Ed "Private Frazer" Balls says the economic crisis is the worst for 100 years: "Children's and Schools Secretary Ed Balls has warned that the current economic downturn will be worse than the Great Depression, reports said.
Balls, a close ally of Prime Minister Gordon Brown, told a conference at the weekend that the crisis was the most serious global recession for 'over 100 years,' according to the Yorkshire Post .
At the gathering in Yorkshire, he also raised fears of a resurgence in far-right groups as there was during the Great Depression."
This deliberate statement, as part of a speech, confirms Gordon brown's Freudian slip last week, and indicates that the Government is aware of the true extent to which the banking system is...I am searching for a non-sexual expression here...ruined by the Ponzi credit derivatives.
It looks as if the banks have gone the way of the Norwegian Blue To clear up any doubt, the banking system has shuffled off its mortal coil and joined the choir invisible. Its metabolic processes are history. It is demised. The banks' account sheets make Mr Micawber look like Croesus. They are Black Hole Singularity. They are tohu-bohu, without form and void.
To summarise: the financial system is built on debt. Banks create money for lenders out of nothing, restrained only by a multiple of the capital that they actually hold, a typical ratio being 65:1, meaning that they were lending out £65million for every million that they held. The derivatives bubble has inflated this debt bubble until the derivatives market is "valued" at ten times the world's GDP. Part, if not all, of the derivatives market is a Ponzi scheme, a pyramid selling scam which is dependent on infinite growth to sustain itself. In shor the banksters have been taken for a ride with all our money. When Ponzi schemes break, there is no compensation for the marks; they lose all, and are lucky if they get the satisfaction of seeing the scammer locked up.
If this analysis is correct, we are in the coming months going to witness the evaporation of our money into cyberspace. I believe this is why Ed Balls, consciously, and Gordon, subconsciously, are letting us know that a Depression of ten or more years looms.
If our money does go up in a great financial bush fire, we are going to need a plan to rectify the situation. This is where James Robertson's G20 Campaign offers a new beginning.
The other aspect of the problem is that Ed Balls was warning of a right wing backlash, as in the 1930s. This is a real threat, and he did well to warn of it.
Right wing politics is a hot air balloon, with two burners: unemployment and housing scarcity. As long as there are white people with no jobs and no homes, the BNP can point to immigrants in jobs and homes and make them scapegoats for the people's anger. The classic response of the Left, to march and counter-march against them, is a hopeless tactic, creating a game of cowboys and indians, or worse, Israelis and Palestinians. The real political solution to the rise of the far right is for Government to make sure that there are sufficient houses and jobs in Britain for all. The Green Party's Right to Rent policy is a start for housing; and the Green New Deal is the tool for creating good work and energy security. The GND+ is an even better tool, that creates even more jobs, but the Handbrake Tendency has seen to it that we cannot vote on that for another 18 months (sigh).
What is the Green Party's policy on the financial crisis? Well, we will be able to vote on a few measures, including a short stab at Monetary Reform, at our conference in Blackpool Winter Gardens, 20th-23rd March. Until then, we have no policy.
This, to my mind, is absurd. Our Manifesto for a Sustainable Society is a great democratic venture in political policy, but it is not holy Writ, and it does not cover political developments that happen after policy is decided at Conference. Clearly, we need a day to day ability to respond to the rapidly changing political circumstances. We do have a Political Committee appointed by GPEX and accountable to them, but its processes and decisions are opaque.
We need to formalise this process, giving Political Committee power to make decisions that go beyond what is written in the MfSS, and report back to Conference. However, it will take two years to get this through, if ever...
So there we have it. We just need Monetary Reform, Right to Rent, GND+, and a Green Party leadership that is empowered to think on its political feet. La lutte continua.