Category: "Politics"

Financial system in crisis

The following article is from the October issue of the Yeovil CLP newsletter, due to how rapidly the situation is developing I've decided to publish it here too.

The current situation we see in the financial system is no accident. For years we were told that the invisible hand of the free market will sort out the difficulties that market economies face. We see short term profits and bonuses put before long term stability as a result. Instead of financial companies looking at what they were doing when they were shifting such high risk debt around they just assumed the market would sort it out, and as long as they could sell the debt packages onto another company and make a bit of money in the process everything would work out alright.

However things didn't go alright and the US subprime mortgage market collapsed when somebody realised all this debt wasn't worth anywhere near as much as it was believed to be, as a result the system ceased up and financial companies found themselves lumbered with the high risk debt with no way to sell it on.

Over the last few months we've seen those who oppose regulation, such as the government in the United States face up to reality as they are forced to get involved or watch the world financial system suffer more setbacks. The most obvious examples being the takeover of Freddie Mac and Fannie Mae, leaving almost half of America's mortgages under the watch of the US government.

Even the Tories are gradually facing up to the realisation that the financial market cannot be allowed to operate unrestricted – at least during the bad times. One can only imagine what sort of state we'd be in now if the then Shadow Chancellor Oliver Letwin got away with his plans to scrap the Financial Services Authority because of what he called their “intrusive regulatory regime”. Only last year was the Conservatives' policy commission on the economy saying “We see no need to continue to regulate the provision of mortgage finance”.

Of course what really matters now is what we can do to lessen the impact of these events. The Left Economics Advisory Panel is campaigning for:

1) Nationalising the banks and establishing democratic control over banking decisions, ensuring democratic representation on boards, ending the bonus binges, controlling executive pay and share holder rewards.

2) Cutting interest rates significantly and immediately, restoring democratic control over key economic decision making by not only widening the remit of the Bank of England beyond ensuring price stability to advising on the wider economic health of the country but also reverting the bank's role to being one voice amongst many others to be taken into account.

3) Securing people a home by converting repossessions to social rentals so that people have a 'right to stay' in their homes and embarking on a massive council house-building programme.

4) Enhancing security in employment by ensuring people have a say over the future of the companies by strengthening rights and representation at work.

5) Bring fuel bills under control with price controls on the consumer price of gas and electricity, so that people are not being forced to choose between heating and eating this winter, with the threat of nationalisation if needed.

This is the sort of programme we need implemented to protect the public and ensure long term stability. Not half-hearted nationalisations like Bradford & Bingley where the tax payer is lumbered with the bad debt, while other banks pick up the profitable parts of the business. Chancellor Alistair Darling informs us all options are being kept open, we'll see.

Labour announce tax rebate for 22 million people

Look for an extra £60 in September, and another £10 a month for the next six months in your take home pay.

This is part of the chancellor's plans to help those that lost out under the abolition of the 10p rate, but it won't only benefit them. It will help another 15 million or so other people, including ones who benefited when the basic rate was lowered from 22p to 20p.

Going forward I would like to see the income tax threshold continue to increase so the burden on the lowest paid is reduced.

The Tories are quick to criticize, saying in effect only they know how to help hard working families.

So what would they do? Well raise the inheritance tax threshold, currently set at £600,000 for couples. According to the Telegraph today, they'd increase the threshold further from the £1 million they announced last year to £2 million for married couples.

Great. Nice to see tax cuts aimed squarely at the Tory front bench. Clearly what they see as being a hard working family isn't quite what ordinary people think.

Should the EU reassess its ties with Russia?

The BBC asks. The answer is yes. It also needs to reassess its ties with the United States.

One American reader on the BBC websites writes:

The contempt and dislike for America by Europeans continues to amaze me. So go right ahead and give Russia what it wants. First, S Ossetia and Abkhazia, then the Crimea.

The population of the Crimea is mosty Russian, and if they were to demonstrate their desire to rejoin Russia, then they should have our support.

Ukraine can't spout on about how evil the USSR is, and then hang on to territories that the soviet government moved into the Ukrainian SSR for administrative reasons. Ukraine having the Crimea is like France having the Tower of London because the EU commission moved it under French jurisdiction.

Russia will continue to approach your borders. And will hold you hostage with her oil an gas.

The last time I checked it was NATO that was busy approaching Russia's borders, I don't see any Russian bases in Ireland or France, do you? Have they ever made such aggressive moves? No.

Surely they're more likely to hold us hostage with their gas and oil if we start pissing them off? Oh wait, that defies the George Bush foreign policy guidelines.

Good luck to you! Its time for America to stay on our side of the Atlantic.

Good, you can start by getting out of Iraq and Afghanistan and dismantling your military bases in Europe and central Asia.

Britain, and the rest of the EU need to stop playing into the hands of US foreign policy, and recognise that Russia for hundreds of years been our friend, well aside from a few unpleasant bits, and British invasions of Russia. We should start by recognising the new independent countries of South Ossetia and Abkhazia, and then leaving NATO, and promising we won't let Mr Miliband or Mr Cameron go parading around Eastern Europe talking BS.

We won't bring energy prices down while continuing to insult what should be our equal partner, nor will the situation improve while we let NATO build military bases right up to Russia's borders. Such aggressive action on NATO's part cannot be allowed to take place, and Britain should make a stand against it.

Even ignoring if its right or wrong for the west to carry out such an aggressive policy towards Russia. Which is wrong, and Russia does have the right to defend itself - just as we wouldn't permit Iranian bases in Ireland or France, neither should we expect them to put up with NATO and American bases in Ukraine, the Baltic states or Georgia. Ignoring all that, we have a lot more to gain from being Russia's friend then their enemy, good deals on gas and oil is just the start of it, unfortunately some people cannot even grasp that.

Miliband on Russian recognition of Abkhazia and South Ossetia

Looks like Mr Miliband has caved completely to the interests of US imperialism, not surprising, but at least he's made it official - if it wasn't already.

From the Press Association:

Britain branded Russian recognition of Georgia's breakaway regions "unjustifiable and unacceptable" as the diplomatic row intensified.

Foreign Secretary David Miliband accused Russian President Dmitri Medvedev of "inflaming" the crisis by insisting that South Ossetia and Abkhazia should be independent.

In a statement, Mr Miliband said: "The announcement further inflames an already tense situation in the region.

"We fully support Georgia's independence and territorial integrity, which cannot be changed by decree from Moscow."

Mr Miliband called on Russia to "abide by international law as the basis for resolving this crisis".

Moscow must implement "urgently and in full" its commitment to withdraw troops to positions they held before the military confrontation with Georgia earlier this month, he insisted.

"The announcement by President Medvedev that Russia will recognise South Ossetia and Abkhazia is unjustifiable and unacceptable," Mr Miliband said.

Let's see what happens if we change a few words around:

Russia branded British recognition of Serbia's breakaway region "unjustifiable and unacceptable" as the diplomatic row intensified.

Foreign Secretary Sergey Lavrov accused British Foreign Secretary David Miliband of "inflaming" the crisis by insisting that Kosovo should be independent.

In a statement, Mr Lavrov said: "The announcement further inflames an already tense situation in the region.

"We fully support Serbia's independence and territorial integrity, which cannot be changed by decree from Washington and a handful of EU capitals."

Mr Lavrov called on Britain and the West to "abide by international law as the basis for resolving this crisis".

NATO must implement "urgently and in full" its commitment to withdraw troops to positions they held before the invasion of Yugoslavia in 1999, he insisted.

"The announcement made by Western countries stating they will recognise Kosovo is unjustifiable and unacceptable," Mr Lavrov said.

It also looks like Miliband did a Saakashvili:

It takes no account of the views of the hundreds of thousands of Georgians and others who have been forced to abandon their homes in the two territories.

The combined populations of Abkhazia and South Ossetia is about 250,000. He of course leaves himself an escape hatch by saying "others", yet clearly his intent was to imply that hundreds of thousands of Georgians have fled. He also dismisses the multiple referendums that have been carried out in Abkhazia and South Ossetia. The people of both republics have clearly stated they don't want to be part of Georgia, and in the case of South Ossetia at least - I don't know about Abkhazia - have stated they want to join with their fellow Ossetians in the Russian Federation.

Britain should move to recognise the Republics of Abkhazia and South Ossetia. Self-determination of nations is and should be a fundamental right. That's not to say all such moves are progressive - some clearly are not and are fueled by petty nationalism, or the top dog wanting to stay top dog in their tiny country. In the case of Northern Ireland the call was always for a united Ireland, not merely independence from Britain. South Ossetia remaining independent for an extended period I don't think would be progressive, 70,000 people is hardly a viable nation. They've been isolated for over 16 years now, the time has come for them to unite with North Ossetia, and Britain should be playing a leading role in that, we should not be supporting a country like Georgia who sought to crush the democratic will of the people of South Ossetia, and who destroyed a city in the process.

Saakashvili must go

The signatures are on the paper, the ceasefire has been signed by both sides now. But something is clear, Saakashvili has issues. This guy makes Condoleezza Rice look sane. I'm sure even she was embarrassed by some of the crap this guy came out with at their joint press conference earlier:

I have to specify, this is a ceasefire agreement. This is not a final settlement. We are under Russian invasion and Russian occupation right now.

So you keep saying, over and over (Big Lie, Mein Kampf anyone?). But I see that you're still in government, and I don't see any Russian troops in Tbilisi.

We certainly should move from this temporary arrangement to a genuine international force on the ground to replace the occupiers and people who are up to trouble.

International force? The Ossetians and Abkhazians have said they want only Russian peacekeepers - as they're the only ones they can trust. Seriously, how can they trust the west when they were willing to stand by and watch Georgia invade their lands and kill their people? For hundreds of years Russia has provided protection for the many peoples in the Caucasus from aggressors from the south. Even though Russia has its own interests to look out for here they find themselves on the same side.

Two days ago they used weapon of mass destruction.

Right... Why does this guy remind me of a dodgy car salesman?

It's an unprovoked brutal invasion to kill Georgian democracy and end the independence of Georgia.

Oh yes of course, you didn't betray the Ossetians and break a ceasefire, you didn't destroy Tskhinvali and kill thousands of people asleep in their beds nor cause ethnic cleansing when you forced half the country to flee to Russia. Nor did you kill 13 Russian peacekeepers.

Russia just decided to "invade", with two battalions! And then instead of marching on Tbilisi, they just decided to cripple the Georgian forces that were attacking South Ossetia and Abkhazia, right, nice invasion. Sounds to me like they were defending their peacekeepers and Russian citizens in South Ossetia and Abkhazia.

He then spins everything upside down again.

This is the country which had been bombed with cluster bombs, which has been robbed, looted and still the police function, lights were on, doctors were in place, supply lines never stopped and people never got desperate and ran away and never succumbed to this pressure, that is what we managed to build.

Police still function? Maybe that's because Russia didn't blow up the police stations, unlike NATO, or the United States do when they go to war.

Doctors in place? Maybe that's because Russia didn't blow up any hospitals like you did in Tskhinvali.

Lights on? Maybe that's because Russia didn't blow up the power stations, like you did in Tskhinvali, and your so called friends in NATO did when they attacked Yugoslavia or Iraq, heck power stations were near the top of the list. When NATO or the west are going after a country nothing is safe, power stations, TV stations, the Chinese Embassy, hospitals, schools, anything is on the list, civilian or not.

Maybe there's something we can learn here. Unlike NATO countries, Russia doesn't target civilian infrastructure. I think there's another lesson we can draw, if it wasn't for Georgia's scaremongering criminal president, things would actually be relatively normal in Georgia now.

Oh and one last thing. Not running away? Well maybe not the Georgian people, but there's certainly one chap who likes to run away, I guess he just wants everyone else to do the dying in his stupid wars.

His actions over the last few weeks has made it clear to everyone he isn't fit to be the president of anything, let alone a country like Georgia.

South Ossetia conflict over, Saakashvili exposed

After Russian forces halted actions against Georgian forces yesterday, citing that South Ossetia had been secured and that (to quote Russian President Medvedev) the "aggressor has been punished and their armed forces have suffered significant loses", Georgia has finally accepted the Russian-French plan for ending the conflict in South Ossetia. The plan consists of:

1) Non-use of force.
2) Stop all military action.
3) Free access to humanitarian aid.
4) Georgian troops return to their previous positions before the conflict.
5) Russian troops return to the lines they held before the start of the military operation. Before an international solution is worked out Russian peacekeepers are taking up an additional security role.
6) The start of an international discussion over the future status of South Ossetia and Abkhazia.

Essentially the terms that Russia called for late on the 8th, namely Georgian forces returning to the positions they held in the middle of last week, and that they would sign an agreement renouncing the use force against South Ossetia.

It is unfortunate that Saakashvili refused to make any agreement until Georgia's forces were rendered incapable of continuing any significant assault against South Ossetia, his decision needlessly continued the conflict for two or three days.

They have also put him in a weak position at home, despite massive increases to military funding over the last few years, and getting training from the United States and Israel, Georgian forces proved they only "enemy" they could kill were the Ossetians asleep in their beds in Tskhinvali, this is no doubt a humiliating blow for the Georgian military, and Georgia's so called tough-man president, who's gambit failed miserably.

The quick end to the war also exposed Saakashvili's lies, and shows how willing the western media were to repeat them.

The so called invasion of Gori, Poti, and other towns that the Georgians said had fallen to the Russians, and the reports of the Russian military being only a few miles from Tbilisi have all been shown to be utterly false. Worse still there were journalists in Gori at the time it was supposedly under Russian control. Who reported that there were no sign of any Russian forces, but still western TV stations and newspapers reported that the Russians had advanced to Gori. That's not all even a US defence official told AFP that "we don't see anything that supports they are in Gori [...] I don't know why the Georgians are saying that" and that there was "no obvious buildup of Russian forces along the border that signaled an intention to invade", the Russians also denied having moved on Gori.

Despite three sources saying it was nonsense, the press were all too willing to go along with whatever lies Saakashvili's threw out there, and even go as far as showing footage of Tskhinvali and claim it was Gori.

It also shows how far Saakashvili is willing to go, he not only said that Russian forces were in control of half of the country. His forces instigated mass panic by telling civilians to leave their homes because the Russians were coming. His actions are responsible for the scale of the displacement in Georgia at the moment.

Also obvious now the dust is settling is how brutal the Georgian attack was on Tskhinvali, 70% of the city is estimated to of been damaged or destroyed during the night of the assault. It can only be described as ethnic cleansing. Attacking a city - at night, unprovoked, with heavy artillery, multiple rocket launch systems and aircraft can only be considered an attempt by Georgia to cause as much death and destruction as possible, to terrify the Ossetians into fleeing, which half of them have done. Some were not so lucky to escape, some were bombed on the road to Russia, thousands are dead in the rubble of their homes in Tskhinvali, and the dozen or so villages around which were all targeted by the Georgian military in their opening assault.

If it wasn't for the speedy response of Russia after the night of the 7th Georgia would have been successful in cleansing South Ossetia of the Ossetian people. While this was happening western governments said nothing, Georgia should of been strongly condemned for carrying out such a vicious attack upon civilians, yet nothing from western governments. Some, like the US Secretary of State, and George Bush had the nerve to tell Russia to effectively let Georgia carry out their ethnic cleansing.

The war crimes tribunal at the Hague must begin investigations into the Georgian military, and members in the government such as Saakashvili to determine their roll in any possible war crimes. They must not be allowed to get away with such brutal actions towards a civilian population.

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