Back in 2013, I wrote an article, together with Richard Murphy, director of Tax Research UK, which was about a chilling proto-fascist document written by JP Morgan – it can be accessed here: The Euro Area Adjustment—About Half-Way There.
Firstly, the authors said that ‘financial measures’ are ‘necessary’ to ensure that major investment houses such as JP Morgan can continue to reap huge profits from their speculative activities in Europe.
Secondly, the authors maintain, it is necessary to impose ‘political reforms’ aimed at suppressing opposition to the massively unpopular austerity measures being imposed at the behest of the banks and financial sector.
The authors write: “The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism [following world war 2].
“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus-building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the [eurozone] crisis.”
Whatever the historical inaccuracies in their analysis, there can not be the slightest doubt that the authors of the JP Morgan report are arguing for governments to adopt authoritarianism to complete the process of social counterrevolution to austerity that is already well underway across Europe.
What JP Morgan is making very clear is that anything resembling ‘socialism’, representative ‘democracy’, collectivism, trade unionism or inclinations towards the left of the spectrum must be removed from political structure: localism must be replaced with strong, central authority; labour rights must be removed, consensus (democracy) and the right to protest must be curtailed.
In short, JP Morgan are calling for extremely authoritarian measures to suppress the working class and wipe out its social gains since the post-war settlement. This is the proto-fascism and reflects the unadulterated antisocial voice of neoliberalism, which is incompatible with human rights, social liberalism and democracy.
JP Morgan are not a lone voice making such demands. In the UK, savage welfare cuts have driven some disabled individuals to fear for their lives. But the austerity programme also has a few winners. Cutting or eliminating publicly funded support programmes that support the poorest citizens, those who fall on hard times, has long been an ideological goal of Conservatives.
Doing so also generates a tidy windfall for the corporate class, as the ‘business friendly’ government services are privatised and savings from austerity pay for tax cuts for the wealthiest citizens. The liberalisation that the financial class demand – what bankers call deregulation – is the process that caused the financial crash.
Many of us have said over the last eight years that austerity is not an economic necessity or ‘in the national interest’ as was claimed in 2010, and it is more like a tool of ‘statecraft’ and radical socioeconomic re-engineering, driven entirely by ideology and not economic requirements.
You can read my 2013 article here.
Now for more of the same
In a truly nauseating article in the Financial Times (FT) titled How to hedge your finances against a future Corbyn government, financial ‘advisors’ are cowering in outraged ‘fear’ at the prospect of a Labour government. They are very worried that a few millionaires may face a capital gains tax rise, property taxes and other erosions to the generous privileges they have become accustomed to over the last few years.
Gosh, fancy that, having to contribute a fair amount of tax towards maintaining a country that the rich have taken so much from. Yet they don’t want to contribute anything to the society that has benefited them so much.
I can really empathise with their ‘fears’. I mean, that’s almost as bad as having to join the foodbank queue because your wage doesn’t meet the cost of living, or even your most fundamental survival needs. I can see why they would be left cowering in fear behind their hoarded wealth.
This despicable class of people, who regard most of their fellow human beings as disposable commodities, have had their own way for far too long. They have institutionalised their power through law, media, and corrupt political rituals, and have become habituated to the status quo.
The FT says “They might be considered unlikely to vote for Jeremy Corbyn, but the rising popularity of the Labour leader is rapidly moving up the agenda in conversations between the UK’s wealthiest and their financial advisers. In the event that he came to power, what impact might future Labour policies have on their wealth? And secondly, what financial planning measures — if any — could be considered to mitigate these?
Well you could be less controlling and anally retentive. Less pathological about wealth defense. You just let go and stop hoarding obscene amounts of money. You could care about the suffering inflicted on others so that you can stash your cash offshore, leaving a black hole in the economy and our public services on the point of collapse, because of ever-circling vulture capitalist parasites like you.
George Bull of RSM, the accountancy firm, says: “these fears are well-founded, as Labour’s 2017 manifesto mentioned wealth taxes as one option for easing the care cost crunch.”
Oh, the sheer horror of it. I mean fancy having to give a shit for the people who have been brutally dispossessed by the state in order to fuel the accumulation of even more wealth for the already very very wealthy. How outrageous.
The article goes on to say: “Should a mis-step in the Brexit negotiations topple the existing administration, this could prompt a fresh election which many believe Mr Corbyn could win.”
Yes, and your very worst fear has been realised. The PM’s Brexit deal was rejected by 230 votes – the largest defeat for a sitting government in history. It takes a very special sort of skill to unite so many people against your proposals. Dis may.
Yet curiously, despite the vote of no confidence tabled by Corbyn, the BBC are claiming that the Pound rises after ‘meaningful’ Brexit vote and crashing defeat for the PM.
The BBC then claim the “vote opens up a range of outcomes, including no deal, a renegotiation of May’s deal, or a second referendum.” However, the BBC don’t mention the rather obvious other possibility – a General Election, which is more than a little short sighted of them.
Even if we assume that a no confidence motion may not force an election , it would be prudent to consider Wednesday’s vote as the start of a process. The shadow international trade secretary Barry Gardiner has suggested the PM could face a series of confidence votes in the coming weeks. In fact that is highly likely, since she does not command a majority and will struggle getting anything through parliament.
Apparently, sterling rose 0.05% to $1.287 after declines of more than 1% earlier in the day. The currency slumped 7% in 2018 reflecting uncertainty about the terms of the UK’s exit from the European Union.
“A defeat has been broadly anticipated in markets since the agreement with the EU was closed in November 2018 and caused several members of the government to resign,” said Richard Falkenhall, senior FX strategist at SEB. The BBC says that “business groups said their members’ patience was wearing thin.”
On Friday, hedge fund manager Crispin Odey, a major donor to the Brexit campaign, said he now expected the project to be abandoned altogether and that he is “positioning for the pound to strengthen.”
The real culture of entitlement
The very wealthiest are likely to find ways to circumvent increased taxes on those on the highest incomes. I guess rich people don’t like ‘progressive’ tax , well-funded and functioning and effective public services
Bull continues: “There is no certainty as to what people might do.
“However, we hear far greater interest about lifetime tax planning — for example, gifts of assets to children being made sooner rather than later — so that parents’ asset values are reduced before a wealth tax or land value tax takes force.”
“The favourable inheritance tax status of defined contribution pensions, which can currently be passed tax free to heirs in some circumstances, is something many advisers fear the current government will scrap, let alone a Labour one. Higher-rate tax relief on pensions contributions is another obvious area of vulnerability, advisers say.”
Vulnerability? I guess that’s pretty relative. Ask those people targeted by austerity policies from 2010, which saw them lose their lifeline support while at the same time, the chancellor handed out £107,000 each per year to millionaires in the form of a tax cut. People have died because the government’s austerity policies. Get a grip.
My favourite part was this:
“The Labour party has also signalled its intention to close various loopholes and tax breaks, as well as ending “the social scourge of tax avoidance”. It has signalled that it would make public the tax returns of those earning more than £1m a year and double the number of HMRC staff investigating wealthy tax avoiders.
“It might also increase the insurance premium tax on private healthcare. The rate of corporation tax would be restored to 26 per cent. In addition, a Labour government might tackle tax planning that takes advantage of the gap between income and corporate tax rates, such as the practice of holding investments within a company.
“One possibility is that the undistributed profits of “ close” companies— those controlled by five or fewer people — could be taxed as though they had been distributed to shareholders.
“Labour has said it wants to see the public disclosure of trusts, which it describes as “a key vehicle for tax avoidance and illicit financial flows”. The industry says HMRC already has access to this information and making it public would put beneficiaries in a vulnerable position.
“People avoiding tax by using trusts would fear “trial by media”.
“It would be a witch hunt. People might want to consider unwinding those structures.”
My heart bleeds. Like the ‘trial by media’ that unemployed and disabled people faced in the run up to the brutal and uncivilised cuts to the social security that the overwhelming majority of them had paid into via taxes? And all to justify a transfer of wealth from public funds to a few private bank accounts, a proportion of those being offshore.
The hysteria continued: “Labour’s plans to nationalise railways, water, energy and Royal Mail would take a toll on those segments of the market. And Mr Corbyn’s aim to intervene more heavily in areas such as energy could drag on the dividends paid by those companies and investment funds.”
But it would benefit the public. You know, the many, not the few.
Job Curtis, a Henderson fund manager, says: “We are already beginning to see weakness in companies involved in passenger transport and water utilities. United Utilities — a water company covering the north west of England, has experienced a large share price fall in the last year partly because of the increased likelihood of a Labour government under Corbyn.”
“Sectors including utilities and energy companies are high dividend payers and whether it’s nationalisation or increased regulation and price caps, the outlook for higher and sustainably high dividend incomes looks under threat under a Corbyn government,” says Mr Stevenson.
But many of us will be able to afford our utility bills.
Henry Pryor, an independent buying agent, whines the prospect of a Labour government is “frightening” for the owners of large, expensive assets. I think Henry should really try to expand his understanding of the word “frightening”.
I suggest he asks citizens for some insights, perhaps those with severe illness who are forced to claim disability support after a lifetime of working and paying social insurance via taxes, then he should go through mandatory review and the appeal process. That’s fear. Or perhaps he should spend a year on the streets, without the safety of his wealth and assets.
That said, perhaps the pitchforks really are coming…
Nick Hanauer is a rich guy, an unrepentant capitalist — and he has something to say to his fellow plutocrats: Growing inequality is about to push our societies into conditions resembling pre-revolutionary France.
You can sign the petition (here) to register your own no confidence in Theresa May’s government, and demand a general election. Only 557 more signatures are needed, as the response overnight has been overwhelming.
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