How mistaken ideas helped to bring the economy down
Martin Wolf, The Financial TimesHow did the world economy fall into such a deep hole? It is recovering, but painfully, and after a deep recession,
despite unprecedented monetary and fiscal easing. Moreover, how likely
is it that a balanced world economy will emerge from this
force-feeding? The very fact that such drastic action has been
necessary is terrifying. The fact that there is little room for a
policy encore is yet more terrifying. Most terrifying of all is that
this is not the first time in recent decades the world economy has had
to be guided through a post-bubble collapse.
Read more ...
Whose Money? says:
For a start, we doubt whether the economy is actually recovering, at any rate as far as its long-term health is concerned.
Secondly, we'd say that an economy which was healthy in the first place would never have reached the point where it needed forced feeding.
An economy hooked on the credit drug to the point where it no longer displays much interest in either normal activity or ordinary means of nourishment is a different case.
It amazes us that so many articles are written by so many expert commentators without the least attention being paid to the root cause of these recurrent attacks of economic breakdown. This, of course, is the fact that credit is issued according to the priorities of profit-making private businesses, and that those priorities are just as likely - in fact, as we are now seeing yet again, even more likely - to favour debilitating speculative enterprises as those which contribute to the well-being and sustenance of the nation.
Rather than asking government agencies to nip asset-price inflation in the bud, would it not be more sensible to switch from private to public credit: real credit, nourishing productive enterprise, as opposed to what we currently call credit - a term which at present disguises our crippling dependency upon debt?
Get the patient off the drug. Then there will be no need for forced feeding.Jesmond Picture House is finally
demolished
Sam Wood, The Newcastle Journal
ONE OF the region's best loved old cinemas is finally being reduced
to rubble, as it makes way for a new office and retail complex.
Demolition work on the facade of the historic Jesmond Picture House, in Newcastle, began yesterday.
For more than 70 years the cinema showed some of the hottest movies from Hollywood to packed audiences.
But as the popularity of the cinema declined so did attendances, and the reels stopped rolling in 1993.
Read more ...
Whose Money? says:
We are sad to see the old building come down. In the photos we link to above the state of its deterioration over the past 15 years is plainly seen - and we wonder if this deterioration was not deliberately permitted in order to make demolition inevitable.
Under a sane financial system, there is no reason why the cinema could not have been restored and developed as a valuable community resource.
Instead, we are amazed to read that it is to be replaced by "a new office and retail complex".
If there is anything we are not short of at the moment, it is empty office and retail space. All this new development can hope to do, as more shops in places like Whitley Bay disappear each month and even Newcastle sees closures, is take business away from those who are already struggling to survive.
It is insane to place hopes of a revived economy in retail and rising house prices, when the borrowing which recently funded the "boom" in those areas can no longer be sustained.
What is needed is a new, more efficient and productive way of supplying money to the economy, not the offer of more and more goods which people can only afford to buy by mortgaging their future.
The way forward is not property speculation and dysfunctional, compulsive consumerism, but a stable, productive economy, with a good standard of living for all made possible by a switch to publicly-created, debt-free money at national, regional and local levels.
Northern Rock will be split, but stay in
North East
William Green, The Newcastle JournalTHE sale of Northern Rock will be kick-started today with Brussels approving its split into a "good" and "bad" bank.
Business
and political chiefs gave a cautious welcome to news the European
Commission is today set to approve the split – which is likely to take
place in the New Year and could see the “good” part of the bank sold
within months.
But they stressed keeping the Rock in the North
East and securing jobs was vital amid signs the “good bank” could go to
a new entrant to the banking sector, such as Tesco or Virgin Money.
Read more ...
Whose Money? says:
This is not the way to go.
Only last week Mervyn King was talking about breaking up the big banks, and here we have Alistair Darling planning for Northern Rock to grow into "something bigger", along the lines of the major lenders we already have.
We'd like to see the consolidation of real deposits (ie, the hard-earned money of millions of small depositors) into stable, nationalised money, with supplementary currencies issued at regional and local level as necessary. Locally-orientated banks and building societies - such as Northern Rock used to be - could then compete to lend out this publicly-created, debt-free money to promote a thriving economy.
As long as we maintain the status of the banks as sole providers of non-cash money to the nation, there will be no solutions.
If we look first to the needs of the productive economy, and channel money into circulation in line with those needs, everything will begin to fall into place.
SECRET PLAN FOR EURO INCOME TAX
Gabriel Milland, The Daily Express
SECRET
plans to seize more than £4billion a year from Britain and make its
citizens pay taxes direct to Europe emerged last night.
The leaked proposals, seen by the Daily
Express, state that Britain should lose the billions of pounds in
rebate that was agreed by Margaret Thatcher 25 years ago.
The
plans – with a foreword by European Union Commissioner Jose Manuel
Barroso – would cost every British family at least £155 a year.
They would also mean Brussels being given the power to dip straight into taxpayers’ pockets.
Read more ...
Whose Money? says:
Whether these plans are resisted or not by the present government, they are the logical end-point of the course the EU has been taking ever since its genesis as the European Coal and Steel Community.
With the pound soon likely to be virtually interchangeable with the euro, as their exchange rates converge, and with around 85% of our laws now originating in proposals of the EU Commission, it is natural that the money will follow the power.
This is diametrically opposed to the requirements of freedom and self-government.
It is our opinion that the centralisation of financial (and therefore political) decision-making power within the nation state has already led to unacceptable levels of waste and the flagrant misdirection of public spending on, eg, quangos, bureaucracy and aggressive warfare.
It has become routine for Westminster governments to disregard the priorities of taxpayers, who are compelled by law to furnish them with the wherewithal to exceed their mandate; and this impotence of the electorate has now been vastly extended, reducing local governments to beggary as they find themselves forced to appease not only London but Brussels.
Indeed, it has now reached the point where we can only hope to have a few financial crumbs thrown in our direction if we consent to come into line with the centrally-planned policies of people who have lost any sense of identity with those they "represent".
With our national government already unresponsive to local needs, the suggestion that our taxes must increasingly come under the control of a body beyond all democratic control threatens yet more alienation.
Our vision of life after money reform is quite the opposite. This would give us an opportunity to reverse the present trend, legislating for all taxes to be collected locally and to remain firmly under the control of local electorates, nothing being passed on to a more remote level of government without their express consent.
This is the way to return power, both financial and political, to the grass roots, where it properly belongs.