Alistair Darling today called for international cooperation and transparency from the world's banks as global stockmarkets fell again today and central banks pumped yet more money into the system.

Following chaos on Wall Street yesterday, and in which Morgan Stanley and Goldman Sachs became the latest US financial institutions to come under fire, the chancellor attempted to reassure the public that Britain could ride out the crisis.

"We need to take action internationally, and we are," Darling said. "This is clearly a very difficult time , and I am confident that we will get through it." ...

Guardian 18 September 2008

Brown and Darling are singing from the same hymn sheet, but it's difficult to know what to make of their joint optimism. On same day as the media was full of the Lloyds TSB takeover of HBOS - said to have been arranged by Brown and the chairman of Lloyds TSB at a drinks party [GDN] - it was also reported that:

The public finances suffered yet another lurch into the red last month amid warnings of a record deficit this year that would force the next government to raise taxes or cut spending, or both. There was an overall shortfall of tax revenues relative to spending of £10.2bn in August - the worst August figure since monthly records began in 1993. Economists said the speed of the deterioration, if continued, could push the deficit to £70bn this fiscal year, double the 2007/08 figure and way above the £43bn estimate the chancellor, Alistair Darling, made in the budget in March.    [GDN]

Which does make you wonder where all the money is coming from for little matters like Northern Rock, central bank "liquidity pumping", those shiny new aircraft carriers, polyclinics, support for pensioners in fuel poverty ... how long have you got?

Meanwhile, across the pond where it all started, the message seems to be getting through that perhaps, fingers crossed, all those utopian theories about the virtues of the "free markets" might - just might - be losing their appeal. The New York Times, no less, reported that:

Is the United States no longer the global beacon of unfettered, free-market capitalism? In extending a last-minute $85 billion lifeline to American International Group, the troubled insurer, Washington has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, but it has also probably undercut future American efforts to promote such policies abroad.

"I fear the government has passed the point of no return," said Ron Chernow, a leading American financial historian. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams." ...

"For opponents of free markets in Europe and elsewhere, this is a wonderful opportunity to invoke the American example," said Mario Monti, the former antitrust chief at the European Commission. "They will say that even the standard-bearer of the market economy, the United States, negates its fundamental principles in its behavior."

Mr. Monti said that past financial crises in Asia, Russia and Mexico brought government to the fore, "but this is the first time it’s in the heart of capitalism, which is enormously more damaging in terms of the credibility of the market economy." ...

In parts of Asia, the bailouts stirred bitter memories of the different approach the United States and the International Monetary Fund adopted during the economic crises there a decade ago.

When the I.M.F. pledged $20 billion to help South Korea survive the Asian financial crisis of the late 1990s, one of the conditions it imposed was that the Korean government allow ailing banks and other companies to collapse rather than bail them out, recalled Yung Chul Park, a professor of economics at Korea University in Seoul, who was deeply involved in the negotiations with the I.M.F.

While Mr. Park says the current crisis is different — it is global rather than limited to one region — "Washington is following a different script this time."    [NYT]

Which raises the $64k question: Has anyone heard from the IMF during the current crisis, or are the Chicago Boys getting a reality check?

• New Labour: Last of the Big Spenders?
  
  There's never a good time to find debts are higher than you realised, but this is one of the worst of times, what with the 'credit crunch', higher food prices, higher energy prices, higher oil prices, and tighter mortgage rates.
  
  The Treasury coffers are not only empty, 'Prudence' Darling-Brown has run up record levels of public debt:
  
  Alistair Darling may have to borrow £90 billion and raise taxes,
  
  and
  
  Public finances show worst August deficit on record
  
  This might account for - but not excuse - the Treasury's refusal to finance safer vehicles for squaddies in Afghanistan; but it can neither account for, nor excuse, the insanity of ordering over £6 billion of armaments in pursuit of Robert Cooper's "Liberal Imperialism" - the fantasy that the UK is still a world power, and needs to "project force" in any part of the world.
  
  The new liberal imperialism
  
  Britain plans to spend £3bn on new nuclear warheads
  
  £3.2bn giant carrier deals signed



• The Economy: "Not dead, just resting"
  
  Why is only Britain facing recession?
  
  CBI urges formulation of industrial policy
  
  Cost of £1bn energy relief plan 'will end up on household bills'
  
  Housing Crisis to continue until 2011
  
  Household savings rates at lowest level for half a century
  
  Thousands 'face negative equity'
  
  Lenders put further squeeze on homebuyers
  
  Oil: The final warning
  
  Darling begs Britain to accept 2% pay rises
  
  Risk of systemic failure grows
  
  The food crisis begins to bite



• Broken Energy Market
  
  The Financial Times explains - like no one else - what is wrong with Britain's energy market.   Nuclear Options
  
  Underneath the impression of whirl-wind activity New Labour turns out to be rather addicted to shirking decisions.
  
  The Energy Review of 2003 ruled out a new generation of nuclear power stations, and was strong on renewables. By 2006 the U-turn was complete. Energy Reviews
  
  These non-events, combined with the total failure of the European energy markets, are pushing an unknown number of people into energy poverty, and will almost certainly lead to increased hypothermia deaths in the coming winter. Jeremy Warner
  
  Worse, there is a realistic prospect of more and more power cuts, as the UK's "energy gap" deteriorates:
  
  Power cuts provide an ugly vision of Britain's future
  
  A looming supply crunch
  
  Political opportunism and energy policy
  
  "Mind the gap"
  
  Government puts carbon capture on fast track
  
  UK in 'delusion' over emissions



• Permanent Revolution
  
  The effect of ten years of 'permanent revolution' has been to largely negate the benefits of the huge sums of money that have been poured into public services like education and health.
  
  Contrast this headline: "Education spending to reach £74bn" [BBC], with:
  "Increasing number of children being taught by classroom assistants".   [TLG]
  
  Similarly, contrast the optimism of Lord Darzi's NHS Review, [LD] with the continuing problems evident in materinity 'services' [DDM], and the recent outrageous report on the staggering neglect of people with learning difficulties.    [IND]



• Privatisation
  
  The obsession with privatisation is what we should expect since it is a key agenda item of the Washington Consensus.
  
  This agenda is kept well out of the mainstream media for reasons articulated by
  David Selbourne:

  There are no boundaries of class or party among those who sense, or know, that British society is in profound trouble. Yet the consensus that this anxiety has created remains largely unexpressed.
  
  Politicians dare not tell the whole truth about it for fear of adding to public alarm, and losing by it. Complaint over the quality of public provision, or about the education system, or about the statistics of violent crime regularly break surface, but in fragmentary fashion. ...
  
  In 1994 I wrote The Principle of Duty; I would find it difficult to get published now. In the book I argued that limits must be set to selfish individual entitlement if our free social order is to be preserved. Today, libertarians of every stripe command public debate and such argument is increasingly perceived as reactionary rather than enlightened ...

  NHS Logistics
  
  Post Office Closures



• The end of the Social State
  
  The relentless pursuit of the neoliberal agenda since May 1979 explains why policy differences between the mainstream parties are now marginal, and largely presentational.
  
  Compare New Labour's "Pathways to work" with Tory policy: Chris Grayling
  
  It's also the reason for the winding-down of the social state, instanced by the run-down in the quality of care for deprived children, the elderly, and the mentally ill.
  
  The latter are also an easy target for the 'populist' media, and think-tanks like the TaxPayers' Alliance: [TPA], who undermined their excellent analysis of government waste, with a cheap shot like this.
  
  The mentally ill are at the focal point of the bi-partisan "war on the sick-note culture".
  
  The LSE Depression Report highlights the size of the problem, and the lack of available treatment. [LSE]
  
  Yet, as David Smail, Oliver James and Paedar Kirby have each pointed out, neoliberalism's impact on society, and community, inevitably leads to increased incidence of conditions like anxiety and depression.
  
  The confirmation that prison in now the 'default' option for the mentally ill is matched by research confirming that the size of the prison population is inversely proportional to spending on welfare: Crime and Welfare Equation
  
  The scandal of 'criminalising' mental health patients



• Policy Oxymorons are a common facet on New Labour's disjointed, er, 'thinking'.
  
  Most notable is Gordon Brown's war on child poverty: Party of the Rich
  
  Up. Up. Up. Child poverty, pensioner poverty, inequality
  
  New Labour wishes to both redistribute wealth, as though it were still a social democratic government, and keep the global investor class onside with a favourable tax regime - and not too much bother about tax avoidance and tax loopholes.
  
  Inequality Britian   Taxation   'Standortkonkurrenz'
  
  The government's approach to climate change and energy policy gives rise to similar oxymorons, instanced by Ms Ruth Kelly's astonishing belief that aviation can expand ad infinitum with the vague proviso that "offsets" are made "elsewhere in Europe".
  
  In other words, someone else will cut their carbon emissions to such a draconian extent that our party can continue.
  
  Ruth Kelly    UK in 'delusion' over emissions
  
  Systemic denial also underpins the commissioning of a new generation of coal-fired power stations alongside vague - and totally deceitful - references to carbon capture and storage.    CCS_Greenpeace



• Snouts in the Trough
  
  In the absence of accountability, too many members of Parliament have been allowed to become more concerned with their own welfare than that of the people they are supposed to be serving. (This is a bi-partisan problem.)
  
  This is what we should expect, it's neoliberal 'ethics' in action.
  
  Nice work if you can get it: MPs keep their perks
  
  How many jobs does an ex-PM need?
  
  In the Absence of Accountability
  
  Honours system damned by Westminster inquiry
  
  Is Lord Ashcroft ashamed to live here?
  
  "Ethical" Neoliberalism
  
  "F*** You Budy"



• Social Cohesion 1: Lord Goldsmith's Feudalist Option
  
  Lord Goldsmith's report 'Citizenship: Our Common Bond', and Mr John Hutton's exhortation to voters to "celebrate huge salaries" came within hours of each other, and are emblematic of the contradictions at the heart of New Labour.
  MoJ    John Hutton
  
  Mr Hutton's objective is to promote the acceptance of neoliberal outcomes, ie: the gap between rich and poor has, is, and will continue to grow. Get used to it! IB
  
  Lord Goldsmith's objective is a variant of the same theme. The Queen is to be wheeled on stage to provide the social bonds which global-neoliberalism has trashed.
  
  The intended outcome, a sort of docile feudalism, would suit the global 'movers and shakers' very nicely.
  
  Forelock tuggers don't ask questions, they stick within the 'cultural' boundaries of News International.   CM
  
  New Labour's utilitarian test-driven view of 'education' - training would be a better label - further enhances progress towards the kind of 'culture' described in Ray Bradbury's Fahrenheit 451.
  
  Social Cohesion 2: the Pinochet Alternative
  
  For reasons that are not transparent, New Labour is further degrading society by its security agenda.
  
  It would be easy to blame this on 7/7, but, as the IRA's mainland bombing campaign did not provoke a similar response, it's hard to go along with that line of argument.
  
  Emulation of the US Homeland Security Department's policies might confirm the 7/7 theory, but, as many of the current data-bases seem unconnected with the 'war on terror', this argument also seems incomplete.
  
  I tend to the view that this is actually the Pinochet Alternative to Lord Goldsmith's feudalist route to the acceptance of the neoliberal 'utopia'.
  
  This is confirmed by the use of RIPA powers to pursue a variety of non-terror related crimes and misdemeanours, the ID cards project; the growing DNA database; ContactPoint, and the NHS Spine.
  
  'Snooper's charter' to check texts and emails
  
  Parliament Protest
  
  Brian Haw
  
  Lords of the Blog
  
  SOCPA_Liberty
  
  SOCPA_Indymedia
  
  SOCPA case thrown out of court

Art, truth and politics

N02ID

Safe in our cages

"You've failed us on liberty"

No such thing as society

Shock Doctrine

Augusto Pinochet