The act of placing one’s belief and expectations onto a political figure has many examples in recent history. In 1997, the re-branded ‘New Labour‘ under Tony Blair came to office amidst thousands of people lining the streets of London to celebrate. Here was a leader who people believed inspired ‘hope‘. A fresh start after eighteen years of the Conservatives in power. ‘Things Can Only Get Better‘ was the rallying call to the masses.
Fast forward eleven years and it was the turn of Barack Obama of the Democrats, who became the U.S’s first ever African American President. Again, thousands of people stood before their chosen one and proclaimed him the messiah. Obama’s whole campaign was run on the ticket of ‘hope‘ and ‘change‘. ‘Change Has Come to America’ he proclaimed.
The past twelve months has seen a concerted resurgence in using abstract concepts to galvanise a targeted demographic. There was Bernie Sanders in the U.S. who ran for Democratic leader with slogans such as, ‘A Future To Believe In‘ and ‘A Political Revolution Is Coming‘. Republican Donald Trump, who the media portrayed as an outsider candidate running on an anti-establishment platform, went with, ‘Make America Great Again‘.
This method of influencing people’s emotions and in turn manipulating them psychologically was most recently out in force during the general election campaign in the UK. Here, Labour’s Jeremy Corbyn ran with, ‘For The Many, Not The Few‘, and concentrated minds to the idea that the richest in society should ‘Pay Their Fair Share‘ in order to increase living standards for all.
Aside from the fact that a majority of the most successful campaigns of the past twenty years originated from the left of the false political paradigm, what they also had in common was a sycophantic urgency to believe that candidates such as Corbyn – generated as they are from the establishment system – represent our best hope for a brighter future. This was evident whenever Jeremy stood up to give a speech. Sharp criticism of the Conservatives met with vociferous cheers, boasts of how under his leadership the qualities of fairness, compassion and decency would shine through met with sustained applause. It was a timely example of how a politician who has never been exposed to a position of national authority can yet gain unquestioning adulation and loyalty. For his faithful supporters, Corbyn’s word was law. If he said he was going to do something, woe betide you for suggesting otherwise.
This level of subservience is not unique to Jeremy Corbyn. The same phenomenon was true of Blair, Obama, Sanders and Trump. When you pare back the rhetoric of ‘hope‘ and ‘change‘, an often altogether different picture emerges. Let’s examine this from the perspective of Corbyn and Labour.
Weeks before the election, Labour released what was deemed by Corbyn’s followers to be a ‘fully costed‘ manifesto. On first glance it appears as much. Spending commitments amounted to £48.6 billion, with tax measures designed to fund said commitments also amounting to £48.6 billion. Fully costed. End of discussion.
More interesting than the commitments themselves, however, were the footnotes written beneath them. One of which read, ‘Where a 2021-22 estimate is not available, estimates have been uprated using OBR forecasts of average earnings growth, CPI and/or nominal GDP‘. Straight away this tells you that Labour’s spending commitments are based on projections for the future health of the economy as determined by the Office of Budget Responsibility.
The OBR has a questionable reputation when it comes to making forecasts. In 2012, they admitted how their projections for growth in the UK economy were ill conceived – they had predicted growth six times stronger than proved the case. For 2017, they have increased their GDP growth forecast for the UK to 2%, up from the original projection of 1.4%. Bear in mind that this upsurge in expectation was made before GDP figures in the first quarter were known. This figure first came in at 0.3% growth after a forecast of 0.5%, and was revised down to 0.2% a month later. The final figure, currently expected to remain 0.2%, will be released at the end of June. To achieve the annual 2% growth that the OBR have forecast, GDP will have to average just over 0.6% growth over the next three quarters.
As I document on a regular basis through economic updates, a trend is developing through the global economy of a slowdown in consumer spending and the issuance of new credit. The UK is not immune from this. Labour’s claim that their manifesto was fully costed is only as legitimate as the OBR forecasts which support it. And as history proves, they have a track record for over estimating growth expectations. Not that this appeared to concern Labour supporters. £48.6 billion one way, £48.6 billion the other was as far as investigation into the party’s numbers went.
Also of interest to me was a brief passage contained beneath Labour’s set of tax measures titled, ‘National Transformation Fund‘. In short, this was a fund which Labour would use to invest in infrastructure such as ‘transport, energy systems, communications, scientific research and housing fit for the 21st century.’ The total amount required to finance this fund came to £250 billion. A quarter of a trillion pounds. If you ignore the platitudes of the fund being necessary because of the Tories ‘holding Britain back‘, the truth behind how this program of ‘investment‘ would be funded is made clear:
We will take advantage of near-record low interest rates to create a National Transformation Fund that will invest £250 billion over ten years in upgrading our economy.
What this fails to recognise is that the language emanating from central banks is now focused on ‘normalisation‘, meaning a return to higher rates of interest after nearly 10 years of record low rates. The Federal Reserve is currently in the middle of a course of rate hikes. The Bank of England have been suggesting for a number of months that a ‘policy adjustment‘ may be necessary should inflation rise persistently and economic data e.g. false fundamentals, show sustained improvement. The era of low interest rates is beginning to come to an end.
To gauge where Labour were coming from with their ‘National Transformation Fund‘, cast your mind back to September last year at the Labour party conference when Jeremy Corbyn stood before delegates and said:
“A Labour government will borrow to invest.”
In wanting to achieve a ‘Different Kind of Politics‘ (Corbyn’s own words), he was advocating the same process of borrowing money from private banks to pay for what the party called ‘investment‘. In politics, ‘investment‘ is a by-word for borrowing money that was originally created as debt.
You might be wondering what the problem is here. After all, people loan money all the time to kick start a business or to help finance the purchase of a house. You need that initial ‘investment‘ as a basis for eventually making the enterprise profitable and sustainable. The trouble is how money is created. A full examination is far beyond the scope of this article, but essentially what banks do when a customer is granted a loan is create a deposit which is paid into their account. The loan is attributed as an asset of the bank and a liability of the customer. To make the loan profitable, the bank charges a rate of interest on the money. This method of money creation is called ‘Fractional Reserve Banking‘. What the bank does not inform their customer of is how the creation of the loan cost the bank nothing to produce. Yet they still charge a rate of interest on it.
Here is a short clip of former UKIP MP Douglas Carswell discussing ‘Fractional Reserve Banking‘ on an addition of Question Time. Note how presenter David Dimbleby appeared genuinely lost as to what Carswell meant by the term, and how Carswell’s fellow panelists opted not to press him on the subject.
Of deeper concern here is that Jeremy Corbyn will more than likely understand what ‘Fractional Reserve Banking‘ is, but instead of challenging its dominance as Labour leader he continues to promote the practice as the only way of raising capital for ‘investment‘. I make the assumption that he understands because of Early Day Motion 748 that Corbyn signed his name to in November 2013. This motion was titled, ‘100th ANNIVERSARY OF THE BRADBURY POUND‘. The blurb for the motion read as follows:
That this House notes that the hundredth anniversary of the Bradbury Pound on 7 August 2014 is a welcome reminder of the historic precedent for public credit as the sound basis for debt-and interest-free Treasury money and therefore the sound alternative to the national debt and interest-bearing bank money; congratulates the Forum for Stable Currencies for having promoted the public credit since 2002; and urges HM Treasury to follow John Bradbury’s model and address social, economic and political issues across party lines in one fell swoop and avoid wholly unnecessary austerity cuts.
The ‘interest-bearing bank money‘ alluded to here is none other than ‘Fractional Reserve Banking‘. The Bradbury Pound, which briefly came into existence in 1914 at the start of the First World War, was created by the treasury and was therefore a non-interest bearing currency, given that the process of its creation bypassed the private banking system. Jeremy Corbyn is aware of the Bradbury Pound, as is his shadow chancellor John McDonnell who also put his name to the parliamentary motion.
Nothing in Labour’s manifesto gave any indication of reneging on the practice of ‘Fractional Reserve Banking‘, chiefly because were Jeremy Corbyn now Prime Minister he would have no such intention of bypassing the Bank of England by instead permitting the treasury to print a new form of currency that was non-interest bearing. A reason for this is because it is central banks that exert the most influence over the wider economy, and who have the capacity to send markets higher and also to induce a sustained economic depression. All at the behest of ‘the central bank for central banks‘ – The Bank for International Settlements. This effective seizure of the economy has become far worse over the past ten years following the monetary stimulus of quantitative easing (which remains ongoing in the UK).
The ‘National Transformation Fund‘ garnered scant press coverage during the election campaign. All that Corbyn’s supporters heard was £250 billion ‘investment‘ to rebuild Britain’s ailing public sector. Asking how he and his party intended to fund the venture was at no stage up for open and honest discussion.
Over in the U.S. Donald Trump is in the process of announcing a $1 trillion dollar infrastructure program to rebuild American industry, funding for which will originate out of the same banking model that Jeremy Corbyn would have depended on. This in spite of being aware of an historical alternative in the Bradbury Pound.
The overriding point here is that Corbyn has been Labour leader approaching two years, and by definition has the platform and the reach to raise awareness of ‘Fractional Reserve Banking‘ to the electorate. Much of Corbyn’s core support comes from people struggling to exist from one wage packet to the next, and from those who have no option but to rely on the State for financial assistance because of unemployment. Either way, large swathes of voters both in and out of work are being forced to supplement their income with interest bearing loans. Without realising it, millions of people are being ensnared by ‘Fractional Reserve Banking‘ whilst at the same time remaining oblivious to its existence.
The ‘Different Kind of Politics‘ that Corbyn laid claim to in 2015 has yielded nothing of the sort. As a back bencher, he regularly stood up in Parliament and revolted against the Conservative opposition and even his own party under Tony Blair and Gordon Brown. It was here that Corbyn put his name to the 100th anniversary of the Bradbury pound early day motion.
As party leader, he has remained on message with regards to how money is created within the economy. He is now at the forefront of a system in which participants of do not deviate from. From advocating a non-interest bearing alternative currency, he soon reverted to type and enthusiastically announced that a Labour government would ‘borrow to invest‘, and signed off on a manifesto that pledged to ‘take advantage of low interest rates‘ in order to conjure up their National Transformation Fund.
The cult like status afforded to Corbyn, such as emblazoning t-shirts with his name on and changing Facebook profile images to reflect support, does not make him a hero. What it does do is reveal the level of gullibility that permeates British society. The desire to be led, to abdicate responsibility over to the State – the very system that has presided over the abject misery of so many – has brought us to this point in time. Whilst we seek to attach ourselves to a collective political movement, we remain entrenched in our division as individuals.
The youth of today and families struggling to survive are free to rally behind Jeremy Corbyn, but the dogmatic allegiance this breeds ensures that we are no nearer as a nation to exposing the fraudulent nature of our monetary system to the wider public.