Friday, 28 October 2011
By demanding that the worst excesses of global capitalism be reined in, the Holy See echoed the message of protesters encamped outside St Paul's Cathedral in London, the indignados of Spain and the Occupy Wall Street movement in the US.
In a forthright statement, the Vatican's Pontifical Council for Justice and Peace called for an end to rampant speculation, the redistribution of wealth, greater ethics and the establishment of a "central world bank" to which national banks would have to cede power.
Such an authority would have "universal jurisdiction" over governments' economic strategies. Existing financial situations such as the World Bank and International Monetary Fund were outdated and no longer able to deal with the scale of the global financial crisis, which had exposed "selfishness, greed and the hoarding of goods on a grand scale".
The global financial system was riddled with injustice and failure to address that would lead to "growing hostility and even violence", which would undermine democracy. Wealthy countries should not be allowed to wield "excessive power" over poorer nations, the Vatican said. Cardinal Peter Turkson, the head of the pontifical council, said banks needed to question whether they were "serving the interests of humanity" in the way they operated.
The proposal calls for a new tax on international financial transactions, but the battle for the future of humanity (based upon robust values/ethics) has only just begun and is becoming more vocal from Christians ... and is joining forces with others (e.g. the Occupy Movement).
However the 'battle' is not going to be easy or without 'casualties', as some church leaders are clearly not happy about this ... for instance the Revd Canon Giles Fraser resigned yesterday after having sided with anti-capitalist protestors camped outside St Paul's cathedral. The cathedral was losing £20k a day in lost takings (e.g. it charges £20 just for entry) and was coming under increasing pressure from local authorities ... clearly some in their senior ranks felt this financial loss (and unwanted attention) was just too much to bear ... hypocrisy indeed!
In a sign of the deeper splits within the clergy, a report that Canon Fraser had been due to publish, which was damning of the lack of ethics amongst bankers, had been shelved by the cathedral amid concerns that it would escalate the row by appearing to add weight to the protesters' cause.
Further evidence today that we are heading for a double-dip recession ...
1. Two of the nine Bank of England Monetary Policy Committee (MPC) members have effectively now admitted it ... with one now saying there is a 50-50 chance the economy will contract in the final three months of the year. They are trying to 'rescue us', or should I say 'cover the recession up', with a further £75bn of quantitative easing (printing money) ... and they hinted a further extension of this is likely in the coming months. The problem with this approach is that the money simply ends up in banks (who caused the problem in the first place) for them to speculate with (rather than lend out to businesses) and it also pushes up prices/inflation (nb the idea that the stock market is 'rallying' is a big con ... it simply follows the effective devaluation of the pound).
2. Sentiment among the British public has dwindled to recession levels as fears mount over the outlook for the economy and household finances. GfK NOP's consumer confidence index fell to -32 in October from -30 in September. It has only breached that level on two occasions since the survey began in 1974 - March 1990, and June 2008. At both points the UK was heading into recession.
But don't worry ... the Chancellor and the Government now have something else to 'pin the blame on' ... not themselves ... or any of their policies/inaction ... but the crisis in Europe* ... how convenient ... and timely!
* After all the rhetoric from Cameron and the Government about listening to the voice of the people (and giving them a referendum on Europe), it's interesting that they imposed a 'three line whip' to force MP's to vote against a proposal aimed at giving ordinary people an opportunity to have their say over Europe ... whilst they continue to use taxpayers money to prop Europe up! Hypocrisy indeed.
At a time when high inflation, high unemployment, and low wage growth are weighing down on UK household budgets a report has been published demonstrating how we are definitely NOT "all in this together".
With pay freezes being imposed on the vast majority, the 'cosy club' of people sitting in boardrooms, and who also sit on renumeration committees, are rewarding themselves handsomely ...
Today an IDS report confirmed that FTSE 100 directors have seen their pay increase by a staggering 49% in just one year ... and this is a very large percentage increase on an already very large salary!
The problem is that the vast majority of people sitting in boardrooms and on renumeration committees are also directors themselves ... so these people are effectively live in an 'incestuous world' where they all vote to push up boardroom pay and give each other a big pay rise ... however good/bad their company is doing!
Average FTSE 100 director pay is now up to £2.7m, including fixed pay, benefits, bonuses, value of long-term incentive plans and gains made on the exercise of any share options cashed in during the year.
Britain's economy may be struggling to return to pre-recession levels of output, but the same cannot be said of FTSE 100 directors' remuneration," said Steve Tatton, editor of the IDS report.
IDS said: "At a time when employees are experiencing real wage cuts and risk losing their livelihoods, it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors ... the pay gap between the boardroom and the shop floor does not yet show any signs of closing."
Which is a complete understatement ... the gap is actually widening rapidly and at an increasing rate ... not just in percentage terms ... but in terms of actual value too (pay rise of £0 compared to a pay rise of over £1m)!
The Unite union has called executive pay "obscene" and has called for shareholders to be given more power to hold directors accountable. The union's general secretary, Len McCluskey said: "The Government should strongly consider giving shareholders greater legal powers to question and curb these excessive remuneration packages".
""Institutional shareholders need to exercise much greater scrutiny and control of directors' pay and bonuses ... it's obscene and it shows that the City has learnt nothing during the financial troubles of the last four years."
Brendan Barber, the TUC's general secretary, said: "Top directors have used tough business conditions to impose real wage cuts, which have hit people's living standards and the wider economy, but have shown no such restraint with their own pay ... Reform should start with employee representation on remuneration committees, which would give directors a much-needed sense of reality."
Deborah Hargreaves, chair of the High Pay Commission, also said "We have got a closed shop here and someone needs to break it open."
In a recent speech Ed Miliband also said this must be challenged ... let's see if he speaks up about this again and does something about it now ... or let's see if he chooses to quietly walk away from the challenge after finishing yet another attention grabbing and crowd-pleasing speech!
It's a shame so many people are either ignorant or apathetic ... and also have such short term memories!