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John Passant

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November 2010
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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)

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Don’t bash the banks – take them over!

The banks are showing us who really runs Australia. After the Reserve Bank put the cash rate up 25 points, the Commonwealth Bank announced it would increase its mortgage lending rates 45 points.

First, let’s deal with the RBA. This unelected group of bourgeois economists and business people has as its remit to keep inflation under control – between 2 and 3 percent. Underlying inflation last month was at its lowest in 5 years.

So why increase rates? Because they predict the mining boom will drive up inflation. You know, the boom because some mining workers will get – shock horror – better pay. So the two speed economy is at the heart of the RBA’s thinking.

I seem to remember the Resource Super Profits Tax would have had the effect of slowing down the mining boom and diverted the benefits and growth to the other sectors of the economy.

So we can thank those who opposed the RSPT, and those in Labor who capitulated and gave us the lily livered Minerals Resource Rent Tax for the latest rate increase.

That capitulation showed unequivocally that Labor manages the system for the benefit of capital and indeed for the benefit of powerful sections of capital. The mining magnates overturned a Government decision to impose a minor tax on them and destroyed Kevin Rudd’s Prime Ministership to do so.

They ruled, Labor managed.

Now to the banks. The Commonwealth has raised its rates because, they claim, its borrowing costs  – the money it pays to depositors and to funds in the wholesale local and international markets – have gone up.

That is true – because the global financial crisis meant banks were scared to lend to each other and everyone’s risk profile went up quite a few notches. But Australian banks are among the safest in the world, and with the Government guarantee on deposits even more so.

Remember back to the start of the global financial crisis?  In October 2008 the Rudd Labor Government guaranteed bank deposits and bank borrowing. While it later refined these guarantees, propping up the banks was an important part of the Government’s response to the GFC.

The Commonwealth Bank made $6.1 billion profit during a period of intense financial destabilisation. That profit is built on the back of its net interest margin gouging and government support.

Bank net interest margins are the difference between what banks earn in interest from borrowers and what they pay in interest to lenders. They increased during the GFC.

So while borrowing costs did rise the Commonwealth and other Australian banks have increased their lending rates to us by more than their increased borrowing costs. They gouged us, and continue to gouge us.

The banks margin over the cash rate has increased over the last 2 years from 2 percent to 3 percent.

Effectively we workers as bank customers are paying for the impact of the GFC on banks’ profit rates and the opportunity the GFC has presented to increase the banks’ share of the surplus value the workers in industrial sector create. Rather than take a hit to their profit, they have actually increased their return on investment since the GFC by screwing us for more.

The Labor Government response to the banks since they won power in 2007 has been to huff and puff publicly and do absolutely nothing.

Things are so bad that Labor inaction has made Opposition Treasury spokesman Joe Hockey look like a flaming radical with his nine point plan to ‘increase competition’ in the banking sector.

Funny, Keating did that 25 years ago by allowing foreign banks into Australia. That’s been a great success hasn’t it? And in 1990 labor’s Kim Beasley oversaw the privatisation of the Commonwealth Bank supposedly to increase competition and drive interest rates down. Again, that’s been a great success hasn’t it?

The reality is that competition leads to monopoly.

In Australia the Government has a four pillars policy under which the Government mandates the continued existence of the big four banks – ANZ, NAB, Westpac and the Commonwealth. If that four pillars were to be lifted there would be three or perhaps even just two – big Australian banks. 

Finance capital fight with other sections of capital for a share of the surplus value workers in productive sector of society produce. But the interdependence of finance and industrial capital makes any attempts to rein in the banks a problem for the effective functioning of capitalism as  a whole. At he same time increased costs of doing business (i.e higher interest rates and tighter lending rules) impact on the other sectors of capital and reduce their activity. They slow them down.

Since finance capital depends ultimately on the productive process it cannot consciously destroy that sector. But its own drive for a greater share of the bucket of surplus value forces it to attempt to steal more and more of our expropriated labour from the  other vultures on the bones of our wealth production. It is a patient with a sick phobia to attack its very essence over and other again.It is feeding on its own soul.

The banks rule, not Labor.The ALP managed capitalism and so must give in to the banks or at best very slightly restrict their profit gouging.

Hockey isn’t about attacking the banks, he is about making them more powerful. Competition won’t solve the problems the banks highlight – the lack of real democracy in Australia, the rule of the oligopoly of big business, and the passing on of the GFC to workers.

The banks’ profits are untouchable. This is as true for Labor as it is for the Liberals.

Is there an alternative? We could push for a rent tax on the banks’ super profits. But that is small bickies. It leaves in place the structures of exploitation and the ongoing attempts by the banks to maximise their profits..

Nationalise the banks under workers’ control so all the community benefit.  

State support and a quasi monopoly of the big 4 banks put the banks in a strong position to grab an extra share of surplus.

So while the banks are particularly hated (since they impact directly on most working people) their gouging merely reflects the feeding frenzy of all the bourgeoisie on the profit we create.

Why not nationalise the banks and use their profits for socially useful spending?  The case for nationalisation? Ken Henry put it this way in relation to mining companies.

Public production allows the government to control exploration and production expenditure, but may lower the return to the community if public enterprise is less efficient at resource exploration and production due to a lack of expertise and market discipline.

Substitute banking for resources and the point remains the same.  In fact given the failure of the banking sector during the GFC the onus should be on banks to show that public ownership wouldn’t be more efficient. 

To paraphrase Henry, public ownership allows the government to control finance, and will increase the return to the community if the public enterprise is under bank workers’ control.

Add in the profits from the other Big 4 banks and a real resource rent tax and we have a good basis for addressing climate change, closing the gender pay gap, ending aboriginal disadvantage, building public housing to end homelessness, fixing public transport, ending the hospital queues, improving education outcomes and paying better wages to the workers in those industries, for example.

None of this will happen because this is a society that puts profit before people. It’s time to turn society on its head and put people before profits. Nationalising the banks under workers’ control would be a good first step in doing that.

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Comments

Comment from Brett
Time November 3, 2010 at 7:06 am

John, once again your making the statement for nationalisation:

Nationalise the banks under workers’ control so all the community benefit

Let’s stop talking empty rehtoric and lets talk practicalities:

How exactly are you going to do that? Are you going to steal from the legitimate owners of the banks – the shareholders? Or are you going to pay them the current market value and by doing so, bankrupt the government and stop money going to hospitals, roads, the police and other necessary parts of our society?

Comment from Duanne
Time November 3, 2010 at 9:07 am

The Reserve Bank is a Private Banking Corporation. It is not the the the Commonwealth of Australia Federal Government, so why are they permitted to to dictate the interest rates we the people have to pay? Secondly if they set the interest rates, by who’s authority allows the BIG 4 banks to increase the interest rates above the interest rate set by the Reserve Bank? With the latest interest rate hikes by both the Reserve Bank then the Commonwealth Bank I am compelled to ask How many homes will the banks foreclose on and evict families who cannot absorb the interest rate hikes? The system of variable interest is not a fair system. A mortgage is a financial contract and as such it should be the same as all other hire purchase contracts. If you buy a car, furniture items, electrical goods or anything else on a hire purchase agreement you know the total price you will pay at the time of signing the contract, interest rates are set for the life of the contract. With variable interest you are not aware of the total amount or the final end date to the contract. I don’t know if that would bethe only answer to the problem, but it sure would stop the financial greed of the banks

Comment from Tom
Time November 3, 2010 at 9:45 am

The suggestion put forward by Dwayne is a logical answer to intrist rates but would the government legislate an enactment to change the banking system? I doubt it.
It would not be in the governments best intrists. You only have to look at their track record in the last 20 or so years. They have sold everything of value to foreign investers. Investers who continually increase prices uses spin in an attempt to justify the increases. The biggest percentage of the population of Australia are mostly are working class people on a wage. Most struggle week to week just to survive. Continual increases for the basics Power, Gas, Telephone, Food, Mortgage and rent makes life a struggle, but do wages increase in line with all the other increases? NO. Judging by the result of the last federal election the people have had enough of the DICTATORSHIP governments, labour and the coalicion. People are beginning to realise we are no longer free, we are slaves of the government and corporate cartels. As individuals we can do nothing to change the unfair systems used against us, but if we UNITE AS ONE VOICE we can use our strength in numbers to force the government to serve us the people instead of the corporations they serve now.

Comment from Arjay
Time November 3, 2010 at 4:59 pm

We can start by beginning new Govt owned state banks.Lack of competition is not the problem John, the banks don’t have enough of it.

http://secretofoz.com/

The most important reform should be the removal of the fractional reserve system of banking from private banks.Bank will no longer be able to create money in their computers.They will only be able to loan out what they have on their books.

Only Govt should be able to create the money that represents the increase in productivity of our nation.

John how do you nationalise the Commonwealth and compensate the shareholders?

Comment from John
Time November 3, 2010 at 7:32 pm

Given the conservatism of all parties and bourgeois thinkers in Australia (other than apparently Ken Henry at Treasury whose tax reform blueprint is actually sensible conservatism) nationalisation is only going to occur when there is a revolutionary change from capitalism to democratic production to satisfy human need. There would be no compensation then.

Comment from Brett
Time November 4, 2010 at 8:35 am

No compensation? So you’re advocating theft then? Even with a move to “democratic production”, that does not extinguish prior property rights, so you’re saying that you advocate theft then.

Theft is the basis of your “enlightened society”? Really?

Why do you think people would move to a system where they lose the things that they’ve been working for? Rich and poor all lose alike. Again, why are people going to move to this? Sounds like you have a sales job ahead of you!

So when do you see this happening John? Do you see a flavour for “democratic production” in this country? Do you see a move to socialism? How is the membership of SA going?

Perhaps it’s time for a realisation John: There is no taste for socialism. There is no taste for “democratic production” which is demonstrated by SA’s tiny membership. And there certainly isn’t a taste for a society based on theft, not to mention one where property rights are so completely ignored.

Or have I missed something here John?

Comment from John
Time November 4, 2010 at 11:58 am

When workers take over their factories and workplaces and organise production democratically to satisfy human need they regain their humanity. They abolish private property so shares – a barrier to human development – become irrelevant. The workers gain a world. The only losers are the ruling elite.
The question of the consciousness of the working class that you raise – although not in those terms – is an important one. Because workers today aren’t by and large interested in socialism doesn’t mean that will always be the case. I am reminded of Andre Gorz a left wing academic in France who wrote in January 1968 that there would never be a revolution in France. In May 68 ten million workers went on strike in the biggest general strike to that time in history and threatened the rule of capital, until the Communist party rescued French capitalism.

Don’t mistake the present for the future. Socialist Alternative is going OK. A couple of hundred members, educating ourselves, involving ourselves in campaigns, sometimes leading one or two of them, attracting new people, and doing the ground work for the future. The CPA in Australia was small to start with. It grew to a mass party about 15 years after it was founded. Give us time, and of course the changing circumstances of capitalism sometimes throw up real opportunities for the left, as France last month shows both positively and negatively. When that happens let’s see if we are good enough to seize the day and grow.

Comment from John
Time November 4, 2010 at 10:02 pm

Brett , you need to understand that the wealth of the banks and the shareolders’ profit itself is based on theft – it’s ultimately the cumulative ” trickle-up” of unpaid labour time – surplus value .
The ad hominem attacks re SA ( of which I am not a member ) and your ” appeal to popular belief” re their size are both clearly fallacious arguments , in the strict sense of the word.
Overall seizure of the banks without compensation would negatively impact only a minority of people in this country – the ” mum and dad ” shareholders might lose a few thou at most , but ould be more than compensated by the positive social- environmental programs that would then be possible , as John outlines. The only ones to really feel it would be the serious elites – and hell, karmic justice has to do its bit somewhere …….

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