK Prime Ministers between them have created over 1,000 peerages (who remain in the House of Lords for the rest of their lives, whilst it takes around 35-40 million voting citizens to elect just 650 members of the House of Commons on four to five year terms.

Even worse than the farcically anti-democratic house of Lords, is the fact that the UK has an unelected head of state called the Queen. Not only is she the head of the government, she is also the head of the Church of England. In comparison, at least the US has a theoretical "separation of church and state".

Worst of all, Britain doesn't even have a written constitution like the United States, our politicians can just make it up as they go along.

If you ever find yourself worrying that American democracy is nothing bust a sham based on an illusion of choice, just thank God you're not British.

Anyway, back to the point, which is to express my views on American politics. I can just imagine how these opinions from an Englishman would go down so darned well with an American audience.

The two main candidates in your election are obvious corporate shills. Anyone that doesn't accept this as a fact, doesn't know the first thing about American so-called democracy. We are talking about people so daft that they don't even understand the vastness of corporate political donations, the immense manpower of corporate lobbying or the actual composition of the two main parties. People like this should not be allowed to vote. However, this kind of simple-minded reactionary cretin seems to make up a hefty proportion of the US electorate, so disenfranchising them would be out of the question. The only solution would seem to be to give them a "distraction party" to vote for. A party led by clown like morons that quite obviously lack the mental faculties to run the most powerful nation on Earth, something like the British Official Monster Raving Loony Party. The only danger of course, is that the size of the credulous idiot demographic is severely underestimated and the American public end up electing some kind of deranged chimp in a suit!

Mitt Romney - The liar


Mitt Romney is is exactly the same kind of vacuous, dishonest, pathologically self-serving, intellectual-lightweight as Britain's David Cameron. Just look at the socio-economic chaos Cameron and his bunch of toffs are creating in the UK as a foretaste of what a Romney Presidency would be like.

Romney is such a dishonest, flip-flopping, self-serving, intellectual lightweight he makes "Tricky Dicky" Richard Nixon look like a man of towering integrity; he makes Ronald Reagan look like a man of towering intellect; and he makes George Bush II look like a man of extreme competence.

Romney will say absolutely anything if he thinks it serves his own self-interest. If he's talking to a crowd of extremely wealthy Republicans, he'll promise to cut taxes for the wealthy and slash public services, if he's talking to an audience of ordinary Americans, he'll promise not to cut taxes for the wealthy and to protect jobs and services. He is quite clearly a man of remarkable dishonesty and duplicity. One hopes that the American public are able to see his glaring lack of integrity. I mean he's "flip-flopped" so many times it is impossible to actually imagine what he would actually get up to if handed supreme power, except of course it would be some kind of evil money making scam, such as the activities he got up to at Bain Capital.

The fact that a transparent liar like Mitt Romney has managed to get himself this close to supreme power is a rude indictment of the state of American democracy.

Barack Obama - The dreambreaker

Obama swept to power during one of the great (if not the greatest) American financial crises, he won the Presidency on a mandate of "change"
and "Obama-mania". But he immediately appointed dozens of the very people who caused the economic meltdown, or did absolutely nothing to prevent it (Tim Geithner, Larry Summers, Ben Bernanke, Gary Gensler, Mary Shapiro and many others)  into all the top economic and many of the top political positions within his administration. Obama's coziness with the banks has been one of the hugely disappointing things about his Presidency. It doesn't matter how conservative or liberal you are, corruption is surely something that the President should attempt to stamp out, instead of giving a free-pass to everyone involved in the economic crisis (except Bernie Madoff).

Another major disappointment has been Obama's continuation of costly interventionist US military policy. American wars have cost the US economy $ trillions it can't afford and cemented the impression that America is a land of cruel oppressive imperialists. Instead of being the nation that reluctantly but heroically rescued Europe in Two World Wars, America has transformed itself into the global warmonger in chief. The Obama administration has done absolutely nothing to counter the common impression that the US is the global bully-in-chief.

It does seem that Obama is miles ahead of Romney on social policy; I mean he has said that gays should have the right to marry and he doesn't seem like the kind of guy that would force women to carry their rape babies. Despite this slightly more socially progressive stance, Obama still signed the grotesquely anti-constitutional NDAA, which revokes even more constitutional rights than Bush destroyed with the so-called Patriot Act.

Obama is clearly just playing the social progressive card to hoover up the votes of people that are terrified that Romney is so dishonest that they can only guess at how malicious his social policies might actually be, whatever is most profitable to him and his associates one would imagine.

Gary Johnson - The race to the bottom guy

Gary Johnson is the latest fundamentalist libertarian trying to win the Presidency. His social and foreign policies are actually way to the left of Obama and his economic policies are way to the right of Mitt Romney.

On social policy Johnson is a classic liberal, he would repeal the Patriot Act and the NDAA, he would end the war on drugs, fully legalise marijuana and he believes that gay marriage is a constitutionally guaranteed right, not something that should be left up to the individual states to decide for themselves.

On foreign policy Johnson is a non-interventionist. He would remove US troops from Afghanistan, oppose any attempts to launch yet another multi-trillion war to "liberate" Iran's oilfields and he would attempt to reduce the enormous burden on the US taxpayer of maintaining countless military bases all over the world.

On economic policy he is a fundamentalist anti-tax libertarian, intent on turning the US into a vast tax-haven by completely abolishing corporation tax and income tax. These policies would trigger a destructive race-to-the-bottom in "main street" America and the rest of the world alike. Johnson's economic policies would trigger the corporate endgame, with all countries suddenly slashing corporation taxes, labour rights and business regulations in order to incentivize corporate interests to remain in their countries. Corporate interests would increase their already disproportionate share of the wealth, workers would get poorer and the environment would be annihilated. Such a race to the bottom would be hugely detrimental to everyone but the corporate elite and their shills. A strategy that would prolong the American empire at the cost a creating vast social and economic instability, in "main street" America and across the World.

Absurdly the US mainstream press describe Johnson's policy of marijuana legalisation, not his loopy economic policies as his "most controversial". How is it possible for anyone to accept the mainstream media narrative that Johnson's plan to stop locking up tens of thousands of people for nothing more than inhaling the fumes of a virtually harmless herb is more controversial than his plan to completely abolish corporation tax and turn the entire US economy into the largest tax-haven in the World?

Jill Stein - The lost cause

Jill Stein is the Green party candidate. There is not much point in talking about her; the Green Party's impressive list of policies; the fact that they are endorsed by America's greatest living intellectual; or the fact that unlike their political rivals, they refuse to take corporate donations.

The American corporate media has smashed the green movement with more success than green-demonisation campaigns in any other country, which is sad, because the origins of the green political movement can be traced back to the protest movements of the 1970s.


The green movement is making headway in many of the World's richest and most powerful nations, Germany and Japan are leading the way, China have started talking up their green credentials and even oil rich Saudi Arabia have set a policy of greenification before their oil runs out.

The United States is a country where more people believe that the Earth was hand crafted by God on a busy week just a few thousand years ago than believe in the possibility that environmental pollution could be causing global warming. What makes this so absurd is that American business and foreign policy is absolutely dominated by oil. If Christian God really did make the world, and all the oil reserves just a few thousand years ago, one wonders why on Earth he decided to put such huge oil reserves in non-Christian countries like Saudi Arabia, Iraq and Iran.

Rosanne Barr - The loudmouth

To non-Americans, Rosanne Barr is a typical American citizen, she is brash and opinionated, she is a self-made woman with a cruel sense of humour, but beneath it all she has a good honest heart. Rosanne burst into the American consciousness by deliberately mutilating the last two lines of the national anthem at a baseball game back in 1990. She then cemented her place as an American celebrity with her long-running sitcom about American working-class life "Rosanne".

She tried to get the nomination for the Green party, but when she failed she quickly secured the nomination of the Peace and Freedom party instead.

Her name won't even appear on the ballot paper in many states, but she is certainly worth a mention because she is the kind of working-class liberal feminist candidate that would absolutely infuriate the reactionary Republican right. But as a self-made individual she should rightly be considered an American working-class hero.

The other no-hopers

Just like the vast majority of American voters, I don't know enough about the other no-hopers like Rocky Anderson and Virgil Goode to hold any valid opinion about them, except the certainty that they have as much chance of making it to the White House as Mozambique has of overcoming the United States to become the most powerful economy on Earth in the next couple of days.

Conclusion

As an Englishman it is clearly not my place to tell you how to vote. However, I believe I have every right to express my opinion on who I would vote for if I was an American citizen.

Firstly, whatever the circumstances, I'd vote against Mitt Romney. Letting a duplicitous, manipulative, self-interested and amoral cretin like that into the White House would be a disaster for the vast majority of Americans, a disaster for the American economy and a disaster for the World. If I was a resident of one of the swing states that actually gets to determine the US Presidency I'd have to hold my nose and vote for Barack Obama. 

If I lived in one of the majority of states that are traditionally blue or red, where it doesn't really matter who you vote for; I'd cast my vote for one of the other candidates as a protest vote, probably Rosanne, simply because voting for Rosanne Barr as President would have seemed absolutely unimaginable back in the 1990s.


Whichever way I cast my hypothetical vote, one of the two corporate backed candidates is going to win. I find myself hoping that Obama wins, simply becuase the other guy is pretty much evil personified. But then, the lesser of two evils is still evil, right?

All the best my friend, and good luck whatever the outcome.


Thomas G. Clark (Another Angry Voice)

Saturday, 23 June 2012

Credit Default Swaps explained


Following financial sector deregulation in the US,
the CDS market grew exponentially
Credit Default Swaps are complex financial derivatives.
 
Although forms of Credit Default Swap had been in existence from at least the early 1990s, the financial giant JP Morgan is widely credited with creating the first modern Credit Default Swap in 1994.

In 2000, neoliberal financial sector deregulations in the United States meant that the Credit Default Swap market was exempted from virtually all regulation.

The Commodity Futures Modernization Act of 2000, (which was also responsible for the Enron loophole) specifically stated that CDSs are neither futures nor securities and so are outside the remit of the SEC and CFTC.  After these deregulations, the Credit Default Swap market grew exponentially. In 2000, the market was worth $0.9 trillion. By the time the global financial sector insolvency crisis occurred in 2008, the CDS market was worth more than $30 trillion (more than 15x the size of the entire UK economy at the time).

The easiest way to imagine a CDS is to think of it as a kind of financial sector insurance. The similarity between a traditional insurance policy and a CDS is that the buyer pays a premium and in the case that one of the specified events occurs (a company goes bankrupt, a currency loses value, a state defaults) the buyer receives a payment from the issuer of the contract.

The main difference between an insurance policy and a CDS is that the buyer of a CDS does not necessarily have to own the financial product they are "insuring", in fact the buyer does not need to have even suffered any financial loss at all in order to claim their payout. This creates a situation where Credit Default Swaps can be used to speculatively bet against troubled entities. In the last days before the American bank Bear Stearns went bankrupt, a large number of Credit Default Swaps were purchased on their stock, and during the Greek economic crisis a huge market for Credit Default Swaps on Greek government bonds developed.

These kinds of speculative CDS contracts, where the buyer is not interested in taking out insurance against the failure of one of their investments, but simply making a profit out of someone else's misfortune are often called Naked Credit Default Swaps. It has been estimated that Naked Credit Default Swaps account for over 80% of the global CDS trade.

To put Naked Credit Default Swaps into a simple context, lets use the analogy that they are like strangers buying insurance on your house because they think that there is a strong possibility that it will be robbed or attacked by arsonists. Since there is no need for the owners of the Naked Credit Default Swaps to have any financial interest in your house, lets say 200 speculators buy this kind of insurance on your house. The first and most obvious problem with this situation is that in the case that the house is attacked by an arsonist, the issuer of all of the Naked Credit Default Swaps is going to face an insurance payout 200 times the size of the actual economic damage of your house fire, because they must pay out over and again on the same event. This kind of multiplication effect contributed to the collapse and subsequent taxpayer bailout of the American insurance giant AIG, which issued hundreds of billions of dollars worth of CDS contracts without bothering to hedge against the possibility that the reference entities might lose value, meaning that when the 2008 financial sector meltdown hit, they faced CDS payouts in excess of $100 billion on the collapse of Lehmann Brothers bank alone.

The AIG collapse and taxpayer funded bailout illustrates another fundamental difference between CDS policies and ordinary insurance policies. In order to sell home/car/travel/contents/life/health insurance, the insurer must comply with strict insurance industry regulations and demonstrate that they actually have the capital reserves to pay out on the policies they have been issuing. There are no such constraints on issuers of CDS policies, meaning that AIG issued billions of dollars worth of CDS contracts with no obligation to actually maintain the credit reserves necessary to pay out on them. After the financial sector meltdown AIG received a $182 billion bailout from the government, At least $90 billion of which went towards payouts on AIG's unhedged Credit Default Swap policies. Most of this taxpayer funded cash mountain went to pay out on Naked Credit Default Swaps owned by large American and European banks, including Goldman Sachs which received a $12.9 billion taxpayer funded windfall.

The second problem with Naked Credit Default Swaps is that they actually provide a financial incentive for the buyers to then do whatever they can to increase the probability that the troubled assets that they are betting against will fail. In our analogy, the 200 strangers who have bought insurance policies on your house now have a financial incentive to increase the chances that your house burns down, since they have nothing to lose in financial terms from a house fire on a property that they don't own, and a lot to gain. They don't necessarily have to turn to arson and burn it down themselves, however they could easily ensure that all the local arsonists and vandals have your address and a good supply of petrol and matches.

there are two particularly egregious examples of financial institutions using Naked Credit Default Swaps to profit from the misfortune of their own clients. In 2001 the American financial giant Goldman Sachs received a $300 million payment from Greece for helping the country to hide the true extent of their debts from the European regulators. This deal shows that staff at Goldman knew that the Greek economic situation was far worse than the official figures stated. At the same time as they were helping Greece to cook their books they were also buying up Naked Credit Default Swaps on Greek assets, meaning that they would make large profits if the true extent of the debts they were helping Greece to hide became public. To return to the analogy, Goldman Sachs knew the Greek house was likely to burn down, as they had helped them to hide the fact that it was full of financial dynamite from the European safety inspectors, using this insider knowledge they bought a load of CDS insurance policies and waited for the financial bomb to explode and the cash to start rolling in.

Another example of firms betting against their own clients can be seen in the sub-prime mortgage crisis. Many American banks packaged up their worst mortgages into financial instruments called Collateralised Debt Obligations, paid the Credit Ratings Agencies to stamp them with AAA, top grade ratings then sold them on to their customers as valuable assets, rather than the toxic sub-prime junk that they knew they actually were. Packaging toxic junk as valuable assets and selling it to your unsuspecting customers is bad enough, but many banks went even further by taking out Naked Credit Default Swaps on the dodgy assets they had just sold. Returning to the house insurance analogy once again, this is as if an estate agent had made a hefty profit selling you a dangerously constructed house that they knew would be certain to burn down within a couple of years, then taken out insurance policy to make sure they made another profit when the fire actually happened.

There are currently debates in the United States and Europe about whether speculative uses of credit default swaps should be banned, however there is vociferous opposition from the financial sector players who have been allowed to use these products to make huge profits on other people's misery. Financial misery that in many cases they actively helped to create. The case for the regulation of the CDS market is an undeniably strong one, especially given that the American business magnate Warren Buffet (who is hardly some kind of socialist free market critic) described derivatives bought speculatively as "financial weapons of mass destruction".

The huge obstacle to sensible regulation of the CDS market is that the financial interests of those who would lose out under a properly regulated system have enormous influence over western political systems. The UK is run by a political party that is majority funded by the financial sector, meaning that the Tory party happily kicked UK financial sector reform into the long grass and spend hundreds of thousands of taxpayers' money on actively opposing virtually all new financial regulations proposed by the EU.

In America Barack Obama has surrounded himself with the very same bankers and economists who were at the epicentre of the global economic meltdown. People who were instrumental in the creation of the highly unstable derehulated financial sector in the first place. Any effort to regulate the CDS market in the US would be seen as a huge political u-turn and an admission of responsibility for the global economic crisis for whichever party did it, since both the Democrats and the Republicans introduced ideologically driven measures designed to remove regulation from the CDS market.


 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.


Tuesday, 19 June 2012

Reaction to the 2nd Greek election

The fact that the pro-austerity New Democracy party crept into first place in the re-run of the 2012 Greek legislative elections has been greeted with unmitigated joy from the Euro fear mongerers that did so much to frighten the Greek electorate into voting against their own interests.

Shortly after the first inconclusive Greek election in May 2012 the Euro fear mongerers initiated their campaign of lobbying in favour of the pro-austerity parties. German Chancellor Angela Merkel telephoned the Greek President Karolos Papoulias in order to advise him to run the election as an unofficial referendum on Greece's membership of the Euro, in order to frighten the electorate into voting pro-austerity.  British Prime Minister David Cameron waded into the discussion, putting the threats in much more explicit terms with his statement that "we now have to send a very clear message to people in Greece: there is a choice – you can either vote to stay in the euro, with all the commitments you've made, or if you vote another way you're effectively voting to leave."

The unelected technocrats also joined in with the policy of Euro fear mongering in the lead up to the second Greek vote. Christine Lagarde of the IMF chose to sanctimoniously lecture the Greek people, claiming that she had no sympathy for the suffering Greek civilian population, insisting that it is "payback time" for Greece and making it clear that the IMF would never consider softening the terms of the country's austerity conditions. All in all a very clear message to Greek voters that they must vote for austerity or the IMF will pull the plug. 

The Belgian Finance Minister Steven Vanackere continued the fear mongering by stating that contingency planning for a Greek exit from the Eurozone was taking place. The mainstream western press got in on the fear mongering act with CNN even going as far as to claim that Greece could not only be thrown out of the Eurozone, but the European Union too, dependent on the election results. On the eve of the election the German tabloid Bild addressed a threatening letter to the Greek electorate, demanding that they vote for the pro-austerity parties or face "complete disaster".

Even after this co-ordinated campaign of fear mongering, significantly more Greeks voted for anti-austerity parties than for the pro-austerity establishment, making it quite astonishing to see how the mainstream press have been joyfully misleading the public with their coverage of the results. Instead of focusing on the extremely significant fact that the majority of Greek voters actually cast their votes for anti-austerity parties, the UK press has been gleefully describing the results as a victory for the pro-austerity minority, simply because New Democracy managed to sneak into first place with only 29% of the vote, meaning that they could claim the 50 bonus seats handed out to the single biggest party. Thanks to the bonus 50 seats the political establishment parties ND and PASOK (the people that led Greece into the crisis in the first place) can potentially form a coalition government to continue the policies of defunct neoliberal pseudo-economics dressed up as "austerity" and vast bailouts that flow straight back out of Greece to pay out on what should have been losing financial sector bets made by the reckless European financial sector.

Considering only 42% of Greek voters were intimidated into voting for the pro-austerity parties, whilst 55% of the Greek electorate voted for explicity anti-austerity parties, the undisguised glee of the pro-austerity Euro-bullys is particularly hard to stomach.

Angela Merkel telephoned ND leader Antonis Samaras to congratulate him on his victory, saying that she was confident Athens would "abide by its bailout pledges". Barack Obama's press secretary Jay Carney congratulated Greece and said that "we believe that it is in all our interests for Greece to remain in the euro area while respecting its commitment to reform". Italy's unelected puppet Prime Minister, Mario Monti, said he was delighted with the Greek vote, "which is also a great sign for Europe". The right-wing austerity fetishist Spanish Prime Minister Mariano Rajoy was also delighted that New Democracy had come in first, which he described as "good news for Greece, very good news for the European Union, for the euro and also for Spain".

As unpleasant as it is to see the pro-austerity forces gleefully celebrating this result and the mainstream media spinning it as if the Greek electorate had handed the pro-austerity forces a resounding victory, in the long run a continuation of the neoliberalisation of the Greek economy against the wishes of the majority of the electorate may actually do more to damage the credibility of the austerity fetishists than a win for the anti-austerity parties.


See also

 
 

Wednesday, 23 May 2012

Who is to blame for the economic crisis?



The reckless gamblers at Bradford and Bingley  
were responsible for their own downfall.
I decided to write this article after I came across an absurd comment trying to absolve the financial sector from any responsibility for the neoliberal economic meltdown, the guy said;


"We are being told to blame the bankers but the banks were the victims of the fraud."
 My immediate response was:


Nope, they were victims of their own stupidity.
In order to portray the financial sector as the unfairly criticised innocent victims of the economic crisis, it would take willful ignorance of what actually happened, which was this:

The parasitic "shadow banking sector" lobbied and demanded to be freed from the burden of regulation, which the "orthodox neoliberal" politicians were more than happy to oblige with.

Both sides of the so called political spectrum in the US and UK repealed legislation which was designed to prevent banks from destabilising the economy. Margaret Thatcher's Tories began the deregulation process in the UK in the absurd attempt to create a post-industrial London based financial services economy. The Labour Chancellor Gordon Brown further deregulated the financial sector in the 1990s ceding all democratic control of the Bank of England to the private sector in compliance with neoliberal pseudo-economic theory. In the United States, Bill Clinton's Democrats set about dismantling the legislative firewalls that were put in place in order to prevent another Wall Street crash and George Bush's Republicans intensified the process in the 2000s. The European Union and other countries such as Argentina also set about enacting absurd neoliberalisation reforms and financial sector deregulations.


Once the financial sector were freed from the legislation which was originally put in place to prevent their reckless gambling tendencies from creating economic instability, most of them quickly set about over-leveraging themselves to the max (using mortgage payments, savings and pension schemes as their reserves) in order to make all kinds of insane bets on crap like Spanish and Irish property assets, Greek government bonds and complex derivatives (like Collateralised Debt Obligations) that they clearly didn't even understand. 

As long as it was stamped with a decent rating from the (either corrupt or utterly clueless) Credit Ratings oligopoly, they racked up vast debts to throw money at it without bothering to assess the risk for themselves. Trying to absolve the financial sector of responsibility for their own reckless speculation on inaccurately rated and often fraudulent "investments" is as absurd as trying to absolve the customer from blame had they borrowed beyond their means in order to buy a wreck of a second hand car without negotiating any warranty coverage or even bothering to take a cursory glance at the vehicle first.


The run on Northern Rock was caused by their own
gross mismanagement of risk.
After years of reckless speculative gambling, the inevitable neoliberal meltdown happened. I the wake of it, instead of letting the reckless gamblers die (as neoliberal theory actually specifies) the western governments and central banks shat themselves, decided that many of the institutions were "too big to fail" and started pouring countless trillions into the debt riddled institutions, in order to pay out on what should have been losing bets. In order to try and cover the cost of these financial sector interventions Western governments set about inflicting harsh self-defeating austerity measures on the "real economy" (jobs, wages, pensions, welfare provision, infrastructure etc) using the Great Neoliberal Lie as their justification narrative.

It is transparently clear that "austerity" is just the same old neoliberal claptrap rebranded as something urgent and necessary, rather than the defunct ideologically driven gibberish that actually caused the economic crisis in the first place.

Massively reducing government spending on infrastructure and causing a dramatic reduction in household disposable income led to the transparently obvious consequence of reduced aggregate demand and economic stagnation, which in turn led to increases rather than decreases in budget deficits and national debts as the pace of cuts failed to match the falls in tax revenues. The harder they cut the "real economy", the bigger the debt burden they ended up creating.


It is clear that for decades the global economy has been run by economic illiterates; by people that don't give a damn about economic history (the most stable and productive period was the mixed economy era, which their craze for greed-is-a-virtue, privatise everything, more riches for the rich and screw the workers, neoliberal pseudo-economics has ruined). They don't bother with vital regulations to prevent anti-competitive practices (monopolies, oligopolies, cartels, information asymmetry, subsidisation of failure...) from developing because the simplistic neoliberal mantra says that "all regulations are evil" and they don't even seem to understand really fundamental economic concepts such as aggregate demand, value multipliers and false economies.


The only people more culpable for the economic crisis 
than the bankers themselves, are the politicians that
  meekly abdicated their responsibilities to protect
 the economy from their reckless gambling urges.
Many of the biggest culprits in the neoliberal financial sector meltdown are directly involved in Barack Obama's government and nobody in the US has even been prosecuted for the economic chaos they have created. In the UK the Tory party came to power on the back of public discontent at Labour's handling of the crisis, yet the financial sector have an effective controlling interest in the Tory party, providing more than 50% of their political donations. It is absolutely no surprise that proposed reforms to prevent the banks from recklessly gambling with our mortgage payments, savings and pension funds has been booted into the long grass (2019 at the earliest) by the banker funded Tory party.

The financial sector are to blame for the economic crisis. They caused it by inflating a giant bubble of "easy credit" and using it to fund their reckless speculative gambling instead of making carefully hedged long-term investments. The politicians that meekly enabled their risky gambling habits by deregulating them, then bailed them out, and are now working to make the "real economy" pay the costs of the financial sector gambling debts through "self-defeating austerity" and even now refuse to prosecute or even re-regulate the banks.

The lessons of history are pretty clear, the free market fundamentalists / neoliberals / anarcho-capitalists (call them what you want) have tended to create the economic crises through enabling risky short-term profiteering and it has been government's job to clean up their messes and prevent them from doing it again, two things that the impossibly compromised "orthodox neoliberal" politicians of the West are abjectly failing to do at present.


So in conclusion, the people that are to blame are the reckless bankers that mismanaged the risk that they are supposedly paid their obscene salaries in order to manage, and the politicians that enabled this reckless gambling spree by deregulating the financial markets.

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