financial system takes it in the arse

Sometimes it’s great being poor.  I’ve been watching the latest round of the gradual disintegration of the financial system with some glee.

Wall Street takes it up the arse

AIG, the grandly named American International Group, is the latest Wall Street financial giant to be taken into public ownership.  In return for an $85bn loan, the Federal government has taken a 79.9% share in the insurer.  How deliciously ironic: the US government taking companies into public ownership.  An admission of defeat?  Of course, there has always been a much stronger element of planning to the American economy than its leaders like to admit.

It’s funny, in my limited research -  I remembered that I had a subscription to the Financial Times website – I haven’t come across any commentator who even mentions this little irony.  I first picked up on it in a book called Supercapitalism, which talks about the role the US government played in regulating major industries during the Cold War.

Of course, this isn’t the first time in the past couple of weeks that the US government has taken a giant financial institution public.  The two federal backed mortgage providers, Fanny Mae and Freddy Mac, were taken into public ownership last week. That was kind of different, I thought, because they were started as Federal Government schemes and were highly regulated – although they did have public shareholders.  In any case I was too busy to care last week.

As befits the arcane workings of the financial system, AIG is a supremely complex institution (check out this .pdf).  It has some four divisions offering various types of insurance and financial services, all of which are reporting an operation loss.  So they’re perfectly positioned to feel the effects of both global warming and credit crunch.  But the US government has decided that AIG is to important to go down.  It’s tendrils snake their way in to pretty much every aspect of financial life in the US, it’s collapse could lead to an almighty systemic shock.  But are they just postponing the inevitable?

Taking companies into public ownership gives no guarantee that they won’t fail.  And lots of financial institutions are failing – just look at the fiasco at Bear Stearns or Lehman Bros.  With the world’s biggest mortgage book on their hands already looking like a risky investment, can the US government bear the brunt of the cost of climate change through the world’s biggest insurance book?  Remember Lloyds?  (Actually I don’t, I was too young.  But people have told me about it).

The other Lloyds, Lloyds TSB, today announces that it is in final stage of merger talks with HBOS.  In fact, actually Lloyds TSB is buying HBOS.  HBOS of course lost a spectacular 77% of its share price over the last.  I’ve been too broke to buy newspapers, so I haven’t brushed up on the facts; but I must admit that I was secretly quite pleased because my overdraft with them is maxed out.  It made me think of a Fight Club-esque scenario where we were taken back to economic year zero, but without the conflicted machismo.

not sure what's going on here, this is the geezer from the halifax ad

HBOS has the UK’s biggest mortgage book, by far.  It’s collapse would be like Northern Rock times a million.  But just like Northern Rock, HBOS relied on wholesale money markets for much of its funding. Their mortgage book doesn’t look to be in particularly good shape either: about a third of their mortgage customers own less than 20% of the equity in their homes – leaving them in all kinds of shit if house prices tumble (as seems inevitable).  The numbers are vast, and rather difficult to understand.  Read for yourself.

Apparently, because they’ve been comparatively sensible and didn’t join in the with the credit gold rush, Lloyds TSB would be able to absord HBOS’s vast liabilities.  But their merger would create such a massive financial institution that it would constitute a threat to efficient markets – one BBC reporter terms it a ‘Banking Collossus’.  The government has said it will legislate to make sure the deal avoids the attention of the Competition Commission, but what about the EU?

And is it really a good idea to make institutions larger?  Whatever about efficient markets, a combined HBOS and Lloyds TSB would have a massive structural role in British financial life.  Is it wise to have profit motivated organisations playing such a major role in society?  Perhaps they are trying to maneuver themselves in to a position that they are too big to fail.  But the larger they come, the harder they fall – see above.

Oooh.  The boards of the banks are apparently meeting now…  Watch this space

Filed under: finance , banks, finance, money, politics

Fuck Obama – Immortal Technique for President

In case journalism doesn’t work out, I’ve decided to add a second string to my bow by becoming a rapper. I thought it would be a good opportunity to tie together my intimate knowledge of life in the ghetto with my burning passion to string words together in a vaguely entertaining way. What’s brought on this sudden ambition? Well, a few months ago my (now sadly ex-)girlfriend took me to see rapper Immortal Technique. I’ve spent the whole time since absorbing the lyrics of his various songs and thinking ‘I wanna do that’…

Immortal Technique is a Peruvian-American rapper born in Latin America but raised in New York. I’ve no idea how long he’s been around for, but his take on hip hop music is so individual, so novel and so exciting that I’ve pretty much eschewed all my other favourite artists and now listen to his shit pretty much exclusively. Now this is completely different from all the chart hip hop that we’ve got used to hearing in the charts in the past decade. There’s none of that boasting about how many gold chains or diamonds the singer and his crew are brandishing, nor about how expensive a bottle of brandy they can afford (much of which is product placement anyway – see here). Immortal Technique’s flows are revolutionary in every sense of the word. It’s difficult to explain – you’ve just go to listen.

Here’s a good place to start, it’s the number one Immortal Technique video on youtube – today’s date makes this one particularly poignant:

Now check this one out:

AAAAAGH! Fuck Fiddy man! This is the real shit!

The best thing was standing in the Coronet Theatre, South London, surrounded by the kind of kids that radical political heads are always bemoaning being unable to reach, watching everyone chanting for revolution – not Obama style ‘change’, but real, fuck-the-rich, let’s-take-charge-of-our-own-shit revolution.

Keep searching youtube and you’ll find that Immortal Technique not only does conventional rap tunes, but he also records politically fired up spoken word stuff over the beat and does a good line in public speaking too. The guy is a bona-fide legend in his own lifetime.

In the meantime, I’m gonna keep writing my rhymes; but with role-models like this i’ve set myself a tough standard to reach.

Filed under: media , music, politics

greedy fuckers

The government are taking more out of our hard earned and already pitiful wages than at any time since the height of Tory belligerence in 1991, says a story in the Sunday Telegraph.

The proportion of household income taken in tax rose from 34pc to 34.6pc in the first quarter of this year – the highest level since Spring 1991.

Calculations by Capital Economics, based on figures from the Office of National Statistics, show that if you earn about £23,800 the taxman now takes £8,222 a year direct taxes.

And what are they doing with our money?

We have two stupid, profligate overseas adventures in the Arab world that are costing us dear in people, money and international goodwill.

The technology and infrastructure of surveillance has been extended nationally to an unprecendented and truly Orwellian degree.

Politicians themselves squirm in sleaze and corruption scandals while the rest of us struggle to continue our wretched, exploited and numb lives.

No matter what party is in power all this will continue. Elections offer no choice. No wonder no one votes.

Filed under: politics , money, politics, tax

freedom to loaf

This weblog malarkey requires a lot of discipline, and I’m not really the disciplined type. It isn’t easy finding things to write about all the time. Still less easy is actually finding the stubborn will to avoid mates and the pub and actually sit down at a keyboard. Even then there are still the lurid possibilities of internet porn still to explore. I shall struggle on. I must. Literary fame awaits me one day – or maybe I’ll be mayor of London…

A lot has happened since I last graced y’all with my erudite analysis. I now have a job, and so I feel the excrutiating pain of exploitation all the more keenly. Though every cloud has a silver lining: I soon hope to resume my daily newspaper fix, which will hopefully put paid to my writer’s block.

But the work thing is a real fucker. Although towards the end I felt slightly as though I was grinding to a halt, I really did enjoy my three month sabbatical from wage slavery. Thanks to a deal struck with my former employer I was not short of cash, and didn’t even have to claim Job Seeker’s Allowance. I was able to while away my days watching Jeremy Kyle, reading interesting things, and day dreaming ideas for articles, books, businesses and other projects. But money, like all good things, is only finite, and, unless you have enough to make it work for you, it soon comes to an end. When you’re stuck the wrong side of the class divide, the only perpetual certainty is work.

Must it be this way? One good thing I read during my umm, let’s call it ’study leave’, was Alexander Berkman’s ABC of Anarchism. I picked up this slim volume from the 56a Infoshop, an intermittently open anarchist bookshop near my house in South London. It cost just £5, but the pleasure I got from reading it was, as if I paid by Mastercard, priceless.

Berkman was an active anarchist theorist and agitator of the early 20th Century, and involved in Labour disputes across the industrialised world, from Boomtime USA to Weimar Germany. He eschews the staid, scholarly and latinized language of most radical writers to present his ideas in a way that is clear, vivid and engaging. His paragraphs are short and sweet. His language is plain but succinct. Anyone who’s had a chance to read George Orwell’s wicked rant Politics and the English Language will know exactly what I’m on about here.

Although I have long and loudly professed my anarchism, I shamefully hadn’t actually bothered to read any anarchist theory for almost a decade before I read Berkman’s ABC. I think I had probably forgotten what anarchism was, apart from a vague sense that it somehow chimed with my own deeply held feelings about radical freedom.

According to Berkman the basic idea is that we should be able to live our lives free from ‘compulsion of any kind’. Government, Berkman claims, is just organised violence. “The law orders you to do this or not to do that, and if you fail to obey, it will compel you by force.” The authority of the government is based on its monopoly of the legitimate use of force. This threat of violence is the glue that keeps us stuck in place in the social order. It guarantees the vast wealth of the economic elites, even though they have more than they could use in their lifetimes. It ensures that your creditors can hold you to account for whatever you owe, however poor you might be. Given this, the most obvious step in the advance of human society is the abolition of the state.

That’s just a caricature, and Berkman does admirable work in countering many of the frequent objections to anarchism. ‘Doesn’t anarchy just mean chaos?’ No, by advocating a society free from coercion anarchy is really a doctrine of radical pacifism. ‘Don’t anarchists throw bombs?’ Well yes, sometimes, but everybody throws bombs from time to time, even conservatives (think of the Taliban).

‘What about crime?’ Now here’s a knotty problem, and one which I have had difficulty unravelling, at least to the satisfaction of my girlfriend, who always brings it up when I’m trying to tell her about how we need to abolish the state. The solution is complicated. Of course, the abolition of the state – and, by extension, of the state backed legal system – would make a nonsense of the very notion of crime in the sense of ’something illegal’. In a society without property stealing is a non sequitur.

In a society based on pacifism the only deviance is violence, and I guess, even in a society without rules, there must be some kind of way of dealing with violent people. I have spent a lot of time wondering about this but I have not thought of a satisfactory answer. In a society without compulsion now can people be brought to account for their actions?

This makes me think that there is a contradiction at the hear of anarchism. It purports to be an ideology of freedom, a dream of a society with no rules. But actually there are rules, insofar as one person can never use any personal ability to exploit or compel another, which makes me think that to work an anarchist society must have at least one very strictly enforced rule.

Oh what a can of worms! It’s still got to be better than 40 hour a week wage slavery…

Here’s is a lovely anarchist riot porn slide show to watch

Filed under: politics , anarchy, politics, violence, work

reclassification, criminalisation and discrimination

My mum gave me a good laugh yesterday afternoon. She rose from her slumbers just after midday, as is her habit, and was just in time to catch Home Secretary Jacqui Smith in parliament announcing the Gordon Brown’s latest plan to make the country a Better Place: the reclassification of cannabis to class B.

“Fucking fat cow,” she exclaimed. “Fucking fat, fat fucking cow,” she continued. “I’m tired of being ruled by fat people. Look at them, all fat and comfortable. What’s their problem? Fucking fat cow.”

This kind of language is unusual for my mother, who is usually among the best and most properly spoken people I know. On this occasion however, notwithstanding her morning grumpiness, her violent hyperbole seemed entirely justified.

Not only are the government clearly over-nourished, but by their reclassification of cannabis they have clearly signalled that they intend to use the full discretionary powers of parliamentary mandate to make sure that no one in the country has any fun whatsoever. No wonder they are polling the worst electoral results in 50 odd years.

This is just the latest move in a trend which I indentified in an earlier blog post: the move towards puritan politics. First they banned smoking indoors, next they blocked supercasinos, now they are increasing penalties for weed smokers. What next? A ban on kissing on the grounds that it leads to unnecesary and risky exchange of saliva?

What’s worse is that the government ignored their own advisors on this move, for the first time in parliamentary history. Even the Home Office’s Advisory Council on the Misuse of Drugs recommended that reclassification would make no difference to the level of cannabis use in the UK, and that there is no scientific evidence to support a tightening of legislation. Indeed, the advisory council’s top scientist, Prof David Nutt, dismissed the move as “naive”. In the end they voted twenty to three against reclassification, which seems pretty definitive

This recommendation came in the face of recent media hysteria over links between cannabis, especially the supposedly super-strong ’skunk’ variety, and psychosis in young people. The right wing press, for reasons best known to themselves, have championed this campaign, with lurid tales of teenagers brutally murdering their own families while under the influence of the ‘evil weed’. Commentators have sought to imply links between the emergence of stronger varieties of dope with the spate of teenage violence affecting our urban communities. Overall, they have used the kind of hyperbole more appropriate for crack cocaine to vilify cannabis and cannabis users.

In fact, as most news reports have been eager to point out, cannabis use among young people has actually decreased since it was made a class C drug. And the evidence for a link to psychosis is, as the ACMD’s decision shows, sparse. Which makes one wonder what the government’s real reason is for reclassification. My mum reckons it’s because they actually want more people smoking weed, ostensibly to stop them rising up in some kind of spontaneous revolutionary movement. Perhaps, she argued, increasing the legal penalties will make it seem more illegal, and so more appealing to rebellious young people. I have a different theory.

There is a very convincing school of thought that argues that the original reason for drugs prohibition in the USA was more to do with the control of certain groups of people, rather than public health. At the beginning of the 20th century the USA was experiencing a massive wave of immigration. Economic migrants from all over the world began pouring in to the sea ports of the US looking for the American Dream. This made the White Anglo Saxon Protestant (WASP) majority nervous: they envisaged their country being stolen away from them, as they had in turn stolen it from the native american peoples. In response they passed laws which allowed them to use the legal and penal machinery of the state to target these new immigrant groups. Opium was made illegal to criminalise Chinese immigrants who came to build the railroads. Alcohol was prohibited to criminalise Catholic Italians and Irish immigrants. Cannabis was made illegal to target Mexican farm labourers.

So who are the goverment trying to criminalise this time? Well, the foremost answer is young people. This government is afraid of youth, they don’t understand it, they didn’t inhale and if they did they probably got scared and didn’t like it. But more than that, they are also criminalising whole sections of the Afro-Caribbean community who have strong cultural connections to cannabis use – sections of the community whose culture incidentally lends rather a lot to English popular youth culture.

A recent announcement by the Police backs up this theory. As reported in the Guardian recently, police chiefs claim that, even with the reclassification of cannabis, they do not intend to depart from their current strategy of confiscation and warnings for possession of small quantities, except where they see fit to impose harsher penalties. This hands the power to criminalise over to the police. Always a bad idea.

Filed under: drugs, politics , discrimination, dope, jacqui smith, police, politics, weed