Recession Archives - Aberdeen Voice

Debt Culture And The Need For A New Direction

Articles, Environment, Featured, History, Opinion No Responses »

Oct 282011

Jonathan Hamilton Russell discusses what he feels are the problems facing society today and how we could potentially solve them.

The culture and economics of greed and reckless speculation linked to ever increasing debt has left the world economy on the brink of collapse. It is the vulnerable elderly, those with various disabilities and the young that are the most affected.
We have seen across the world an increasing gap between rich and poor and large numbers of young people being unemployed or at best taking work not linked to their training.

Yet the solutions to our problems have included little in relation to redistribution of wealth.

The poor if given more money are much more likely to spend than the rich and this in itself would help in getting us out of recession. The rich have gained from the good times and as such they should also take the responsibility and pay their debt to society now we are in crisis. To this affect there needs to be increased taxes at the top and tightening up of legal and illegal tax loop holes.

John Kenneth Galbraith possibly the most famous and respected Economist of all time talking about the 1930’s recession mentioned two main factors that caused the 30’s crash – increasing disparities of wealth, and lack of Economic intelligence.

More recently Steve Keen an Australian Economics Professor who predicted the present world financial collapse has identified the main reason for the collapse in the 30’s and now, as high levels of debt.

These debts are much worse now than in the 1930’s.

He thinks the financial bailouts will make the situation worse as we will have even more debt to pay off leading to a spiral of decline and to the potential collapse in the world economy.

Yet the solution so far has been to throw more money at bad debt rather than investing in public infrastructure and future employment as was done in the 30’s. As part of this we also need to be investing in green technologies and insulation of houses to help reduce the increasing costs of energy, which again affect mostly those at the bottom end of society. This in turn would create more employment.

More power to those protesting outside Wall Street but also spreading to other cities in the United States and across the world including Glasgow, Edinburgh and London.

Image credits:
GAMBLING DEBT © Dana Bartekoske Heinemann | Dreamstime.com
CHEAP HOUSE © Franz Pfluegl | Dreamstime.com

Back From The Brink – Alistair Darling Biography Review.

Articles, Community, Creative Writing, Information, Opinion No Responses »

Sep 162011

Voice’s David Innes’ benchmark indicator of biographical literature quality is more or less, “Would I have a pint with this guy?” It was with some interest and not a little thirst that he approached the latest revelations from inside government, written by the man who achieved heady high office as President of the University of Aberdeen’s Student Representative Council in the mid-1970s and then went on to reputedly greater things.

Tabloid is a newspaper shape, although the term is now universally used to describe populist low-rent journalism. Not here at Voice where your screen size delineates layout and low-rent isn’t our way.
Tabloids’ views on Back From The Brink have been almost prurient in their seizing on the Darling-Brown relationship as their focus for summarising the book’s content and offering review.
Whilst this is interesting, and is probably welcome relief from the views of Debbie from Doncaster, 22, 38-22-36, on monetary policy within the Eurozone and its effect on Greek public expenditure, far more interesting is Darling’s take on the events and decisions forced upon him during his tenure in No 11, as the economic crisis of 2007 threatened to destroy global financial systems.

The former Chancellor’s view is that the Financial Services Authority (FSA) failed due to its never having had to deal with a financial crisis, as the regulatory system had only ever had to operate in good times.

When the chill economic breeze blew over the North Atlantic and the unregulated mortgage free-for-all was found not only to have been the preserve of US financial institutions, the UK banking system clammed up, investors panicked and the reliance on UK financial service companies for 25% of UK tax revenue was shown up for the short-term folly that it was. Not before those responsible had lined their own pockets, of course.

As banks pleaded poverty and our mortgages and pensions were put at risk, these self-same bankers, previously vocal in their demands to be left alone, free from governmental intervention, queued up at the Treasury door, looking for a bail-out, courtesy of Mr and Mrs Joseph Soap of Gullible-At-Sea, also demanding that the “toxic assets” (those’ll be debts which will never be paid, then) be taken on by taxpayers whilst the banks continued to rake off the top line from profit-making accounts.

It is to his credit that the Chancellor extracted significant pounds of flesh from these banks in charges for the liquidity handout they received.

Here’s a very interesting fact to ponder next time you’re trying to have a cheque cleared through our banking system, where processes move at the pace of traffic in King Street on a rainy Thursday night, the week before Christmas – $6bn was reputedly taken from the UK Lehman Brothers’ UK operation on a Friday evening so that it could be in the US operation’s empty coffers on the Monday morning. As the author observes, this

“demonstrates…how quickly money can be moved from one jurisdiction to another”.

Of course, when it suits the usurers.

It is to Darling’s credit that much of the technical content is made easy to understand, even to economic illiterates like your reviewer. He is also very clear on timescales, forensically-sharp on the decision-making processes and pays suitable tribute to a Treasury team worked to exhaustion putting measures in place to prevent meltdown.

He stints neither from taking credit for saving the banking sector – and by definition everything else in the economy – from collapse, nor shies away from admitting where errors were made.

Among those errors was the Prime Minister’s approach to the 2010 General Election. His “Tory cuts v Labour investment” was a line easily seen through, a false promise which the electorate didn’t buy. Darling’s view, over-ruled, was that voters could be persuaded that whilst cuts were to be made, they would accept that they did not need to be made to the degree and on the timescale gleefully endorsed and seized upon zealously by public sector-despising Tories and their Lib Dem patsies.

As sometimes sweet relief from the incessant round of IMF, G7 and G20 meetings, Spending Review speeches, Budget statements and Treasury late-night sessions, Darling writes affectionately about his family, the social and charitable aspect of life in No 11 and of his bolt hole in the Hebrides. He comes across as mild-mannered, thoughtful, loyal and reliable. He describes himself as “managerial”. That’s a fair self-assessment.

Of course, this insider account is one-sided, although credible. It will be interesting as others’ takes on the financial crisis are published and comparisons can be made.

So, would I have a pint with the former Chancellor? Yes, without a doubt, if only to point out that “the late Tommy Docherty” referred to on page 119, is very much alive.

Your round Alistair, just don’t put it on expenses.

Back From The brink. 1000 Days at No. 11
Alistair Darling
Atlantic Books.
ISBN 9 780 85789 279 9
337pp

£19.99

Nuclear Power And The Future Of Delivering Energy

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Jun 182011

Nuclear Power has always been a contentious issue. There have always been advocates for and against. International concerns about Climate Change, an impending energy crisis and the nuclear accident in Japan have highlighted the issues concerned. Jonathan Hamilton Russell writes.

For CND there has always been the concern of the link between the technology of Nuclear Power and Nuclear Weapons. The Sustainable Development Commission chaired, at the time by Jonathon Porrit in 2006, produced a report for the then Labour Government stating unanimously that, following a detailed analysis of sustainable development factors, that Nuclear was not the preferred option.

This followed a Government White Paper in 2003 which had concluded that Nuclear Power was not an Economic Option. Several days after the Sustainable Development Commission reported, Tony Blair announced that Nuclear Power was to be an essential component of our future Energy Provision.

Recently high profile environmentalists James Lovelock and George Monbiot have been converts to Nuclear Power given their concerns about Climate Change and the resulting requirements to cut back on Carbon omissions.

The SNP have long championed alternative energy and have been against Nuclear Power, as have the Scottish and English Green Parties, Greenpeace and Friends of the Earth. Jonathon Porritt, who was sacked as the chair of the Sustainable Development commission still sees alternative energy and energy conservation as the way forward.

We have had until recently a bonanza of cheap energy in Scotland and the UK and the public has become used to cheap energy and the ability to regularly drive, fly and live and work in centrally heated buildings. This situation will soon end. The reality of peak oil and the need to import Russian Gas have yet to be admitted to the public by most politicians, and the expectations of the general public is that the status quo remains. Whatever decisions are made, there will be inevitable opposition to both nuclear power and alternative energy. Climate Change has already gone down the political agenda.

We have failed to invest and research sufficiently, concentrating our efforts on oil, gas and also nuclear

The costs of producing both Nuclear Power and Alternative Energy will be much higher than present costs and will require both increased public subsidy and will mean rising costs for the consumer. The costs are likely to reduce as we become more expert at production of nuclear or its alternatives.

The costs of South Korea’s Nuclear Reactors went down by 28% by the time they produced their 7th and 8th Reactors.

Safety measures have improved – the Reactors in Japan are 40 years old – and the safety technology no longer requires power from outside. However, the risk of human error intentional or otherwise and unknown hazards still exist. The costs of insurance are high and do not include de-commissioning. The potential hazards of storage of spent Uranium still remain to be seen. Only three councils have agreed to storage underground – all three being in Cumbria.

There is however still uncertainty of risk in relation to this method of storage. Storage and waste costs still have to be borne by government. Increased use of Uranium will lead to shortages as estimates are that about 100 Years worth still remain, and when it runs out what will happen?

There are concerns and restrictions in many countries regarding the mining of Uranium, and Kazakhstan – a Muslim country on Iran’s border – has the main stocks. The costs of Uranium are likely to increase if there is more demand. There has historically been considerable contamination of local communities when mining has taken place, and even with greater safety measures some risks will remain.

The alternative is increased energy conservation and the use of renewables. As identified by the Sustainable Development Commission the UK – and in particular Scotland – has the potential with tidal energy, wind power, carbon capture, waste and power, and solar developments to cover our energy needs.

However there are challenges. We have failed to invest and research sufficiently, concentrating our efforts on oil, gas and also nuclear. There would have to be significant resources put into research and design, and if we were also putting our efforts into nuclear then opportunities with renewable would be lost.

The recession will mean there is less money to invest. A much better use than cutting the cost of petrol in the long term would have been to use the money from taxing oil companies to pay for the development of renewable energy resources.

There would be problems both with nuclear and renewable as to where to place energy resources.

There has been significant public opposition both to nuclear and wind developments. The Crown Estate commission has powers in relation to developing resources at sea which would have to be overcome.

The North-East of Scotland has a huge potential for the development of renewable energy and the area would benefit from more focus on its development. The main problem I would suggest in relation to our future energy provision, is public expectations and politicians needs in terms of re-election. People have become used to private transport and cheap central heating and whichever way we go will be unpopular.

My own conclusion is, that spending on Nuclear Energy developments will divert money that could be spent on energy efficiency and renewable energy. There is a challenge in relation to needs in terms of peak usage – such as before Christmas – but these could be overcome by us linking into a European network of energy.

In historical terms Nuclear Power is just another short term fix whilst the opportunity of renewable energy will always be with us. In some countries which are landlocked, Nuclear may be the only possible route but given what has happened in Japan potential risks of location would have to be taken into account.