Banks batter Brick Lane

Today, Lloyds announced that another 2,100 jobs would be slashed. Another source forecasts that the City of London would continue cutting – the financial sector will lose at least 13,000 this quarter. Looks like 70,000 jobs will go this year from financial services.
At street level, the City still looks plush – Bishopsgate/Spitalfields still buzzing or so it seems.
Suited execs still cross Commercial Street and enter Brick Lane, though in ever decreasing numbers. The waiters and owners of Banglatown restaurants have noted the drop in sales over the last eighteen months.
Their faces show no sign of witnessing any ‘green shoots’ providing more covers and customers.
This is how trickle down economics works (or doesn’t). Next door to the two great financial centres on this planet, very little wealth crosses over.
Still, in the good times, some Bengali owners could rent out flats to City workers and others swap curry for money – it’s still happening but getting tougher by the day.
The Bankers (or more precisely the top execs) are cutting jobs and those remaining eating less in Brick Lane.
To top it all, the supposedly nationalised banks are not lending to small businesses.
They are eating up our money but rationing out loans.
Small businesses are suffering from a drought of ‘working capital’.
While the New Labour government, ever so keen on voters, is intent on banks lending to consumers (voters), we hear nothing about banks looking after their small business customers.
Where are the jobs going to come from if local, small businesses are not given a lifeline?
Size does matter…. Big Banks…. Big Auto companies…… Too Big to fail companies….. they get the ear of Lord Mandy and Mr. Darling… small businesses need not apply….

Farid Bakht

Get into more debt

I wonder if you can help me out on this one….
BA has just arm-twisted 7,000 people to work for free for a month – in effect take a 8% pay cut.
The message from the top is: take pay cuts, reduce your pay expectations or lose your job.
How does that square up with the government encouraging us to go shopping, to ’save the economy?
How are we going to do with that if we get less money in our hands?

Ah, now I get it…. we are meant to borrow more.. on credit cards.. to make up for the drop in income.
So that’s it.. the problem and the solution are the same!

When the executives decide to return their bonuses from, say the last three years when they were running their businesses in to the ground …… and energy bills for example halve, then we can consider ‘helping out’.
Meanwhile, we could ask the Trade Union Leaders to work for nothing -since they are standing at the sidelines, totally bemused and ineffective.

Farid Bakht
Parliamentary Candidate, Bethnal Green & Bow

Happy days are here again

Today we were told by one think tank that the recession could be over.
House prices are also going up.
Before you crack open that bottle of champagne, press the pause button:
BP, now longer beyond petroleum, says oil consumption is down to 2003 levels in the UK at 1.7 million barrels a day.
It’s not due to efficiency but a sharp decline in factory production.
Quantitative easing or printing may offer temp jobs and prevent a depression but it is likely to lead to hyper inflation by 2011 – after an election maybe but important to all when you wonder if that means higher interest rates next year.
Unemployment will soar for years.
To reduce government borrowing from Zimbabwe levels, next year will see 10% cuts across the board – a Tory gave that away today though insisting the NHS wouldn’t be touched. Yeah, sure.

Farid Bakht

Tens of millions of Americans are hungry

For three decades, the three main UK political parties have followed a project they like to call ‘globalisation’ but which effectively means ‘Americanisation’.
Until the credit crunch, all three told us that America was a successful, prosperous economy and was a role model for the UK. That brand of capitalism apparently worked and we had to ape it or else.
As the cracks appear in that model, (we heard yesterday that house prices have fallen 41% in much of California), a Florida bank collapsed yesterday too, the hidden scandal of inequality and hunger is coming out.
We know about insociant bankers but what about the poor?

In today’s Guardian, Sasha Abramsky pens an article mentioning his book: Breadline USA: The Hidden Scandal of American Hunger and How to Fix It.
It’s about “the growing crisis of hunger and, more generally, anxiety about how to afford basic food stuffs, and show it percolating upwards throughout the ranks of the unemployed, the working poor and, increasingly, job-insecure portions of the middle class.”
I highlit the middle class in the sentence because it shows just how vulnerable so much of society (today confident and secure) can be transformed into victims – a true shock to the system.
He mentions that obesity is on the rise too – it’s cheaper to eat junk food. Similar things are happening in the UK as sales of fresh fruits and vegetables are declining.
He, however, concentrates on what he terms “a more traditional, skinnier version of food-related poverty has re-emerged in America. As the economy has tanked, tens of millions of people have, quite literally, become unable to buy enough food to survive”.
“What does this mean? Well, basically, that left to the tender mercies of the market, they would now be slipping into malnutrition, even starvation. They literally don’t have either the money or the credit to buy the basic amounts of calories needed to survive. They routinely skip meals in order to put enough food on their kids’ plates, or they eliminate necessary foods (in particular proteins and fresh produce) from their diets to save a few pennies here and there.”
“That they aren’t starving is because, in the arena of food distribution (unlike, say, that of housing), the country’s frayed social safety net remains somewhat intact. Food stamps now serve a larger number of Americans than ever before. And the department of agriculture subsidises a charity network of food banks throughout the country to the tune of hundreds of millions of dollars annually.”
“Yet, before we pat ourselves too heartily on the back, let’s examine what this means: the latest estimates are that about 32 million Americans (more than one in 10) are now receiving government food stamps. Texas alone has approximately three million people on food stamps. “
“Nationally, however, the food stamp programme routinely misses about one-in-three of those who are poor enough to qualify – and in states like California that number’s closer to one-in-two. People are afraid to apply, embarrassed to apply, can’t take time off from work to go to aid offices during the week or don’t know about the programme – a problem likely to worsen as funding for state outreach programmes takes a hit because of state budget crises. That means there are at least 10 million more people now poor enough for aid who don’t receive it.”
So let’s see. We have 32 million on food stamps and 10 million on top who don’t receive it but should.
Out of a population of 300 milion, then 42 million cannot feed themselves properly.
You have to pinch yourself when you realise this is America.
Imagine most of the population of England being hungry – that’s the enormity of the scandal.
In a $9 trillion economy, able to spend $800 billion on wars and armies, the ‘great and good’ seem comfortable having 42 million hungry people in the country.
And our main parties want to emulate that kind of economy and society?!?

The author ends with this revealing comment: “I talked with a Wal-Mart worker in upstate New York who ended up with about $15 a week for food expenditures last spring. I spoke with little children in California’s Central Valley who routinely went to bed having had only dry cereal for dinner. “

In the UK, ASDA is owned by Wal Mart.
A vision of the future perhaps?

http://www.guardian.co.uk/commentisfree/cifamerica/2009/may/18/us-economy-food-stamps-hunger-poverty

After the election: savage cuts

The Daily Mail creates the slogans.
The Telegraph reveals more what the elite really think.
This month Telegraph has taken to tell David Cameron to forget about the centre ground and go back to being a Thatcherite. Pretty certain that the Tories will win the election, the Telegraph wants Cameron to spell out what he is going to do for the City of London and international financiers.
The economic scenario is scary (forget the green shoot nonsense which is all about us lulling us into spending again). Have a look at some of these right-wing quotes.
“The UK will soon have a budget deficit of 15pc of GDP. The Government will be selling gilts equivalent to 20pc of our national income for at least three successive years. To say this is the worst fiscal crisis in this country’s peace-time history is an understatement.”

“The importance to our tax base of financial services and housing meant the bursting of the credit bubble was bound to hammer government revenues. Combine that with the retirement of millions of baby-boomers and 2010-14 was always going to be difficult.”

“If Cameron doesn’t say (he will make massve cuts) ……. the UK will soon lose its Triple-A credit rating. Big institutions will then be forced to dump UK gilts – leading to a disastrous spike in yields. Interest rates right across the economy will balloon, whatever the Bank of England does. “
“For international debt markets, the name of the game is supply – how many gilts will be issued, and when. So if the Tories don’t show how they’ll issue fewer gilts, the Government will have to pay much more for credit, leading to even deeper spending cuts.”

“Unless Cameron starts building the political consensus now, getting the country squarely behind the need to spend less, the markets simply won’t believe he’ll actually will cut spending when he gets into office.”
“The stark truth is that the UK’s ability to roll over its debts is in grave danger”.
According to the Telegraph, by not talking about this subject, the political classes are out of touch.
“The country knows full well we’ve long lived beyond our means. The public is screaming for someone to take control.”
David Davis says there should be a debate about how to cut public spending
For a Tory then to talk about cutting Trident and renegotiate PFI contracts (which have fattened many a private company) is extraordinary. He also made the familiar call to cut public sector pensions.
” During the coming few years, our fiscal meltdown will make it tougher than under Thatcher, tougher than the IMF debacle of the mid-1970s.”

In case this makes you think it best to vote for New Labour, forget it. It will be worse with them. The last twelve years have shown how Brown (Chancellor and PM) has bent over backwards to prove his credentials and gain some brownie (no pun intended) points from the money-men. They would cut even more than the Tories to show they meant business and retain Britain’s credit rating..
Nick Clegg, in trying to get into bed with either party in government, will ask Vince Cable to persuade us that There Is No Alternative.
TINA makes a comeback …… a few months after all the banks went under………..

Now do you understand why they are diverting everyone with red herrings (H1N1, MPs pay…. Bankers’ bonuses)……. ?
Somehow I think the people aren’t that easily fooled. The problem is they are not sure who provides an alternative…………….

Farid Bakht

House prices fall back to 2004 levels

The average house price has fallen to less than £155,000, a level last seen five years ago, according to the Halifax house price index.
The lender said average property prices fell by 1.7% during April, a drop of 17.7% over the past year.
They expect the falls to continue.
The house price to earnings ratio stands 4.26 in April.
This compares with a peak of 5.84 in July 2007. Unfortunately for all those trying to talk up the market, the average ratio of house prices to income is less than 3.5.
Moreover, incomes are not going up – have a look at how employers are taking the opportunity to demand pay freezes and even cuts. Then, there is the case of unemployment continuing to rise for a few years more. So we should not expect incomes to remain static and a ‘bottom of the market’ when the ratio hits 3.5. Instead, prices will follow incomes further down, in a negative spiral.
Finally, it’s still very difficult to actually obtain a mortgage or avoid some hefty fees charged by supposedly ‘nationalised’ banks.
Analyst Howard Archer believes prices will fall to an average of less than £135,000 – a fall of 33% from the 2007 peak of £199,612.

Save London Met University

This is to both update you on the situation at London Metropolitan University and to thank you for the many messages of support and help offered to our campaign so far.

As you know, London Met UCU have been balloting on industrial action to oppose our management’s insistence on the loss of 550 FTE posts – which will result in up to 800 job losses (1/4 of our entire workforce). The result of our ballot was announced yesterday. We managed to achieve a massive vote for action (64% for strike action, as well as 71% for Action Short Of Strike) on a high turnout.

Strike Action – Thursday May 7thWe have now decided to action that ballot with a university-wide one day strike next Thursday (May 7th). The timing is such that we will be taking action to avoid disrupting our students’ exams – that start the following Monday, in order that our strike is combined with student action to save our university.
To that end, we will have picket lines from 8am across the University (our main campus buildings are located very near to the following tube stations: Holloway Road, Moorgate, Aldgate East, and Whitechapel) where we, together with our students, will be collecting signatures for our petition, etc…
In addition we will be holding a mass rally at 1pm outside Tower Building, Holloway Road (just opposite Holloway Road tube on the Piccadilly line). Please make every effort to join us in the morning if possible and to send delegations (and banners) from your branches to our rally in the afternoon.
Further updates will be posted on our website: www.lmuucu.org.uk and daily blog (www.savelondonmetuni.blogspot.com).

March and Rally – Saturday May 23rd

In addition to next Thursday’s strike we have also jointly, with PCS and Unison, organised a London-wide March and Rally for jobs on Saturday May 23rd, starting at 11am, from (see: www.ucu.org.uk/index.cfm?articleid=3680). Again, we would like to encourage you, particularly London-based branches/members, to make every effort to join us.

We believe that the situation at London Met, though very specific on one-hand re the serious financial mismanagement of our institution, is also far too generic re the response of university/college management generally to attack staff, students, and the very education ideals we believe in, to pay for either their own, or Government induced, financial crisis, or to use the threat of financial crisis to remould the shape of education institutions to the dictates of what can best be described as the failed neo-liberal market model of education. We are only the tip of the ice-berg, as the threat to jobs at 100+ HE institutions nationally indicates.

This is therefore not simply our fight, but the first salvo in a much bigger fight for the sort of education system that all of us – students, staff, community, deserve.

Please join us.

In Solidarity

Mark…

Mark Campbell
UCU Co-ordinating Committee – London Metropolitan University
UCU National Executive

“Cuts” is a four letter word

The budget has come and gone. The same cannot be said for the worst recession since World War Two.
Both New Labour and the Conservatives are playing games. They are not being straight with us. With both eyes on the election, they think they can continue to patronise us and take the public for fools.
People are deeply worried. They are hanging on their jobs and juggling their bills. What they need in times of trouble is for political leaders to level with them.
Brown and Darling have become fiction writers, with their absurd claim that the economy will grow at 3.5% in the year after next. They also would have us believe that the UK economy will resume growth in 2010. The IMF (itself too slow) says the UK will shrink by more than 4% this year.
So why are Brown and Darling doing this? They need to get the bond traders to buy a few hundred billion pounds worth of Government Bonds (IOUs) because with unemployment set to rocket and businesses go to the wall, the government will receive less money. To fund their spending programmes, they will need to borrow.
Unfortunately, the Bankers and Bond Traders are back in the driving seat. They will demand higher interest rates on the IOUs. If not,they will “go on strike”.
To avoid this catastrophe, two things will happen:
a) the government will cave in and pay higher rates (the other side of the election)
b) they will make breath-taking cuts in public expenditure (again after amay 2010)

Both the Conservatives and New Labour are playing a game – instead of CUTs they prefer to say “efficiency savings without touching frontline services”.
In real terms government sdepartment pending will fall by around 3% every year over the next decade.
This means hammering education and health – the first to suffer will be the public sector workers with pay freezes or worse (the propaganda is that only the private sector is under the cosh while nurses and teachers are apparently up their with bankers in terms of pay and benefits!)
In 1976, the IMF and the City of London forced Old Labour to make dramatic cuts .. “as a sign of intent”.
In 2010, both will insist on the new Conservative government to do the same. Brown would do the same in the unlikely event of returning.
Meanwhile, voters are going to have a think about this one – if you shift your vote from Brown to Cameron or back, what will be the point of you putting your ‘X’ against either party?
The recession is going to get a lot worse by election time. And the main political parties will continue to spin and fabricate.

Farid Bakht

Fire in the sky

It seems Iraq is being downgraded, now that the Western energy companies have carved up their shares of the oil wealth, the bases have been constructed to house US troops safely away from the cities.
The next few years will be all about Afghanistan.
I am finding it difficult to understand what ‘change’ is available for the region, now that we have seen the Democratic President get comfortable in the Oval office.
As far as I can tell, we are witnessing an upsurge in Predator Drone attacks on the FATA (Federally Administered Tribal Authority) region of Pakistan.
These pilotless planes are controlled like a videogame in the US, spewing out bullets and missiles from above.
Recently, up to 14 Taliban leaders have been killed, with hundreds of innocent casualties.
Is this ‘change’?
It seems more like a Vietnam era attempt to bomb a way to ultimate defeat and destroy an entire region in the process.
Pakistan is set to be destroyed as a functioning state in this ‘Af-Pak War’, with the Northwest Frontier Province and much of Baluchistan being absorbed into a Pashtun dominated entity.
This will take several years which means by the time of the next US Presidential elections, something called Pakistan will still exist.
But at what cost?

The untold story is that Afghanistan is rich in mineral resources (think gold and copper) and is the transit route for a long-dreamt gas pipeline to feed Turkenistan gas to India.
This is hardly a war to prevent terror, since it is creating martyrs daily. It is a resource war.
It is also a geo-strategic element in the ‘Containment’ of China and Russia.
Do we need to be involved in this diversion at a time of economic meltdown?

Farid Bakht

Could the UK unions look at their French cousins?

On the heels of a million people on the streets of France protesting about the unfairness of workers having to sacrifice jobs and income, we see comparative calm amongst many trade unions in the U.K..

I am concerned that the Unions are not mobilising their members to make their opinions heard in a time of the severest recession since World War Two.

Instead, some Unions preferred to support the Government over their disgraceful decision over the 3^rd runway at Heathrow, neglecting their stand on climate change as well as the plight of millions in the rest of the capital and country, fearful of losing their jobs.

Instead, can they not think more strategically?

This means taking action with national protests, demanding the complete nationalisation of the banks which have been ‘bailed out’.

They should insist this is accompanied by a guarantee that they will not be sold back to the market.

They should call for the removal of the top directors and end the scandal of some failed bankers being paid by this Labour government to extricate us from a mess they themselves created.

The massive protests over Gaza show that ordinary people are prepared to brave the cold and put pressure on the government when it is clear there has been injustice.

Domestically, an economic injustice is now occurring as the beneficiaries (and culprits) of the boom are being saved at the expense of millions of people, who are expected to suffer pay cuts, shutdowns and redundancies.

I wish to express sympathy for all those losing their jobs, such as the 1,000 announced yesterday at London Underground.

Let’s hope the Trade Union movement plays a more prominent role than it has done so far.

Farid Bakht