Liz Truss playing with the economy

Liz Truss playing with the economy pic.twitter.com/AKrbE7XlPD

— James Felton (@JimMFelton) September 27, 2022

A little societal wisdom...

I believe our society has fallen into a pyramid scheme where there's people relegated to the bottom of that pyramid and there's people that feel they're entitled to the top of that pyramid.

Ice Cube (2016)

New bombshell film exposes Israel lobby role in UK Labour Party

A new cache of leaked Labour documents shows how Israel lobby operatives worked against former leader Jeremy Corbyn from within the UK’s main opposition party.

Israel lobbyist Luke Akehurst intervened to help save suspended right-wing Labour activist Luke Stanger from expulsion – despite a series of complaints of harassment and intimidation.

The leaked files also detail how Palestine solidarity activists and left-wingers were investigated, suspended and expelled from the party, while right-wing pro-Israel members were protected by senior party figures.

The documents were revealed on Thursday in the first episode of The Labour Files, a new three-part series by Al Jazeera’s investigative unit – the same team behind the 2017 series The Lobby and the censored 2018 series The Lobby – USA.

The Qatar-based satellite channel describes the trove of internal Labour Party materials as “the largest leak of documents in British political history.”

During the Corbyn years, the files show, the generally left-voting city of Brighton became a focus of clashes between the party’s left and right wings.

A leaked 2016 email shows that Palestine solidarity activist and Labour member Becky Massey was secretly reported to the party’s disciplinary unit by Labour lawmaker Peter Kyle. “I would like to direct you in the strongest terms to investigate and to remove the member from the party,” Kyle wrote, then naming Massey. In one tweet, Kyle complained, “she calls Israel a ‘sick society.’”

The lawmaker accused her of being “aggressive” to him and his staff. Massey denies this in the episode, saying “I’m not an aggressive person” and recalling that Kyle had been to her house for Labour meetings in the past.

Massey was targeted in part due to her posting of an article by The Electronic Intifada to Twitter.

Despite Kyle’s intervention, Massey avoided suspension in 2016. But as The Electronic Intifada revealed in 2020, Massey was expelled from Labour after right-winger Keir Starmer became leader, at the request of Israel lobby group the Board of Deputies of British Jews.

The files show that another Labour right-winger who secretly reported Massey was former lawmaker Ivor Caplin.

Caplin would later become chair of pro-Israel group the Jewish Labour Movement – which has close ties to the Israeli embassy in London.

Labour national executive member and Israel lobbyist Luke Akehurst, left, intervened to protect suspended right-wing activist Luke Stanger, also pictured, despite credible claims of abuse and harassment. Al Jazeera

More by Asa Winstanley (EI)

'Eat The Rich! The GameStop Saga's' Short Squeeze: Explained

Netflix trailer

Everyone loves an underdog, so when news broke in January 2021 that Reddit users had flooded the market by buying shares in a low-rating company, causing many of the wolves of Wall Street to lose cash, it became a quirky global news story.

But the real story was far more complex than that. While some of the Reddit users saw themselves as rogue, everyman traders, the event came about as a result of a perfect storm: nations stuck at home during the pandemic, the rise of online crypto and groups surrounding it, and the desire to accelerate what people saw as the dying stages of capitalism.

Naturally, after this financial melee, Netflix commissioned a documentary series about it, Eat The Rich: The GameStop Saga. But what really happened in the amateur trading takeover, and how did it all end?

How did it all start?

Back at the beginning of January 2020, shares in the American gaming and electronics store, GameStop, were at a low of $3, and a subreddit group, r/wallstreetbets, decided to start investing in it.

Just as Wall Street hedge fund traders began to short the stock – that is, betting heavily on it dropping further, until it went out of business – a year later in January 2021, these Reddit users and other amateur online traders went harder. By hyping the stock up in these online communities (Elon Musk obviously got involved too, tweeting “Gamestonk!!”, a reference to the weird businessman meme) the price rose from $19.94 on 11 January to a record high of $347.51 sixteen days later. The Wall Street Journal reported that, according to Dow Jones market data, more than 175 million shares of GameStop were traded on January 25, the second largest total in a single day, surpassing its 30-day average volume of 29.8 million shares.

What was the effect of this bulk-buying of stock?

Unsurprisingly, the finance experts who lost out were incredibly pissed off. Bloomberg noted that short sellers had lost a total of $6 billion due to the squeeze.

Some brokerages, including Robinhood – ironically named after the man who stole from the rich to give to the poor – halted the sale of GameStop stock and other volatile stock that the Redditors were cashing in on on their apps, leading to claims of “market manipulation”. Alexandria Ocasio-Cortez tweeted at the time: “This is unacceptable. We now need to know more about @RobinhoodApp's decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I'd support a hearing if necessary.”

This led some customers to file lawsuits against the brokerages, and demand that inquiries be set up to investigate what happened, as well as online financial regulation in general.

As The Guardian reported at the time: “A lot of people are crowing that this is giving large hedge funds and traders a taste of their own medicine. These funds have historically been able to shift the price of a stock for their own benefit, whether that is the “pump and dump”, or by openly and heavily shorting it”. It added that the big appeal - apart from shits and giggles for a population under lockdown - “is a form of wealth transfer – the only losers in this trade are large hedge funds, and the winners are lower-income internet users, some of whom are only putting up a few thousand dollars.”

Did the stunt end up pulling capitalism down for good?

Yeah, nice try… but no. John Cassidy wrote in the New Yorker at the time: “We can say that almost all speculative manias happen in four stages: displacement, boom, euphoria, and crash”, adding that the boom was indicative of “buying in the hope that you will be able to get out before everything goes to hell…This is the peculiar logic of collective action that I have called, in the past, ‘rational irrationality’.”

While we were in the boom and euphoria then, things have definitely pivoted to crash now – with the bottom of the crypto market falling out over the past year, leaving many first-time online players on the market severely out of pocket. Still, out of all of this, one positive is the online traders might have saved GameStop from going bust. As it stands today, their share price is $25.32.

Source: Esquire.

The slow destruction of the NHS by US-style privatisation

H/T TG.

Mental IIlness and QE II

H/T TG.

A transfer of wealth from labour to capital unparalleled since the 1930s

It’s the steady erosion of collective bargaining over a number of years that has led workers’ pay to fall, while employers’ profits continue to rise, says LORD JOHN HENDY QC in the first of a two-part article series

THIS week the Office for National Statistics (ONS) reports that the rate of inflation measured by the consumer prices index rose by 10.1 per cent in the 12 months to July 2022, up from 9.4 per cent in June.

The Bank of England expects inflation to rise to “just over 13 per cent” in the last quarter of 2022.

The ONS confirms what we all know: the principal contribution to inflation in July came from the cost of electricity, gas and other fuels, and food prices. The price of oil dramatically increased in early 2022. This was not because of war or increases in the cost of exploration, extraction, refining or transport: it was because the global cartel of energy producers calculated that consumers would pay.

In consequence, the first six months of 2022 doubled the profits of Shell, BP, Chevron, and Exxon Mobil to $58.2 billion.

As for gas, in July, Centrica (which owns British Gas) declared profits for the year of £857m, six times as much as its previous year’s profit of £140m.

This week, world gas prices surged to €251 a megawatt hour, equivalent to more than $400 a barrel of oil, 10 times the price a year ago.

Gas producers could thank Russia’s war restriction of gas exports for this as traders outbid each other for the limited supply.

But that too is capitalism: the price of these commodities does not reflect the actual cost of supply (which has not increased), it reflects that cost plus the maximum amount of profit which the producers can extract.

And the consumers must pay. This is a working-class catastrophe, considering that 10 per cent of UK employees earn less than £695 per month and 90 per cent earn less than £4,963 per month. Those on benefits and pensioners are even worse off.

Inflation means that those incomes are now worth less. This week the ONS reports that median wage increases are, on average, currently running at around 6.54 per cent a year. With inflation at 10.1 per cent that is a significant cut in purchasing power.

Yet the “median wage increase” disguises the fact that for the lowest-earning tenth of the workforce (three million workers), wages are increasing at a mere 1.3 per cent a year. And the median varies by industry. It might be thought that sectors, like hospitality, with shortages of workers might pay higher increases. Not so.

ONS reports that the median annual wage increase in accommodation and food services is only 2.46 per cent a year (just above arts, entertainment and recreation at 1.85 per cent and below education at 3.15 per cent).

In contrast, finance and insurance achieved 8.32 per cent a year. These figures exclude bonuses — benefits largely enjoyed by those in the top earning group.

As the value of wages falls workers become cheaper to hire and employers’ profits rise. This sudden transfer of wealth from labour to capital is unparalleled since the 1930s.

That’s why the current fight by railway workers, mail and call centre workers, dockworkers, nurses and junior doctors, bin workers, Co-op coffin-makers and the rest is so important. Their fight is a fight for the entire working class.

The upsurge in industrial action has been compared to the 1970s. But circumstances are very different.

The 1970s was the most equal decade in British history. Wages took a greater share of GDP than ever before or ever since.

That achievement was because 85 per cent of workers had their terms and conditions set by collective bargaining between unions and employers. Successive governments have demolished collective bargaining in all but a few sectors.

They did this by urging the end of sector-wide bargaining and fostering derecognition by individual employers, abolishing the wages councils, repealing legislation extending collective bargaining, ending the requirement that public contractors abide by collective agreements, allowing corporations to move whole industries overseas, and by encouraging privatisations in the public sector and outsourcing in the private sector.

Above all, the destruction of collective bargaining was achieved by legal restraints on industrial action, most particularly the outlawing of sympathetic industrial action.

The result is that less than 25 per cent of workers have the benefit of collective bargaining today. In fact, bargaining over wages is much less than that because so many workers in the public sector have their wages set either by a pay review body or by governmental wage freeze. The fact is that the vast majority of British workers are not in a position to negotiate better wages; for them it’s “take or it leave it.”

And for most, they can’t afford to leave it. They don’t need the governor of the Bank of England to tell them to exercise wage restraint — they have no option.

Lord John Hendy QC is chair of the Institute of Employment Rights (www.ier.org.uk). Read part 2 of this series in tomorrow’s Morning Star.