January 7th, 2010
5th January, 2010
Sorry about the delay in posting, but this is my latest blog for the Huffington Post.
“One is president of a country of about 300,000 people — Iceland — a country about the size of Virginia, President Olafur R. Grimsson. The second is president of a country of about 300,000,000 people, the United States. President Obama.
Both their presidencies have been scarred by the financial crisis. Both have had to balance the interests of their people against the interests of their bankers.
President Obama has allowed that balance to tilt in favor of the bankers.
President Grimsson yesterday took a stand against bankers and international creditors, including the British and Dutch governments.
Instead, he stood up to defend the interests of his people.
Continue reading… ›
January 7th, 2010
 7th January 2010,
Read Ann Pettifor and Jeremy Smith’s letter on why Iceland must NOT repay the debt in the FT today:
” Sir, The president of Iceland’s refusal to approve repayment to the British and Dutch governments should be welcomed (January 5). The pause gives the Anglo-Dutch governments an opportunity to withdraw their demand for full repayment from the government of Iceland, a country whose population at 317,000 is somewhat smaller than Leicester’s.
The UK and the Netherlands, with a combined population of 76m, should cease to use economic force majeure on a tiny country, and accept the principle of co-responsibility for the crisis. Repayment of the nationalised losses of a private bank amounts to €12,000 per Icelandic citizen, and will inevitably impact harshly on their lives and public services. By contrast the cost to Dutch and British taxpayers of the bail-out will be about €50 per capita.
We understand the strong desire of the present government of Iceland to restore the country’s tattered reputation.
But anyone reading the financial press in 2007 and 2008 (as opposed to the academic reports commissioned by Iceland’s chamber of commerce) would have known that Iceland’s banks were far from risk-free. That was why British and Dutch depositors enjoyed good rates of return on their deposits.
The British and Dutch governments have sound political reasons for protecting small savers lured into shark-infested financial waters. What is unjust is that the tiny population of Iceland should be forced to bear the full costs of the laxity of Icelandic, British and Dutch regulators and the reckless behaviour of private bankers and risk-takers. “
Read the letter on the FT website here.
January 5th, 2010
 5th January, 2010
There has been much sturm and drang generated by the Guardian and others on the threat posed to government finances by the flawed and often irrational rating agencies, and by the supposedly despotic, vengeful and greedy bond markets.
Methinks they protest too much.
We at the Green New Deal group have long argued that there is no reason why governments should rely for their financing on the capricious private bond markets. Instead, we write in ‘The Cuts Won’t Work’ - finance ministers should oblige the banks in which taxpayers have a substantial stake to lend to the Treasury at very low rates of interest.
That’s how World War II was largely financed in Britain – and no one was the worse for it. The loans were given a title: Treasury Deposit Receipts. These TDRs – bless them – financed a war that saved Britain from the threat Nazism posed to its very existence. Today they could be used to finance the public investment needed to substitute for the collapse in private investment – and to stave off the threat posed by climate change.
Analysts on the Financial Times Lex column (FT 1st January, 2010) have obviously read our latest report, and describe our proposal as “an intriguing alternative” . Governments they write “may lean on the commercial banks in which they hold large stakes to take up the strain instead. Forcing them to purchase government bonds would help replace the market heft of central banks.”
Quite so. You read it first in the Green New Deal.
December 31st, 2009
31st December, 2009
Dear Readers.
First, thank you for the support you have given this blog, and for your helpful and insightful comments over this eventful year. I have much appreciated our conversations, and your loyalty. May 2010 bring you all peace of mind and economic stability. And may we together begin to grow a new political climate and a new political class, that will finally detach itself from the financial elite, and respond to democratically-determined priorities for peace, stability and social justice.
Second, apologies for this period of hibernation over the holiday season. I blame Andrew Ross Sorkin (of the New York Times) whose 540 page blow-by-blow account of the events leading up to the failure of Lehman Brothers and the massive TARP bail-out of October, 2008 is a must-read. “Too Big to Fail” was a constant companion over the holidays, interrupted only by my periodic, but lame attempts to prove that I too can bake mince pies, stuff chickens and light log fires.
Finally, a gift from the Financial Times, which yesterday published a poem illustrated here – The bankers who wouldn’t say sorry: a cautionary tale”. Martin Dickson, the paper’s deputy editor speaks for all of us through this light-hearted ditty, but does more: he warns in the last verse of what is to come as a result of financial greed and political ennui. Sadly, I, and many others, share his gloomy forecast.
It would be good to end this story
In a nice blaze of moral glory,
Like Hilaire Belloc’s clever tales
Where evil-doing always fails.
Alas, the only moral here
Is bankers just themselves hold dear.
But there’s a price we all will pay
If politicians won’t display
A little courage and crack down
Upon these unsafe, grasping clowns:
Another bomb is being built,
By bankers with no sense of guilt.
It’s ticking now, will louder tick
Unless we stop it, fast and quick.
For mark my words, believe this rhyme,
It will go off in five years’ time.
You’ll hear no end of sturm and drang.
When it explodes with a loud BANG.
December 12th, 2009
 12th December 2009
At the end of last month I delivered the prestigious EBOR lecture at York. My address was entitled:
“Credit, usury and political power: chasing the moneylenders from the temple that is our democracy”
Click on the link below to read a PDF version of the full lecture:
EBOR Lecture November 25th (PDF)
December 10th, 2009
 9th December, 2009
It has been an extraordinary day this day, and something to witness: this frenzy of pre-election fisticuffs.
Extraordinary because Conservatives, like mindless bullies, are fighting a phoney war against the victims of this crisis.
The fact is the Tories are spineless scaredy cats, too timid to take on the perpetrators, who have successfully bribed them with various inducements, including the playground’s shiniest marbles.
As a result they have turned away from the perpetrators, and are picking on nurses, policemen, teachers, civil servants, Alzheimer-carers, school cooks, hospital cleaners and psychiatrists – to categorise but a few.
All these victims of the financial crisis now stand accused – by the Tories and their friends - of pillaging Treasury coffers of £250 billion – the rise in government debt since this crisis started in 2007.
Continue reading… ›
October 29th, 2009
 29 October, 2009
Dan Roberts has a great column in the Guardian today. He asks the right questions. First, why is the Treasury spending £8 billion of taxpayers money reinflating the housing market? Second, why is the Treasury encouraging this now nationalised bank to increase mortgage lending, when the productive sector of the economy – companies, small businesses et al – are being starved of loans from taxpayer-bailed-out-banks, or else having to borrow at usurious rates?
A superb report from the Centre for Research on Socio Cultural Change at Manchester (“An alternative report on UK banking reform”) suggests the answer: The nationalisation of Northern Rock is being treated as an “equity style turn around”, with the overarching objective of protecting and creating value for the taxpayer as shareholder.
“It is not clear whether the banks have been nationalised or the Treasury has been privatised as a new kind of investment fund.”
It makes perfect sense doesn’t it, given that the Treasury is advised on these matters (some would say it has been captured) almost exclusively by bankers? Get reading the CRESC report -its excellent - the first piece of independent, academic thinking on reform of the banking sector to have crossed my path.
September 2nd, 2009
The Motley Fool, September 2nd, 2009
Motley Fool blogger TMF Sinchiruna spotlights the Times interview, describing me as “once ridiculed, later vindicated…” TMF Sinchiruna goes on to say: “Peter Schiff, Jim Rogers, Niall Fergusson, Ann Pettifor … these are the voices that I believe investors need to hear. Turn off the tv and look deep into the events of last year and consider for yourselves whether anything more than a hail-mary reflationary maelstrom has been heaped upon the fire that started it all.”
Read the Motley Fool article >
Also just did an interview for You and Yours on Radio 4 which was broadcast Wednesday. You can listen to it here.
September 1st, 2009
Article Published in the Times, September 1st 2009. Photo by Jon Enoch.
Ann Pettifor predicted a painful end to the good times. Now she says that only radical action can prevent further gloom
Phil Thornton
Ann Pettifor is a member of a select club — the seers who saw it all coming. Now the economist, who predicted the credit crunch as far back as 2003, believes that the worst is yet to come unless there is radical reform of the financial system.
Six years ago she parodied the International Monetary Fund’s annual economic forecast with her own — The Real World Economic Outlook. Then, in 2006, her book The Coming First World Debt Crisis, warned that rich countries were heading for a debt crisis that would overshadow anything seen in the developing world. Both were ridiculed.
With the British and world economies languishing in the worst recession since the Great Depression and with once-mighty banks reliant on government life support, she could be forgiven for being a little smug. Not a bit of it: “No, being Cassandra is not something I wish for. I hate this role of being a gloomer and doomer, as I’m an optimist by nature. But I am very pessimistic now.”
Continue reading… ›
August 20th, 2009
From The Ecologist: August 17th
They emptied the public purse to fund their continuing largesse. Now it’s time for the banks to pay us back. At phenomenally good rates…
Read the Ecologist article >
Download the Green New Deal here >
|
In the September 2003 edition of openDemocracy I wrote:
Click here to read the full story in openDemocracy
BOOKS:
|
