Tag Archives: economic crisis

Daily Headline – 05/02/13

US; Standard & Poor

US S&P flagStandard & Poor’s (the credit rating agency not the US) are to be sued by the US government over their 2007 assessment of mortgage bonds.

The US says that it was due to this assessment that their banks lent money to people with bad credit history to buy houses.

S&P responded stating that (the case and argument) is completely without factual merit.

It seems the US is looking for people to blame for causing the global economic crisis, the problem can be anything it seems except the capitalist system itself.

Too many unregulated or minimally regulated components of industry allowed to do as they please without any regard to the consequences of their actions.

For more on this story click here.

Daily Headline – 24/01/13

Japan posts record high trade deficit in 2012

Japanese economy flag

Japan has the highest government debt as a percentage of GDP running at 229.77% in 2011. To put that into perspective in the same year ‘economic crisis’ stricken Greece has the 2nd worst at 160.81%.

The 2012 figures are not officially out yet but Japan is set to be 238.44% and Greece (still 2nd worst) is 189.15%. After 2012 Greece’s debt (as a percentage of GDP) is set to get better year after year whereas Japan’s is set to continue getting worse

Japan is continually ruled by centralist and centre-right governments.

Japan cannot and will not come up with the answers to its problems while it continues to keep Capitalism on life-support.

Business shafts customers

By Leon J Williams

Failing music retailer business HMV has decided to shaft its customers by not honouring gift vouchers that haven’t currently been redeemed.

HMV is a British multinational company that after 90 years of operation has entered into administration, likely to be soon no more.

Over 4,000 jobs hang in the balance as yet another British High Street retailer collapses under the ongoing economic crisis, the by-product of capitalism.

Last week it was announced that Jessops (a camera retailer) was set to close down, making around 1,400 workers unemployed.

With companies going under left, right and centre where will these people find work, pay their rent and feed their families?

The right-wing British government is also cutting benefits to the disabled and unemployed meaning a downwards spiral for the working class.

Higher unemployment, failing businesses means less tax revenue for the government, which means the UK will find it harder to reduce national debt, which has been seen and admitted by the government when they acknowledged that it will take far longer than previously expected.

‘Austerity’ doesn’t work, we need investing in sustainable jobs not welfare cuts, service cuts, job cuts!

Update

It has just been announced that Blockbuster UK, the video rental chain has also gone into administration putting at risk over 4,000 jobs.

Iceland; Socialism works!

By Leon J Williams

Since the economic crisis Iceland has been on the verge of bankruptcy, it’s banking sector collapsed followed by huge international anger at the government allowing their banks to fail, rather than as with the US and UK which bailed out those banks with taxpayers money.

So since these times how have the three countries fared?

I have taken a little look at unemployment, national debt and tax rates for Iceland, the US and the UK from 2010-2012.

Unemployment
……….Iceland   USA      UK
Peak     9.4%      9.4%     8.1%
Now      5.4%      7.75%   7.8%

Debt (as % of GDP)
……….Iceland   USA       UK
2010     123.8     94.2      82.2
2011      99.1      102.9     82.4
2012      97.3      106.5     88.4

Tax Rates (up to)
…………… Iceland    USA      UK
Income tax      46.24%     15.3%    50%
Corporate tax   20%        39%      24%
VAT             25.5%      0%       17.5%

Movement
……….Tax   Debt   Unemployment
Iceland   ↗       ↘          ↘
USA       ↘       ↗          ↘
UK        ↘       ↗          ↘

Iceland’s unemployment rate has fallen by 4% the most during this period and is the only country of the three whose overall tax has increased and is the only country whose national debt has fallen.

Some will say this is clear that the policy of socialism of increasing taxes for everyone (not just the poor) works and in a sustainable way.

Often the specific type of socialism is referred to as ‘Nordic Socialism’.

Whether or not this is a form of socialism or not it should help put to bed the myth that the right-wing churn out that you must lower taxes so that businesses will employ people which will in turn reduce government debt as less people depend on the state.

Worker Cooperatives & their role in the economic crisis

By Leon J Williams

Back in early March last year I wrote about ‘Worker cooperatives‘ explaining briefly what they are and how they work.

With the current ‘economic crisis’ that seems to never end in Europe and with the UK and US on the verge of a triple-dip recession I thought I would revisit the topic.

Sometimes in life it can feel that we are all helpless, unable to control our own lives and destiny while governments and the corporate world dictate how things are going to be, businesses are going into administration at what seems an unprecedented rate and job security seems like a distant dream.

It would seem that this is the perfect time for worker cooperatives to thrive, people banding together to secure their own futures without any dependence on the state or an employer.

Why aren’t they?

Have people forgotten what a worker cooperative is?
Do people not know enough like-minded individuals?

Two reasons come to mind:

1) People are so full of fear about their current plight that they have become paralysed, on one side they have a job that could go any day or they are unemployed with precious little money to risk and on the other there is the unknown with a society that’s screaming just take what you have and be grateful!

2) People have become so accustomed to the capitalist way of thinking that they would rather keep their jobs in the hope of maybe one day earning lots of money than they would set up a co-op with other people are share their profits.

Maybe cooperatives are booming but are hidden away with the media not wishing to cover or have we become so selfish that we would chance it to make lots over stability shared?

For additional information on setting up a cooperative click on the appropriate link below:

UK
Ireland
USA