Raphie de Santos used to be head of Equity Derivatives and Strategy at Goldman Sachs and is now a member of the Scottish Socialist Party. He is speaking at a meeting organised by Birmingham Socialist Resistance on Tuesday 16th December at 7.30pm Bennetts Bar, Bennetts Hill, Birmingham City Centre. Below is the text of the flyer advertising the event.
Fifteen months after the credit crunch first broke, governments and stock markets around the world are finally facing up to what is likely to be the most serious economic recession since the 1930s depression.
The period of neo-liberal capitalism is over for the foreseeable future. A range of economic and social policies that were put in place by the Thatcher and Reagan governments of the early eighties, and later developed by and extended by Brown, Blair, Clinton and Bush, have come to the end of their shelf life. They have come round to bite the very capitalist beast that launched them. These policies sought to overcome capitalism’s structural impasse of declining profits, over production of goods and an over accumulation of profits, seeking new avenues of investment. The privatisation of housing, the easy availability of credit and the deregulation of the financial markets and its institutions, together with an easy monetary policy followed by the US central reserve and the Bank of England monetary committee, created a huge bubble in the housing market and the development of an unregulated derivatives market.
When the central banks burst the bubble they had created by raising interest rates in 2006 and 2007, it caused waves through an inter connected financial system . The barriers between banking operations had come down and this allowed the banks to take massive gambles on the poorest peoples’ debt, and bet against a recession by selling insurance on bankruptcy – credit default swaps (CDS) and also be exposed to all sorts of loans to speculators and corporations which hinged on never ending economic expansion.
A crisis that started amongst poor people in the United States quickly spread to the global financial system, bringing down the value of all sorts of products linked to it. This froze credit or lending between banks and to individuals, small businesses, corporations, local states and countries. This then caused a collapse in house prices with the biggest effects being in the UK, USA and Spain. The credit freeze or crunch has now fed into the economy
with a huge fall in consumer spending, leading to a recession that even the most optimistic economists think will last the whole of 2009. Only China, of the world’s major economies, will escape a recession, but it will suffer a huge slow down in growth, leading to factory closures, unemployment and extreme hardship to the massive Chinese working class.
The banking system is basically exposed to a recession and already over a trillion dollars of its capital – cash in the till – has been wiped out. Many banks have already gone bankrupt
and governments’ latest bailouts are aimed at filling these tills to stop some of the top tier of banks going under. Governments will have to return with more of our money to prop up the system at the start of 2009. This will be required as more year end write-downs hit banks’ capital reserves and they also start to suffer the losses from selling insurance against bankruptcy, as the number of corporations who fail start to increase in number. That is the problem for governments; they do not know how much these banks are exposed to and what is the dynamic of the loans and derivatives the banks have. It is likely that the banks in the major economies will be under full government control by the end of 2009.
Capitalism is on the edge of its second major depression and its greatest financial crisis could push it over the edge. Unlike the 1929 crash, where bankruptcy was limited to US banks, this is a global financial crisis and the banks exposure to risk and recession has been multiplied several times by the use of complex financial instruments called derivatives. Central banks abandoned taking out the toxic assets of the banks and switched their strategy to propping them up. Governments themselves run the risk of becoming bankrupt as they are unable to fund the losses of the banks world wide. Socialists have the opportunity for the first time in decades to put a rational alternative to capitalism, one that is based on meeting peoples’ needs; that is under their control and decision making. Come and hear that alternative and discus how to fight back against the offensive that capitalism will launch against working people and the poor of world as they try and save their system . . . . . . .
Posted by Admin as Birmingham, Economics at 8:21 PM MST
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Socialist Resistance supporters in Birmingham have launched a new website.
Click here to visit it
Their next public meeting is on Tuesday 17th June at 7.30 in Bennett’s Bar at which Alan Thornett will be talking about the need for political trade unionism. Download the flyer from the link below.
Flyer.
Posted by admin as Birmingham, Socialist Resistance News, Upcoming events at 2:28 PM MDT
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In the context of a national swing to the right and in the aftermath of a recent split which has drained time, energy and resources, the Birmingham local election results can be counted as reasonably successful. Respect has survived.
Within that overall positive framework there is cause for celebration and some disappointment. The victory in Sparkbrook saw the share of the vote increase slightly. It gives Respect all three councillors and provides a springboard for future gains in that area. It is the result of hard work by the two incumbent councillors in maintaining a presence throughout the year, delivering improvements for local residents and campaigning for real needs such as more school places. This was allied to the continuing resonance of Respect’s name and Salma Yaqoob’s high profile. In the end it all delivered a thumping 43% of the vote. As has been pointed out elsewhere, this was delivered despite diverting resources out of Sparkbrook to help in other areas, notably Springfield.
Springfield was worked very hard last year, but was a big casualty of the split. Work stopped and the dynamic ceased. To add to the problems, a boundary change brought in more unfavourable areas. This year the gauntlet was picked up by Salma Iqbal, who led a very positive campaign which drew in many new helpers, including from out of Birmingham. In a six week period of intense work, the damage was repaired, so that in the end the vote dropped marginally from 26% to 25%, but was essentially maintained. The leaflets featured local, all-Birmingham and international issues, combining attacks on Britain’s war –mongering abroad with supporting local residents’ opposition to the “red route”. Full support was given to the local Council workers’ dispute over equal pay.
The feedback on the doorstep was positive and encouraging and towards the end, the window posters started going up again. Such was the feeling as we went around; we must be honest and admit some of us thought Salma could win it. In that sense there is of course disappointment. Yet, Salma deserves a big vote of thanks for her tireless efforts. Without the abuse of the postal vote system, by New Labour in particular, she could have come very close.
Mushtaq again, almost single-handedly, led the campaign in Nechells. Yet with scarce resources he came second on 19%, only a slight drop on last year.
Abdul Aziz managed 20% in Aston, a drop from 28% last year. Socialist Resistance supporters who worked for him reported that he suffered from a lack of resources; there was more support out there for Respect than he could physically tap into. More focussed and detailed literature would have helped.
The bigger disappointment was in Kings Heath. This was another casualty of the split. The work in the area collapsed in the previous period, the Muslim vote was not mobilised this time and despite a well organised, well run campaign, where the candidate made an impressive mark at the hustings, for example, the damage had been done. There was also more of a leftist Labour opponent to contend with. On a positive note, new activists in that area have come forwards and there is now the project of building a new branch and starting some serious local work. A vote of 5% is the baseline for future development.
During the campaign there was a very successful rally in the town centre, combining local council workers, teachers and other public sector workers. The several thousand strong rally and demonstration was leafleted by Respect giving its full support to the strikes.
So, Respect’s vital foothold in the city has been maintained. It now has the responsibility and opportunity to move outwards and become more of an all-Birmingham organisation.
The unending attacks on Muslims, Council workers, the unemployed and other oppressed layers will need countering. The big challenge of the next General election also awaits.
On the electoral level there is life outside of Respect in Birmingham, but not a great deal of it. The Greens went up from 14% to 16% in their one targeted ward of Bournville. The Socialist Labour Party went down slightly in Handsworth Wood to 13% from 15% and Raghib Ahsan managed 11% in Lozells and East Handsworth, down from 20% last year.
The Tories gained six more seats and so the ruling Tory - Liberal Democratic coalition will remain in power. The BNP vote either fell slightly or was maintained.
The task of building a political alternative to the neo-liberal mainstream and the far right is as urgent as ever. That is the task of Respect. Socialist Resistance will play its part in helping make it happen.
Posted by admin as Birmingham, Britain, Respect at 8:29 AM MDT
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