Adnan Al-Daini

“It doesn’t really matter if it’s Labour or Conservative because the people behind the scenes are always the same...” said a 23 year-old man from Liverpool, who took part in the UK (August 2011) riots. The quote is from a report “Reading the Riots” commissioned by the Guardian and the London School of Economics.

It tells us something that has now become common knowledge, namely that people have lost faith in the democratic process.  Politicians and society, all of us, the 99% and the 1% must take heed.  People do not like this government, but they do not have much faith in Labour either.  This explains why the Labour party is not benefiting from the dire economic situation we find ourselves in.   Labour is not trusted. Their so called “light touch regulation” was an abdication of their responsibility to control the explosion of a debt fuelled economy, and the voracious greed of the “moneymen” that brought the country into this sorry state. 

Some commentators blame Labour’s difficulties on choosing the wrong leader, Ed Miliband.  I think it is the lack of credible policies that lie at the heart of the problem for Labour.   It has no vision.  It has articulated no alternative policies that are up to the job of tackling the immense problems faced by capitalism today.  

Do they have a policy on bringing a fairer distribution of wealth in a rich country like Britain? A report by the Organisation for Economic Co-operation and Development (OECD), referenced in the Guardian, concludes that “income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid-1970s.” What are their policies on reducing unemployment, particularly among the young, that has now topped one million?  What are their policies on reforming the banks and financial institutions? What are their policies to bring a more equitable balance between capital and labour? What are their policies to address the democratic deficit by wresting control from the “moneymen”?

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Adnan Al-Daini

George Osborne, the British Chancellor’s autumn statement may be many things, but fair and just it is not.  Some of the poorest members of our society, public workers, who do valuable work that distinguishes a caring society from one that is not, are to carry a heavy load for dire economic conditions not of their making.  The disastrous economic outlook is to be remedied by public sector workers accepting substantial cuts in their meagre wages, and additionally by a cut of 710,000 jobs in the next four years.  An acknowledgment that his plan A is not working came in the shape of a paltry £5bn investment in infrastructure, with the hope that an additional £20bn would be invested by pension funds. 

People can accept hardship and cuts if they perceive that the load is being shared fairly and justly, with those most able shouldering a heavier load. David Cameron, a month after taking office (June 2010), made his "we are all in this together" speech in which he said:

"I want to make sure we go about the urgent task of cutting our deficit in a way that is open, responsible and fair. I want this government to carry out Britain's unavoidable deficit reduction plan in a way that strengthens and unites the country. I have said before that as we deal with the debt crisis we must take the whole country with us - and I mean it. George Osborne has said that our plans to cut the deficit must be based on the belief that we are all in this together - and he means it...But this government will not cut this deficit in a way that hurts those we most need to help, that divides the country or that undermines the spirit and ethos of our public services. Freedom, fairness, responsibility: those are the values that drive this government, and they are the values that will drive our efforts to deal with our debts and turn this economy around."

I think any objective assessor of reality would see the hollowness of the above rhetoric.

If one is to judge the health of society, two measures stand out. One is the level of unemployment, and the other is income inequality.  The lower these are, the healthier a society is.  The autumn statement fails on both counts.  The actions proposed widen the gap between the rich and the poor, and they increase the level of unemployment.  Society will pay dearly for such short-sighted ideologically driven policies. Research shows that alcoholism, drug addiction, crime, antisocial behaviour, mental illness, and family break ups will rise as a result of these measures.

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Adnan Al-Daini

“If the Euro fails, then Europe fails”- so said Angela Merkel, the German Chancellor.  This is what we have been hearing from pundits and experts for weeks now.  Predictions of economic Armageddon if the eurozone breaks up have been aired ad nauseam by politicians and experts.  Commentators and journalists hardly ever ask the two most important questions. Why? How? 

The Euro as the currency of seventeen diverse countries with their different cultures, lifestyles, traditions, tax and spend regimes is dead.  The sooner we realise that, the better it will be for everyone.  Research by the Centre for Economic and Business Research (CEBR) predicts a rosier future after a short sharp shock of eurozone collapse. In an article in the Telegraph, headlined “Collapse of the Euro will help Britain”, the conclusions of the research are presented as:

“Britain will be better off in five years’ time if the eurozone breaks up than if the single currency survives the debt crisis, research suggests today.  The disorderly break-up of the euro would mean a short, sharp economic shock and probably a recession, but would be followed by a quicker return to strong economic growth, according to the Centre for Economics and Business Research.  The economists also predict that break-up would free many eurozone members from the deficit-cutting austerity policies that threaten to subdue their growth for years.”

The article quotes the research thus:

“If it [the eurozone] breaks up the immediate pain is much more intense, but then there is a more stable basis and we would expect that within about 30 months growth will actually be faster than if the eurozone survives in its current form.”

I am no economist, but this analysis makes a lot of sense to me and probably to most people in Europe.  In the absence of cogent explanations to the contrary from politicians who have invested a lot of capital in the Euro, and are influenced by self serving institutions and lobbyists, I'd put my trust in the CEBR conclusions.

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Adnan Al-Daini

Eurozone finance ministers have endorsed a record
110-billion-euro bailout for Greece. The aid package
requires that Athens implement tough austerity mea-
sures. But Athen's plans for painful wage & pension
cuts have already triggered widespread protest there.

A classic instability in engineering systems occurs when disturbances to a system are magnified, rather than damped out, leading to its destruction. 

As Greece, Italy Portugal… etc. struggle to pay the interest on loans these banks were happy to push on to them not that long ago, they are being asked to pay more interest. It thus deepens their difficulties, and when combined with severe austerity measures, bankruptcy becomes inevitable. It thus mirrors the instability in engineering systems.  I believe Greece should declare bankruptcy, leave the Eurozone, and start building a sustainable economic model distinct from the existing corrupt capitalism that is serving the 1%ers and blighting the lives of the 99% in the U.S., UK and other Eurozone countries.  Yes, this will deliver a shock to the system, but it could hardly be any worse than the present draconian austerity measures demanded by the IMF, ECB and European politicians. The humiliation of Greece by foreign politicians and unelected bodies, dictating what Greece must do regardless of what harm it causes its people, must be too much to bear in a country that gave the world the concept of democracy. Institutions and governments are demanding that Greece privatize its energy sector utilities, airports, marinas…etc. This hasty privatization programme, demanded by external governments and institutions, prompted Stefanos Manos, a former national economy minister in a centre-right Greek government to say (Guardian, 1 August 2011):

"With timetables being so pressing, I worry that the whole process is very ill-prepared. If there is not enough transparency we may end up like Russia, where only a cast of oligarchs end up benefiting."

I have news for Mr. Manos. The privatization of utilities in Britain has not been a great success either.  It has faithfully served global corporations and the super rich, with many of the poor now having to make a choice between heating and eating.

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Adnan Al-Daini

The greed, excess and selfishness that brought liberal democracy and capitalism to the edge of the abyss have been demonstrated once again by the latest research from Income Data Services (IDS).  It shows that the pay of directors of the UK’s top businesses (FTSE 100) rose by 49% over the past year, bringing their average pay package to about £2.7 million. This is at a time when average pay nationally for private sector workers rose by 2.6%, a cut in real wages when inflation is running at 5.2%.  The march of income inequality is gathering pace, with total disregard to the effect such injustice and unfairness have on society. 

There is ample evidence to demonstrate that this is not related to the performance of these companies, but based on complicated formulae, with pay panels comprising like-minded people that recommend rises regardless of how the company performs.  In any case, the performance of a company surely does not depend entirely on the performance of a few people at the top, but on the entire workforce.  If the company is successful, rewarding the bosses only is insulting to everybody else who has contributed to that success. It is divisive and unjust.

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Adnan Al-Daini

In my student days our thermodynamics lecturer gave us a little talk regarding examinations.  He started with the usual advice about reading the question carefully, not to panic if we could not initially answer the question, and to move on to another... etc.  Finally, he said- do not do what one student did who wrote to the examiner: “I am sorry I cannot answer this question but I can answer the following one”.  He then proceeded to write his own question, and to answer it perfectly.  The above story sums up the actions of politicians thus far as they respond to the economic crisis engulfing capitalism worldwide.  The politicians are unwilling, unable, or both, to tackle the causes of the problem which are the lack of demand as a result of unemployment, cuts in real wages and soaring energy prices, with profits rising by 700% since June 2011. Instead, they continue to pump more and more billions into the banks, with the gap between the poor and the super-rich that lies at the core of the problem forever widening.

Jeffrey Sachs, the well-known American economist, interviewed on BBC radio 4 Today programme (October15, 2011) about his book “The Price of Civilisation”, made some very telling remarks:

“International capital at the top is mobile, and is running circles around our government: this is the essence of globalisation”.

Of course, this clearly implies that democracy itself is being subverted and corrupted.  The ordinary citizen is no longer able to effect change through the ballot box.  Is it any wonder that people are taking to the streets in the U.S and Europe, in actions that mirror the Arab spring to demand that they should be heard?

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Adnan Al-Daini

Wikipedia dryly defines QE as: "The term quantitative easing describes a monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed, i.e the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero."

We all know QE stands for Quantitative Easing; a better description would be Questionable Economics. The Bank of England has just announced QE2, where £75bn is being electronically created and pumped into the banks. This is in addition to QE1, the £200bn injected in 2009 in exchange for mainly government bonds. The more I read about this system of finance, the more convinced I become that this is a racket that enriches the banks and endangers the real economy, with many economists arguing that it makes the current dire economic situation worse. The aim of the Bank of England is to enable the banks to lend to small businesses and entrepreneurs to create growth in the economy. The banks failed to meet their lending targets with project Merlin, using the first £200bn. The government hopes the banks will do more this time with the additional £75bn in their coffers. Why they believe this has not been explained. Why should the banks lend more to businesses if greater profits can be made elsewhere?

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Adnan Al-Daini

Iraqi women farmers unload wheat in this Diyala
Province village. The Iraqi government is trying
to develop more drought-resistant varieties.

Is there no end to the suffering of the country of my birth, Iraq, and its people?

In my early teens in Iraq, in the late fifties and early sixties, I used to accompany my father to farms to buy wheat grain for our own consumption, and a few sacks more to sell in the village to make some profit.  I remember the discussions between my father and the small farmers regarding the quality of the grain, and whether the dough would stick (hounta khabbaza) to the walls of the clay oven in which my mother baked the bread.  This particular quality is essential to prevent it falling into the hot embers at the bottom of the oven. The farmers used to assure us of the quality, giving a little history of how the grains had been improved by knowledge sharing between farmers, with the best quality seed being adopted. 

The system had an inbuilt informal ability to improve the quality of the wheat grain.  This method of sharing expertise and the use of knowledge passed through the generations were applied to every aspect of farming and fruit orchards to improve the quality and quantity of the produce. 

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Adnan Al-Daini

Politicians and opinion-formers, please stop listening to the “moneymen”. Go back to first principles and start using some common sense.

I do not know about you but I am finding myself baffled, irritated and confused by the World Bank, the European Central Bank (ECB), the IMF and a few other acronyms that seem to dominate the news.  I did not vote for any of these organisations, so why do they have such an influence on my life, the lives of the rest of the British public and the lives of tens of millions across the globe. They seem to be running the world. The news is dominated by the “market”. On our television screens we see people staring at screens and pressing buttons. With a few strokes on a keyboard these people hold the lives of millions at their mercy.  How did it come to this?  What sort of a system have we created that gives so much power to these people?  How is it that these people, who are entrusted with the money made by working people, end up gobbling up the money for which people have laboured so hard?  How were they ever allowed to have such a stranglehold on the lives of millions?

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Adnan Al-Daini

An elderly woman in a care home. The Government
may introduce a 'national care service'. (Alamy)

Fair taxes are good for society as a whole, and those who can afford to pay the higher rates should be proud that they are contributing more for a pleasanter environment for all of us to live in.

Salaries above a certain threshold earned by the super rich are used as a status symbol, part of the “because you are worth it” culture that now permeates our society.  It is a way of massaging the massive egos of those people.  It is a competitive weapon in their battle with other like minded bosses that shouts, “I am at least as important as you if not more important”.  Look at my salary.

The proposal of Vince Cable, UK’s Business Secretary, to give shareholders and workers greater say in the salaries of their CEOs and directors at the top of an organisation, is to be welcomed as a first step.  However, it is not enough.  Here is a suggestion for Mr. Cable and the Chancellor to consider, which is progressive, fair and serves the interests of the ordinary citizens. Decide what multiple of the average pay of a UK employee is a fair wage for those “Masters of the Universe”, -say 10 times.  

Any pay above that, tax at a punitive rate rising in very steep steps to a level of, say 80%.  If this does not moderate the pay, it will have the effect of returning money to the government to help those most in need.  Taxation of the very rich, in itself, should not dent their super egos as they could continue to brag about their mega remuneration packages.  It may even give them another instrument to enhance their self-worth, with remarks like, “The taxes I pay are enough to keep [x] numbers of old people warm in winter”, or, “The taxes I pay are enough to lift [x] number of children out of poverty”.

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