Posts Tagged ‘economy’

Crisis economica en Puerto de la Cruz

March 11, 2011
wine and liquor store

wine and liquor store



Puerto de la Cruz is in economic meltdown. Walk down any street, bares, tiendas, restaurantes, hoteles, cerado permamente. In some streets virtually every business is closed. Many have been around for years.

The causes are various.

Like Ireland, the property bubble has burst, and like Greece and Ireland, Spain is expected to go cap in hand for a bail out.

In England, the ConDem government is using the budget deficit as an excuse for slash and burn of public services, unemployment is growing.

There are few tourists on the streets of Puerto de la Cruz, and those who are on the streets either have no money or are not spending it.

The dire state of the local economy is being made far worse by hotels going all inclusive, todo incluido. Money is not flowing into the local economy. Most goes to the foreign tour companies, some to the hotel and of that, the wages is all that flows into the local economy.

Some countries make all inclusive illegal. This is something Tenerife or the Canary Islands must to do as a matter of urgency. If not, next year Puerto de la Cruz will be a ghost town.

A head tax on the hotels offering all inclusive which would make it no longer a viable proposition and would compensate for the money no longer flowing into the local economy.

Bailgate Pound

What we’re arguing against and what we’re fighting for

December 12, 2010
George Osborne

George Osborne

George Osborne thought his smokescreen was working. It looked for a while like the people of Britain were going to accept the biggest cuts to public spending seen in the Western world in a century. He had, it seemed, delivered a sleight of hand that would impress even the most slippery magician.

The trick he’s been using to great effect is, though, an old one. It works something like this: in a crisis, people panic. They accept something big has to happen to solve it. But massive crises are complex, and a global economic collapse is particularly hard to understand – we aren’t taught the basics of economic history at school, we learn that these are matters for clever men in suits who use long words.

And so what George Osborne spotted is what right wing politicians around the world have known for the last 40 years: a disaster is a great time to radically change a country. From the privatisation of New Orleans’ schools after Katrina, to the corporate plunder of Iraq after the 2003 invasion, this trick is nothing new. Naomi Klein’s book The Shock Doctrine describes in detail how it has been used the world over.

There is a big problem. People understand this might require a big solution. And so they accept policies they would never normally countenance – policies not designed to solve the problem, but to radically change society in a way no one ever voted for.

And like this sleight of hand, Osborne’s “solutions” too are nothing new. The Conservative students I studied with at university – the generation who were born under Thatcher, and are now the researchers and aids to this government – were arguing for 30% spending cuts long before the recession. And their predecessors did too – in fact, in 1910, the Conservative Party brought down the Government rather than allow the people’s budget, the foundation of the welfare state, to pass. And they have used every opportunity since to rid this country of what they see as a dangerous socialist experiment.

And this “solution” is, of course, nothing of the sort. The idea that you solve a deficit caused by unemployment by cutting jobs is economically illiterate. Don’t take it from me – look at what is being said by the world’s leading economists, including most recent Nobel prize winners: Britain is embarking on a radical economic experiment which is not only un-necessary, but probably going to make the recession worse.

But because people have been taught that economics is too complex for us, many people seem to stop listening when you try and explain why the cuts are a bad idea. And I’ve tried lots of ways:

I’ve tried explaining that the Treasury’s debt really isn’t that big: it was bigger for most of the 20th century, and, compared to the size of our economy, is one of the lowest on earth.

I’ve tried to explain that most of the debt is owed to people in the UK: our pension funds buy government bonds. If, as the Tories predict, borrowing did get more expensive, that would just mean that Britain’s pension funds would get fatter – money the Treasury could tax back.

I’ve tried pointing out that the borrowing isn’t getting more expensive, but cheaper. And this is extra-ordinary. Before the election, the excuse that they gave for cutting public spending was that they believed we’d be punished by the bond markets if we didn’t: investors wouldn’t buy government bonds. They were wrong. What has actually happened is that investors have decided that they don’t want to risk buying shares in companies which might collapse, and so they have rushed to buy government bonds. As a result, borrowing is cheaper than it’s almost ever been. The reason they gave for cutting has evaporated. They were just plain and simple wrong.

And I’ve tried explaining the multiplier effect. The way out of a recession is to invest in jobs. Once you’ve created a job, that person buys stuff and pays taxes. The Tories like to compare the national economy to a household. But, when I buy stuff in the shop, I don’t get lots of the money back in tax. And I don’t get even more back in tax when the shopkeeper buys her stock or pays her staff. And again when the staff buy things, and so on. And so the way out of the recession is to look at the real problem – unemployment – and take advantage of record cheap borrowing, by investing. As Nobel winning economist Joseph Stiglitz – former economist for both the World Bank and Bill Clinton – tells us, cutting now could well lead to higher long term debts.

I’ve pointed out that we tried this all before. Cutting spending to pay the debts of WW1 caused the great depression. Building the welfare state allowed us to build our way out of the debts left by WW2.

And I’ve reminded people that it wasn’t public spending which caused this crisis, but listening to crazy right wing ideologues like George Osborne who thought that we should shut down everything and hand our economy to the bankers.

And I’ve tried explaining that public services aren’t a cost to the economy but an investment in the civilisation which makes our economy possible. If we don’t invest in them now, we make our future economy less prosperous, and this will cost far more than our record cheap, very low debt.

And I’ve pointed out that the impending climate crisis means we urgently need to invest to create jobs building a new economy – this can’t wait, and the legacy we leave if we don’t will be unimaginable.

And I’ve tried many more arguments besides. And these arguments work – sometimes. A little discussion of why the great economists of our age think that George Osborne is either mad or bad or stupid often does leave people convinced.

But many turn off at the wiff of a discussion of economic theory. And you don’t get the chance to have that little conversation with everyone in Britain.

However, there is one more argument: one I haven’t yet mentioned, which doesn’t require so much explanation – an argument which convinces almost all who hear it. A fact so compelling that once shouted, it will echo throughout the country:

If the mega-rich who caused this crisis paid the same level of tax as you and me, we wouldn’t have a deficit.

And of course, all of these arguments are what the Labour Party would be explaining, if they were brave enough to challenge Britain’s entrenched corporate power. But they aren’t. And so, with the noble exception of our one Green MP, and a few on the Labour left, it it falls to us, the people, to make this case.

But that’s ok. It’s ok, because this is nothing new. Public services were won by social movements who shouted, and screamed, and withdrew their labour, and occupied, and built new political parties, and, yes, smashed windows. And it’s ok because the fact that they don’t teach economic history in school doesn’t mean that we don’t remember this lesson. It was our grandparents and our great grandparents who won a state pension, who invented the NHS and who built affordable council houses. That was their legacy to us.

And it’s ok because our thanks to them will be to use the technology that our parents with their state funded education invented for us, to organise a resistance to the Tories so strong that our children will never forget. Because the history of Britain is a history of ordinary people fighting the Tories to win a fair share of our country’s wealth and power.

And as UK Uncut have shown, it is not a history that our generation will soon forget. Because people are realising that George Osborne’s smoke screen stinks. And as we blow it away, we will have a chance to learn the lesson Osborne teaches us, and take the chance to work out, together, what kind of country we want to build from the ashes, and leave for our grandchildren. And, if nothing else, that’s worth fighting for.

A guest editorial posted by Adam Ramsay of Bright Green Scotland and No Shock Doctrine on UK Uncut.


UK Uncut

Tax Justice Network

Tax Research UK Blog

Also see

A sad day for democracy

Captain SKA – Liar Liar

For Our Generation it’s the Greens or it’s Nothing

Taming the Vampire Squid: Take back our banks

Why cuts are the wrong cure

Shop a Scrounger

Topshop day of action against tax dodger Sir Philip Green

Sir Philip Green and his Topshop billions get the UK Uncut treatment

Grolsch tax avoidance

Grateful Vodafone executives say a big thank you to Chancellor George Osborne

Nationwide shut down of Vodafone stores

Vodafone £6 billion unpaid tax bill

Taming the Vampire Squid: Take back our banks

December 7, 2010

Journalist Matt Taibbi wrote that a big investment bank is like a giant vampire squid. A new animation from The Great Transition
asks what banking is for? And whether vampire squid can ever be tamed?


Taming the Vampire Squid

Why cuts are the wrong cure

Shop a Scrounger

The Great Transition

New Economics Foundation

Wake Up, Freak Out – then Get a Grip

Also see

Shop a Scrounger

Why cuts are the wrong cure

Why cuts are the wrong cure

December 4, 2010

We are not all in it together. The poorest is society are being made to pay the price of the greed of the richest.

There are alternatives to savage cuts in welfare, savage cuts in public spending.

We all know cuts are a false economy. Cuts will make Britain more unfair. Yes, there is a deficit, and yes it should be reduced, but at a rate the economy can cope with. A budget deficit, which is not as bad as claimed, is being used as an excuse for slash and burn of public services.

Also see

Shop a Scrounger

Ministers accused of ‘burying’ damning report on impact of benefits cuts

Topshop day of action against tax dodger Sir Philip Green

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