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Emily Carver is Head of Media at the Institute of Economic Affairs.

The heavens may have finally opened but there is a foreboding sense that disaster is on the horizon.

Bad news keeps coming, yet we only have a vague idea of how the next Prime Minister will attempt to deal with the omini-crisis we face. Soaring energy bills, NHS waiting lists, repeated strike action, illegal immigration; the country feels in a state of limbo as the to-do list grows by the day.

Despite the deluge of apocalyptic headlines, many are unaware of just how tough its going to get (a recent survey showed 12 per cent of us think bills willdecreasethis winter, while most underestimate the scale of the rises heading our way). But many of us are already pinching pennies as the cost of basics keep rising.

One exception to the doom and gloom has been the resilience of our labour market, though the issue of shortages in key sectors remains. The latest data show a mixed bag, but no sign of recession (yet). The headline problem that median pay increases have failed to keep pace with accelerating inflation is of little surprise, although an increase in low-paid workers, for example in food and hospitality, is likely to have had a downward effect on the median pay data.

But with unemployment only very marginally up, and payroll employment at a record high, there is still hope that the economic downturn could at least be a job-rich recession.

However, the cost of lockdown is becoming more apparent by the day. Businesses are going to the wall in record numbers. During the pandemic, insolvencies were kept artificially low. But as government support tapered off, businesses that were clinging on for dear life have found rising costs the final nail in the coffin; in the second quarter of this year, insolvencies were 81 per cent higher than in the same period the previous year.

The question of how businesses are going to cope with rising outgoings remains unanswered. Despite the growing consensus that government must always have a solution, it may well be that there is very little ministers can do to alleviate the pain, and its likely that many of those who have not prepared, for example through energy efficiency measures or cost savings, will go bust.

The number of restaurants, for example, falling into insolvency has increased by more than 60 per cent in the past year and more up-to-date figures are likely to show the situation worsen. For hospitality, Sunaks endless schemes and handouts were for thousands of businesses simply putting off the inevitable.

Perhaps if the trade-offs had been articulated earlier, fewer people would have accepted the Governments authoritarian measures for so long. In any case, it was a dereliction of duty that both government and opposition failed to communicate what impact the pandemic and public health measures might have on the economy and our standard of living further down the line.

It was as if the Government could simply turn on the spending taps, throw us a life jacket, and everything would be near plain sailing. The only thing that mattered was keeping the virus at bay.

Many of us enjoyed near or full pay, while the state borrowed and printed money to keep our heads above water and keep businesses that otherwise would have gone to the wall alive. This gave a false sense of security. Many in salaried jobs even accrued savings as living expenses plummeted.

Much of that money will now have been well and truly spent. A large proportion of households have no savings at all.

Against this backdrop, the left is gaining support for its big-state solutions. Sir Keir Starmers economically illiterate policy to punish the oil and gas sector with further windfall taxes in order to freeze the energy cap will do nothing to deal with the fundamental issue: a lack of gas supply.

Nor will it be cost-free, as the Labour front bench seem to think it will be. Of course, no word is given to the impact of windfall taxes on investment, the very evident failure of the energy price cap as a policy, nor the way the Net Zero dogma of successive governments has left us woefully exposed to supply shocks.

But at least Starmer has a proposal (Labour would stop the energy price cap going up. This would save families 1,000 this winter), however overly simplistic it may be. And its a popular one. When the public is asked whether theyd like to maintain the current price cap, of course the vast majority say yes. Who would opt for higher energy bills?

But this is akin to asking people if they want any freebie. The difficulties lie in the terms and conditions.

With the current vacuum in government, its prime time for the Left to make gains, and they may well be doing so. Worryingly, public debate appears to be on their side, at least in the battle of ideas, and polling continues to show Labour in front on managing the economy.

After the Government succumbed to a windfall tax, the Conservatives lost their free market credentials. The Left has capitalised on this. Now, greedy corporations are to blame for inflation. Nationalisation of industry is the answer to rising prices.

And further redistribution of wealth is demanded, with little to no recognition of the considerable cost-of-living support already announced by the Government amounting to 1,200 for a working-age family on means-tested benefits, which will apparently be paid for by the windfall tax, but more so extra government borrowing.

Liz Truss, focusing on economic growth, has promised to reverse the rise in National Insurance and suspend the green levy on energy bills. Rishi Sunak, on top of his already announced support packages, has committed to removing the five per cent VAT on household energy bills. The accusation that this is mere tinkering at the edges is fair, and further immediate support in the form of higher benefits may well be needed.

But its on the next leader of our country to be honest about the challenges we face and the limits of government. Its on them to look beyond sticking plasters, to communicate a longer-term strategy that will lower the cost of living through supply-side reforms rather than increasing dependence on the state, and to have the courage to rethink our energy strategy that has for so long neglected security of supply while prioritising arbitrary climate targets.

It will only be by providing a strong and confident alternative to the left-wing narrative and restoring the party to its reputation of managing the economy well that the Conservatives stay the party of government.

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Emily Carver: The Left is gaining support for socialism, as the cost living crisis mounts, and the new Tory leader must fight back - ConservativeHome

Ferdinand Marcos Jr was elected president of the Philippines in May. In his inaugural address, delivered on June 30, Marcos pledged that his presidency would be like that of his father, the countrys brutal and corrupt dictator who ruled a martial law regime for a decade and a half. Citing his fathers example, Marcos Jr vowed he would get it done.

During the socially explosive years of 197072, Ferdinand Marcos Sr methodically deployed, tested, and prepared the legal apparatus of state repression prior to the full imposition of military rule in September 1972. The months since the election of Marcos Jr have been marked by the incremental tightening of the authoritarian rule.

On August 8, Walden Bello, chair of the political party Laban ng Masa [Fight of the masses], who ran for vice president in the May elections, was arrested and charged with cyber-libel. Bello is a former congressman with a prominent international reputation as a figure of the left and an opponent of globalization. He promotes reformist politics as if it were a type of socialism.

Bello famously called vice presidential candidate Sara Duterte, daughter of the previous president Rodrigo Duterte, a coward for her refusal to engage in public debates during the election campaign. When Duterte was elected vice president, her close aide filed libel charges against Bello for his campaign statements. Bello was dragged through the humiliating process of arrest and had his mugshot takenbarefootat a local police station before being released on bail a day later.

Bello is scheduled to be arraigned before the Regional Trial Court in Davao City in September. He has filed an appeal with the Department of Justice on the entirely justified grounds that the libel complaint constituted political persecution.

The arrest of Bello is a direct attack on the right to free speech and an indication that the Marcos II government is preparing to crack down on all forms of dissent.

Sixteen priests, nuns, and lay persons, all members of the Catholic church organization, Rural Missionaries of the Philippines, were indicted on August 15 on charges of funding the Communist Party of the Philippines (CPP), which is classified as a terrorist organization, and have been denied bail.

The sixteen are charged on the basis of testimony provided by two anonymous witnesses, who the government claims are defecting members of the CPPs New Peoples Army (NPA). The Marcos Sr dictatorship routinely employed secret witnesses in its military courts to label political opponents Communists, and this practice is being brought back.

When Marcos Sr imposed martial law, he shut down all news, television, and radio broadcasts that he did not directly control, and only allowed them to reopen when they acquiesced to his dictatorship. Marcos Jr is shutting down the opposition media and banning alternative sources of news and political perspective.

On June 8, the National Telecommunication Commission ordered 27 websites blocked at the request of the National Security Council which cited the reactionary Anti-Terror Law passed under the Rodrigo Duterte administration.

The banned websites include those associated with the Stalinist Communist Party of the Philippines, as well as the personal page of CPP founder and ideological leader, Jose Maria Sison. Bundled up with the CPP in the ban were websites of legal political organizations, including BAYAN, and alternative news sites, such as Bulatlat and Pinoy Weekly. International publications, including Monthly Review and Counterpunch, which had in the past published material favorable to the CPP have been banned as well.

On June 29, the Security and Exchange Commission ordered the revocation of the certificates of Rappler, one of the countrys leading news publications critical of the Duterte and Marcos administrations. The revocation is currently under appeal.

Fundamental to these authoritarian maneuvers is the rewriting of the past and the rehabilitation of the martial law regime. The Presidential Museum and Library, which contains valuable documents on the Marcos dictatorship, has been taken offline. The anti-Terrorist law is being used to ban a growing list of books, which are deemed subversive from libraries, schools and universities. The attack is sweeping. Among the authors listed is poet and National Artist for Literature Bien Lumbera.

Mandatory military training is being brought back. Vice President Duterte, who is secretary of education, announced that she intended to make Reserve Officers Training Corps (ROTC) a requirement, rehabilitating a Marcos-era policy that only ended in 2002, and which was long associated with brutal hazings and indoctrination.

Unadulterated propaganda is being mass produced. A major film recently released, Maid in Malacaang, depicts the overthrow of the Marcos regime as the ouster of a wise and kindly presidential family by an ungrateful mob. Government announcements are now being routinely made over the television stations of Sonshine Media Network, headed by an anti-Communist cult leader loyal to Marcos and Duterte, Apollo Quiboloy, who is wanted for sex trafficking and who claims to be the Son of God incarnate.

We are witnessing a creeping martial law.

The repressive apparatus of the Marcos II administration builds upon the measures taken by the fascistic presidency of Rodrigo Duterte, but there is something qualitatively new as well. Dutertes rule was marked by the crudity and volatility of a provincial warlord vaulted to the heights of Philippine society. He unleashed police violence against the poor, in the name of a war on drugs, and oversaw the extrajudicial killing of over 30,000 people.

The Marcos II administration is less personalistic. There is a calculated legality to its systematic repressive measures that is starkly reminiscent of those taken by Marcos Sr.

Duterte expressed a global phenomenon: the turn by the ruling elite to authoritarian forms of rule in the face of mounting social crisis and unrest. Marcos Jr represents a significant further step in the open embrace of dictatorship.

Marcos Jr has the backing of a super-majority in both the Senate and Congress, which represents the support of a substantial majority of the bourgeoisie. The embrace by the ruling class of dictatorship, and the targeting of all forms of opposition for repression, expresses at the most fundamental level the political preparations to crush the emergence of mass opposition from the working class and oppressed masses. The ruling elite are keenly nervous as they confront immense crisis.

The Philippine Statistics Authority (PSA) reported on August 15 that 20 million Filipinos live below the poverty line. That number has gone up by 2.3 million people since the last time data was collected in 2018. The poverty threshold is defined as an income of P12,030 ($US215) a month for a family of five. More than 18 percent of the countrys population falls below this meager measurement.

An even more dire statistic is the proportion of Filipinos unable to meet basic food needs, defined as making P8,379 ($US150) a month for a family of five. Some 5.9 percent of the population could not afford adequate food on a daily basis, 200,000 more people fell into this category since 2018.

The average income of Filipino households declined by 2 percent since 2018 in absolute terms and fell by 10 percent when adjusted for inflation. Minimum wage has fallen even farther. Minimum wages in the Philippines vary throughout the country and are established by a regional wage board. BusinessWorld calculated that minimum wages, when adjusted for price increases over the past year, had fallen by somewhere from 10.716.9 percent since July 2021. For working families on the brink of poverty these figures are catastrophic.

Philippine society is a powder keg. An op-ed published in the Philippine Star following Marcos election made clear that the Philippine ruling class shares the same fears as their counterparts around the globe: Marcos must resist going Sri Lankas way.

Marcos campaign for presidency relied on lies about the past which were made possible by the historical ignorance of broad layers of the public, who have been systematically miseducated. He secured a good deal of support, however, through populist promises. In late April, in the final stages of the campaign, he pledged to lower market rice prices to P20 ($US0.36) a kilo through subsidies and price caps, a pledge that if implemented would have cut the price of the most basic food necessity in half.

The Marcos II administration, however, has not brought down food prices; it has shut down news organizations. There are no substantive palliative measures forthcoming. Like his father, Marcos Jr sees the solution to the growing unrest in repression and dictatorship.

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Creeping martial law in the Philippines as poverty grows - WSWS

Sunday was the anniversary of the day in 1935 that President Franklin D. Roosevelt signed the Social Security Act. Critics decried the program as socialism, which it is, of a mild and democratic sort, but hardly anyone complains about it nowadays.

In fact, Social Security might be the single most popular program the federal government operates. Even Republicans, who despise such programs in theory (its a tax, its mandatory, it has a somewhat progressive or redistributive benefit structure, which means it helps the poor more than the rich), dont dare criticize it much and never talk about getting rid of it.

The Social Security Act has many other provisions, but the big one is that it requires workers and their employers to contribute every pay period to a trust fund during their working years and enables retirees to receive benefits a pension of sorts starting at any age between 62 and 70 (the longer you wait, the bigger the monthly check).

You probably knew all that, but I thought Id observe the anniversary.

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Im 71 and have started getting my benefits and will get them until I croak. Pretty cool. Really helps. I havent calculated how long Ill have to live to get all my contributions (and the contributions of my various employers) back, plus interest. But its not an investment program. Its an insurance program, which insures us all a bit against not being able to pay for our retirement years.

Social Security is also, as I said above, socialism of a sort. Its mandatory. Theres no guarantee youll get back more than you pay in (although most recipients do). Its also an anti-poverty program of a sort, which conservatives are supposed to hate, because it has a somewhat progressive benefit structure.

I bring it up mostly to observe the anniversary and also to gig the knucklehead red-baiting Right, who should be calling for the abolition of this bit of socialism but dont dare.

Plus, I enjoy the tale of Ida Mae Fuller, who worked under (and paid into) Social Security for three years, then retired and received the very first Social Security benefit (Social Security check number 00-000-001, for $22.54) and ended up living until she was 100 years old and collecting $22,888.92 in total benefits.

God rest ye, Ida Mae, beneficiary of socialism.

Heres a link to a smarter lookback at Social Securitys origins, part of Heather Cox Richardsons series Letters from an American.

Richardsons piece doesnt mention Ida May Fuller but does celebrate Frances Perkins, the first-ever woman in the cabinet, who, as secretary of Labor under Franklin D. Roosevelt, is credited by Richardson as the driving force behind the Social Security law.

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An anniversary for Social Security and a nod to its first beneficiary - MinnPost

On 21 July, the European Central Bank decided to raise interest rates for the first time since 2011 and unveiled a new tool aimed at protecting eurozone states from rising borrowing costs. Responding to the decision, Bob Hanck argues the ECBs response to inflation essentially boils down to a massive transfer of funds to banks, almost certainly without any positive effects for the population at large and especially for those who most feel the negative effects of inflation on essentials like energy and food.

About a decade ago, the billionaire Warren Buffett stated, with thinly veiled sarcasm, theres been class warfare for the last 20 years, and my class has won. The recent decision by the ECB on 21 July to raise interest rates reminded me of this. Not only is there a lot of confusion among central bankers about what is going on in the advanced capitalist economies today (a topic for a post later this summer); the simultaneous rate rises and the central banks aim to contain bond spreads among EMU member states will also likely lead to a significant transfer of wealth to the bankers.

Enter ECB interest rates

The basics first. The inflation that looked temporary in 2021 following on from the supply bottlenecks after the shutdown of the global economy in 2020 and much of 2021 lasted longer, in fact significantly longer, than many (including me) thought. High inflation (still) has little to do with too much money sloshing around in the system, despite what you will read almost everywhere. The main causes are still in the real world: the remaining uncertainty around Covid-19, confusion about fiscal responses to the necessary support packages for households and business, Putins war in Ukraine and its repercussions, and the stagnation (or decline?) of Chinas export-led growth model have created the perfect storm.

Food and energy prices have rocketed, hurting all, but those with smaller incomes considerably more, as they spend a larger share on these essentials. In fact, core inflation, stripping out volatile items such as food and energy, is much lower: Paul Krugman pointed out a few weeks ago that it was, at about 4.5%, roughly where Paul Volcker declared victory forty-odd years ago. Ignore for a moment the issue of what a small rate rise will do when inflation is running at close to 10% (as I said, a topic for another blog) or the question of how exactly a wage-price spiral will develop when real wages are falling almost everywhere (another blog post). With inflation rising, the ECB needs to do something, and to be seen to do something.

One money, many government bonds

The snag is that the ECB, like all other central banks, has only one tool to handle inflationary pressures: interest rates. Higher rates dampen demand (but remember that current inflation resulted from a supply shock), and increase returns on savings, especially bonds.

Yet in EMU that has a nasty side effect: bond spreads between countries (the differential in the borrowing costs of governments) rise as well. In normal times, the bond yields on the 19 euro members debt moves more or less in tandem, with only small differences. But times of crisis upset that synchronicity, and EMU members that are deemed weaker by financial markets are punished with a higher risk premium they pay a higher interest rate (in large part because their growth prospects are lower now, which means tax revenues fall).

Enter ECB cash

So, since it wants to counter that centripetal force, the ECB needs to think of ways to reduce the risk for lower-quality bonds, such as Italy. For that, it also only has essentially one tool: buying up the bonds, directly or indirectly (by subsidising banks), of the weaker member states to push their actual interest rate down (the interest rate falls when demand for the bonds rises).

We have had a long flavour of that policy since 2012 under the guise of quantitative easing, and we are about to witness another incarnation. We now know where all that extra cash went not in investment, as hoped, predicted or desired, which is at its lowest level for two decades, according to Martin Sandbu in the FT a few days ago. So where did the money go? To the banks, and especially the bankers, whose bonuses are broadly back where they were 15 years ago. So it goes.

In essence, therefore, we are entering Alices Wonderland (again). The ECBs reaction to the cost-of-living crisis for the bottom half of the income distribution is a rate increase to manufacture slower growth and a recession with high unemployment (which was probably on the books anyway, courtesy of Putin). In other words, if you were screwed then, youll be even more screwed after the ECB has its way with the European economy. So it goes.

To those who have, shall be given

But very few observers mention that the QE-type policy the ECB is engineering today has the opposite effect at the top (trust me: I scan the FT pages for those insights and have yet to find them). Banks will receive more cash to buy Italian bonds. Part of that will go to the bankers in the shape of increased income. Now, since even banks cannot pay several hundreds of billions to their employees without blushing these days, they look for alternative opportunities to use that cash.

In a world entering a recession or at least a period of very, very low growth the main, if not sole condition for investment is absent, and only one avenue makes sense: save the money. How do banks save, you might ask? They park the money at the ECB. Its called a central bank for a reason. And here the perverse policy comes full circle, because the higher interest rate that the ECB has just imposed on the economy ends up being a nice present to the banks. The free money from the ECB has been turned into more money, paid for by the ECB. We pay twice, the banks only gain, and the lower 75% of the income distribution loses their jobs or see their standards of living fall. So it goes.

Echoes of Kalecki

It is impossible to tell if this is simply incompetence by the ECBs governing board, an almost criminal bottom-up redistribution of life chances, or a Kaleckian institutional class struggle that has moved from individual capitalists to the only government arm that cannot be politically influenced.

The FTs Martin Wolf lamented, early in the financial crisis, that socialism for the bankers and capitalism for everyone else was not a viable growth model but thats where we are headed again: the ECB as a giant welfare system for the banks. At least Buffett suggested that he had to work for his money capitalism applied for everyone in that sense; his point was that taxes were increasingly regressive.

One of the old Marxist tropes talked of the state as the executive committee of the bourgeoisie, safeguarding the collective interests of the capitalist class. The advent of social-democratic parties in government took, at least for some, the bite out of that argument. But the fact that central banks everywhere, including the ECB, are now raising rates just when labour markets seem to be structurally tightening for the first time in fifty years, reopens that can of worms.

If you ever wondered who the principal is in the conservative monetary policy set-up that we have lived with for over three decades in the OECD, stop wondering. It is not the population at large. It is not the European Parliament, the Commission, or the Council either. It seems to be the financial sector: its called a central bank, after all. So it goes.

Note: This article gives the views of theauthor, not the position of EUROPP European Politics and Policy or the London School of Economics. Featured image credit: Adrian Petty/ECB (CC BY-NC-ND 2.0)

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Socialism for the bankers, capitalism for the rest of us so it goes - London School of Economics

The president spoke extensively with the members of the Economic Affairs Commission of the National Peoples Power Assembly (Parliament) about the complex situation in the country, subjected to pressure from the United States in various fields, with the purpose of making the Revolution succumb.

They fear socialist construction in a Cuba without an economic blockade, said Diaz-Canel, who pointed out that we have not been able to do what we wanted, but rather what was possible in the midst of so many aggressions and at a very high cost in terms of the sacrifice of the population.

The first secretary of the Communist Party of Cuba pointed out that the imperialist logic aspires to suffocate Cuba economically to cause social unrest, a policy that he described as dishonest, criminal and genocidal, since no nation has the right to prevent the development of another.

It is hypocritical to affirm that the blockade is to help the Cuban people, when all its actions directly affect them, he remarked.

Diaz-Canel pointed out that the strategy of imperial domination has three fundamental elements: the first is the platform of cultural colonization, which uses social networks and the entertainment industry to impose its values and that the peoples deny their roots, culture and identity.

The second is in the economic field, which in the case of Cuba is committed to coercive measures and the intensification of the blockade policy, and the third is subversion, to which millions of dollars are dedicated each year to try to destroy the social political system that Cubans chose.

They are frustrated for not having achieved what they set out to do on July 11 last year, the president said. They failed and have failed in all the soft-coup actions implemented.

Diaz-Canel emphasized that the answer to this strategy is socialist construction. We cannot give up social justice, he added, the essence of our system is the greatest possible social justice, with the greatest possible democracy and social participation.

The Cuban head of State commented that the country is committed to a cultural decolonization program, whose objective is to ensure that current generations know their history and culture, to convert them into convictions that contribute to the defense of our ideas.

The president added that in the face of subversion, we put revolutionary articulation before, with greater participation in social networks, more social debate, and the increasingly broad participation of representatives of social sectors in the analysis of public policies and laws in process.

Likewise, he noted that new measures and alternatives for economic problems continue to be studied; in the midst of shortages we have not stopped, we continue working, but always within socialism, he explained.

jg/car/kmg

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Cuba responds with socialism and ideas against imperial domination - Prensa Latina