Wednesday, 31 May 2023
NATO/Ukraine's Bombing Of Moscow
Tuesday, 30 May 2023
2. The General Relations of Production, of Distribution, Exchange and Consumption a) Production and Consumption - Part 1 of 3
a) Production and Consumption
Monday, 29 May 2023
Social-Imperialism and Ukraine - Part 35 of 37
Today's AWL have adopted the bourgeois-defencist "idiot anti-imperialist" position of Alan Thornett, during the Falklands War, which they then opposed. |
Sunday, 28 May 2023
2. The General Relations of Production, of Distribution, Exchange and Consumption - Part 3 of 3
Saturday, 27 May 2023
Social-Imperialism and Ukraine - Part 34 of 37
The Brexit Nightmare (8)
The following video summarises much of what has been said in the previous seven posts on The Brexit Nightmare. It also rightly asks why Starmer continues to sell the lie that Brexit could somehow be made to work, and also why the Liberals are not pushing the issue.
I have answered both those questions. With Starmer, its not just that he has responded opportunistically, in search of the votes of bigots and reactionaries. He has gone much, much further than that, turning Labour into a reactionary, petty-bourgeois nationalist party, and the adoption of all of the ideology that goes with that. Its become a UKIP Mark II, or a softer version of the BNP, complete with all of the internal lack of democracy.
For the Liberals, it appears to be a question of opportunism and tailism. In future posts, I'll look at what might be done in response to that, including what might be organised in terms of a Socialist Campaign for Europe, alongside a Socialist Campaign For A Labour Victory in the upcoming elections, but the problems that faces given the authoritarian nature of Starmer's Blue Labour Party. Even in this video the argument is based around the idea of a closer relation to the EU, leading to re-joining at the end of the decade. But, a closer relation of any meaning - single market membership and so on - begs the question, if you are formally bound by those regulations, why would you not want also formal EU membership to vote on those regulations? The idea of no taxation without representation applies here.
So, what is actually required is a campaign, now, for re-joining the EU, including electing MEP's at the next European Parliament elections. To do that its necessary to campaign on the basis that the next government would simply legislate for such re-entry, immediately, and talks with the EU to that effect are needed now.
Friday, 26 May 2023
2. The General Relations of Production, of Distribution, Exchange and Consumption - Part 2 of 3
The Brexit Nightmare (7)
The disaster that is Brexit is made manifest each day. Trade declines, inflation rises, immigration which was the guiding star of the bigots that voted for Brexit, has soared, Britain remains bound by the EU regulations the Brexiters claimed they were freeing Britain from, and it has acted to fragment Britain itself, in Scotland and Northern Ireland. The Brexiters can't respond rationally. Farage rightly claims that Brexit has not happened, and blames the Tories. But, that is because his Brexit, the Brexit they claimed was possible, and that Starmer continues to claim is possible, never was!
Tory Ministers are even led to act dumber than they really are to avoid answering the questions that Brexit daily poses to them. In this video, Tory Minister Therese Coffey, plays dumb so as to avoid answering a question from the SNP as to why Scottish agricultural exports to the EU have been slammed, and instead blames the EU, rather than Brexit. First she talks about imports to Britain rather than exports to the EU, and fails to recognise that the checks that are now required in that trade are precisely the result of the creation of a border where none previously existed, which is precisely what the Brexiters said they wanted in order to "take back control".
Thursday, 25 May 2023
Social-Imperialism and Ukraine - Part 33 of 37
The Brexit Nightmare (6)
UK inflation data, yesterday. showed that the Brexit nightmare continues. Yes, not all of the higher prices is due to Brexit, but Brexit makes the effects in Britain worse than they would have been, and worse than elsewhere in the EU. The cause of inflation is the excess liquidity created by central banks, and that is not peculiar to Britain, and the higher price of food and energy is a result of NATO's boycott of Russian energy and food exports, but, the UK is hit worse on all these things, as a result of Brexit, and less able to deal with them.
Yes, the headline inflation rate fell from 10.1% to 8.7%, but that was still way above the predictions of a fall to 8.2% by the Treasury, and 8.4% by the Bank of England. Its still more than 4 times the Bank's target rate of 2%. RPI is still in double digits at 11.4%, down from 13.5%. But, the problem for the Bank and the government is that this drop in the headline rate, is itself largely due to technical factors, as last year's figures drop out of the calculation, and as one of the biggest contributors to the rise in prices - energy costs - has benefitted from a fall in global prices, and is now benefiting from a reduction in demand, as Europe and North America move into Summer.
Energy prices rose 10.8% compared to a year ago, but that compares with a rise of 40.5%, last month, compared to a year ago. But, that does not apply to food prices. Yes, they rose by less this month than last month, rising 19% compared to a year ago, against 19.1% last month, but that difference of 0.1% points is less than a statistical margin of error, and in any case, its 19%, for goodness sake, in an area of household consumption that is most vital. And, its, here, that Brexit has a clear impact. On the on hand, it has increased the costs of Britain importing cheap food from the EU, on the other, the removal of free movement, means that the previous supplies of EU labour to work on UK farms to gather in the harvest has disappeared.
Whilst that flexible EU labour supply has gone, one of the main concerns of the bigots that voted for Brexit, of stopping or reducing immigration has also backfired on them. Instead of falling, legal net migration has rocketed to nearly a million a year. That is not the kind of flexible labour supply from the EU that previously existed. To come to Britain, now, workers need to come on a visa, with very few rights to stay. So, its only workers who have some likelihood of a long-term, secure employment that would take the risk.
But, Brexit has also led to the UK seeing its food and energy prices rise more as a result of Brexit, because of the fall in the Pound that resulted from it. Yes, in recent months, it has risen, compared to the crash that happened, last Autumn, due to the Brexit Budget of Truss and Kwarteng, but its still down by nearly 20% compared to where it was before Brexit, and that makes the cost of all its imports a similar 20% more expensive.
What is more, the higher than expected inflation figures caused UK borrowing costs to rocket, in a similar way to what happened last Autumn. Higher interest rates would usually be expected to lead to a higher Pound, as speculators move hot money into the UK to get the higher interest. But, instead, the Pound fell. The reason is that the higher inflation means higher Sterling prices for UK exports, making them harder to sell abroad, so worsening the UK's trade deficit.
A look at the actual data, shows that the situation is even worse. Even taking the headline CPI figure, it rose 1.2%, month on month, compared to only 0.8% last month. That means a worsening of conditions, currently. In fact, a look at those month on month figures shows that is not just a flash in the pan. During last year, the month on month figures rose by between 0.4 - 0.6, except for a couple of months at 0.7% and 0.8%, and October, when the figure was 2%, largely due to the rise in the energy price cap. But, in the last four months, the figures have been, -0.6%, 1.1%, 0.8% and 1.2%. Taking just the last three months, the average is just over 1%, which if continued over the next year, would mean headline inflation rising, once again to around 12%.
Looking at the Core Inflation rate, it illustrates this point, because, even on a year on year basis, it rose, this month, compared to last month. It rose to 6.8%, as against 6.2% last month. The month on month figure highlights that even more. It rose by 1.3% last month, compared to 0.9%, the previous month. That is a 50% increase, and again, if carried forward a year, would mean inflation back way into double digits. Again, the core inflation data for the last three months is way higher than the average for all of last year, suggesting that any hope of inflation going away soon is doomed.
Service prices also rose faster, year on year, last month than they had the previous month. They rose by 6.9% compared to 6.6% in the previous two months. Again the rise in the last three months is higher than the average in every month of last year. Given that Services account for around 80% of the economy, it is again an indication that whatever the government might want to tell workers, as it tries to make them accept real wage cuts, the inflation is not going away any time soon.
Indeed, as workers wages rise to try to keep up with those rising prices, and the higher costs arising from Brexit, from higher mortgage costs, taxes and so on, so the Bank of England will, inevitably, increase liquidity further to enable firms to raise prices again, so as to not suffer a squeeze on their profits, and as higher UK prices make exports uncompetitive, a lower Pound will again be a way of trying to cheapen British exports, but will further increase import prices, giving a further upward twist to inflation.
Yet, interest rates are much lower still, today, than they were when inflation was at these levels in the past. On Sky News, yesterday, their Economics Editor, Ed Conway had a very peculiar way of looking at that, saying that, today, debt is much higher for households, as they have much bigger mortgages, as though that were some kind of limitation on how high those interest rates might go. That puts the cart before the horse. The reason that households have so much more debt today than they had 30 or 40 years ago, is precisely because, artificially lowered interest rates, in the intervening period, caused asset prices, including house prices, to soar, as part of a deliberately created asset price bubble.
That was part of the whole conservative social-democratic (neoliberal) economic model that thought that it was possible to replace real revenue growth, i.e. the creation of new value, via real capital accumulation, and expansion of labour, by instead inflating asset prices, creating capital gains, some of which could then be converted into revenue. That required a continued delusion, a Ponzi Scheme, that those revenues were themselves real, rather than simply an illusion created by this continual monetary inflation of asset prices.
The financial crisis of 2008, ended that period of delusion, and only the surreal era of further liquidity injections, negative yields and so on has enabled it to continue since. Even then, only the imposition of physical lockdowns, global trade restrictions like Trump's trade war, Brexit, the sanctions again Russia and China, have prevented the inevitable increase in economic activity and employment causing interest rates and wages to rise, causing those asset prices to crash even harder, bringing the whole house of cards down with it.
When it does, Brexit will cause the crash in Britain to be harder than elsewhere, and harder than it would have been without it.