Global Capitalism vs Christianity - has a 'battle' begun?

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 Existing financial situations such as the World Bank and International Monetary Fund were outdated and no longer able to deal with the scale of the global financial crisis, which had exposed "selfishness, greed and the hoarding of goods on a grand scale".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.

Double dip ... here we come!

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.

Proof we are definitely not 'all in this together' - Directors pay jumps 49% in one year!

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!

GP's 'rationing' healthcare already ... and they're not even being 'bonused' on it yet!

The number of patients being referred by their GP to see a hospital specialist has dropped by almost 5% over the past year, prompting fresh concern that access to care is being rationed as a direct result of the pressure on NHS finances.

GPs in England referred about 3.6 million patients for a first hospital consultation between April and July, according to data from the Department of Health (DoH). That was 4.7% fewer than the same period in 2010 – 3.8 million referrals.

The number of patients being seen by consultants after a GP's referral also fell during the same period, from 3.1 million last year to 2.9 million – a drop of 5.2%. The two sets of figures do not match because many patients remain on waiting lists.

The British Medical Association (BMA), the doctors' trade association, said that reductions in patients' access to healthcare were happening more often.

"The NHS is under a lot of pressure to do less, for example through referral management initiatives, which seem to be on the increase. These may save money but for every lost referral there is a patient who is not getting diagnosed or treated, and a hospital that is more likely to encounter financial problems," said a BMA spokesman.

John Healey, the shadow health secretary, also warned that some patients may be missing out on drugs, surgery or other treatment because of the falling number of referrals.

"While it is important to reduce demand for hospital care, patients will want reassuring that they are not being denied necessary treatment," he said. "These figures show the huge pressure on hospital finances at a time when David Cameron is wasting millions of pounds reorganising the NHS bureaucracy."

The NHS in England is struggling as its budget increase this year is just 0.1% – after a decade of big annual rises – while it seeks to save £20bn by 2015. The efficiency drive was ordered by the NHS's chief executive, Sir David Nicholson, in 2009, intending to free resources for the growing number of patients, especially elderly people, with long-term conditions such as cancer, diabetes and obesity. Nicholson has told the NHS several times not to limit services in order to meet the target.

GP's are not being 'bonused' to 'ration' healthcare yet but make no mistake ... plans for GP commissioning has this at its heart ... e.g. the less spent on patient care the more their consortium will profit ... and the more the consortium profits the more the GP's will receive in dividends (i.e. cash straight into their bank accounts) ... to compliment the multimillion pound windfall they'll also receive when they decide to sell off their 'stake' in their consortium. 

Conflict of interest? You bet! Government prepared to fix this fundamental flaw in the reforms plans? Absolutely not! The real reason for these reforms is cut the healthcare budget ... and 'rationing at source' (i.e. at the point where people might be diagnosed and/or referred) is the simplest and most effective way the Government see to do this ... but they know they'll have to 'bribe' the GP's to get them to do this!

Some GP's are clearly already 'signalling' their 'enthusiasm' and 'ability' to do this ... whilst others steadfastly refuse out of principle. What people fail to realise is that not only will they be rationing healthcare, these soon to be multi-millionaires will also be looting the NHS of the finance is desperately needs to spend on healthcare!

Hippocratic oath - or Hypocrasy ...?

When diagnosing patients in the future ... will patients believe and have trust in what their doctor says and recommends? ... or will that vital trust be broken ... with patients trusting them little more than politicians? **

Unsure ... well if you need more information in order to decide ... why don't you listen to what trustworthy and honorable GP's say ... and/or the latest news on GP's being caught charging the NHS for treating patients that don't exist ... or who died years ago!

** Age old saying: 

Question: "When do you know a politician is lying?"

Answer:   "When their lips are moving!"

"Weapons of mass destruction", "I pledge not to raise tuition fees", "I'll cut the deficit, not the NHS" ...

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".