Flawed capitalism - lobbying and corporatocracy

Capitalism, which allows money to flow and be used without constraint, has led bankers to put money into where they get the 'greatest apparent return' ...

and unfortunately these places turn out to be ones where a community with any real moral code/values would not want it to go  ... e.g. 'money for nothing' schemes/scams ... and places where people can be exploited the most.

One might think in a capitalist system that any 'money for nothing' scam would quickly and naturally collapse, but this does not happen when the excessive profits generated are 're-invested' into lobbying Governments and policy makers to gain support/favour and put them into a position where their scam can continue to flourish and/or 'cannot' fail (e.g. as the Banksters did, and continue to do, hence the bailouts and continual pressure to water down any regulation).

The problem with capitalism is that money/wealth is naturally directed towards influencing those in power, to maintain/ further their position to exploit markets. For instance this occurred with banks persuading the Government to remove house prices from UK inflation figures, which created the house price boom (as interest rates would not longer have to increase due to a rise in inflation) and saw house prices triple in a decade.  

Some people argue that the problems we are now seeing are more to do with having a Corporatocracy rather than Capitalism, as corporations use money to unduly influence and control politicians in order to introduce/change rules in their favour (e.g. by relaxing financial regulations, changing food, health and energy policies ...).

Indeed before entering office David Cameron himself highlighted that Lobbying would be the next big scandal (post the scandal relating to politicians and the media), but on entering office he decided not just ignore it but to ensure that he benefited from it!

Lobbying is indeed a big scandal (e.g. banks 'invested' £100m into lobbying last year), but Capitalism creates an environment where a Corporatocracy can thrive, and creates many more problems besides (e.g. the movement of money to exploit people to the maximum, and the ability to move any wealth to tax havens in order to avoid paying any tax etc). 

Corporatocracy is indeed a big problem, but it only thrives due to the flawed and corrupt nature of capitalism.

Corrupt capitalism: Banks are throttling Economic Recovery

The Business Secretary, Vince Cable, today accused Britain's banks of "throttling" the economic recovery because of an anti-business culture which focuses on short-term profits. 

Speaking on the BBC1's Andrew Marr Show, the business secretary said: "The real problem at the moment is that the banks – because of their existing culture which is frankly anti-business, obsession with short-term trading profits, not focusing on the long term – are throttling the recovery of British industry."

The business secretary blamed the banks for undermining the multibillion-pound quantitative-easing programme by the Bank of England to inject liquidity into the economy.

He said: "There has been a breakdown in the mechanism, in the transmission. It just doesn't get through to companies. We are going to ensure that the new money that the chancellor and the governor of the Bank of England talked about at the mansion house does actually directly reach the companies.

"Given that our leading banks are, frankly, throttling recovery by not making business-lending available, particularly to small-scale companies, we now have to focus single mindedly on that task. How to make sure that the additional money gets through to business."

However talk is cheap ... as he/his party voted against a wide ranging judicial inquiry into the culture and practices of banks. His limited understanding of the level of corruption involved is also deeply worrying (n.b. the banks actually create/counterfeit over 90% of the money supply in the UK, not the Bank of England, and given this they are able to decide how they want to spend/gamble it).

We need to i) take back control of money supply (off the private banks), ii) separate casino banking and retail banking fully (i.e. not just 'ring-fencing') and iii) tax financial (casino bank) transactions just like any other form of gambling.

Only by doing these things will real businesses start to thrive and the UK economy start to flourish. Unfortunately Cable doesn't understand this, and the Labour party doesn't either (given their parallel announcements today)! 

No wonder Cameron and Osborne were desperate to stop a wide ranging judicial review ... as it would have started to expose/explain everything to them!

Corrupt Capitalism ... Triumphs over Democracy

When potential collusion/corruption became apparent within the media, police and government ... MP's were quick (and right) to conclude that the only course of action possible was a public judicial inquiry (Leveson) - with an independent judge able to go wherever the evidence takes them.

However when it came to corruption/fraud within banks (and possible collusion with politicians/regulators), Cameron and Osborne fought tooth and nail to avoid an independent public judicial inquiry.

Osborne, like a typical 'out of touch' posh boy, ignored any discussion/debate and chose to immediately go on the offensive ... with disgraceful and unprecedented personal attacks (targeted at the shadow chancellor) ... and amazingly trying to claim that those demanding the forensic inquiry were the ones trying to cover things up! ... you couldn't make this stuff up (again)!

... and why did Cameron and Osborne pull rank, and 'whip' their MP's to vote how THEY wanted ... because THEY wanted to cover things up!!!

If a full judicial inquiry had been instigated then they would have found it very difficult to control (in terms of its scope and level of scrutiny) ... and they would have quickly seen a full/frank exposure of how private banks control politicians - e.g. through vested interests, lobbying and party funding (i.e. Conservative party funding).

A judicial inquiry would have also exposed/questioned the mass counterfeiting of money by private banks, which the Government still allows because of the 'illusion of growth' it creates (e.g. inflated asset prices, artificial 'house price booms' and money for speculation).

The printing of 'paper money' is limited to the 'Bank of England', but 'electronic money' is not ... and private banks 'create' electronic money by simply placing a number in a spreadsheet ... and then demanding 'interest' on it (real 'money for nothing')!

Private banks also channel the money (i.e. and hence the 'means of production') to wherever they want it to go ... thus bankers control the economy, and the areas within the economy allowed to grow (i.e. this is not carried out by representatives of the people, for the people)!

Manufacturing collapsed, with little/no interest paid by politicians, as those in control of money supply (i.e. the private banks!) chose to channel all the money into 'money for nothing' schemes instead e.g. fuelling asset prices and gambling on currencies/derivatives/financial 'products', instead of supporting the creation of real assets (e.g. new houses, new/real products we could sell/export)!

Banks poured money into these 'schemes' in pursuit of short term profit and 'greater returns' - with investment in real businesses sidelined and/or frowned upon (as these require time, effort and resources). 

With the apparent 'illusion of growth' the Government (and the Bank of England) were not only complicit, they were more than happy to help! ... e.g. by agreeing to remove house prices from the inflation figures (which would have otherwise kept house prices in check)!

Politicians are currently controlled by the banks (e.g. lobbying, threats to growth and/or moving abroad) and/or in the pockets of banks (party funding, ex bankers, future bankers ... just look at Tony Blair who is now getting $2m+/year from J P Morgan) ... 

... and politicians such as Cameron and Osborne are the worst kind ... as they are not only controlled by the banks ... they are also in the pockets of them too (nb they bankroll the Conservative Party, and Cameron's family wealth, and Eton education, were a direct result of banking too).

Labour would be quite rightly accused of being controlled/ manipulated by the banks, but they would not be accused of being in the pockets of them (except for Tony Blair). One cannot say the same for the corrupt Conservatives however, who refused to give the British people a proper inquiry (and justice) by minimising its scope, independence and level of scrutiny (n.b. they now control the scope, chairmanship, and membership of the committee of MP's who will investigate them)!

Cameron and Osborne will go down in history for their abject failure to protect the British economy against corrupt bankers, and when the next crash happens (which it undoubtedly will, as they have still done nothing to fix it!) they should be arrested, have any/all their assets confiscated ... and they should then be tried for treason!

An independent forensic investigation would have uncovered the scale of corruption involved ... and would have resulted in the 'control of money supply' being taken away from private banks and returned to representatives of the people ... it would have also re-enforced the need for a full separation of casino banking from retail banking (i.e. a "Glass-Steagall" type act, and not just 'ring-fencing') ... as earlier reports recommended (but were subsequently watered down/ignored, due to heavy pressure and lobbying by the banks)!

Corrupt capitalism has triumphed over Democracy ... and made a mockery of our 'democracy' once again!

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."

Napoleon Bonaparte, 1815

Corrupt capitalism: Fraudulent bankers are running amok!

Following recent posts, and on from my many previous posts about the immoral and corrupt practices of bankers, today we got yet more of a glimpse into the culture of investment (casino) banking and what they really get up to ... in their immoral pursuit of profit ...

... they are running amok, creating 'money out of nothing' ('electronic money') so they can gamble on rates, derivatives, assets and currencies etc ... and they are also fraudulently ensuring the 'casino wheels' are 'rigged' in their favour! ... and how do they do this ... well today it emerged they've been fraudulently rigging the 'rates' (e.g. reported libor/euribor rates) ... that they themselves have gambled on ... to make sure all their bets 'win' (... and sharing the 'profit' between them)!

You couldn't make this stuff up ... and there are clearly lots more scandals still come out too!

The case for taking back control of money supply (i.e. the creation of 'electronic money'), and separating casino banking from retail/commercial banking, should now be absolutely clear to everyone. These are both imperative to i) take back control of our economy (and off of the banks!) ... and to ii) ensure we do not give money (either directly or indirectly) to casinos! 

Without a tie to our personal and business accounts, the taxpayer would not have had to bailout/subsidize casino banks ... as they could go bust ... without affecting the accounts of voters or businesses.

Moreover, gambling/financial transactions should be taxed, to fall into line with other forms of gambling! All 'money for nothing' schemes should be outlawed (i.e. banks creating 'electronic money' themselves) and gambling heavily taxed, to subsidize tax reductions to activities that 'add real value' to our economy and society.

Yet Cameron and Osborne actively boycott any such proposals, and vehemently oppose the introduction of a financial transaction (gambling) tax on their immoral betting ... 

Cameron and Osborne also appear to have given up on the economy in terms of trying to create jobs/growth ... and are now set on slashing benefits and blaming the poor ... instead of tackling the corrupt actions of bankers, or reversing flawed policies currently destroying jobs/growth!

They are also slashing public services and raising taxes for hardworking people ... whilst incredulously cutting tax for the rich ... and allowing/overseeing widespread tax avoidance by the rich too (schemes where the ultra-rich pay less than 1% cf the 30-40% tax paid by the vast majority)!

People can clearly now see there are one set of rules for the rich/powerful (i.e. no real rules) ... e.g. the counterfeiting of money, widespread tax avoidance, no criminal prosecution of bankers/executives ... but there are an ever increasing set of rules policing everyone else (e.g. 'big brother', 'police tasers' ...)!

As far as the bankers are concerned we need to hit them hard immediately ... as a trivial fine (i.e. £60m from the FSA ... nb the £290m includes US charges!) is not enough ... we should immediately take back control of money supply (i.e. 'electronic' money as well as 'paper' money - see the excellent Positive Money reports below!) ... and make sure our money is only used to provide carefully regulated loans directed to customers and business (i.e. not for themselves to gamble in pursuit of more profits/bonuses). 

A forensic legal inquiry should also be started to uncover all corrupt practices and to jail the ring leaders (nb which will no doubt quickly spread to the regulators, politicians and Government officials manipulated/'run' by these people!) ... and a complete separation of retail/casino banking should also start immediately too.

Positive Money Report ...

Whenever major decisions are taken about the future of the UK, news cameras will be aimed at reporters standing in front of Parliament. But is Parliament really where the key decisions are being made today, or has power shifted down the river to London’s financial sector, the City?

This news report from Positive Money finds a banking system that has more ‘spending power’ than the democratically elected government, no accountability to the people, and a massive concentration of power in the hands of a few individuals. 

However, the greatest concern is that government has surrendered one of its most important powers — the power to create money and control the money supply — to the private sector, which has exploited this power to blow up housing bubbles and indirectly transfer wealth upwards and inwards, with disastrous results. There has been no democratic debate about this transfer of power, and no law actively sanctions the current set-up.

As the last few years have shown, the banking sector can have a serious negative impact on our lives. Leaving it with such a huge and unaccountable degree of power is no more likely to work in the best interests of society or democracy in the future than it has in the past.

An Overview:

Ceding the Power to Create Money to the Banking Sector

In the current system, banks create the vast majority of money in the UK, in the form of the electronic bank deposits that appear in your bank account. They create this money without regard to how much is needed for the economy and society as a whole to operate effectively, and they put over 90% of this money towards activities that do not contribute to the growth of the real economy.

This power to create money causes inflation that insidiously transfers wealth from savers and those who hold their wealth in cash (i.e. the poor and those on medium incomes) to those who are rich enough to hold their wealth in other assets (such as property). Giving private sector banks a monopoly on the creation of money also means that whenever additional money is needed in the economy, only private banks can provide it. In effect the entire money supply must be rented from the banking sector, at great cost to the economy. The creation of electronic money is a service that could be provided by the government at no cost to anyone.

The business model that permits banks to create money—so far from the popular perception of banks as simple intermediaries between savers and borrowers—is inherently unstable and will systematically require periodic taxpayer-funded bailouts. The cost of these bailouts diverts revenue from the activities that the government was elected to do, compromising its ability to fulfil its democratically mandated objectives.

Leaving this power to create money to the private sector creates a serious democratic deficit: a process that many would consider to be the sole prerogative of the state is in the hands of corporations who have no accountability to the wider public and whose interests are completely at odds with those of society as a whole.

Overstating the True Contribution of the Banking Sector

Politicians and policy makers are misinformed about the true contribution of the banking sector because they are only shown the positive side of the sector’s contribution to government finances, i.e. the taxes they pay. The overall contribution of the UK banking sector to the Exchequer is about 6% of overall tax revenues. In the year that the banking sector paid its highest ever tax, the manufacturing sector paid over three times more.

Society is now acutely aware of the direct cost to the taxpayer of bailing out banks but less attention is directed to the hidden subsidies they benefit from, even in the good times. Firstly, because of both implicit and explicit government guarantees, when a bank borrows money it does so at an interest rate lower than it would be able to otherwise. Secondly, by giving up the power to create money the government forgoes an important source of revenue, which results in higher taxes, lower spending or a bigger national debt. Conversely, the banks benefit financially from the power to create money. These hidden subsidies more than outweigh any taxes paid by the banks.

No Accountability to Customers

Unlike pension funds, banks are not required to disclose how they will use their customers’ money. As 97% of the UK’s money supply is effectively held with banks, this allows them to allocate a larger sum of money than either the entire pension fund industry or the elected government itself. Consequently the UK economy is shaped by the investment priorities of the banking sector, rather than the priorities of society.

Just five banks hold 85% of the UK’s money, and these five banks are steered by just 78 board members whose decisions shape the UK economy. This is a huge amount of power concentrated in very few hands, with next to no transparency or accountability to wider society.

The Close Relationship Between Banking and Government

It is impossible to know how much influence the financial sector has over policy but they certainly devote substantial resources to getting it. The financial sector makes large donations to political parties: the Conservative Party is 50% financed by donors associated with the financial industry, and it offers a ‘backstage pass’ to meet the Prime Minister in exchange for a £50,000 annual donation, raising the question of whether ‘cash for access’ is subverting the political process.

Lobbying is a fact of political life and only the most naïve politician would fail to take account of their naturally biased agenda. However, the resources of banking sector lobbyists far exceed those from other sectors and therefore the views of the banking industry may be drowning out those of civil society.

The close relationship between the banking sector and its chief regulator, the FSA, should be worrying, especially given the record of the last few years.  The revolving door between the banks and their regulators revolves faster in the UK than in any country other than Switzerland and a former Prime Minister now consults for one of the world’s largest investment banks, for a salary approximately 12 times more than he earned as Prime Minister.

Policy Implications

A few economically simple changes to the banking system would return power back to the people and restore some level of democratic control over the economy. These changes are:

1. Make banks ask for permission from their customers before they lend out their money.

2. Make banks disclose how customers’ money will be invested, so that members of the public can refuse to fund activities that they are not ethically comfortable with.


3. Remove the power to create money from the banks and return it to a democratically accountable body.
 
Making these changes would help redress the democratic deficit in banking and limit the ability of the banking sector to damage society. After the experience of the last few years, these are changes that urgently need to be made.

Corrupt capitalism ... Profiting from Making People Fat!

Recent posts have raised the issue of the corrosive and corrupt nature of capitalism (involving the control of money and power). 

This post continues on this theme ... by focusing on how food corporations are deliberately poisoning and deceiving people ... and all in the pursuit of profit!

For decades food corporations have been heavily pressurizing and lobbying Governments ... to get their way, and to ensure they avoid any barriers (i.e. regulations) that would limit their ability to profit. 

And their route to more profits has not been to offer better/ healthier foods ... but to cut costs and find ways to make people consume more ... 

Over the last two decades scientists were starting to raise concerns about obesity and looking at the reasons people become fat (e.g. fat intake, sugar intake, exercise), but under significant pressure/lobbying from food corporations the focus of attention was pushed away from sugar intake and onto to lack of exercise and the levels/types of fat in diets ... with any scientific funding investigating the impact of sugar on obesity increasingly switched off!

The food industry (particularly the sugar/corn companies) did this as, following their creation/manufacture of High Fructose Corn Syrup (nb basically a very cheap type of sugar, containing a glucose/fructose mix), they saw a great opportunity in the marketing of "low fat" products packed full of ultra cheap (and sweet) High Fructose Corn Syrup (HFCS) ... and selling it for a premium! 

Fructose started to enter the food chain in massive quantities for the first time ... and it is now in the vast majority of processed foods (as a sweetener, preservative and/or browning agent). In fact it's hard to find foods without large doses of it now (e.g. the vast majority of processed foods, breads, sauces, drinks etc etc)!
 
... and consuming large volumes of fructose turns out to be a huge problem ... for two fundamental reasons:

1. Fructose is 'processed' by the body in a completely differently way to other carbohydrates ... unlike glucose, fructose cannot be metabolised directly by cells and it all has to be broken down by the liver (nb where poisons are processed). The process of transformation in the liver involves fructose being turned into uric acid, but also into dangerous fats which enter the bloodstream and get deposited around the body (nb additional chemicals created from breaking down fructose also enhance/accelerate this whole process further)! So 'low fat' (and highly processed) foods containing fructose are actually a way of pumping the body full of fat ... i.e. people are being duped into a terrible form of 'high fat' diet (i.e. that creates high levels of body fat) ... and are not on a 'low fat' diet at all ... and as all the advertising around it might suggest!

2. This first problem is further exacerbated by yet another fundamental problem with fructose ... the fact that the consumption of fructose does not surpress ghrelin (i.e. the hunger hormone generated by the stomach) and it doesn't stimulate insulin or leptin (i.e. the hormone that tells the brain that your body is already metabolising food, in order to surpress further intake) ... so people still feel hungry and continue to eat!

Fructose delivered to the food industry the perfect solution ... a way of making people feel continually hungry so they'll consume more ... and all under the 'banner' of healthy 'low fat' foods! 'Low fat' foods are mostly full of cheap sweet fructose, as it's used to replace all the taste lost from removing the fat (nb food tastes like cardboard without it)! You couldn't make this stuff up ... and yet it's all true (e.g. take a look at the video below from a world leading endocrinologist who attempts to explains it all ... including the biochemistry)!

Fructose has successfully generated the profits the food industry were looking for (alongside a strategy of 'super-sizing' portion sizes). Fructose is effectively a poison (processed by the liver) which has created a multitude of detrimental effects on the body including those relating to obesity (e.g. high blood pressure, insulin resistance, cardiovascular disease, Type 2 diabetes ...) with all the consequences to public health and well-being. And the solution ... well most of the food industry are still arguing obesity is a result of lifestyle (e.g. the lack of exercise) ... and people's personal decisions (i.e. not a particular type of food) ... whilst others have made a fortune selling people 'slimming' products ... and by creating 'yo-yo' dieting!

Sporting events, such as Euro 2012 and the London 2012 Olympics Games, are also currently swamped with advertising from companies like McDonald's, Mars and Coca-Cola ... as they try desperately to link themselves to healthy activities ... when they could not be further from the truth ... e.g. Coca-Cola also contains caffeine, an addictive drug and diuretic (makes you lose water) ... which makes you feel more thirsty ... and it's also packed full of fructose (just like McDonald's meals and Mars bars!), which fills you full of calories (and increases your body fat) ... and makes you feel more hungry!

The tobacco industry is heavily taxed, banned from mainstream advertising, and surrounded by numerous health warnings ... and fructose will eventually have the same! But just like the tobacco industry ... the food industry is using all its power to stop this from happening ... and is currently succeeding!

The problem in the case of the food industry is that the Government is not just heavily lobbied ... it also 'benefits' from all the jobs created as a result of all this over consumption too (e.g. the food industry, packaging and distribution industries, supermarkets, fast-food chains, pubs, clubs and restaurants ...) ... and hence are reluctant to do anything about it ... and this will continue until the 'costs' of obesity far outweigh all the jobs involved in creating it ... or until there's a sufficient public outcry!

Morals don't come into it ... in free market capitalism its all about profit, and the food, retail, distribution and healthcare industries are all effectively 'profiting' from obesity ... and they will not cut off these profitable revenue streams out of choice ... so ordinary people are going to have to stand up against this themselves ... by boycotting these 'poisons' ... and by creating a public outcry to force the Government to do something about it!

Corrupt economics: Destroying Value ... and Communities

The Government is currently promoting the fact that they are shifting their focus onto exports, manufacturing (cf finance) and growth (i.e. job creation).

However this once again appears to be all spin and no substance!

Our current trade deficit is at its worst level for seven years, manufacturing is shrinking (not increasing), and recent figures show that the vast majority of jobs currently being created are in finance (over 60%) - not manufacturing (less than 3%)! 

This Government tries to tell us the financial sector makes up a small part (less than 10%) of the total economy, which is a complete distortion ... this small figure does relate to the manufacturing sector, but not the financial sector ... and the job creation figures provide a truer picture of reality ...

Corrupt 'free market capitalism', is systematically backing/ promoting 'money for nothing' scams ... over 'real' hard-working businesses desperately trying to positively contribute to society and add real value to people's lives ..

It is well known and well documented (e.g. on this blog) that bankers (and finance companies in general) do not add any real value to society ... in fact they're actually systematically destroying value ... hence they need to be reigned in. 

In the future 'adding real value' needs to be positively backed/promoted ... and destroying value needs to be made illegal or, as a minimum, taxed very heavily to replace/cover any value it may destroy (i.e. just like other forms of gambling, tobacco, alcohol etc currently are). This Government is vehemently resisting any financial transaction tax ... which would be a good start to achieving this goal ... and why? ... well, they are 'in the pockets of the bankers', are also threatened by them (e.g. threats to move their centres overseas if they don't like what the Government is doing) ... and they allow this corrupt banking system to counterfeit money and to keep the 'means of production' (i.e. money/capital) mostly in the hands of themselves (over 60% of all new jobs/investment) ... so they can create and exploit yet more 'money for nothing' scams (i.e. 'financial engineering')!

They are systematically stealing taxpayers money, plundering and destroying communities, and stealing people's future ... by burdening communities with debt slavery for decades to come. 

Capitalism is better described as the 'economics of exploitation' ... and this is not being tackled because we also have a mockery of a democracy.

As Aristotle once said ...

"Democracy is when the indigent, and not the men of property, are the rulers"

... and ...  

"In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme" ... 

Irony and Hypocrisy: Corrupt GP's saying the NHS 'in peril' if they are NOT given the money!

With key Royal Colleges and healthcare representatives expressing concern, and in most cases, outright opposition to the proposed NHS reforms, Andrew Lansley and David Cameron are under increasing pressure. 

No-one voted for these NHS reforms and Cameron stated at the last election that he was committed to putting a stop to top-down reforms! David Cameron also said that the NHS would be safe in his hands and that any reforms would need the support of the healthcare professionals, yet despite all these fine words he is still ploughing on despite their outright opposition!

Hypocrisy indeed!

And what is Lansley doing? ... well he clearly decided to call upon a few GP 'friends' to write to the Telegraph to say they back the reforms, with typically threatening rhetoric ... "The NHS will be 'in peril' if the Government's controversial health reforms are prevented from going ahead".

However the letter wasn't signed by any GP, but 56 GP's specifically setting up new commissioning groups who, under the bill, will effectively replace primary care trusts (PCTs) and be handed the almost entire NHS Budget £80bn to manage (and personally profit from)!

The cold reality is most GP's are actually not at the fore-front of healthcare, with many out of date in terms of knowledge, and acting more like money orientated businessmen than healthcare professionals, already pocketing 6 figure+ salaries ... and these 56 particular GP's are looking to take over virtually the entire NHS budget so they can get massive kick-backs, bungs and bonuses (e.g. from rationing healthcare, steering away from optimal clinical decisions and receiving share options/dividends) and in doing so, become Government made multi-millionaires at the expense of patients and taxpayers.

Last November the BMA moved to a position of total opposition to the Bill, and in the New Year the Royal College of Nurses and the Royal College of Midwives  followed suit. The Royal College of GPs is itself is deeply sceptical, although it's not publicly in total opposition yet (due to representations/lobbying from immoral/corrupt GP's like the ones who signed this letter), even though 90%+ are apparently in opposition (due to clear conflicts of interests between 'cashing in' and 'care').

Dr Clare Gerada, chair of the RCGPs, said: "GPs must understand their role in commissioning and we support the principle of greater clinician involvement. But many of our members feel that this could have been done in a less disruptive way by placing GPs on the boards of existing PCTs."

The Government, when it 'paused' to 'listen' to concerns, did not pause in its quest to abolish PCT's and the process of bribing corrupt GP's to ration and privatise healthcare. It therefore no surprise, given the stench of self-interest and personal gain, that these people are providing the only voice backing the reforms. 

Most healthcare professionals, royal colleges and professional bodies know exactly what the Government and these corrupt GP's are up to ... but are finding it difficult to say so publicly. When will one or more of these bodies finally spill the beans and make it completely clear to everyone what is actually going on ... as they certainly have a professional and moral obligation to do so, as ignorance is unfortunately not bliss, and any apathy on their part will almost certainly kill ... literally!

The reality is that the NHS is indeed 'in peril', but only if we give these people the money, not if we don't!

Accounting loopholes used by bankers to 'inflate profits' (and their bonuses)!

Following on from my recent post about the locusts, leeches and vultures in our society (i.e. financial services companies and lawyers) a report has been published today by the Adam Smith Institute showing how banks (the locusts) use outdated/flawed accounting rules to fictitiously boost profits in order to maximise their bonuses.

The report highlights how technically insolvent banks are using IRFS accounting rule annomalies to report massive profits by using expectations of future values when calculating/reporting profits ... to make it look as if they are not insolvent and to make it look as if the bankers are making lots of money (in order to boost their own individual bonuses).  Yet many of these assets, contrary to increasing in value can easily, and in fact do (as we have seen!), become worthless.
  

The report highlights how the 'financial engineering' going on in banks is no more than a legalized scam/ponzi scheme (e.g. Credit Default Swaps) and how it's effectively fraud (which compliments/augments the legalized counterfeiting they also undertake)! It also highlights how politicians and regulators are doing nothing to tackle the anomalies in the accounting procedures to stop them from doing this in the future.  

The report also exposes how the ratings systems not only allow, but positively support, them making up and using 'fraudulent' financial vehicles to fictitiously drive up profits (by giving scam 'products' triple AAA ratings),  whilst making it very difficult for hard-working small/medium enterprises to get a loan (due to not giving them triple AAA ratings and/or no rating at all). This makes it easy, and much more lucrative, for banks to 'manufacture profits' from 'financial products' (or 'vehicles'), rather than generate profit by lending money to an enterprise working hard to manufacture 'real products' (e.g. real 'vehicles')!

So what are the Government doing? ... Well rather than tackling the problem at its source (e.g. by starting to address the flawed rules/systems that allow such scams to go on), they have instead said they are going to set a little bit of taxpayers money aside (i.e. your money!) for small/medium businesses (whipppeee)! ... and at the same time they are preparing for the next bank bailout - which will occur when the value of all these fictitious financially engineered products actually prove to be worthless (and when the current commodity boom they are currently pushing also goes bust). With 'ring-fencing' effectively put into the long grass by politicians*, nothing of any substance will have been implemented to protect the taxpayer before the next collapse (currently being driven by the bankers).

The end result ... mega-rich bankers/speculators ... bankrupt nations/taxpayers. 

The process ... legalized fraud, robbery and counterfeiting ... endorsed by corrupt politicians and law makers (n.b. lobby groups such the CBI also lobby heavily on behalf of banks, claiming they are the 'Voice of Business', when due to the vast amounts of money given to them by the banks, they are really the 'Voice of Banks').

In China such people would be tried for economic sabotage ... and, if guilty, hanged ...

So when will people in the Western World realize what is happening and start to demand action ... a couple more years perhaps? ... when the next bailout is required?

Well, whatever the timescale, the bankers are clearly looking to make hay while the sun shines (i.e. taking a shedload of your future wages - i.e. the taxes they will take from you in the future to pay for previous/future bailouts) ... whilst the politicians/lawyers try to put up barriers, blow up bridges, and get their lifeboats ready ... so when people do finally realise what's actually been going on they won't be able to reach them ... or their corrupt bank friends!

* David Cameron has put plans for any ring-fencing at least 5-10 years away, and he also put aside our national interests last week when trying to protect his banking friends in the City from any regulatory changes taking place in Europe.

Irradicating the "Economics of Exploitation"

A great blog from the Renegade Economist ... which makes the case for a new economics ...

"While unearned wealth is both a symptom and a driver of economic injustice, the objective of transformative social change is not to soak the rich, but to create an environment in which economic opportunities are more widely distributed among the population ...

The recent riots and looting in London and other English cities are symptomatic of deep economic dysfunction. The social fabric is straining under the weight of an economics unable to offer any possibility of a different, better future.  The social contract is under greater pressure than at any time since the 1930s. But there is a crucial difference between the world then and the world today: a transformation in our collective moral aspirations that offers a spark of hope for the future, the kind of spark that in the dark days of the mid-20th century it took a world war, and the horrors of the holocaust, to ignite.

A just economy will not emerge from the tired debate between left and right, or endless arguments over whether free markets or state control of the economy deliver the best outcome. Justice requires that we transcend these stale and failed dialectics. Neither the contemporary vision of a free-market economy, nor a state-socialist or Keynes-inspired social democratic model can deliver a just economy; each is too riven by conflicts and compromises to get anywhere close.

Nothing short of fundamental reforms to the three pivotal institutions of the modern economy will do. Without substantial changes to the tax system; the financial system and the monetary system, a just economy will remain beyond reach.

Foundations of a New Social Contract

While a smaller, less expensive, state is perfectly achievable once everyone is permitted a viable stake in the economy, the state will still have an important function for which it will need to raise revenue through taxation. But it should tax the use of land and natural resources, things that are limited supply, rather than wages and profits. Taxing the output of economic activity discourages entrepreneurship and penalises hard work.

Financial markets must be reformed so that their sole purpose becomes the channelling of investment capital to the real, productive economy; activities that create the goods, services and experiences that people need to live decent lives, and the extras that promise the possibility of fulfilment and happiness.

Alongside these changes we need a new system of money creation; one that ensures stability in the money supply and that sufficient credit is available to fund every viable new business start up, or sustainable plan for expansion. Money should no longer be created as debt, as this places an unnecessary and counterproductive burden on both business and the economy as a whole.

Economic Renaissance for the Majority

These measures would curtail the minority enjoyment of unearned wealth and bring the benefits of a dynamic, opportunity-rich economy within reach of many more people. It’s perhaps not easy to imagine such a future economy, and it’s probably impossible to model the precise impact of these changes in terms that conventional economics demands, but such modelling is not necessary. These reforms would have to be implemented gradually so they can be fine-tuned as their impact becomes evident. And a great deal more research is required, especially into the impact that changes in each of these spheres will have on the other two: the mechanisms of the tax, financial and monetary systems are complex and interdependent.

If such changes are to be successfully implemented, they will have to be coordinated internationally. This may seem an impossible goal, but it’s not so very different in scale or complexity to the changes unleashed by the process of economic globalisation over the last thirty or so years; it’s just better motivated.

Over to You…

But none of this can happen without the commitment of a critical mass of people. Where that tipping point lies is impossible to know but it is out there. What we need now is the most successful marketing campaign in history. Central to that campaign should be the message that transformative change to economic structures and institutions is possible, and if such change were achieved, the life experience of the vast majority of human beings would be dramatically improved.

Next week, in the final article in this series, I shall look at the prospects for this campaign, and at the importance of established democratic structures in the process of revolutionary economic change"

"Nothing in the world... not all the armies... is as powerful as an idea whose time has come." Victor Hugo 

... This is a great article. IMHO the current form of 'economics' is a mixture of Poweromics (the 'economics' of exploitation, self interest and greed) and little will change until Ignoromics reduces (as suggested in the last paragraph ... 'over to you').

For instance over the last few days the banks have made a conserted and co-ordinated effort (with the CBI - the "Voice of Banks" - not the "Voice of Business" - as they are most bankrolled by the Banks) to strike fear in the public and threaten the Government not to split retail banking away from investment banking (nb which is being brought in to stop taxpayers having to bailout reckless bankers again). Creating fear is a common tactic used by those in Power (remember the Iraq war and those 'weapons of mass destruction'?) ... and the banks are using the 'destruction of the economy' as their 'weapon of choice' (even though it is they that destroyed the economy in the first place)! 

The Liberal Democrats say the want to press ahead with reform, but David Cameron and George Osborne are taking the opportunity (i.e. comments about the threats to the economy) to say they would like to 'park the reforms in the long grass' until the economy is stronger (anything to do with the 'backhanders', lobbying and their ultra-rich friends perhaps?) Just have a guess where these guys are likely to go after they leave Politics ... and I am sure it will be, just like Tony Blair before them, to lucrative jobs in the City!

The problem with the current economics is that it is not just the financial system that is corrupt, but it is all the other essential pillars of society too ... such as Government, the Media (remember Murdoch and the News of the World) and the Judiciary.

The move away from taxing jobs/profit to taxing unearned income/wealth (e.g. land values, gambling, financial transactions etc) is IMHO a 'no brainer' ... as is taxing the extraction of limited natural resources ... and making illegal the electronic counterfeiting of money (which the legal system allows the banks to do every day - i.e. creating money out of thin air, loaning it out and charging interest on it!) as well as the reckless and deliberate destabilising activities of banks (e.g. shorting, and the creation of 'toxic products' such as credit default swaps).

Current economics is unfortunately proving itself to be more about the movement of money/resources to wherever Governments allow them to exploit/profit from people the most ... a form of 'economics' contrary to 'growth' and 'well-being' ... and more about the "Economics of Exploitation".