Britain is in no position to laugh at Iceland’s problems

 

Patrick Hosking Business commentary

Is Britain simply a bigger version of Iceland? Certainly the City of London is starting to look a bit too much like Reykjavik, but with taller buildings and fewer cod. It is an exaggeration, but not that much of an exaggeration, to liken the UK to the broken, bankrupt North Atlantic island.
 
Like Iceland, we boast a huge banking industry out of all proportion to the overall economy. Like Iceland, we have an unfunded depositor lifeboat scheme totally unequipped to grapple with failing banks. Like Iceland, our national output is dwarfed by the vast liabilities of our banks. Like Iceland, our banks for years scoffed at relying on domestic depositors to fund their activities and developed a dangerous addiction to wholesale money. Like Iceland, our Government is poised to go on a borrowing spree to try to soften the pain. Like Iceland, our currency is on the skids as foreign investors pull out.
 
Our problems are not nearly so extreme, of course, but we'd be foolish to feel terribly smug as the International Monetary Fund and Scandinavian neighbours go in to bathe Iceland's wounds.
 
The scale of our problems has still not been understood. In essence the domestic banks are largely bust. The Government's £500 billion bailout plan is primarily designed not to keep banks lending to small firms and to homebuyers but to prevent an unimaginable financial calamity.
Banks provide the very foundations and plumbing of the entire economy. A failure of confidence in them could still bring the entire capitalist edifice tumbling down.
 
It suits ministers, however, to maintain the bogus claim that the bailout is about sustaining bank lending. True, that would be a helpful side-effect, but is not the main purpose. Indeed, a gentle and gradual reduction in the indebtedness of individuals and companies is still needed.
At the risk of hyperbole, we should not be worrying about whether this is going to be a thin Christmas for retailers (it is), but whether Britain and the West are about to plunge into a years-long economic Dark Age – complete with mass unemployment and social unrest.
 
Taxpayers are already facing a loss of almost £10 billion on their investment in Royal Bank of Scotland, Lloyds TSB and HBOS even before the Government hands over a penny. That is what their languishing share prices are saying.
 
The recession has barely begun and the banks are on their knees. Scores of billions of pounds of bad debts are yet to come, as companies and individuals default on loans.
 
When in early October officials mapped out the bailout with banks, they insisted that those banks stress-tested their balance sheets for a serious downturn. In the six weeks since then, the outlook has darkened swiftly. The worst-case scenario imaginable then may well be looking like a central-case scenario now.
 
Richard Pym, executive chairman of Bradford & Bingley, the nationalised bank, told MPs this week that the bank had already stress-tested its mortgage book to see how it would cope with a 25 per cent drop in house prices (answer: £600-800 million of losses). But he no longer regarded this as sufficient and was busy putting much larger house price falls into his equations.
 
The fattened-up capital cushions of the banks will be enough for a while, but banks remain colossolly levered. It wouldn't take much of a deterioration in their assets to wipe out all the fresh capital raised. The banks may well have to come back to taxpayers for more. They will be given it, too, albeit at the price of total nationalisation.
 
One third of Icelanders now want to emigrate, things have got so bad, a recent survey found. The proportion of Britons with similar wanderlust may not be so different before this economic agony passes.

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The Dollar Explained!

 
Imagine a large building full of about 50 people in a remote area, not accessible to other human beings.

Each person would need to have his basic needs - food, clothing, shelter and so forth, met. In doing so, each person would have to develop skills to go about earning his livelihood to support his needs. But it would be nonsensical for every person to develop each skill that is needed to survive. What would happen in reality is that each person would develop a few key skills and use these as his source of living; for example one person may specialize in growing crops and rearing animals, whist another may specialize in plumbing and carpentry.

Now these people would have to trade with one another to benefit from one another's skills. For example, the farmer may trade 10 chickens with the builder in exchange for him renovating his room, or a cleaner may trade half a day's cleaning in return for a knitter to knit two woollen jumpers for him.

As the number of skills or trades in the house (offered by the people resident there to one another) will be quite numerous, it would not only be very difficult and complex to keep track of all the exchange ratios between different goods and services, but also extremely impractical for day-to-day living.

Enter the use of a paper currency, which would remove the difficulties faced in exchanging goods and services with one another. From now on, for example, one hour's worth of cleaning could be assigned a value of one unit of the currency, a woollen jumper as five units, one chicken as three units and so on.

So instead of the farmer dragging around a number of goats with him to obtain building services from the builder, he now simply needs to take with him the appropriate amount of currency in his wallet to obtain this service.

Now imagine all the 50 people in the house working away hard to earn a living through their particular skills - except one. This individual, let us refer to him as the central banker or just banker for short, instead of learning to lay bricks, learning to treat people, learning to cook or develop any other skill the other people in the building needed to trade with and survive on a day-to-day basis, does something different and unique.

What this individual does is to print and control the currency being used in the building. On the surface, this may look innocent enough, but look at the consequences for him and the rest of the people in the building.

As mentioned previously, instead of trading goods and services directly, the residents now trade with one another through the use of this currency. So if the cook needs some medical attention, instead of having to bake a number of cakes there and then, he now simply offers the doctor in the building the necessary amount of currency. This currency the cook has earned, which he is now using for his treatment, may have been earned by him for example in the previous week by selling cakes to the farmer.

But what does the banker need to do if he falls into a similar predicament? Does he spend hours working away providing a service or days making a product in order to save up for his treatment? No - he does not need to; the banker simply prints some of the paper currency which the people in the building trade in and exchanges this for his treatment. And he does this for whatever goods or services he may require.

The net result is that while the other 49 people in the building have to work (producing physical goods or providing tangible services) to earn their paper currency and therefore purchase other goods and services through the use of this currency, the banker needs not engage in any real work.

All he needs to do is simply ensure that he has the means to print the currency he may require and further ensure - through force if necessary - that the other people in the building will use his paper money for all the transactions occurring in the building. And this leads to a very important conclusion at this point - that effectively the banker is obtaining the goods and services he needs to survive absolutely free from the rest of the residents (minus of course his cost of printing the paper notes, which is negligible).

To maintain this privileged position the banker will resort to force or intimidation to make sure that only his currency is used in the building at all times. Effectively, the behavior of the banker is more akin to that of a gangster.

This arrangement will remain to be the case as long as the rest of the people trade in his currency and the banker can print this currency freely without any restriction - that is, he does not have to back up the currency he prints with any material substance of value such as gold or silver (for example, for every 1,000 units of currency printed he would have had to have one ounce of gold in reserve.)

So the question arises, if the banker's currency is not backed up by gold or silver, why is it worth anything, considering that at the end of the day it is just bits of paper? As illustrated above, paper currency will have value as long as there are people who will trade goods and services using it.

It is interesting to note the effects on the price of goods and services as currency is printed and fed into circulation. Let us assume that in the above building there are a total of 5,000 units of currency collectively amongst the 50 people living there and that the price of an adult cow is 400 units as currently sold by the farmer. Further, at present, there is only person interested in buying this cow at this price.

Now imagine that the banker prints an extra 1,000 units of currency. With this extra currency, he loans part of it to some of the other people, say 400 units each to two people (each of whom help the banker exert his dominance in the building). Now suddenly these two people are also interested in purchasing the cow, since they now have the funds to do so.

However, the farmer is now faced with a total of three people all wishing to buy his cow for 400 units. As a result, the farmer increases his price to 480 units, which results in only one of the people still managing to stay in the bidding to buy the cow. This may well be the original bidder, but now he has to dig deeper into his savings to pay for this product.

Essentially, what has happened in the building is the process of inflation, which has caused the prices of goods and services to rise substantially. This has happened simply because there is now more paper currency in circulation chasing the same number of goods and services.

So far, we have just examined the effects of this currency arrangement on one large household. Imagine now a small community of 10 such buildings, each with about 50 people residing in it and living in a similar fashion. They too would have their own currencies circulating in their respective households.

However, our banker from the first building has designs on these other buildings as well. If he could get the occupants of these neighboring buildings trading in his currency then its purchasing power would increase.

For example, imagine in one of the other buildings the main product which was produced there was paraffin oil, and this was an essential but costly item for day-to-day living in not just that building, but all the other buildings. If the banker himself wished to buy this product, then he would for once have to offer a tangible physical product or service as opposed to just exchanging his paper currency for the goods.

But rather than actually having to work to pay for this valuable commodity, the banker has a better solution for himself - to simply get the other building to trade in his currency as well.

How does he achieve this? The banker identifies in the paraffin-producing building, and brings into dominance, a family living there who will agree to make their whole building trade in the banker's currency. In return, the banker will provide physical assistance to the family to stay in power and help legitimize their position. In addition, the banker will support the family's claim that the paraffin produced in the building is their property, and that the other people resident in this building have no claim to it (even though they have a right to).

So just as with the occupants in the banker's building, the occupants of the paraffin-producing building will now also be trading in the banker's currency. The effect? The value of the currency will go up, since the residents of the banker's building can now go and purchase paraffin from this other building using the currency they have been earning.

And further, the effect of this will now be felt across the entire community of buildings. Since they all need this essential and costly item of paraffin oil, to purchase it they will also be required to trade in the banker's currency. To earn this currency, they will have to offer physical goods and services to the banker in return for his currency. This will further drive up its value. 

 Thus under the above equilibrium, the banker's currency and hence the banker's wealth will flourish. However, if ever the other buildings stopped trading in his currency and set up their own ones, particularly the building which drives the micro-economy in the community (namely the paraffin-producing one), the banker's influence and wealth will shrink drastically.

If the banker could not persuade the other buildings to continue with his currency, especially the paraffin one, whether politically or commercially, then the banker would end up using force (as a criminal) as a last resort to make sure that they do not switch over to their own currencies.

This entire scenario may sound like a fantasy when considering reality. Yet it is not a fantasy - it is happening right now and on a global scale. The banker is called the USA and the currency in question is of course the US dollar.

At the close of World War ll, the US had managed to place itself in the position where its currency was effectively the reserve currency of the world via the Bretton Woods agreement, but was still linked to the gold standard. It was not until 1971 that the Bretton Woods agreement between the major world powers was abandoned on America's initiative. From this point onwards, the US dollar was no longer backed by the gold standard; that is, unlike prior to this, on demand one US dollar would now not yield its supposed value in gold.

The thinking behind the Bretton Woods agreement, enacted in 1944 in the US, was to ensure that all the major currencies in the world would be backed by the gold standard, thereby theoretically assuring that no country would be able to print its currency freely. But as the other powers in the world declined in their influence, and as the US simultaneously gained further hegemony globally, the agreement was broken at America's behest.

The US was fundamentally able to resort to this scenario due to the Organization of the Petroleum Exporting Countries (OPEC) agreeing (in 1971) to trade oil in US dollars. By now, having the sale of crude oil barrels, relatively costly and traded in their millions per day, in dollars, the US currency was now an essential requirement to facilitate trading on an international level. Not only was crude oil now traded in dollars, but other major commodities also followed suit, including gold.

Almost 40 years on, due to a mixture of reckless lending practices, fundamentally flawed trading processes of the likes of short selling, credit default swaps, derivatives trading and so on, the Western banking system has been placed on the verge of collapse due to the gigantic losses the banks have incurred.

Despite dictating their capitalistic philosophy globally (forcing Third World countries to liberalize their markets by removing trade barriers, allowing the privatization of state assets at heavily reduced prices), when their turn has finally come, the Western governments are hypocritically demonstrating that they are not prepared to let their financial institutions collapse by being subjected to the much-advocated force of the free market.

Apart from the plugging of a few holes via various investment means (including getting funds from Gulf nations), the Western banks have been essentially left with no option other than to go with begging bowl in hand to their respective governments and plead for bail-out packages. The governments in turn, having close ties with the elite of the financial world and to avoid a run on the banks and total economic pandemonium engulfing their societies, have in turn been left with no option other than to plough billions of dollars, pounds sterling or Eros into the banks.

Most crucially, if the funds to raid from do not exist currently, then the governments are resorting simply to printing the money and injecting it into the system. Recently, the US government announced a US$700 billion bailout package for its financial sector. In reality, according to some financial experts, the US government is actually pumping a fresh $400 billion a day or $2 trillion per week into the system.

This injection of readily created capital may stave of the banks from collapsing at the moment, but in reality all that has happened is that the problem or debt is being passed from one entity to another. As the money is printed and fed into the banks to avoid them collapsing, the money will then find its way into the economy.

As this is happening, inflation is taking root as ever more paper currency is chasing a static number of goods and services. The result of which will be only one thing - hyperinflation around the world, including Western economies, in the coming months and years. Thus the current deficit problem of the banks is effectively and criminally passed on to the masses.

Make no mistake - this is theft, and a theft on a colossal and universal scale. And it is a theft of a unique nature, not being possible beyond the workings of this model.

There is no need to take possession of the physical sums of money individuals in the society may possess. But rather, whether people's hard-earned funds are placed in vaults or under mattresses, the value or purchasing power of these savings is gradually being siphoned away by those who are the recipients of the newly generated funds, which is to say the banks. The more dollars that are printed and placed into circulation, the more the value of existing dollars (and currencies which are pegged to the dollar, such as the Saudi riyal) are being stolen.

What countries around the world urgently need to do is to ditch the US dollar, particularly the Middle Eastern states. As long as they trade in the dollar, they give it strength. Furthermore, since they, along with the Chinese, have some of the largest reserves of dollars that exist (earnt through the sale of physical assets and services), they are only losing out as America criminally dumps more such dollars into the world.

Even if today the Western world were to revert to some form of a Bretton Woods model, reintroducing, for example, the gold standard with regard to currency, then there still will be no guarantee that this would not again be brushed aside at some future point if any one of these powers gained greater global dominance relative to the others.

The real solution is to deal with the actual underlying capitalistic model that legitimizes such behavior. We must recognize now that, as with the communist system before it, capitalism has proven to be a failure. The world must now search for another model to govern its finances.

We have this in Islam. To summarize, in an Islamic economic system, the gold standard is compulsory, thereby preventing the generation of unsupported paper currency. In addition, Islam does not permit the various aforementioned capitalistic trading practices as undertaken by current day banks, which are effectively bringing down the Western economic system. Moreover, unlike a man-made system, the principles in Islam (the sharia) are unchanging; therefore Islamic rules will remain in effect no matter what the situation.

Asif Salahuddin (asif@evocadrinks.com) is an electronic engineer by profession. He is currently the operations director of an international beverages company based in London, UK.

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Crisis? What Crisis?

 

By Dave Fryett

19 November, 2008
Countercurrents.org

The economic mess that has been unfolding the last few months is not, as the right fear and the left hope, an organic collapse of the global capitalist system But rather it is, as so many so-called financial crises before it, a scam perpetrated by what Lincoln used to call the "money power." The goals are to capture other lucrative businesses, reduce government and its ability to constrain its hegemony over capital, and to reduce union membership by creating such dire economic circumstances as to make unions powerless to save their members from hardship.

What we are experiencing is not the fall of the bourgeoisie, but its ascendancy to dictatorship. It is a charade, it's class war waged by a confidant, victorious bourgeoisie, not one on the verge of imminent ruin. In fact, the economic failure of the bourgeoisie, as things are currently constituted in the West, is an impossibility.

How is it that the money power can create havoc in their own markets and be assured that the summoned tempest will never come to blow their own ships aground? They control the issuance, cost, value and availability of money and credit.

What most in the West fail to recognize is that from Jerusalem west to the Pacific, the so-called national banks are private corporations owned by the international banking cartel. It is these institutions, not the governments which they putatively serve, which determine monetary policy. They do so as suits their own interests and not those of the respective nations involved. The central banks determine interest rates; are allowed to create deposits out of thin air on a data-entry basis thus bringing new money into existence; and they control how much money is in circulation. This they do by either loosening their loan requirements, which stimulates the economy and creates a boon, or by tightening which creates an insufficiency of money and a "credit crisis" such as we have now.

In his testimony before Congress, the then CEO of Bear Stearns, Alan Schwartz, said that the run on Bear's stock had been "induced." He went on to say that his company, while saddled with a substantial amount of bad paper in the form of these worthless MBS (mortgage backed securities), was not in such bad shape that it could not have recovered had not there been a "whisper" campaign insisting that Bear's collapse was inevitable. It was this which doomed Bear Stearns, Schwartz told Congress, otherwise they would have recovered in a year or two without the need of governmental intervention.

Instead what happened was that J. P. Morgan Chase (the Rothschild banking empire, prominent members of the U.S. Federal Reserve Bank and other national banks), after the sell-off, came forward to "rescue" Bear by successfully offering pennies on the dollar of the pre-fall value of the company. JPMC also got the government to indemnify against potential losses from Bear's bad paper to the tune of thirty billion dollars. This sum to be borrowed from the Fed.

Crisis? Not for the Rothschilds. As Fed members they and other cartel members had their chairman and servant, Alan Greenspan, not only sanction these new mortgage-based derivatives but advocate for them as well. These MBS led to a general decline in the housing and credit markets which, in turn, accompanied by whispers, led to an investor confidence crisis and a large reduction in the share prices of investment banks. Then JPMC, like the cavalry of olde, rode in to offer help by buying Bear for next to nothing and infusing it with much needed capital. How magnanimous!

Then the government indemnifies the transaction for thirty billion which they borrow from the Fed. The cartel, which includes the Rothschilds, doesn't actually fork over any cash, they simply add a few zeroes to JPM's account. Zeroes which the Amerrican taxpayer will have to repay with money from the real economy thus exascerbating the insufficiency of funds in circulation.

The Rothschilds and the others Fedsters, the High Lords of Capital, are not collapsing. One might opine that they are the beneficiaries of an genuine intrinsic financial calamity and that all the assets they acquired are attributable to the vagaries of market economics. Perhaps so, but first let's look at another Fed-induced holocaust, the Crash of 1929.

In the 19th Century, the American government fought heroically against the international bankers but, tragically, in the following century, with the passage of the Federal Reserve Act of 1913, the cartel regained the commanding heights of our economic life which they had lost under President Andrew Jackson.

At first they lent freely stabilizing the economy they had sabotaged in 1907. The boon that followed was so great that it could be heard to roar its way through the 1920s. Meanwhile, beneath the din of jazz bands, money was moving rapidly up the economic ladder and the gulf between rich and poor grew great, just as it has recently. And due to the great availability of money and credit made possible by the Fed and a concurrent loosening of regulation on the financial markets, people borrowed money to invest in the stock market. This had the effect of hyper-inflating share prices with fictive capital in a hyper-leveraged equities market. When the banks made their margin calls (a call by brokers to produce the money for the stocks which they'd bought on credit). Many shareholders had to sell some or all of their stock to make their margins. This sent the market tumbling down. Smaller banks were forced to foreclose on loans to meet capital requirements. As a result, homeowners and farmers lost their properties and the banks that issued these mortgages often couldn't raise enough money and went out of business. The Fed then raised interest rates thereby shutting off the flow of much needed capital into the economy. This deepened recession into depression by setting it in stone. The government was left to solve a problem which required an ever increasing bankroll in an economy of ever dwindling money supply. This, remarkably, it did when "class traitor" FDR, in what is known to economists as the Great Compression, taxed the rich to fund work programs for the indigent.

Through leaked documents and defector testimony it came to light that this crash was planned by the Fed. Memos show them discussing just how many thousands of banks and farms they thought they could acquire by creating the crash. The Crash of '29 was an economic coup plotted by the people at the top of the economy in order to seize more wealth for themselves and to undermine emerging worker movements and political parties which arose from the gross divergence in incomes between the working and ownership classes. It was a ruse. Eventually, they had to suffer FDR and his New Deal but the gains they made were irreversible. Where before they only controlled a majority of the banks in the Northeast, after the Scam of '29 they dominated American capital from sea to shining sea.

It is often heard that the CIA controls all the largest insurance firms. One hears this said most frequently about AIG (American International Group). If this is a myth, our intelligence community has been in no hurry to debunk it these last few decades. Indeed the connection between the American intelligence community and the insurance industry finds its origins in another bogus, bank-induced, crisis, the Panic of 1837.

More recently however, after returning from Versailles in June of 1919, President Wilson, having spent all his political capital unsuccessfully on his Points, was unable to secure funding for a permanent, intelligence-gathering agency from his uncooperative Congress. Thereupon, so the story goes, he surreptitiously produced one million dollars which he handed over to his then Secretary of State, Robert Lansing, uncle of the Dulles brothers. He then told Lansing that this funding was finite and that those involved in intelligence and clandestine operations were going to have to find ways to make this seed money grow without the aid of Congress or the executive branch. Indeed, Wilson added, the very existence of this fund and the activities it will finance must remain a secret.

The rest, as they say, is history. The founders of modern, American intelligence invested this money in Air America and other successful commercial/intelligence ventures including businesses which normally gather information such as insurance companies. To this day, how the CIA receives it funding and how much remains a state secret.

When of late AIG, this massive information-gathering institution, fell upon hard times, they were given $80 billion by that private corporation we Americans call the Federal Reserve Bank. Massive amounts of tax-payer money flowed into the troubled insurance company long before Paulson started pimping his bailout.

According to Reuters
(http://www.informationclearinghouse.info
/article21219.htm), below are the top eight beneficiaries to date of the TARP (Troubled Asset Relief Program). Originally this $700 billion "bailout" fund was supposed to be used for the purchase of MBS and CDO (collateralized debt obligations), or at least that is what the redoubtable Mr Paulson told our credulous Congress, a plan which would help some homeowners stay in their homes. Baiting and switching, Paulson now informs us that things have changed and he will use the money to buy equity stakes in troubled firms thus dashing the hopes of struggling homeowners nationwide. Nothing for them. Let them eat cake.

And who is on the dole instead? Number one is AIG. This is a company which had already received tax-payer money from the Fed.

Number two is our friends the Rothschilds again. Remember it was they who, with the help of our government, bought Bear Stearns for a pennies on the dollar; and bought billions of dollars worth of assets from Washington Mutual at or near book value.

Coming in at number three is another company in the insurance game, Citigroup. They were among the first to complain about MBS and cry for help, but they soon gave up their pretense of imminent financial collapse and made a serious offer to buy Wachovia. The repo man was banging at their door but somehow they managed to offer billions to purchase another bank.

At number four is the bank which did buy Wachovia.

At number five is Bank of America. They are in such distress that they have only been able to buy Countrywide Mortgage, MBNA (Maryland Bank, National Association), and investment banking giant Merrill Lynch since midyear. Countrywide, as you may recall, was called ground zero for predatory lending by angry Congressional regulators. So laden, we were told time and again, was Countrywide with bad paper that nothing could save it. Was it corporate altruism that led BoA to purchase the depressed company? Not according to their CEO who told CNBC that he thought the company could be turned around in a year or two. He added that he thought this bad paper was not as worthless as the public had been led to believe.

Numbers six, seven, and eight are, or were, investment banking collossi who were purchased by commercial banks.

AIG $40 billion

JPMorgan $25 billion

Citigroup $25 billion

Wells Fargo $25 billion

Bank of America $15 billion

Merrill Lynch $10 billion

Goldman Sachs $10 billion

Morgan Stanley $10 billion

Still not convinced this is a scam? Paulson, without the consent of our supine Congress, changed the corporate tax code. Hitherto it was not possible to buy a distressed company and claim their losses against the buyer's profits thus reducing or even reversing tax liability. Now you can, thanks to the scam's front man. The estimated loss in revenue for our government is $140 billion. Not only will the acquirers not owe any tax thanks to this change, but in some cases the Treasury will have to pay out money in tax rebates. The chief beneficiary of this alteration in the tax code? JPMC, our friends the Rothschilds again. They are set to receive billions in rebates.

Still not convinced? In a statement as telling as it was stunning, Paulson recently said that he was looking into ways to get credit for U.S. businesses and consumers from sources other than banks. He wasn't very specific as to what he meant but nevertheless it is unmistakably clear that the banks are following a policy of monetary contraction and that the monies they have received thus far have not been used for the purpose they were intended. Instead, as has been reported in the New York Times and elsewhere, these "troubled" institutions are using this windfall to make acquisitions, and doing so with impunity.

One must conclude that Paulson is unwilling or unable to make these banks act in accordance with the conditions of this Congressional bailout. Unable? He has the power of the state; the support, at least in this particular, of Congress, President Bush, incoming President-Elect Obama, and the American people; and he's the paymaster of a 700 billion dollar slush fund. He has the power to force these renegade Wall Street firms to comply with the terms Congress has set. Yet instead of using this muscle for the national good he continues to give away public money without strings attached. What's more he is looking for new ways to find liquid credit outside the banking system. It's farcical on its face.

None of the companies listed above need a penny! The top five have feasted on the demise of the bottom three in an orgy of bold maneuovres. Are we to believe that the SEC allowed insolvent commercial banks to purchase other financial institutions with the mere promise of capital infusion? One can imagine the avalanche of shareholder lawsuits which would have ensued. These banks met the capital requirements to make these offers to buy. They are solvent.

At this point the initial purpose of this year's money-power scam rounds into view. Intelligence gathering entities like AIG and Citigroup have received massive infusions of capital which they clearly didn't need. And commercial banks, specifically the money-power banks, have greedily scooped up large investment banks for next to nothing and with the help of tax-payer dollars. This much is now clear.

This is no accident. This "crisis" was planned and engineered by the High Lords of Capital. We are not the victims of the business cycle or insufficient regulatory oversight: We are getting raped. Again. We are not watching their demise unfold but rather their latest subterfuge to move an ever greater percentage of wealth up the food chain into their coffers. We are not observing the last days of capital but rather its consolidation and calcification. This does not mean that there will not be genuine misery for most of the people on our planet, of course there will be. That's the plan. But so long as the Rockefellers and Harrimans and Rothschilds and Warburgs and Dresdners have control over our money supply they cannot fail. No matter what travails they loose upon us, such will never reach their doors so long as they can print money and create ersatz deposits for themselves at their pleasure. However bad it gets for us, they are immune. They own our money. They own our governments. They own us.

Whatever vision of justice you cherish, it cannot happen without the right of the people to control their money supply. Without this the money power can make our markets rise or fall or scamper sideways like a crab. They can create gluts and shortages and manipulate the prices of the most essential things we need. We are at their mercy, as we are once again seeing in this recent crisis. The power to create money must rest with a person directly elected by the voters, and subject to instant recall by them. Without this power, we will remain the currency-slaves of the money power.

And they will not go away. They must be removed:

Lincoln wrote: "As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless."

And lastly, in the spirit of the holiday season, we've decided to pass the hat for the Rothschilds. Please send your tax-deductible contribution to High Street, London. They are down to their last trillions and they desperately need your help...

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Bretton Woods was not Keynes' idea!

 

Keynes is innocent: the toxic spawn of Bretton Woods was no plan of his. The economist's dream was blocked for an IMF serving the rich. Reforms proposed by G20 leaders are too little, too late

 

• 
• George Monbiot

 

Poor old Lord Keynes. The world's press has spent the past week blackening his name. Not intentionally: most of the dunderheads reporting the G20 summit that took place over the weekend really do believe that he proposed and founded the International Monetary Fund. It's one of those stories that passes unchecked from one journalist to another.
The truth is more interesting. At the UN's Bretton Woods conference in 1944, John Maynard Keynes put forward a much better idea. After it was thrown out, Geoffrey Crowther - then the editor of the Economist magazine - warned that "Lord Keynes was right ... the world will bitterly regret the fact that his arguments were rejected." But the world does not regret it, for almost everyone - the Economist included - has forgotten what he proposed.
One of the reasons for financial crises is the imbalance of trade between nations. Countries accumulate debt partly as a result of sustaining a trade deficit. They can easily become trapped in a vicious spiral: the bigger their debt, the harder it is to generate a trade surplus. International debt wrecks people's development, trashes the environment and threatens the global system with periodic crises.
As Keynes recognised, there is not much the debtor nations can do. Only the countries that maintain a trade surplus have real agency, so it is they who must be obliged to change their policies. His solution was an ingenious system for persuading the creditor nations to spend their surplus money back into the economies of the debtor nations.
He proposed a global bank, which he called the International Clearing Union. The bank would issue its own currency - the bancor - which was exchangeable with national currencies at fixed rates of exchange. The bancor would become the unit of account between nations, which means it would be used to measure a country's trade deficit or trade surplus.
Every country would have an overdraft facility in its bancor account at the International Clearing Union, equivalent to half the average value of its trade over a five-year period. To make the system work, the members of the union would need a powerful incentive to clear their bancor accounts by the end of the year: to end up with neither a trade deficit nor a trade surplus. But what would the incentive be?
Keynes proposed that any country racking up a large trade deficit (equating to more than half of its bancor overdraft allowance) would be charged interest on its account. It would also be obliged to reduce the value of its currency and to prevent the export of capital. But - and this was the key to his system - he insisted that the nations with a trade surplus would be subject to similar pressures. Any country with a bancor credit balance that was more than half the size of its overdraft facility would be charged interest, at a rate of 10%. It would also be obliged to increase the value of its currency and to permit the export of capital. If, by the end of the year, its credit balance exceeded the total value of its permitted overdraft, the surplus would be confiscated. The nations with a surplus would have a powerful incentive to get rid of it. In doing so, they would automatically clear other nations' deficits.
When Keynes began to explain his idea, in papers published in 1942 and 1943, it detonated in the minds of all who read it. The British economist Lionel Robbins reported that "it would be difficult to exaggerate the electrifying effect on thought throughout the whole relevant apparatus of government ... nothing so imaginative and so ambitious had ever been discussed". Economists all over the world saw that Keynes had cracked it. As the Allies prepared for the Bretton Woods conference, Britain adopted Keynes's solution as its official negotiating position.
But there was one country - at the time the world's biggest creditor - in which his proposal was less welcome. The head of the American delegation at Bretton Woods, Harry Dexter White, responded to Keynes's idea thus: "We have been perfectly adamant on that point. We have taken the position of absolutely no." Instead he proposed an International Stabilisation Fund, which would place the entire burden of maintaining the balance of trade on the deficit nations. It would impose no limits on the surplus that successful exporters could accumulate. He also suggested an International Bank for Reconstruction and Development, which would provide capital for economic reconstruction after the war. White, backed by the financial clout of the US treasury, prevailed. The International Stabilisation Fund became the International Monetary Fund. The International Bank for Reconstruction and Development remains the principal lending arm of the World Bank.
The consequences, especially for the poorest indebted countries, have been catastrophic. Acting on behalf of the rich, imposing conditions that no free country would tolerate, the IMF has bled them dry. As Joseph Stiglitz has shown, the fund compounds existing economic crises and creates crises where none existed before. It has destabilised exchange rates, exacerbated balance of payments problems, forced countries into debt and recession, wrecked public services and destroyed the jobs and incomes of tens of millions of people.
The countries the fund instructs must place the control of inflation ahead of other economic objectives; immediately remove their barriers to trade and the flow of capital; liberalise their banking systems; reduce government spending on everything except debt repayments; and privatise the assets which can be sold to foreign investors. These happen to be the policies which best suit predatory financial speculators. They have exacerbated almost every crisis the IMF has attempted to solve.
You might imagine that the US, which since 1944 has turned from the world's biggest creditor to the world's biggest debtor, would have cause to regret the position it took at Bretton Woods. But Harry Dexter White ensured that the US could never lose. He awarded it special veto powers over any major decision made by the IMF or the World Bank, which means that it will never be subject to the fund's unwelcome demands. The IMF insists that the foreign exchange reserves maintained by other nations are held in the form of dollars. This is one of the reasons why the US economy doesn't collapse, no matter how much debt it accumulates.
On Saturday the G20 leaders admitted that "the Bretton Woods institutions must be comprehensively reformed". But the only concrete suggestions they made were that the IMF should be given more money and that poorer nations "should have greater voice and representation". We've already seen what this means: a tiny increase in their voting power, which does nothing to challenge the rich countries' control of the fund, let alone the US veto.
Is this the best they can do? No. As the global financial crisis deepens, the rich nations will be forced to recognise that their problems cannot be solved by tinkering with a system that is constitutionally destined to fail. But to understand why the world economy keeps running into trouble, they first need to understand what was lost in 1944.

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Let Sleeping Gods Lie - What do you think?

 

The Church's 'harvest of souls' policy has led us to this foul juncture

BALBIR K. PUNJ

The recent violence involving the church and locals in Orissa and elsewhere has, it is said, sullied India's image abroad, put the Sangh parivar in a spot and evoked global sympathy for the "hapless Christians", the victims of those fascist Bajrang Dal goons. The broad picture put out by the 'secular' media (Outlook included) mirrors the position of the Church: the missionaries only serve the underprivileged, they have no evangelical agenda. The Manuvadi vested interests cannot stand the emancipation of the hapless poor and hence resort to violence. Also, conversion from indigenous faiths to Christianity through fraudulent means is a bogey raised by the parivar to cover its black deeds. In short, the church's motives are pious and those of its opponents devilish. But what are the facts? Were relations between the church and locals all hunky-dory before the arrival of the Bajrang Dal a few decades back? Will the problem disappear if the Sangh is exiled from the country? Are the allegations against the church a Sangh concoction? Finally, is it church vs parivar or church vs locals? To find answers, we must go way back. Christianity came to India a few decades into its birth and remained undisturbed in the subcontinent till about 500 years back. It's the arrival of the missionaries—in the company of imperial forces—that shattered the peace. As Babasaheb Ambedkar writes: "The entry of the Catholic Church in the field of the spread of Christianity in India began in the year 1541 with the arrival of Francis Xavier. The Syrian Christians shrank with dismay from the defiling touch of the Roman Catholics of Portugal. The inquisitors of Goa discovered they were heretics and like a wolf in the fold, down came the delegates of the Pope upon the Syrian Churches". What followed was even worse. Till the end of British rule, the missionaries were brazen about their intent. Hindu gods were abused openly. Writing about his childhood in Rajkot, Gandhiji says in his autobiography, "In those days, Christian missionaries used to stand in a corner near the high school and hold forth, pouring abuse on Hindus and their Gods." Decades later, Gandhiji recalled in Young India (March 4, 1926), "Though the preaching took place over forty years ago, the painful memory of it is still vivid before me." Obviously this practice was followed in the entire British India. If the "preaching" could leave such scars for so long on a person like Gandhiji, how do you expect a tribal to react to such humiliation? Social reformers, from Dayanand Saraswati to Vivekananda to Gandhiji, have questioned the Church's 'real intent' and its methods at one time or another. Gandhiji said, "I believe there is no such thing as conversion from one faith to another in the accepted sense of the term...Christian missions will render true service to India if they can persuade themselves to confine their activities to humanitarian service without the ulterior motive of converting India or at least her unsophisticated villagers to Christianity, and destroying their social superstructure" (Harijan, Sept 28, 1935). Note the words, "destroying the social superstructure". Post-Independence, the Church changed its methods. Open confrontation was dropped in favour of covert methods like inducements to target groups (the poor, illiterate sections). The new strategy, focused on specific areas, yielded a handsome harvest. A comparison between the census figures of 1991 and 2001 shows the growth rate of the Christian population was many times more that of Hindus in as many as 18 of the 25 states and UTs. To carry out the sordid business of harvesting of souls, the Church now adopts a multi-layered strategy, full of prevarication and Janus-faced subterfuge.The church tells the elite it worships the Lord through the service of the poor and has no conversion agenda. But at ground level, there are overt attacks on other faiths. (The trouble in Karnataka followed the publication of a booklet, Satyadarshini, in which Hindu gods were abused). Protests against such insults are termed as attacks on Christians. Again, the right to evangelise is defended and exercised. 'Help' to the needy and subsequent conversions are explained as a 'change of heart'. This is by no means Bajrang Dal propaganda. It is the substance of a 1956 report by the Niyogi Committee, which was constituted by the Congress government of Madhya Pradesh. In response, four Congress-ruled states—MP, Arunachal Pradesh, Orissa and Himachal Pradesh (in '07)—brought out laws to check such unethical conversions and maintain social harmony. "The entire problem began because New Life was attracting poor people in distress and...offering money and property to convert," was how Father Austin Menezes of Mangalore described the work of the New Life Fellowship Trust whose actions sparked off the violence in the port city. ('Life As the Other', The Indian Express, Oct 23, '08). It's true that clashes between the Church and locals have become frequent and violent in the last few years. This was inevitable given the Church's plan to evangelise India in the 21st century. A Tehelka investigative report (Feb 7, '04) says "a new mood of aggressive evangelism has been emanating from America" and it has India as one of its key targets. It is against this backdrop that one has to see recent events. The hapless Kandhamal tribals are under siege, fighting to preserve their culture, even their very existence. The Kandhs, once tribal kings, are now pariahs, hunted by the CRPF in their own land, painted as rapists/ murderers. Thousands have fled to the jungles. There is no one to speak for them. They don't interest our rent-a-cause NGOs and activists. Arraigned against the Kandh tribals are the missionaries with their centuries of global experience in decimating local cultures. Backed with foreign funds, the Church is following its age-old divisive agenda of splitting local society into hostile factions. At immense human cost, it has reaped a rich harvest of souls. The share of Christians in the population of Kandhamal, just six per cent in 1971, had grown to 18 per cent by '01. Kandhamal has witnessed violence earlier too, in 1994 and in 2007. The recent blowout came after the murder of Swami Laxmanananda Saraswati and his three associates. The Kandhs, 90 per cent of whom are Hindus, revered the aged swami. Over four decades, he had not only started schools and hospitals for them—in a sense, he helped them preserve their identity and ancient faith against alien onslaughts. Who killed the 84-year-old swami? Sabyasachi Panda, the Maoist leader who owned up to the killing, said the swami was eliminated for reviving Brahminism. Strangely, Panda turned a blind eye to evangelism. But he divulged an interesting fact—that the Christian Panas (an SC group) provides cadres to the Maoists in Orissa. I for one don't know how to reconcile evangelism, which believes in the harvesting of souls, with Maoism, which believes there's no soul. In Europe, wherever Communism succeeded, the Church had to go underground, if not disappear. But in Orissa, perhaps there is some kind of 'strategic alliance' happening. Did the Church outsource the swami's assassination? Now to the alleged rape of a nun in Kandhamal. Such 'Rape of nun by Hindu fascist' stories have turned out to be false in Jhabua, Jajjhar and Baripada in the past.Unfortunately, by then the 'hot story' had gone cold for the media. We are witnessing another edition of this in Kandhamal. The nun would not attend the identification parade, the SC ruled out a CBI inquiry, but the National Commission for Minorities still jumped into the fray. Is the nun a pawn in the church's game of chess? It's all a result of what Gandhiji called the destruction of the "social superstructure". India is steeped in a pluralistic ethos and believes God is one, irrespective of his numerous names and shapes. The Church has faith only in "one God". The rest, to it, are false. Wouldn't it be better if the church heeded Gandhiji's words and left people to their faith? (The writer, an RS member, can be contacted at punjbk@gmail.com)

 

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200,000 jobs barred to non-European migrants from November 27

 

 

Two hundred thousand skilled jobs in Britain will be closed to non-European migrants from November 27, when the new points-based immigration system comes into effect, the Home Office announced yesterday.
 
The official shortage occupations list, published yesterday, which will be opened to skilled workers from outside Europe, covers 800,000 jobs, compared with the estimated 1m vacancies covered by the existing work permit system. The largest occupations being closed to non-EU migrants are doctors, secondary school teachers and most nursing jobs.
 
The final list of professions covers 100,000 posts more than the provisional list proposed by the migration advisory committee, which is made up of labour market economists. The flow of skilled migration from outside Europe is expected to fall by between 30,000 and 70,000 people a year as a result of the introduction of the shortage occupation list.
 
The Home Office said that social workers were being added to the list - a decision that was welcomed by the British Association of Social Workers, which said 12% of social work posts remained unfilled across the country.
 
The borders and immigration minister, Phil Woolas, said that he had also asked the migration advisory committee to further review the position of skilled chefs, senior care workers, qualified town planners and teachers by next March.
 
The shortage list defines a skilled chef as earning at least £8.10 an hour and a senior care worker as earning at least £8.80 an hour - requirements that have drawn strong protests both from the ethnic catering industry and social care sector. In schools, only maths and science teaching posts have been declared open to overseas migrants.
 
The shortage occupation list forms the basis of tier two of the new five-tier points-based system, coming into effect later this month. Under tier two, companies must pass the resident labour market test - advertise the job for between two and four weeks in Britain before they can recruit someone from outside Europe. Applicants must have English language skills, enough money to support themselves for the first month, and prospective earnings of more than £24,000.
 
As well as expected shortage occupations, such as chemical engineers and construction managers, the official list also includes more unusual jobs such as sheep shearers and ballet dancers - although the latter have to be up to Royal Ballet standards to qualify. In Scotland, the jobs of speech therapists, nurses in care units for elderly people and frozen-fish filleters will also be open to non-EU migrants.
Woolas said yesterday that had the new system been in place last year, there would have been 12% fewer people coming into Britain through the work permit route: "On top of this, the strict new shortage list means 200,000 fewer jobs are available via the shortage occupation route."
Professor David Metcalf, the migration advisory group chairman, said the government had decided that social workers would be on the list for a transitional period while his committee reviewed the evidence of a shortage.
 
"This evidence was not submitted in time for our first report. We will continue to review any evidence and update the list if necessary."
Heather Wakefield, of Unison, the public sector union, said that ministers should make sure that their "tough stance" on migration did not harm vulnerable people.
 
"The social care sector would collapse without highly skilled migrant workers who keep care homes, homecare services and social work teams running."

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First they came for the South Indians, next came the Muslims now its the turn of the Uttar Bharatiya...

 To Be An Uttar Bharatiya...
To be Barack Hussein Obama in the United States of America now means a million happy things to his ilk. To be a Shiv Narayan Yadav in Mumbai these days means many things that none of his ilk would wish for themselves... SMRUTI KOPPIKAR
To be Barack Hussein Obama in the United States of America now means a million happy things to his ilk. To be a Shiv Narayan Yadav in Mumbai these days means many things that none of his ilk would wish for themselves. 
Yadav, by virtue of fulfilling domicile requirement of 15 years, is a Mumbaikar but could be labeled a migrant. Either is an identity, either can be picked upon to suit political ends. Being a migrant anywhere is not easy, much less so in a harsh, crowded, pragmatic to a fault, money-is-honey city like Mumbai. It offers him a half life – a bed shared by three people in turns through 24 hours, 12 inches of space on a clothing line, kitchenette just large enough to store a couple of plates-katoris and a stove to make chai, a corner for pooled-in-and-bought television set to watch Bachchan and Bhojpuri. Yet, migrants flock because Mumbai offers them more than half a chance to make a living. This, after all, is a city built by migrants over two centuries. Over years, depending on political whims, migrants from various parts of the country were made to feel unwelcome by those who claimed a certain amorphous ownership over Mumbai. Now, in the Raj Thackeray era, it is particularly difficult being a migrant from Uttar Pradesh and Bihar. And, the difficulty has nothing to do with crowded trains and cramped living spaces.  

• To be an Uttar Bharatiya – literally north Indian, but taken to mean those from UP-Bihar – is to wish for a time when the term itself was innocent.
  
  
• To be tagged an Uttar Bharatiya in Mumbai now is probably many degrees worse than being one
  
  
• To be an Uttar Bharatiya now means living in perpetual anxiety even within ones' own basti.
  
  
• To be an Uttar Bharatiya in Mumbai now means watching political games being played in one's name.
  
  
• To be an Uttar Bharatiya in Mumbai today means that you belong to the bottom zones of the socio-economic ladder.
  
  
• And, to be an Uttar Bharatiya in Mumbai now means having to measure your words, weigh your attitudes and re-examine your options. 
  
  
• To be an Uttar Bharatiya in Mumbai now means to return to your forefathers' village, looking for land to work out a Plan B 
  
  
• To be an Uttar Bharatiya in Mumbai now means seeking solace and security in the confines of your own Bhaiyya and Bihari bastis 
  
  
• To be an Uttar Bharatiya in Mumbai now means scaling down the celebrations of your festivals, lest it is mis-interpreted and twisted out of context. 
  
  
• To be an Uttar Bharatiya in Mumbai now means forsaking the Bhojpuri films lest there is violence at the theatre. 
  
  
• To be an Uttar Bharatiya in Mumbai now means hunting for Marathi language classes, teach-me-Marathi books. 
  
  
• To be an Uttar Bharatiya in Mumbai now means that you have become part of the city's slang. "Abbey Bhaiyya" and "Abbey Bihari" are the cuss words to end street corner arguments and throw the way of errant drivers. 
  
  
• To be an Uttar Bharatiya in Mumbai means to be unsure if you and your children will be made to feel, increasingly, as second-class citizens in a land that's as much yours as that of Maharashtrians 
  
  
• To be an Uttar Bharatiya in Mumbai now means you wonder at the silence or near-silence of the moderate non-Raj kind of Maharashtrians 
  
  
• To be an Uttar Bharatiya in Mumbai means you long for a city that, not too long ago, was home.

To be an Uttar Bharatiya – literally north Indian, but taken to mean those from UP-Bihar – is to wish for a time when the term itself was innocent.
Till not more than a year ago, it was not a pejorative label, not heard, seen, read in Mumbai as disparagingly and widely as it is today. When it was used, it meant little other than someone hailing from the north of India. Now, the innocent term has acquired undesirable nuances. "Ab chhati thok ke kehna ki hum Uttar Bharatiya hain ka matlab hua ke hum kisiko chunauti de rahe hain, halanke aisa kuch bhi nahin hoga," (To proudly declare that I am an Uttar Bharatiya now means throwing a challenge to someone who is not, though I do not mean it that way at all) whispers Shiv Narayan Yadav, who migrated to the then Bombay over 40 years back, setting up his vegetable stall in Mumbai's Vile Parle market, among Mumbai's oldest and third-largest mandis after Dadar and Byculla.  
The suburb of Vile Parle, on the east side, is pucca Maharashtrian. Yadav points out that all vegetable and fruit vendors there have been Uttar Bharatiyas for decades together. 'Hum to grahak se kuch kuch Marathi bhi bol lete hain," (We attempt to speak some Marathi with our regular customers) he says. "Lagbhag chaalees saalon ke baad, koi hame yeh to bataye ki hum gair-Marathi, gair-Mumbaikar kaise hue," (After 40 years here, will someone enlighten me on how I suddenly turned non-Mumbaikar). Yadav asserts that the term Uttar Bharatiya means his roots, his distant past, his origin; Mumbai is his present, his wealth, his life, his future. A quirk of fate, he says, that after servicing Maharashtrians for decades his prevailing identity should be that of an Uttar Bharatiya. Yadav cannot make much sense of this; he only wishes the storm will blow over.  
To be tagged an Uttar Bharatiya in Mumbai now is probably many degrees worse than being one
Ram Narayan exemplifies this dilemma. Shiv Narayan's call centre-employed son shows the bitterness that the older man masks. "Till the other day I was a Mumbaikar, no one even bothered to ask which part of Uttar Pradesh I came from. I was born here, brought up here. Now, suddenly I am not so much a Mumbaikar but an Uttar Bharatiya," fumes Ram Narayan. He narrates how his colleagues, educated at least till the graduate level, seem to have re-aligned themselves into community and language based identities. "Marathi speaking friends hang out together. UPwallahas hang out together, separately," he says. There are many thousands in the Uttar Bharatiya population – estimated at between six and seven million of Mumbai's total 17 million – who would not answer to the call of an Uttar Bharatiya. Their roots may lie somewhere in Benares or Balia, but their birth certificates are issued in Marathi. This segment finds the controversy hardest to stomach.  
"I have no real home to return to, do you understand," asks the well-turned out Shivpal Singh with a rage that Raj Thackeray should begin taking note of, "I was born here to parents from UP. I am Mumbai and Mumbai is me." The strapping 21-year-old who took a degree this June is looking for a job. "Do you think I will get one in this scenario?" he asks rhetorically. At the other end of the socio-economic spectrum is Santlal Yadav, who has been here since he was seven. At 40, he has a modest electrical business servicing repairs in high-end suburban apartments, and a family that he raised in a Mumbai slum. "My young kids do not even properly say the name of our village near Benares. I hardly go there. There's some land in our name but I have no real connection. I am considered an outsider here and I will be seen as an outsider there too."  
This section is what Kripa Shankar Singh terms "nobody's children". Singh, who started out as potato-onion vendor in Santacruz bylanes in the 70s and rose to become minister of state for home in the Maharashtra cabinet last term, is presently Mumbai Congress chief. "Identity politics has gone on too far, it's touching and scarring the lives of millions whose only concern is to seek a better life within the parameters set by the Constitution of India. Our government allowed too much latitude to Raj Thackeray." Singh knows he will have to undertake an immense amount of damage control initiatives if the Congress is to do well in the next assembly and general election. But his deepest distress is about the fault-lines that are drawn. "Mera beta Mumbaikar hai, main Mumbaikar hoon uta his jitna Raj hain. Ab kaun kisko certificate dega," (My son is a Mumbaikar, I am one too, just as Raj is. Who is to give a certificate to whom)  
 

To be an Uttar Bharatiya now means living in perpetual anxiety even within one's own basti
It is no one's case that Uttar Bharatiyas are being identified and harmed by scores all across Mumbai. Statistically speaking, the few sorry incidents do not count as having touched even 0.5 per cent of the community. The couple of taxis vandalized, bhelpuri stalls uprooted from pavements, Dharmadev Rai being beaten up in a local train, and so on – repeated ad nauseum on television screens to wrongly reflect the entire city and its citizens – represent the worst that happened. They are, undeniably, unbecoming of a multi-cultural and pluralistic city like Mumbai. Taken together with reports that scores of Uttar Bharatiyas from Pune, Nashik and other cities have left for their hometowns, they point to an utter and willful neglect of law and order by the state machinery. However, through all this, millions of Uttar Bharatiyas have lived their lives as they otherwise would, doing all that they would, going to all those suburbs and places as they would, engaging in their work and leisure pursuits. The difference between pre-Raj and post-Raj era is so subtle, so insidious and so very gradual that many non-Uttar Bharatiyas have missed it. The difference is not the violence per se, but the anticipation and anxiety of violence anytime anywhere. 
The unspoken, almost indiscernible, difference shows in the manner of living, in the cadences of everyday life. Wives are anxious about husbands going off on their trades. Women are apprehensive that some "sarphira" speaking in Marathi will storm into their basti when the men are away. Men worry about what lies in store for them at workplaces – the dairies, the vegetable and fruit mandis, the security offices, telephone offices, railway counters and so on. Children in their teens, even pre-teens, approach the neighbourhood cricket gully with some trepidation at remarks that are sure to come their way. The family from UP or Bihar who now takes the suburban local is wary of co-commuters, some even yanking their little children off from the window seat to offer it a man who obviously is a Maharashtrian. The neighbourhod ubiquitous bhelpuriwallah, whose favourite parking place was near the Shiv Sena office, now wonders if he should move to a "safer" corner up ahead on that street, or to another street altogether. Every other taxi driver wonders if he should venture into certain areas for his fares. Autorickshaw owners, many of them, drivers themselves, have to put up with the odd passenger who will terminate the ride with a slap instead of the metered fare because he is "a bloody Bihari". Autorickshaw owners debated if they should "buy over" Raj Thackeray's goodwill by sending him Diwali mithai. Security guards in modest to upscale housing societies face the prospect of being replaced by their Maharashtrian counterparts. Commercial transporters wonder if they should pen Marathi catch-phrases at the back of the trucks and vans. Film industry workers are anxious. Zari factories, neighbourhood atta chakkis, carpenters and painters, all worry if they will function as they always have. The door-to-door fishwallah, who replaced the traditional Maharashtrian Koli women vendors, are scared that their trade will be snatched away. And so on, it goes…. 
The below-surface but continuous state of anxiety is a barometer of how Raj Thackeray's campaign has devoured into the typical Mumbai life. "They don't feel safe, comfortable, at home, anymore. Uttar Bharatiyas are constantly looking over the shoulder for that Raj-type Maharashtrian though the fact remains that Mumbai runs on their services," says Sanjay Nirupam, former Shiv Sena MP and Thackeray-acolyte, now Congress spokesperson in the state, who was instrumental in organizing the Chhat Puja four-five years back on the scale that made Raj see red. "I say this not as defiance, but as the truth. Yeh Uttar Bharatiya pura shahar ko dho rahe hain. Aap inko nikal do, Mumbai bandh pad jayege" (They carry the burden of te city. Throw them out and Mumbai will come to a grinding halt). Rues Vishwanath Sachdev, noted Hindi journalist, political commentator and writer, "What is happening is a dangerous threat to Mumbai's composite culture." 
Kurar village in suburban Malad is an Uttar Bharatiya settlement. Poisar village bridging the suburbs of Kandivli and Borivli in far north Mumbai is home to not less than a lakh Biharis. Across the city's suburbs are pockets of Bihari and UP homes, ghettos if you like. Even in their own bastis now, the anxieties and apprehensions are palpable. "I sent my wife and kids to UP for Diwali and stayed out of the basti as far as possible. Who knows what shape a regular basti fight will take," says Bhim Singh, a security guard, whose neighbouring basti comprises Maharashtrians. In downtown city, at the famous Mahalakshmi dhobhighat, Rakesh Gupta is livid that he must account for yet another variable in his otherwise unsettled life. "My grandfather migrated to Mumbai. My father was born here. I was born here. I sell fish. My brothers work at the dhobhighat. This is the only life and home I have, but when Raj's men came here they threatened to come again if we didn't take the next train to UP," says Gupta. None from this biradari have taken that train, but a few are weighing the option. Sachdev and other worry that this kind of social disturbance may explode in ways we cannot now imagine.

To be an Uttar Bharatiya in Mumbai now means watching political games being played in one's name
The man-on-the-street Uttar Bharatiya is astute enough to recognize that politics and political one-upmanship lie at the heart of this unnecessary campaign against his identity. If he is unforgiving of Raj Thackeray and the Maharashtra Navnirman Sena, he is equally critical of the stream of politicians – Mulayam Singh, Amar Singh, Mayawati, Lalu Prasad Yadav, Ram Vilas Paswan, Nitish Kumar – who have descended upon Mumbai quite regularly during the last four-five years to either establish or consolidate their base here. "Yeh sab to rajniti ka khel hain" (All this is a political game), says Bharat Singh who has lived 30 of his 39 years in a Mumbai basti and works as a security guard. He can tell how many times so-called workers of either Mulayam's SP or Mayawati's BSP have come into his basti, offered people inducements to attend rallies and so on. He can also tell stories of those local Congressmen who tried to compete with the UP leaders.  
After the de-limitation exercise, Mumbai and Thane account for nearly 70 seats in the state legislature, almost 80 per cent of them in urban areas. The Uttar Bharatiya vote can make a difference between winning and losing in as many as 40-43 seats, according to a Congress internal dossier. This is the piece of the pie that Mayawati, Mulayam Singh and Lalu Prasad Yadav, all are eyeing as the springboard to make their base in Mumbai. This is typically their voter back home in UP and Bihar; his support in Mumbai is priceless when they seek to establish themselves in the city. Leaders unabashedly used festivals and occasions to promote their brand of politics. So, UP divas was celebrated in a big way by the SP. Chhat Puja had Nirupam's and Congress' blessings. However, the typical SP/BSP or RJD voter back home has been, traditionally, a Congress voter here in Mumbai. "Whoever forms the next government in Maharashtra will have taken the north Indian vote with him. Otherwise it's not possible," argues Nirupam. Arch rival Kripa Shankar Singh agrees. Between them is a royal battle to be the voice of the Uttar Bharatiya within the Congress!  
The Shiv Sena, recognizing the significance of the Uttar Bharatiya vote, made several overtures to the community through their business leaders, community organizations, festival committees and so on. Uddhav Thackeray imagined that his inclusive "Mee Mumbaikar" campaign would nullify years of the Sena's antagonism towards the community. All this while, the Congress was hard put to dream up strategies to win the Marathi vote which is equally crucial in certain pockets of Mumbai and Thane. Into this cauldron stepped in Raj Thackeray, who saw the potential of crystallizing the Marathi votebank for himself, at the expense of every other political party in the state. The Sena is caught between the Marathi and Uttar Bharatiya vote. The Congress, which happily allowed Raj to knock its principal opposition the Sena, now risks losing its appeal among Uttar Bharatiyas after it dragged feet on action against Raj. "Who speaks for us now? Those who do so in Delhi are doing it for their own ends too," remarks Saheblal Pandey, autorickshaw owner-driver, who can recite the Gita and who educated his son to join the elite nuclear establishment BARC here.  
To be an Uttar Bharatiya in Mumbai today means that you belong to the bottom zones of the socio-economic ladder
There is a Prakash Jha in the Mumbai film industry whose affection for his native Bihar is up there for all to see. There is a Shekhar Suman who had rarely hidden his Bihari roots. There is an Amitabha Singh, from Benares, whose cinematography skills are in much demand by the advertising and film industry. There are scores of others, hailing from UP and Bihar, spread across the entertainment world, the corporate sector, the service industries and the like. Raj's campaign, though centred briefly on the Bachchans and Bhojprui star Manoj Tiwari to gain maximum national publicity, has cleverly stayed away from the upper ends of the socio-economic ladder. The anti-Uttar Bharatiya sentiment is directed against the lower and lower-middle class Uttar Bharatiya by his Maharashtrian counterpart.  
The anti-Uttar Bharatiya campaign makes me hang my head in shame, remarked the noted Marathi author Dilip Chitre, writing in Hindi. Its focus on the poorest of the poor, the most defenseless and voiceless, the weakest link in the economic chain like the factory workers and construction labour, is a barely-disguised class war under the garb of a regional identity campaign. "It is easier to stoke the poor out-of-work Marathi youth to run amok against the Uttar Bharatiya than to provide him with skills and jobs," says Dr R Tiwari, former head of Hindi department in the University of Mumbai. Some Maharashtrian commentators could not agree more. These are people who want to remind Raj, and others like him, that priests were specially invited from Benares to lead Chhatrapati Shivaji's coronation. Even if, to give Raj the benefit of doubt, the Railway carried an anti-Marathi bias in its recruitment, there is hardly any justification for the fact that nearly 40 different services in the city are controlled by Uttar Bharatiyas who sensed and seized the opportunities as they came. Raj's response, briefly, was to organize classes to teach Maharashtrians the art of bhel-making. It fizzled out. 

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