“The pound of flesh which I demand of him is deerely bought, ’tis mine, and
I will haue it.” Shylock in the Merchant of Venice.
Despite the relevance of its theme to much of my work, I am not in the habit of quoting Shakespeare’s anti-Semitic play of 1596, the Merchant of Venice. But William Buiter’s column in the Financial Times of 2 March drove me back to the text. (’Britain’s lack of credibility hurts sterling.’)
6th March 2010
Ann joins Joseph Stiglitz, Tariq Ali and Ruth Lea on Al Jazeera’s “Empire”
24 February, 2010
In the international financial system, the Rule of Law seldom applies.
It is in this context that a wake of vultures (for that is the collective noun) hovers over weakened debtor nations as diverse as the Congo, Iceland, Greece and Portugal and operate within weak international law.
They are international creditors, and their presence reminds us once again of the urgent need for governments to co-operate to devise international law to protect effectively insolvent sovereign nations from rapacious creditors. In just the same way that e.g. the US’s Chapter 11 protects insolvent companies from creditors.
Professor Kunibert Raffer of the University of Vienna has long argued for a framework for sovereign nations that simulates Chapter 9 of the US Legal code by protecting American governmental bodies (such as City governments) and their citizens from predatory creditors in the event of insolvency.
21 February, 2010
Once again apologies for a longish absence. This is down in part, to smashing (literally) building works, to a little grandchild-minding, and to other writing commitments. But have been itching to comment on a) Greece and the EU b) Iceland (it seems the UK is easing up on the pressure); c) the progress of the global recession; and d) China-US relations…..so posts on a, b, c and d are on their way….promise.
In the meantime this is the text of a letter I signed and helped draft, published in today’s Observer, and yesterday (20 Feb 2010) in the Times. It is a response to the letter written to the Sunday Times last week by 20 conservative economists, including Ken Rogoff of Harvard, Lord Megnad Desai, previously a Labour peer, and Bridget Rosewell, who was Mayor Ken Livingstone’s economic adviser.
Our letter has a number of distinguished economists as signatories, as well as my pals in the Green New Deal group - all of whom I am proud to be associated with. See below.
Sir,
We urge the UK government not to heed the siren song of the 20 economists who, having failed to predict the crisis, now seek to advise on its resolution. The world economy is in the deepest recession since the Great Depression. In the UK, output has collapsed by £70bn on an annual basis. Under such conditions, common sense tells us that the government must compensate for the collapse in private investment and address the high level of unemployment.
The only way to restore the public finances to health is to restore the economy to health.
10th February 2010
I have a comment in todays Guardian on the new campaign on the Tobin Tax - the ‘Robin Hood Tax’. Click here to read the whole article:
Ann Pettifor:
“The proposed currency transaction tax (CTT) represents the tiniest grain of sand in the wheels of global, mobile capital, and places very little restraint on the movement of international capital. For that reason CTT will be welcomed, ultimately, by international financial institutions. The proposal lacks a framework of democratic, accountable governance for the disbursement of funds collected under a CTT scheme. NGOs and treasuries are debating whether funds should go, for example, to national treasuries; to the Global Fund to fight Aids, TB and Malaria, or to the UN for mitigation and adaption to climate change. Until disbursement and distribution of CTT revenues are accounted for in a democratic, fair, and transparent way, the CTT will be vulnerable to attack.”
6th February 2010
There’s a lot of rigging of jobs data, so it’s easy for any new announcement to get my adrenalin pumping. Add to that the way journalists and economists talk about these numbers – and it’s enough to get a girl blogging.
The particular article raising my ire today is James Politi’s in the FT: “US data send out mixed message as 1m more jobs lost”.
In it Politi writes: “Yesterday’s data included revisions to figures from a year ago showing 8.4m jobs were lost since the crisis started, nearly 1m more than earlier estimates, offering a stark (a touch of empathy inserted here) reminder” “of the trouble the labour market finds itself in.” Read post »
27th January, 2010
Letter to the Guardian:
Dear Sir,
I was astonished to read Lord Myners’s assertion that banks use our deposits to lend out to businesses and homebuyers. (Comment, 25 January). This is simply not the case, and has not been the case since 1694 when the British banking system was established, and intangible bank money began the process of creating deposits in the banking system.
We have just lived through a period of asset price inflation fuelled by credit-creation that bore little relation whatsoever either to a) our deposits in banks, or b) to the underlying value of assets.
Far from the bank starting with a deposit or reserves as a basis for lending, the bank starts with an application for a loan, the asset (eg property) against which to guarantee or secure repayment, and the promise to repay with interest. A bank clerk then enters the number into a ledger/computer, and charges it to the account of the borrower. This is credit and has been known since 1694 as bank money – intangible and essentially free.
The bank does not need savings, deposits or reserves to create credit. If this were the case there would only be as much credit as there are deposits in the bank. These limits would have constrained an asset price bubble, as assets would not have been artificially inflated by underregulated credit creation. Once the loan is agreed, the bank then applies to the Bank of England for the cash element, which is a very small proportion in these days of debit/credit cards.
The fact that small businesses cannot obtain loans from banks, except at high rates of interest, has nothing to do with our deposits, but with the failure of bankers to fulfil their role and meet the needs of society and the economy. Which is why Lord Turner was right to dismiss them as “useless”. That failure may not have occurred if the Treasury had a better understanding of monetary theory and practice.
Ann Pettifor
Fellow, New Economics Foundation
Its getting late here now, but I am hearing from informed sources in the US that the Democrat candidate in Ted Kennedy’s seat is already blaming President Obama. for the loss of the ultra-safe Democratic seats.
“We were hurt by White House Failure to confront Wall St.” says the candidate’s pollster.
Celinda Lake pointed to polling released by the Economic Policy Institute showing that 65 percent of Americans though the stimulus served banks interests, 56 percent thought it served corporations and only ten percent that it benefited them.
If the Democrats lose this seat, they lose healthcare, according to my sources - because they need 60 senators to the Republican 40 to get healthcare through the Senate. 59 to 41 will not do it.
Of course the polls are not closed yet - but Wall St. is confident. The Dow shot up 106.7 points.
Is there still time for Labour to learn from the spectacular misjudgement of a President considered the most sophisticated of politicians?
17th January, 2009.
This was posted on the Compass site on the 16th January.
I am shortlisted for the North West Durham Parliamentary Selection. A less likely candidate you would be hard pressed to find. I am not a local big wig and did not grow up in the constituency. I don’t have the backing of big hitters - either in the party, or in the unions. Nor am I a youthful 25-year-old, ambitious for power. No, I am far more ambitious than that.
I want the people (especially the young people) of North West Durham to have a sound and stable future. I want Britain to learn from the catastrophic debacle of the financial crisis, and ensure it never happens again. The hopes, aspirations, health, jobs, businesses and climate of Britain must not be sacrificed to pay for economic failure engineered by a small elite in the City of London.
8th January, 2009
This piece appeared on the Guardian’s Comment site:
“Today the people of Iceland, a country whose population, at 317,000, is somewhat smaller than Leicester’s, are required by the British political, financial and economic establishment to carry the full burden of the losses suffered by Landsbanki’s depositor programme Icesave.
We consider this to be unfair, for the following reasons.
A response to the "Triple Crunch" of financial crisis, climate change and oil depletion. Read the report published by the Green New Deal Group and nef (new economics foundation).
Welcome to my blog about the financial crisis. I'm Ann Pettifor, author and analyst of the global financial system, and co-author of the Green New Deal. I predicted an Anglo-American debt-deflationary crisis back in 2003, and am known for my work on sovereign debt and international finance, including Jubilee 2000. Currently a fellow of the new economics foundation and director of Advocacy International.