“Everywhere I hear the sound
Of marching, charging feet, boy”
The financialisaton of the economic system has led to the needs of the majority being overlooked in the pursuit of goals that mean nothing to them.
Neoliberalism’s championing of the financial sector, free-markets, cutting taxes and regulation have benefitted the few at the expense of the majority.
In many ways, Trump’s 2024 re-election triumph was the final repudiation of neoliberalism, the majority finally saying that economic measure such GDP mean nothing to them.
Markets focus on inflation, rates and stock prices, whereas the real economic crisis is at household level as rising costs and diminished opportunities crash voter confidence.
‘the real economic crisis is at household level as rising costs and diminished opportunities crash voter confidence’
In “Darklands”, the article I penned immediately following Trump’s re-election, I wrote:
“Economic reality for voters is simple, do they feel wealthy, better off than before? The answer is binary; yes or no.
“Since 1980 the answer has, for the majority, been no. For the few, it is clearly yes.
“In theory, in the US, the answer, looking a traditional measures should be yes and yes. As Mark Zandi, the respected chief economist at Moody’s, recently wrote “But … there is no denying it: this is among the best performing economies in my 35+ years as an economist.” Growth: up. Jobs: up. Wages: rising. The value of your home: up. Share prices: booming. Inflation: falling. Borrowing rates: dropping.”
“… Yet, still most Americans don’t feel better off.
“And the numbers confirm this; for teachers, clerical workers, sales reps and the great bulk of US employees, whether white or blue collar, wages have flatlined for most of the past half century. Strip out inflation and average hourly earnings for 70% of 10 US employees have barely risen since Richard Nixon was in the White House”.
Unsurprisingly, Trump has done nothing to help the majority. His tariffs and wars have imported supply-side inflation, his unfunded tax cuts for the rich has increased an already bloated national debt.
In short, the majority are still suffering whilst the few continue to benefit.
Whilst the US electorate might yet voice their discontent in next months mid-term elections, the streets in Europe’s cities are see the discontent of younger voters played-out in real time.
Much of this centres around the growing crisis of the housing system, which is fast becoming a crisis of democracy.
One of the base tenets of democracy is the promises that our living conditions are shaped by all. Instead, these decisions have been systematically removed from democratic control and handed to financial sector; private equity firms, pension funds and real-estate investment trusts. They, together with governments and banks, have decoupled the price of housing from what ordinary people earn.
‘the growing crisis of the housing system, which is fast becoming a crisis of democracy’
Homes are now asset class for wealthy investors.
This financialisaton of property is supported by armies of lobbyists acting on behalf of investors, who squash rent-control laws, fund political campaigns, and shape government thinking and policy.
By comparison, tenants, the homeless, the young people locked out of the housing market have only their solitary vote.
This feeling of helplessness is exploited in inner cities by drug gangs who seduce the young and vulnerable with promises of wealth.
One example is Marseille, where the violence of drug gangs is being highlighted by Amine Kessaci, a 23-yr old law student from a housing estate, whose two brothers fell victim to the gangs.
As he explains, teenagers on these estate see their parents getting into debt to pay bills and feel abandoned by the school system; “they are looking to belong to a community”, and they fall for what he called the drug gangs’ “smoke and mirrors” promise of high earnings.
Unfortunately, the pernicious impact of failed neoliberalism shows no sign of abating, with right-wing parties and their fawning media continuing to slavishly support it.
The wars in Iran and Ukraine have, once again, bought the cost of energy into sharp focus.
‘the pernicious impact of failed neoliberalism shows no sign of abating, with right-wing parties and their fawning media continuing to slavishly support it’
In the UK, the right continues to flog the tired old horse that is North Sea oil, telling us that opening the Rosebank oilfield, would create about 1,100 direct and indirect jobs.
What they omit is the fact, that the main beneficiaries are, that one of the companies, Equinor, is an overseas business.
Experts have repeatedly pointed out that new North Sea oil and gas would not bring down fuel prices or ease the supply constraints caused by the Iran war, because oil and gas are sold on international markets.
As we don’t own the means of production, the only financial benefits are tax revenues, which will be limited, given the concessions that drillers can expect. While the total profits from Rosebank for its backers, Equinor, Shell and Ithaca Energy, could be £1.5bn over its 25-year lifespan, the government faces a potential loss of £258m through tax breaks and incentives.
Tax revenues from the North Sea were C.£4bn in 2025-26, but upstream tax relief and support measures amounted to C.£3.26bn.
There is also the expected costs of decommissioning the drilling platforms when reserves are exhausted, estimated at £12bn, to be footed by taxpayers.
‘We live in a shamocracy, where the votes of majority are overwhelmed by the financial requirements of the few’
By comparison, analysis from E3G found that insulating our homes and investing in heat pumps would have a much greater impact on the cost of living, create jobs and boost the economy
Their analysis highlighted how the government’s £15bn warm homes plan, currently under threat of cuts as ministers seek budget savings, would slash £1bn a year from household energy bills, concentrated on those on low incomes. It would also provide a £1.6bn yearly boost to the economy, and about 50,000 new jobs spread across thousands of small businesses.
E3G also estimates that delivering the warm homes plan in full would boost GDP by 0.08%, while AI modelling suggests Rosebank would add about 0.025% on average through its lifetime, assuming the average oil price returning to $70. If the UK taxpayer paid for decommissioning, this would turn negative.
Clearly, the majority are best served the warm homes plan. However, as with property can our single votes offset the lobbying of the oil industry, and the twisted rhetoric of a right-wing media?
Which brings us back to democracy’s promise. The question being asked on the streets is, can this be a democracy when so much of everyday living is governed by financial firms and profit?
The answer is no. We live in a shamocracy, where the votes of majority are overwhelmed by the financial requirements of the few.
“Television man is crazy saying we’re juvenile delinquent wrecks”
The situation in continental Europe is certainly hotting-up, as the discontent of everyone left behind is being voiced, often by the young who see little or no future for themselves.
This has long been coming, it started with the anti-capitalism demonstrations post the GFC, but they fizzled out with no real consequences.
Now, 18-yrs on, people are realising they have been conned.
For the majority it is a hand-to-mouth existence. Many work in the gig economy, with sham jobs that are little more than pretense.
The right are always quick to exploit any unrest. They present demonstrators as anarchists and communists, and promise to fix things with more austerity and zero immigration.
Both policies will deliver zero. Social care will be cut and there will be no one to work in it, only immigrants will work for such meagre pay.
As Trump has proved, right-wing populism is neoliberalism, supporting and increasing the fortunes of the chosen ones while the rest muddle through.
Burnham makes the right sounds, the question is, can he deliver?
He might be able to make a difference by imposing windfall taxes. Banks seem a clear target and the energy sector is ripe for plucking.
The banks’ response highlights everything that is wrong. Increased taxes mean lower net profits and therefore lower dividends. That will never do. Instead, they threaten reduced lending or higher lending costs, and job cuts.
Once again the consumer is screwed over to appease rentiers.
No wonder they are taking to the streets.
The right-wing media are against taxing the banks, too. Clearly they have forgotten that the godmother of this mess, Maggie, did just that in 1981, introducing a 2.5% levy on the non-interest-bearing current account deposits of commercial banks.
Lyrically, we start with a 1968 classic, “Street Fighting Man” by The Rolling Stones, and end with “All the Young Dudes” by Mott The Hoople, written by David Bowie.
See you tomorrow
Philip.
@coldwarsteve
- Notes:
- No replastering, the structure is rotten. A slogan from the 1968 Paris riots
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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