ALB
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Every week brings refutation of the view that banks can create money out of thin air and confirmation that they can only lend money they have got (whether from savers or what they have themselves borrowed). We may as well record them here as anywhere. So, here’s a BBC report on Halifax’s decision to raise the rate of interest on their loans to housebuyers:
Quote:The UK’s biggest mortgage lender, the Halifax, has confirmed it is raising its standard variable mortgage rate (SVR) from 1 May.The Halifax said the rise – from 3.5% to 3.99% – was due to the higher cost of raising funds for mortgages from both savers and the financial markets.(…)It argued that its hand had been forced by market conditions.”The change acknowledges that the cost of funding a mortgage in today’s market remains significantly higher than the longer term average,” the Halifax said.”The increase to the rate reflects the fact that raising money through retail savings and in the wholesale markets is currently very expensive by historical standards.”The report said other banks were doing the same and for the same reason:
Quote:On Friday, RBS raised the rate on two of its mortgages from 3.75% to 4%. (…) An RBS spokesman said the rises were down to the higher costs they were incurring borrowing money, which they had absorbed for some time before opting to pass it on to some of their customers.Banks are essentially financial intermediaries whose main income comes from borrowing money at one rate of interest and lending it at a higher rate. They can’t simply conjure money up out of thin air and then charge interest on it, as numerous currency cranks claim.
Personally I’ve always been against putting branch Minutes on the internet for precisely the reasons you give. I’m sure there must be quite a few members who, for various reasons, don’t want their names and political opinions splashed all over the internet, and for ever. Maybe this should be the subject for a future Conference discussion and decision. You could also raise it in your branch and get the practice dropped unless all branch members agree to it. Most branches don’t do it.
Jesting apart, I think Stuart is making the philosophical point that if there is a choice only of two evils it’s logical to choose the lesser. But the real question is whether or not there is just a choice of two evils.Here’s an extract from wikipedia on the term:
Quote:An early example of the lesser of two evils principle in politics was the slogan “Better the turban than the mitre”, used by Orthodox Christians in the Balkans during the rise of the Ottoman Empire. Conquest by Western Roman Catholic powers would likely mean forcible conversion to the Catholic faith, while conquest by the Muslim Ottoman Empire would mean second-class citizenship but would at least allow Orthodox Christians to retain their current religion. In a similar manner, the Protestant Dutch resistance against Spanish rule in the 16th century used the slogan Liever Turks dan Paaps (better a Turk than a Papist).The reference at the end of the wikipedia article to the 2002 French presidential election which opposed the conservative Jacques Chirac to Le Pen of the National Front reminds me that I actually saw a Trotskyist march in Lille at the time with the banner: “Cholera or the Plague: Vote for Cholera”. Unfortunately I didn’t have a camera with me.Incidentally, which is the lesser evil: the Roman Catholic Church or the Greek Orthodox Church?
And line up with those US Occupiers who say re-elect Obama against whatever nutter the Republicans finally come up with?
stuartw2112 wrote:And in reply to ALB, the Occupy the London Stock Exchange camp is over. The Occupy movement as a whole, here too but especially in the States, is as lively as ever: so lively it’s impossible to keep up with everything that’s going on.That the camp at St Paul’s is over is all I meant. Of course the Occupiers are still around and still discussing. Good.I agree with you about the US. It is difficult to follow what’s going on. There, some have gone reformist, such as these but they have been repudiated by others. Some groups have been taken over by re-elect Obama people or by vanguardists. It’s all very confusing but, hopefully, there are some who are still seeking a way out of capitalism.
I didn’t know there was such a thing as an anarchist theory of economics. I thought they all accepted Marxian economics, like Bakunin did.
It’s all over then. At least they had the sense to go peacefully and not try to battle with the police.
I suppose this is meant only as a publicity exercise to get people thinking about a moneyless society. If it’s anything more it will be a flop.In any event, as we’ve always said “if people won’t vote to end capitalism, they’re even less likely to strike to end it”. There are plenty of elections coming up to test how many people want a moneyless society. In France there’s a presidential election. Why not call for people there to Vote for a Moneyless Society?There’s regional elections in London here in Britain in May. We will be standing a couple of candidates, standing for a moneyless world (or rather for a world society, without frontiers, based on common ownership and democratic control of productive resources, in which money would become redundant), also basically as a publicity exercise. If there really was a moment building up for a World Strike on Friday 27 July 2012 to establish a Moneyless World then we would know by 3 May when the London elections take place — and there’d be 2 Socialist councillors in the Greater London Assembly. A nice thought but, unfortunately, not very realistic at the moment.
A comrade from outside Britain has emailed Head Office saying he wants to be in touch with any other comrades using this. If there are any who do and want to hear the comrade’s tweets, email Head Office at spgb@worldsocialism.org and you can be put in touch with him.
Ozymandias wrote:Let’s face it folks we are all doomed. This species is on it’s way out…fast!Come on, comrade Fraser, it’s not that bad.
Just heard Robert Peston commenting on the BBC on Lloyds Bank’s annual report. Here’s the matter-of-fact way he takes it for granted that banks are financial intermediaries that borrow at one rate and lend at a higher one, and how they can only lend what they have got the funds for, and how their profits are squeezed if they find these harder to get:
Quote:Perhaps the most striking trend is that what’s called the interest margin – the difference between the interest Lloyds charges for loans and what it pays out in interest – has shrunk and will shrink again this year. The interest margin fell from 2.21% to 2.07% and is expected to fall by a similar amount in 2012.One of the main reasons for this income squeeze is the rising cost for banks of borrowing money on wholesale markets, or from other financial institutions, at a time when what banks can charge for loans to customers remains under pressure – partly because central banks, and in its case the Bank of England, are keeping official rates at record lows, and partly because the demand for credit is subdued.Lloyds is becoming less dependent on these less reliable wholesale sources of funding – as part of a strategic effort to make itself safer. And there has been considerable progress in that regard: its more dependable retail deposits represent 62% of all its funding today, compared with 56% a year ago.But the price of wholesale funds is still a big influence on Lloyds’ profits.So much for those who think that banks can create money to lend out of thin air.
Mcnair does raise one interesting possibility: that the present crisis in the West is not just an ordinary economic crisis but also maybe a reflection of a shift of world capitalism’s centre of gravity away from North America and Europe. In which case there might never be a proper recovery here, but it would take place in other parts of the world. But, as Macnair says, this is merely a “speculative hypothesis”.
That’s good news. Email spgb@worldsocialism.org and someone will send you a Form A (that’s it). A Form C is a branch financial return !
Our use of the slogan “Abolition of the Wages System” has nothing to do with wanting to attract Occupiers but is something we inherited from Marx who, as I’m sure you know, ended his talk to English trade unionists in 1865 as follows:
Quote:At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!” [his emphasis]Quote:Trades Unions work well as centers of resistance against the encroachments of capital. They fail partially from an injudicious use of their power. They fail generally from limiting themselves to a guerilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class that is to say the ultimate abolition of the wages system.In addition, in 1881 Engels wrote a series of artocles for the English trade union paper the Labour Standard. Here’s how he ended one of them:
Quote:The working class remains what it was, and what our Chartist forefathers were not afraid to call it, a class of wages slaves. Is this to be the final result of all this labour, self-sacrifice, and suffering? Is this to remain for ever the highest aim of British workmen? Or is the working class of this country at last to attempt breaking through this vicious circle, and to find an issue out of it in a movement for the ABOLITION OF THE WAGES SYSTEM ALTOGETHER? [his emphasis]So, don’t worry, Comrade, we haven’t departed from our principles. We are still what we were when you a member.
