Ian PJ Speech To Parliamentary Conference On Global Economic Meltdown….13 Jul 2009

First posted by IanPJ on Tue 14 Jul 2009 16:09 BST – because we must not forget the why and how, or who was responsible.

As the then Leader of the Libertarian Party UK, I had the pleasure yesterday (Monday 13th July) to spend the day at Westminster, attending as a speaker the Parliamentary Conference on Global Financial and Economic Meltdown.

This lively event, hosted by Lord Tarsem King of West Bromwich was held in Committee rooms 3 and 4a in the House of Lords, and was organised jointly by Global Vision 2000 and the Universal Peace Federation UK.

There were a variety of speakers at this conference, including:

Dr.Nafeez Ahmed : Director, Institute for Policy Research and Development
Anne Belsey: Monetary Reform Party
Canon Peter Challen:Chairman, Christian Council for Monetary Justice
Kelvin Hopkins MP – Labour, Luton North
Ian Parker-Joseph   Leader,  Libertarian Party
Daud Pidcock: Global Vision 2000
David Triggs: Coalition for Economic Justice & Executive Chair, Henry George Foundation
Dr.Adrian Wrigley Systemic Fiscal Reform Group
The full text of the 10 minute speech given by myself is below, although much of the presentation was interspersed with ad hoc examples and comments,
the Monetary Reform solution was presented in the Q&A session due to time constraints.

At no time in history has any individual had such a wealth of information at their fingertips.  With this in mind, you would think it would be easy to take the pulse of the global economy but at no time in history has the global economy been so rich, varied, and rapid.Business systems of increasing complexity govern our lives in ways the classic economists could never have envisaged.  Entire industries collapse without anything tangible ever disrupting supply chains and nations fall bankrupt on the “market confidence” of Wall Street traders.  We live in a world of inconceivable numbers and we live in blissful ignorance of business and financial practices we never knew existed… until they go spectacularly wrong.No government can ever control an economy.  All those who have sought to do so have destroyed it.  One can only manage ones’ responses to events in it.  While we may like to gear our economy in a certain way, our economies do not run in isolation of each other. Thanks to globalisation and the internet we are inextricably linked and we cannot pretend otherwise. Which is why the proposals that I will put forward later will cover both domestic and international economics.

As world leaders try to move us ever closer towards international  regulations and international bodies of control, there is only one constant.

Systems,

Systems of whatever type, inevitably fail… be they computer systems, regulatory systems or currency systems. This presents the immediate reality that if we use only one system then when it fails, we all fail. And we all fail at the same time.

Undeterred by this reality it has not prevented our leaders from seeking to standardise, make uniform and equalise our systems.  But each society has its own unique perspectives and interests, any such common systems require either a democracy bypass or compromise which fundamentally weakens the basis of the system.  In global banking we have seen both.

We have also witnessed institutional schizophrenia whereby one regulator does not know what the other is doing or even what it is for, and our  politicians do not know the extent of their powers or to whom the real power belongs.

What we saw last year was the culmination of national, regional and global government intervening in things they do not understand and cannot control.

The oft quoted cause of this crisis is “irresponsible lending” and “excessive risk” by “greedy bankers”.  But that is only half way to the truth.

The credit crunch is a failure of global regulation as a tool, leading to the construction of castles on a foundation of jelly, such international regulation is now wholly discredited.
Risk is its own regulator when governments do not seek to meddle, and had we retained control of our own regulation, the crisis here need not have hit us as hard as it did.

We are all aware of the disposal of the assets that US banks were legally obliged to create under the Community Reinvestment Act, creating loans worth more than their balance sheets. This put a direct freeze on interbank lending. This subsequent freeze in capital flow sent shockwaves through the markets resulting in instant paralysis.

Subsequently we were forced by circumstance to take a leap of faith that bailouts would restore market confidence and jumpstart interbank lending.  Whether or not this has worked is, frankly, anyone’s guess.

There are conflicting signal signs and while there may be room for optimism we have been warned by the IMF this week that Britain cannot afford another bailout, which may yet be necessary. Among all the talk of “green shoots of recovery” the fear is that we will enter a double dip recession.  The contraction of the job market further could lead to bigger credit defaults, not least on credit card debt which is now outstripping our GDP.

Our present administration has taken it upon itself to bailout everything that so much as squeaks. This is a path to economic suicide.
Even if such measures worked, this is all a sticking plaster at best. Present policy is predicated on the idea that a debt based economy is sustainable and desirable. It is not. UK Plc needs to be producing and exporting, earning money from overseas.

The Domestic Economy needs to be stimulated from the bottom up not the top down. Economies are sustained by the ability of the purchasing public to earn, save and spend, consuming the products that the factories produce.

There is little point in bailing out a failing car manufacturer to see them make cars that they cannot sell.

Put simply it is not capitalism that has failed, it is creditism. Capitalism was designed to work on capital, but it has been distorted and altered to rely on credit, spend now pay later.

It is that this debt based economic model that has now found its way into every layer of society from consumer, retailer, producer to government, all totally reliant upon credit, is the primary reason why a single system failure, in this case interbank lending, stopped everything dead in its tracks.

Having sold off our gold reserves, raided our pension funds  and squandered the money, there was nothing to fall back on, and we have allowed the backbone of the country, the wealth creators, the small to medium enterprise to be drowned in a sea of compliance, regulation and taxes which are crippling our ability to compete, and consequently we have a shrinking productive sector in a country that is spending ever more.

Nations, markets and individuals are stronger through diversity than homogenised cultures, regulatory systems and governments.With this in mind we must reform to ensure our money is real and that our future is built on more than just an I.O.U note to the world bank.

Real Money, not borrowings, is the core of the economy. It belongs to those to earn and spend it, the wealth creators, not merely to those who currently create money or manage it.

But that is only a beginning.

Total Reform of the monetary system, I propose Three planks – Sterling, Sovereign and Free Banking

Firstly, we will return the sovereignty of our national currency—pounds Sterling—to the Crown, removing the privilege of creating money from the private banking industry, with new Sterling being created, debt-free, by the government, and thence spent into the broader economy. The amount of Sterling in circulation will be prevented from being expanded through FRB, stopping bank generated inflationary spirals developing, and keeping the value of your savings safe.

Secondly, we will create a new currency, pounds Sovereign, to be 100% backed by gold. Still vital for international trade, a gold-backed currency will be immensely strong, and help protect the UK from the storms and squalls that sometimes rip through international markets. This kind of currency will also attract investment from overseas into the UK.

Thirdly, allow for the creation of free banks. Free Banks would be completely free of any government interference or regulation. If these prove popular with the market—the citizens of our nation—they will grow and prosper, choosing to embrace FRB if it wished with their own currencies (HSBC peso or Natwest dollars) possibly supplanting Sterling as the primary means of exchange on a day-to-day basis.
However, and should they fail, such failure will not impact on anyone who chooses to keep their banking facilities purely denominated in pounds Sterling. In this way a genuine free market in banking will be able to be tried, without the risks being spread over the general population, or the nation as a whole.

I believe that the proposals outlined above are sound and necessary. Our existing banking system has been creaking from one crisis to the next over many years, and has only remained unchallenged because of the enormous influence that those who most benefit from it—the private bankers—wield over our elected politicians.

I am happy that some of the Libertarian Party policies outlined in our manifesto (http://libertarianpartyuk.com/policy-manifesto-2012/) are beginning to find traction in Westminster, and that my contribution reaffirmed the consensus view with those voices who shared this platform with me yesterday.

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About IanPJ

Ian Parker-Joseph, former Leader of the Libertarian Party UK, who currently heads PDPS Internet Hosting and the Personal Deed Poll Services company, has been an IT industry professional for over 20 years, providing Business Consulting, Programme and Project Management, specialising in the recovery of Projects that have failed in a process driven world. Ian’s experience is not limited to the UK, and he has successfully delivered projects in the Middle East, Africa, US, Russia, Poland, France and Germany. Working within different cultures, Ian has occupied high profile roles within multi-nationals such as Nortel and Cable & Wireless. These experiences have given Ian an excellent insight into world events, and the way that they can shape our own national future. His extensive overseas experiences have made him all too aware of how the UK interacts with its near neighbours, its place in the Commonwealth, and how our nation fits into the wider world. He is determined to rebuild many of the friendships and commercial relationships with other nations that have been sadly neglected over the years, and would like to see greater energy and food security in these countries, for the benefit of all. Ian is a vocal advocate of small government, individual freedom, low taxation and a minimum of regulation. Ian believes deeply and passionately in freedom and independence in all areas of life, and is now bringing his professional experiences to bear in the world of politics.
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