Showing posts with label politics. Show all posts
Showing posts with label politics. Show all posts

Monday, 9 May 2016

Donald Trump: The King of Debt [Video]

Donald Trump, the Republican nominee for President of the USA, is pretty outrageous at times. What he says about the economy, national debt and borrowing doesn't help him either. 

Sunday, 24 April 2016

4 Reasons Why Hillary Clinton Is NOT What The USA Needs

The run up to the 2016 USA General Election has been full of twists and turns. As the Democrat Party seeks to settle its own election for who will run for President, it's important that voters recognise just what exactly front-runner Hillary Clinton could bring to the table, and why it means she is not the President the USA needs.

1) Because she's not going to work just for the American people.
The role of money in politics is something that is incredibly important to take heed of, because it has the capability to influence pretty much every policy stance taken by any politician. You can read more about this issue here, but to summarise, 'donations' made by powerful individuals or companies are often far more than that. They are investments, IOUs- I donate $100k to your campaign, when you become President you develop policies that save me far more than that, whether through tax cuts, deregulation, anything. This, of course, often comes at the cost of everyone else.

The Clinton campaign has refused to reveal what
was said in a series of speeches worth millions of dollars. 
The typical belief is that it's only Republicans who use this tactic to support their election chances, but that's far from the truth. The practice is widespread among Democrats, and perhaps no more visible than in the Hillary Clinton campaign. In 2014 and early 2015, she made $11m from making 51 speeches to various banks, financial institutions and corporations. That's over $200k per speech. Among the most controversial of these speeches are three, made at financial giant Goldman Sachs, for which she received $675,000. Not only is this a massive sum of money, but it's the fact that she refuses to release the transcripts that has put the spotlight on Hillary Clinton's fundraising activities.

Could it be her covering up a couple of Romney-esque quotes she made to the financial elite? Who knows. But, to paraphrase her opponent Bernie Sanders, a speech costing $225k must have been an incredible one- one that the American people deserve to hear.

But receiving such massive amounts of money from individuals and corporations with special interests means Hillary Clinton's own guiding motives, as President, would be heavily polluted. Not just Goldman Sachs, but Wall Street as a whole, various defence contractors, and other corporations don't hand over these sums of money just for fun. They gain a return from it, it's an investment to them. That's why they've been doing it for so long. Because it works. And Hillary Clinton being President would be a true victory for this corrupt system.

2) Because she has dangerous stances on foreign policy.
Barack Obama has come under some criticism over his often contradictory foreign policy, particularly regarding the Middle East. . It was a great source of hope, when Obama would speak of how he wanted to "end the mindset that got us into war" and caused such chaos under his predecessors. And indeed, he had some achievements, such as the reparation of some relations with Iran, but his Presidency has been marked with growing instability in the Middle East, spreading from Iraq to Libya to Syria and elsewhere, in which failed US policy played a significant role.

But Obama's 'hawkishness' (if you can call it that) pales in comparison to that of Hillary Clinton. It's actually been a source of some disagreement between the two during Obama's time in office. Take the Iran issue. Obama has led some sort of improvement of relations, through reduction of sanctions. However, in a recent speech at an American Israeli Public Affairs Committee (AIPAC) meeting she set out her far more aggressive vision of relations with Iran, promising that as President she would immediately seek to "impose real consequences" in the form of reinstated sanctions, reversing any progress made by Obama.

Of course, at the AIPAC speech, she completely ignored the illegal activities of Israel, whether it's the occupation and blockade of Gaza, the airstrikes or the continued expansion of settlements in the West Bank. "Parents worry about letting their children walk down the street. Families live in fear", she said at AIPAC, speaking of Israelis. Well Hillary, tell that to the families of the 2,310 Palestinians killed, or the 600,000 civilians who lost their homes in the same 50 days of bombing in 2014.
Jack Keane- military analyst to Fox News, and
close adviser to Hillary Clinton.

But elsewhere, it's reasonable to say that were Hillary Clinton already in office for the past 8 years, the whole ISIS situation may be a lot worse. She has expressed support for some ideas that have proven to only stoke the fires of tension in the Middle East. Not only was she in favour of the Iraq War, but she has supported moves to increase troop numbers in Afghanistan (to 40,000 troops, which was too much for Obama and VP Biden)  provide weapons to rebels in Libya in 2011 (during an UN enforced weapons ban), fund and provide weapons to rebels in Syria too (most of whom turned out to be ISIS). Now you may agree or disagree with these policies, but it's clear that Clinton would be a significantly greater meddler in the Middle East than her predecessor. It's not really surprising, however, how right wing her military mindset is when you see that her "single greatest influence" on her foreign policy is Fox News' chief military analyst.

Hillary Clinton is more distrusted by voters than Donald
Trump (YouGov)
3) Because she's such a 'politician'.
With Hillary Clinton comes a significant lack of trust. A stunning 56% of responders to a YouGov poll stated that they do not trust Clinton. This was the highest of all presidential candidates, and of course she received the lowest number of votes claiming her to be honest. She was even more distrusted than Donald Trump.

But there's a reason for this: the large majority of people who don't trust Donald Trump, Ted Cruz and the other Republican candidates are Democrats. Yes, the Republicans may also have some internal trust issues, and they are likely to prefer one candidate, but they are largely cohesive in their right wing views.

Many allege that it was Hillary Clinton's department's
inaction that enabled an attack on a USA compound
in Benghazi, Libya. 
Hillary Clinton, on the other hand, is not just intensely mistrusted by the Republicans (just google 'Benghazi', or 'Hillary Clinton emails' to get a taste of this), but mistrusted by many Democrats too, who see her previous policy positions and actions as too right wing.

One of the greatest accusations against Clinton is that she is a serial flip-flopper, a 'typical politician' whose views change to suit the political situation which she is in. Take one of her messages this campaign, of "raising incomes for hardworking Americans". She says she will do this by reducing taxes, "closing corporate loopholes" and by imposing "accountability on Wall Street", but many Democratic voters are sceptical- and with reason. After all, if she was really going to bring banks on Wall Street to account, why would they pay her millions of dollars? Even those on the Street itself don't believe she will do anything significant to them. There's every chance she could turn around as President and tell all the banks that they've been had- but let's be honest, that's very unlikely.

Her history contrasts with many of the positions she currently takes. Whether it's economic (she voted in favour of a $137bn tax break for corporations a decade ago, dubbed "The Most Absurd Tax Giveaway of 2005") or social (just a decade ago she was firmly against gay marriage), she has a history of adapting her policies to whatever will help her in the next election. This election, it's clear how Hillary has tried to adapt her policy positions to try to lure over Bernie Sanders supporters, but it has not been successful as a whole. After all, you can't preach about how bad money in politics is while taking it yourself.

4) Because there's a better alternative.
Despite all this, it's difficult to deny that Clinton has the upper hand in the Democratic election, especially after her victory in New York.

But there's still hope for Democrats dissatisfied with her, in the form of Bernie Sanders. With around 1600 delegates still up for grabs, Clinton's lead of 275 will be difficult, but not impossible for the Vermont veteran senator to surmount.

A young student Bernie Sanders, getting arrested in
1963 for participation in a Civil Rights Protest.
Bernie Sanders has real grassroots support. He has no Super PACS behind him, funded by Wall Street or any large corporations, yet with an average donation of $27 he has still managed to raise as much money from campaign contributions as Clinton. He has never made any secret speeches, and received hundreds of thousands of dollars for them. He will not be scared to stand up to those behind the economic turmoil of the past decade; in fact, they're scared of him. He knows of the dangers of military intervention, and has repeatedly voted against it throughout his political career, favouring a diplomatic, co-operative approach. He recognises the rights of both the Palestinians and the Israelis, and has called for an end to the illegal occupation and settlement developments. And, perhaps most important of all, he is trustworthy. He has been a long time advocate of rights, for all minority groups, even when it was not an easy position to take. He has been addressing thousands of ordinary people, while Clinton has been cosying up to elites in exclusive fundraising dinners that have been called 'absurd' by their own hosts.

He, Bernie Sanders, is what the USA needs to progress into a brighter future. It's certainly an uphill battle for Bernie now, but it's not over yet.

Saturday, 16 April 2016

Mythbusters: Brexit Edition

People have been clouded by scaremongering that has prevented us from getting to the real debate of Britain's EU membership, says Matt Walton. Today, he seeks to set the record straight on this key issue.

The debate surrounding the economic implications of Britain leaving the EU has so far been dominated by both sides trying to outdo each other in terms of scaremongering. “Brexit could cost £100bn and nearly 1m jobs” say the EU-funded CBI one week. “EU policies threaten to cost Britain £9,265” says the IEA the next. It is perhaps no wonder that many voters feel a little bit unsure about who to trust. The announcement this week that the government would spend £9.3 million on a pro-EU leaflet to every household meant that they had another organisation to add to that list of scaremongers. In this piece, I will attempt to draw together the economic arguments for Britain to leave the EU while rebutting some of the outlandish claims of the ‘In’ side. Before starting, however, I have a slight admission: My main motivation for wanting to leave the EU is not economic, but rather democratic. I fundamentally believe that we must leave so that we can hold those who make our laws accountable. However, given that this is an economics blog site, I will focus on the potential economic benefits which this country could enjoy.

Naturally most of the economic arguments surrounding the debate concern Britain’s trading relationship with the EU if we vote to leave. Trade is what the EU is all about after all, isn’t it? Campaigners on the Remain side have said that Britain would struggle to negotiate a favourable trading arrangement if we leave. That Britain is a relatively insignificant market for the EU and it would therefore be the EU which dictates the conditions of the deal, not the UK. This is incredibly misleading. Firstly, on the day that we vote to leave the EU, we become the EU’s largest export market for goods. Moreover, we currently export goods and services to the EU to the value of £228.9 billion per year whereas we import £290.6 billion of their goods and services (2014 figures). This means that we have a trade deficit with the EU of £61.7 billion. At a time when the EU struggles to shake off the remnants of the Euro crisis and when growth is still sluggish, can you imagine any desire on the EU’s part to forfeit this huge source of income?

Let’s suppose, however, that Britain does not reach a trade deal with the EU. A worst-case scenario, where the EU member states close ranks and say: “We won’t give you a trade deal, if you’re out you’re out.” Aside from being a particularly unlikely outcome, it’s also not a particularly damaging one for the UK. In this situation, the UK would revert to the rules of the World Trade Organisation (WTO). WTO rules dictate that tariffs on most goods must be between 1% and 3%. Let it be reminded that this is the minimum standard. In other words, almost negligible. The only areas where this is not the case is a) cars and b) agricultural products. 

But any tariffs the EU imposes on Britain will be matched by equivalent UK tariffs on EU products. Who makes wine and cars? Answer: the Germans and the French – the two countries who dictate EU policy more than any others. The German car industry alone, would be at risk of facing reciprocal UK tariffs on the £16 billion market for German cars in the UK. Almost 1/3 of the new cars sold in Britain come from Germany. You can be sure that, if we vote to leave, the heads of BMW, Mercedes, Volkswagen and the rest of the hugely successful German car manufacturers will be in Angela Merkel’s office the next morning saying “We need tariff-free access to the lucrative British market.” It is inconceivable, therefore, that a trade arrangement between the UK and the EU would not be reached.

If countries like Norway and Switzerland can prosper outside
of the EU, why not Britain?
“But”, cry those who want to stay in, “you won’t have access to the Single Market.” This is a valid point as far as the Single Market in terms of goods is concerned, yet our economy is not primarily goods-focused. David Cameron, in a column urging people to vote ‘In’, has claimed that 80% of our economy is made up of services. Though as he well knows, there is currently no Single Market for services. So the Single Market argument which he and others perpetuate cannot be relevant to the UK’s situation. Non-EU Switzerland, which supposedly doesn’t have access to the EU’s services market, exports five times per capita more to the EU than we do. If countries like Norway and Switzerland, two of the world’s richest and happiest nations, can prosper outside of the EU, maintaining friendly relations and trading with the bloc, without being subject to its constant over regulation, why not Britain?

Another argument peddled by the Remain camp is that British jobs would be at risk if we voted to leave. Their favourite figure to use on this comes from a report compiled by the National Institute of Economic and Social Research (NIESR) in 2000 which suggested that around 3 million jobs in the UK are linked to our trade with the EU. The methodology behind this is fairly simple to understand.  The UK’s exports to the EU are equivalent to 13% of our GDP. Thus, claim the researchers, it is logical to assume that 13% (3 million) of British jobs are linked to our trade with the EU. The operative word here is linked, however. The NIESR explicitly acknowledged that "there is no a priori reason to suppose that many of these [jobs], if any, would be lost permanently if Britain were to leave the EU." Plus, if you use the same back-of-the-envelope-type calculations for the EU, you find that between 5 and 6.5 million jobs on the continent are linked to their trade with the UK. Thus a trade deal with the UK would be imperative for job security in both countries.

I want to move away, however, from criticising the arguments of the ‘In’ side. Instead, let me spell out a more positive vision for Britain’s economy after we leave. After the 2 year negotiation period set out in the Lisbon treaty, and Britain is freed from the EU’s Common External Tariff, we will have access to world prices. These are typically 8% lower than prices in the EU. As a nation with a particular preponderance for imported goods, this will be a noticeable shift. The move from EU prices to world prices will mean that the cost of food and household goods will fall. Furthermore, this means that British firms will have access to cheaper factor inputs. The only result of cheaper inputs is that we, as a nation, become more globally competitive.

A departure from the EU’s protectionist external tariff wall will not just help the UK though. Currently African farmers, some of the most impoverished businesspeople on the planet face EU tariffs of 7.5% on roasted coffee and 30% on processed cocoa products, two of the continent’s major exports. Think what the removal of this barrier, at least on the UK’s part, will do for those same farmers. Tariff-free access to the UK market, the 5th biggest economy on the planet, can only make them richer.

One of the most frustrating things which I am hearing as the referendum approaches is that people “don’t know the facts” or that “they haven’t been told enough about it” – the inevitable result of media and government hysteria most likely. You each have, at your fingertips, possibly the most useful research tool in the history of humanity: the internet. If you are undecided or wanting more information about the referendum, it can be as simple as watching a YouTube video, reading a newspaper column or watching Question Time on Thursday evenings. 

If you want to find out more about the case for Leave, I would recommend listening to Dan Hannan or Tony Benn, or perhaps even reading Michael Gove’s piece on why he is voting to leave. From the Remain side, David Cameron and Alan Johnson are the ones making the case most prominently. 

Ultimately, however, it will be your choice on June 23rd. The outcome will fundamentally alter the course of British politics. 

Whether we vote to leave or stay, there is uncertainty. Yet it is my strongly-held belief that leaving the EU is not a ‘leap into the dark’ but rather a ‘step into the light’, towards a more prosperous, more democratic United Kingdom.

What is your opinion on this issue? Should Britain stay in the EU or vote to leave? Put your opinions in the comments below!

Tuesday, 8 March 2016

'Brexit': Liberation or Suicide?

On Thursday the 23rd of June, a referendum will be held on whether Britain should remain a part of the European Union. This referendum will not only be one of the most significant events in British history, but also in Europe - James Rosanwo examines the key knock on effects of a potential vote in favour of Britain's exit.

The result of this impending vote could shape the future of the United Kingdom, as Scotland and Northern Ireland are heavily invested in Britain’s membership of the EU and will no doubt bring their own membership of the UK into question. The departure of a heavyweight member would certainly have negative effects on it’s the European Union’s dwindling economic stability.

The referendum was called after Mr Cameron completed his supposed renegotiation of Britain’s stance in the EU at the European Summit in Brussels, where he claims he has won concessions on behalf of Great Britain. However, many doubt it may do little to sway the result of the referendum in his favour. Soon after the announcement, many government ministers stated their intention to either back Mr Cameron’s campaign to remain in the EU or do the opposite, with high profile MPs, the likes of justice secretary Michael Gove and London mayor Boris Johnson, boldly reinforcing their discontent with remaining an EU member, pledging their allegiance to the “out” campaign.
The question of Britain's membership of the EU has created
a rift between key figures in the Conservative Party.

At the start of the year, the chances of “Brexit” seemed unlikely. However, recent events such as the European migration crisis and the incessant euro decline, seems to have many Britons favouring an exit. Whether, however, this is a good enough reason to opt for total economic uncertainty instead is debatable.

Mr Cameron has confirmed that if the British people decide to leave the EU, the UK would apply for withdrawal under Article 50 of the Lisbon treaty. Article 50 states that the EU countries’ would negotiate a new agreement with the withdrawing nation over a period of 2 years. It also specifies that the withdrawing state cannot participate in these discussions, so in essence the terms of the deal are established only By the EU. Hence it will be a process that will most likely not be quick or pleasant; neither will it yield results that would be favourable to Britain. One thing guaranteed is that the EU will be desperate to show that a decision to leave will not have a painless outcome.
Many opposed to remaining in the EU still maintain that Britain is being hindered by Europe, believing that  as a country free from the EU it would have an open Economy that would continue to trade with Europe and the rest of the world. Many have offered the Swiss and Norwegian models as  potential solutions:

The Swiss Model: Britain would emulate Switzerland and would negotiate trade treaties sector by sector.
The Norwegian Model: Britain leaves the EU but joins the European Economic Area, giving it access to the single market, with the exception of financial services but exempting it from EU rules on agriculture, fisheries and home affairs.

In practice, however, these models would be very difficult to implement. At the bare minimum, the EU would only allow access to the single market in return for obedience to rules Eurosceptics are so eager to escape, meaning they would still most likely demand free movement of people and big payments to its budget before permitting access to the market. Nonetheless, to these “Brexit” campaigners these hardships would be worth it, if it meant regaining independence from Europe and British sovereignty. 

Yet again, this supposed liberation is not as advantageous as it seems. In essence, Britain would be trading a greater power for a lesser one; in exchange for their newfound independence it would be relinquishing its ability to have any real influence in global issues. What is even more alarming is the threat posed to the EU and the West as a whole. Both Britain and the European Union would be significantly weaker, and less of an ally as separate entities. The strength of the EU is crucial to the West’s duty of maintaining global stability, an ordeal which is becoming more and more challenging given the ever persistent issues involving Russia, Syria, and North Africa etc. There’s no surprise why Russia’s Prime Minister Vladimir Putin would have no objection to ‘Brexit’, whereas America’s president Barack Obama has already urged the British people to vote to remain in the European Union.  

Britain's exit from the EU could further empower the already
dominant Germany.
Germany’s dominance in the EU would also monumentally increase, making them even more of an influence not just in Europe but on a global scale. Britain, on the other hand, would be on the sidelines outside the EU, free from but still in fact constrained by many rules it would have no role in formulating. We would be an independent Britain, still dependent on Europe.

The immediate effect of a vote in favour of 'Brexit' could also be devastating in further ways. Prolonged uncertainty over the UK’s new relationship with the EU would discourage investment, particularly foreign direct investment given Britain’s status as the financial capital of the world and the effects of these fears are already being identified; for instance, the recent fall of the value of the pound.

Above all, one question remains: will Britons be enticed by the illusion of a sovereign and liberal Britain, or will they see reason in the idea that there will always be safety in numbers? One thing is certain however, If the UK separates from the European Union, the decline of the pound will be the least of their worries.

Tuesday, 8 September 2015

What Is Corbynomics?

With the results of the UK Labour Party Leadership Elections set to be announced this Saturday, it's time to take a look at the economic policies of one of the candidates considered the frontrunner, and also the furthest to the left, by many- Jeremy Corbyn.

The Islington MP's economic proposals have made such an impact that they have come under the new title of 'Corbynomics'. Though, admittedly, adding 'nomics' to the names of his rivals would lack the front page appeal of this title (especially 'Burnhamnomics', or would it be 'Burnhamomics'?), it is undoubtedly the unique nature of Corbyn's policies in the leadership race that has brought them a name to come under.

So, what are Corbyn's policies, and are they credible? Here are 4 of his policies that are making the headlines.

An End to Austerity

"You just cannot cut your way to prosperity so Britain needs a publicly-led expansion and reconstruction of the economy, with a big rise in investment levels."
Corbyn is a strong opponent to David Cameron and
George Osborne's policy of austerity.

One of the most appealing policies to his supporters on the left, Jeremy Corbyn has pledged to bring an end to the money-saving spending cuts that have been enforced in recent years by the Conservatives.

This means that a government under Corbyn would end spending cuts on public services such as the NHS, the education system and transport- in fact, he would be likely to increase spending on these as demand increases due to a growing and ageing population.

Corbyn would also reverse one of the most controversial austerity tactics, that is the privatisation of public services. He has pledged to renationalise the railway system, and also prevent the further privatisation of the National Health Service.

Reducing Foreign Military Presence

Jeremy Corbyn believes Britain should learn lessons from
an intervention in Iraq seen by many to have failed.

"Thousands more deaths in Iraq ... will set off a spiral of conflict, of hate, of misery, of desperation that will fuel the wars, the conflict, the terrorism, the depression and the misery of future generations." (2003)

However, the only cut that Corbyn proposes is with regards to the military. He is a fervent anti-war activist, something highlighted by his strong criticism of past actions such as Tony Blair's move to invade Iraq, and current proposals like those to militarily become involved in Syria. So, a Britain under Jeremy Corbyn would reduce its military presence in areas like the Middle East, thus saving a considerable amount of money.

Furthermore, as a believer in non-proliferation of nuclear weapons, Corbyn would close down Britain's nuclear weaponry facility Trident, located in Scotland. This would not only save money, but also be a welcome move, considering a significant proportion of Scots are against the facilities themselves. However, some worry that such military contraction would endanger Britain, in what many see as an increasingly threatening world.

'Quantitative Easing for the People'

"QE for people instead of banks"
Banks would no longer benefit from government QE
programmes under Corbyn.

Quantitative Easing is nothing new in government policy, but the manner in which Jeremy Corbyn seeks to implement the divisive policy highlights the new direction in which he seeks to take Britain.

Put simply, in the current system of QE, the Bank of England creates new money that is inserted into the accounts of national banks, with the aim of encouraging these banks to lend more openly and thus stimulate spending in the economy.

Corbyn wishes for the Bank of England to continue creating new money, but proposes that the finances created should not go to the private banks, but a state-owned 'National Investment Bank', that will "head a multi-billion pound programme of infrastructure upgrades and support for high-tech and innovative industries".

National Education Service

Tuition fees have been a source of discontent for many
of Britain's young people. Under Corbyn they would not exist.
"To become a high skill, high pay, high productivity nation we need to invest in education throughout peoples' working lives - that is the path to prosperity for all.

A significant part of Corbyn's anti-austerity programme would be the increasing of government spending on education. There has been much uproar in the past decade over university tuition fees, first introduced by Labour's own Tony Blair, and increased to as much as £9,000 a year under David Cameron.

Not only would Jeremy Corbyn abolish these tuition fees, but he has also proposed the reintroduction of university grants, which have just been replaced by loans.

Free university forms a major part of Corbyn's 'National Education Service' proposal. This system would see the government increase spending on education (funded by tax increases, government military spending cuts and the economic productivity boost the Corbyn camp believe their policies will bring), in order to make education accessible to all, providing universally free childcare right up to free university.