Bryan Gould : Spot On.....

Bryan Gould, the ex-Labour politician who once ran for the leadership of the Labour party (in 1992) but has since given up politics and retired to his native New Zealand has just posted a piece in the Guardian called "Osborne is committed to austerity... but is even he still a real believer?"

In it, he asks a series of questions that demonstrate that he has understood where the real problems are. Just take a look at them.

"Take the propositions that the market (and especially financial markets) can be accurately predicted on the basis of mathematical models, that they are self-correcting and do not therefore need regulation, and that any intervention in unregulated markets will automatically produce results that will be worse than if they had been left alone. As Keynes warned, and experience in the form of the global financial crisis has confirmed, markets – and financial markets in particular – are all too likely, if unregulated, to lead to excess and collapse.

Or, what about the belief – maintained for more than three decades – that macroeconomic policy is not a matter for government but is a simple matter of restraining inflation – an essentially technical task through setting interest rates that can safely be entrusted to unaccountable bankers? Do we still believe that monetary policy is all that is needed for a healthy economy? Or that it is any more effective than pushing on a piece of string as a means of escaping from recession? Or – when we look to more successful economies overseas – that there is no role for government?

And what about the related confidence displayed in the expertise and objectivity of bankers in running our economy? Do we still believe that bankers have the common interest at heart and do not make decisions to suit themselves? Are we happy that they continue to enjoy the astonishing privilege, as private monopolies, of creating money out of nothing, thereby exercising hugely more power over our fortunes than do elected governments?

What do we think of the faith placed by successive governments, not least by New Labour, in the financial services industry as the means of paying our way in the world? Do we still accept that the huge fortunes made by a few in a largely unregulated City represented real and sustainable wealth-creation in which the rest of us would share?

Even more importantly, what do we think of the careless assumption that focusing on financial services made it unnecessary to concern ourselves with our manufacturing base? Do we now understand that the loss of manufacturing means – now that the chips are down – that we are denied the most reliable way of maintaining our standard of living, the most important source of innovation, the most substantial creator of new jobs, the most effective stimulus to improved productivity and the provider of the quickest return on investment?

Do we understand that globalisation has meant, with the removal of exchange controls, that major global investors can now move huge volumes of money – totalling as much in a single day as the total annual production of most economies – from one country to another, and have thereby disabled democratic governments from doing anything to protect us?

And do we understand that the combined effect of all these policies has been to create a huge mechanism for shifting wealth and resource from the poor to the rich, and that it is that which is responsible, rather than any great ability or virtue on the part of the rich, for the widening inequality that weakens and disfigures our society?"

As I noted in the comments section,  I think this guy deserves a medal.

"Spot on!!

Thank you Bryan Gould for asking some absolutely vital questions that amazingly never get asked by journalists - even in the Guardian.

For example:
" Do we still believe that bankers have the common interest at heart and do not make decisions to suit themselves? Are we happy that they continue to enjoy the astonishing privilege, as private monopolies, of creating money out of nothing, thereby exercising hugely more power over our fortunes than do elected governments?"

Exactly! Commercial Banks have been handed the liberty to create money out of thin air by creating loans and then charging us interest. Since 1983, they have increased the money supply by an average of 10% a year using fictitious money. They do it by lending "money" to individuals, businesses and even governments. And the interest charges on those loans has cost people in the UK £2.4 trillion since 1987.

"Do we understand that globalisation has meant, with the removal of exchange controls, that major global investors can now move huge volumes of money – totalling as much in a single day as the total annual production of most economies – from one country to another, and have thereby disabled democratic governments from doing anything to protect us?"

Spot on again! Financial transactions in the UK were something like £1.76 quadrillion in 2011. In the US, the figure was $5.5 quadrillion. It is no wonder that governments cannot protect their citizens when the financial industry can move such colossal sums around at no cost. And when anyone tries to put a 0.1% tax on such transactions we are told that it will destroy peoples pensions. Rubbish. It will maybe destroy the ability of the financial markets to blackmail elected governments.

Bryan - any chance that you could be persuaded to come back to Europe? We desperately need politicians like you. Maybe you have been talking to the people at Positive Money New Zealand? In any case, you are talking complete sense."