A survey conducted by major retail bank Halifax – owned by the British taxpayer, as it happens – has indicated that half of Britons become strapped for cash every month, and are concerned about their ability to meet basic living costs. In a shocking admission of just how bad the nation’s personal finances have become, twenty per-cent of the public conceded to being stretched within two weeks of receiving their monthly salary, and one-in-ten within a mere seven days.
The survey coincided with a release of a report from PriceWaterhouseCoopers (PWC) that suggested that so-called ‘payday loans’ could could “overtake credit cards and become a mainstream method of borrowing”. Simon Westcott, director of PWC could seemingly hardly contain his glee, when stating that “mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship, as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers”. Whether ‘products’ that charge an infamously extortionate rate of interest could be reasonably be described as “innovative” is highly debatable! To give one example, in 2007, one payday loans company was criticised for offering a loan to a woman in York with an annual interest rate of 2,639,385%. That isn’t a misprint.
For PWC to be releasing a report legitimising these companies would be fairly low, but to cheerfully announce that “consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers” is pretty despicable. Only two months ago, The Guardian published an article entitled “Payday loans: the APR is sky-high, the pain is higher still”, which quoted Labour MP for Walthamstow, Stella Creasy, quite justifiably describing the companies that offer payday loans as a “legal loan shark industry”. The only reason that people go to these companies is simply as a last resort. To suggest that they should somehow become part of everyday life and be seen as, more than just lawful and legitimate, but actually a desirable part of Britain’s financial make-up displays all too transparently how divorced from any sense of reality the corporate sector is, and how the financial state of the nation is dismal bordering on desperate.
In such a climate, it was an interesting time for Chancellor of the Exchequer, George Osborne, to be stating that an “anti-business culture” exists. In a speech on 7th February, Osborne stated: “Of course rewards for failure are unacceptable – and those who believe in the free market are the first to say so. But a strong, free market economy must be built on rewards for success. There are those who are trying to create an anti–business culture in Britain – and we have to stop them. At stake are not pay packages for a few but jobs and prosperity for the many”.
It is difficult to fully do that utterly disingenuous statement justice, as it would pose no problem at all to write an article merely dissecting its rank hypocrisy. However, it is necessary to address two of its statements briefly. Firstly, Osborne suggests that an “anti-business culture” exists. This is coming from the Chancellor that is slashing the rate of Corporation Tax to 24%, and at the same time, as a result of lowering the higher income rate tax bracket to £35,000, is ensuring that 750,000 more Britons become higher rate taxpayers, according to the Institute for Fiscal Studies.
Secondly, Osborne states that “of course rewards for failure are unacceptable”. He seems to have something of a short memory. It was only in November of last year, that Prime Minister David Cameron caused acrimony amongst the MPs of his own party, by indicating his willingness to bail out countries entwined with the European single currency. Presumably this type of failure is acceptable. Cameron’s attitude to the European Union has been particularly duplicitous because when in Opposition he frequently chided the then government over the European Union, implying that he was some sort of ‘Eurosceptic’ who would do everything possible to maintain Britain’s sovereignty, or at the very least would offer the British people a referendum on the European constitution. For example, in April, 2009, Cameron made the following statements:
“[The Lisbon Treaty] is, by all accounts, a constitution. That is why we are making this such an important issue at these European elections. While [Mr Brown] has chopped and changed, our position has remained exactly the same. We are the only major party to have consistently said it is up to the British people to decide on our future in Europe. That’s why we have pledged that if the constitution is not in force in the event of the election of a Conservative government this year or next, we will hold a referendum on it, urge a No vote, and – if successful – reverse Britain’s ratification. Tell Labour you want the referendum they promised. Vote Conservative on the 4th June”.
Funnily enough, just four months ago, when MPs voted on whether to allow the public a referendum on Britain’s membership of the European Union, Tory MPs were instructed to vote against this horribly democratic concept. As were members of the other two main political parties. In fact, under the supposedly ‘Eurosceptic’ Conservative party, Britain has surrendered the rebate it used to receive on payments that it makes to Brussels for the privilege of being part of the European Economic Community. Thus, the UK makes payments of over £15 billion per year towards a budget that The Institute for the Study of Civil Society states “allows the EU to pursue its own policy agenda without pressure from individual member states”. How’s that for a good deal?
Such a policy would be two-faced and indulgent enough were it not for the fact that the single currency, and economies all over Europe attached to it, are, to put it mildly, performing miserably. This is why Mr. Osborne’s notion that “rewards for failure are unacceptable” should perhaps stick in our palate somewhat. Just in case you’ve been living under a rock for the past three years, Iceland, Ireland, Greece, Spain, Portugal and Hungary have all experienced major financial difficulties. Italy has also been struggling, and France and Germany have recently been discussing “greater integration” of EU budgets as a solution to their difficulties, and those of the Eurozone as a whole.
While there has been much idle rhetoric regarding this issue, the stark reality of the causes of the Eurozone financial crisis will probably come as little surprise to anyone with an ounce of intuition. Jim Hightower’s article for Alternet in 2010, “How the Monsters at Goldman Sachs Caused a Greek Tragedy” details how the notorious investment bank, with well documented ties to the Obama administration, caused the financial problems that continue to be rife in the nation:
“In 2001, Goldman’s financial alchemists formulated a scheme to allow the Greek government to hide the extent of its rising debt from the public and the European Community’s budget overseers. Under this diabolical deal, Goldman funneled new capital from super-wealthy investors into the government’s coffers.
Fine. Not so fine, though, is that, in exchange, Greek officials secretly agreed that the investors would get 20 years’ worth of the annual revenue generated by such public assets as Greece’s airports. For its part, Goldman pocketed $300 million in fees paid by the country’s unwitting taxpayers.
The financial giant dubbed its airport scheme “Aeolus”, after the ancient Greek god of the wind – and, sure enough, any long-term financial benefit for Greece was soon gone with the wind. By hiding the fact that the government’s future revenues had been consigned to secret investors, Goldman bankers made the country’s balance sheet look much rosier than it was, allowing Greek officials to keep spending like there was no tomorrow.
Last month, however, tomorrow arrived. Greece’s crushing debt has exploded into a full-blown crisis, with its leaders disgraced and the country on the precipice of the unthinkable: the default of a sovereign nation”.
Just days ago Reuters reported that “Economic sentiment in Greece remained gloomy in January, with the economic climate index registering a small downtick, a survey showed on Monday as Athens negotiates a key new bailout with its international creditors to avoid default”. Unemployment has been running at over 18% in Greece, although this is becoming something far from unusual, with Spanish unemployment now over five-million, at nearly 23%. While the Eurozone flounders, China is buying up Greek debt, and the world’s biggest corporation, mega-investment bank J.P. Morgan Chase, has increased its lending to the Eurozone. Despite the fact that it’s leveraged up to the eyeballs with derivatives and heavily exposed to silver futures contracts. Never mind, they can always rely on the taxpayer to bail them out.
While the European mainland is being besieged and sold off to the highest bidder, we British people should not delude ourselves that this is a continental disease that will never reach this Sceptred Isle. Britain’s national debt is now over £1 trillion, and this does not include ‘off-the-balance sheet’ liabilities such as those involved in bailing out the banking sector. It is estimated that these would increase the level of unfunded liabilities to close to £5 trillion. And there is no plausible plan to reduce this debt, and Britain still has a huge budget deficit. But can still afford to contribute to the crumbling EU’s budget, and even bailout those nations within the Eurozone that are failing. According to Mr. Cameron.
The situation in the UK is similar to the United States, in which it is estimated that there are over $1 million of unfunded liabilities per taxpayer. Just remember this when it’s being advocated that the Anglo-American power structure needs to lead a NATO ‘peace keeping’ mission in Syria. With Britain sandwiched between its two main allegiances with a warmongering flat broke nation, and a flat broke trading bloc, and being flat broke itself, the eagle-eyed amongst you may spot a theme developing…
Throughout Europe, the solution to the problem has been offered by the good old International Monetary Fund. The IMF has already bailed out Ireland and Portugal. Hungary is apparently seeking a bailout from the IMF as well. The conditions of Greek bailouts are being discussed as this article is being written. And what has occurred in Greece since the wonderful IMF has got involved? “Labour unions in Greece have called for a strike after the Government said it would cut 15,000 public sector jobs by the end of the year. Greece is under pressure from its Eurozone partners to accept another round of strict austerity measures in exchange for the $171 billion bailout loan that was promised in October”.
The likelihood of Italy and Spain going to the IMF was continually mooted towards the end of 2011, although this has yet to occur, and this would now appear to have gone quiet. There is a reason for this, and it was succinctly summed up by economic blogger, Gonzalo Lira, on the most recent episode of the Keiser Report:
“The big countries…the (IMF) are sort of afraid of them. They’re basically afraid of Italy and Spain basically telling the IMF and the EU to stuff it and exiting the Eurozone altogether. And so that’s why they’re treading very carefully now, and now they’re doing this about-face of “oh, austerity’s great for the Latin American countries and the little European countries, but, oh, these big European countries like France, like Italy, like Spain, oh, no, no, no, austerity’s bad for them”.
The concept of giving the IMF the finger is a lesson we should learn, and learn well, from the experience of Argentina. In 2001, amid financial problems in the nation, the IMF ordered the Argentinian banks to freeze the bank accounts of virtually every citizen. As you may imagine, this was not received with universal approval. Months of rioting followed. During the height of the crisis, in a country that was previously used to enjoying a reasonable standard of living, in October 2002, over 57% of the Argentinian population were living below the government-defined poverty line. In 2004, the then president of Argentina, Néstor Kirchner, blamed the IMF for impoverishing 15 million people. A Guardian obituary of Kirchner was subtitled by stating that “his bold defiance of the IMF paved the way for South America’s progress”. The Guardian article also acknowledges in September of 2003, Kirchner refused to go along with the IMF’s conditions, and defaulted on Argentina’s commitments to them. The IMF backed down and rolled over the loans. As soon as the carnivorous offshore organisation the IMF was no longer involved:
“Argentina went on to grow at an average of more than 8% annually through 2008, pulling more than 11 million people, in a country of 40 million, out of poverty. The policies of the Kirchner government, including the central bank targeting of a stable and competitive real exchange rate, and taking a hard line against the defaulted creditors – were not popular in Washington or among the business press. But they worked.
Kirchner’s successful face-off with the IMF came at a time when the fund was rapidly losing influence in the world, after its failures in the Asian economic crisis that preceded Argentina’s collapse. It showed the world that a country could defy the IMF and live to tell about it, and contributed to the ensuing loss of IMF influence in Latin America and middle-income countries generally”.
The decaying financial conditions indicated by the Halifax survey are merely symptomatic of a much greater malaise, a systemic virus that has spread throughout the Western world, and is thoroughly entrenched within Britain as well. It is namely a small elite of greedy, super-wealthy banking cabalists taking over the economy, and ultimately, society and culture, and making slaves of the rest of us. When significant numbers of people cannot meet basic living costs one week after receiving their salary, there can be no doubt that the financial situation of the nation has been systematically ground down into a very parlous state indeed.
Unfortunately, it is definitely going to get worse. When it does, we should beware the solutions to the inevitable problems that are offered by the bankster class, particularly when they involve the International Monetary Fund. The banksters that have held Europe to ransom, and continue to do so, will continue to push the idea that more integration, more centralisation, more interdependency is a good thing. It’s a good thing for them, yes! But it is precisely this interdependency, watering down of sovereignty and centralisation of decision making that has led to the existing situation, in which virtually every single Western nation that you care to name is on the verge of bankruptcy. This is not an accident; it’s not some unfortunate crisis that can be solved by slightly re-ordering the way we do business. It’s been caused and created by a cancer within, it’s fundamentally systemic, and to allow the very institutions that have been at the heart of it to offer the solution, particularly when we know that in the past they have veritably driven other countries into the dust, makes about as much sense as a turkey voting for Christmas.
Britain should tell the IMF to stick any assistance offered where the sun don’t shine, and default on a debt that can never be repaid. This will be painful in the short-term, but may lead to salvation. We should not allow apocalyptic predictions regarding the collapse of the Eurozone to scare us; in fact, they should be considered a blessed relief. What we should be focussed on is what happens when the Eurozone does inevitably collapse. Taking the IMF medicine is not the way forward. Just ask Argentina.