Xalchemie

The art and craft of creating Xalchemie posts on X

Xalcemie posts are threads that tell an irrestible story that triggers action.

summary of the TUC budget proposals to Rachel Reeves

 Summary of the TUC's budget submission to Rachel Reeves

The UK faces an unprecedented set of challenges, including

• low growth
• falling living standards
• decimated public services

Workers have endured the worst pay crisis for two centuries. Real pay is going down while around 4 million people are in highly insecure work. (it's a hell of a lot more than 4 million)

The poor performance is attributed to reckless cuts to public investment, a bad Brexit deal, and a lack of genuine industrial or labour market policy.

Chronic under-investment has hollowed out Britain's industrial communities, and cuts to public services disproportionately affect those on the lowest incomes.

More investment is necessary.

To enable this, the TUC calls for significant revenue-raising measures:

The TUC advocates for addressing the imbalances in how labour and capital are taxed. Specific proposals to raise revenue include:

• A significant increase in the bank surcharge.
• Substantial capital gains tax reform.
• Increased taxation on gambling companies.
• A 2% tax on assets over £10 million, which the TUC estimates could raise up to £24 billion a year.

The National Wealth Fund should be expanded and given powers to borrow directly from capital markets. The government should also establish an independent commission to review and evolve the processes for managing public finances.

Raising Living Standards
The TUC stresses that economic policy must target rising living standards, as consumer spending is essential for growth.

Immediate action is needed, including measures to bring down domestic energy costs and an end to the two-child benefit cap.

The TUC calls for a joined-up labour market policy focusing on more and better jobs, including an ambitious quality training or decent first job guarantee for young people.

Implementation of the employment rights bill is essential, which the TUC projects will improve job security for millions of workers and deliver annual net economic gains of around £10 billion a year.

Investment in public services must be sustained. A key demand is an active dialogue with public service unions on a plan to restore public sector pay to resolve the current recruitment and retention crises.

Support is needed across foundation industries to ensure competitive industrial electricity prices, including the introduction of an interim support scheme for industry on the brink of closure.

the 1970s and the mistaken end of Keynes

 

the 1970s and the end of Keynes

From WW2 to the end of the 1970s Keynesian economic policies by Labour and Conservatives led to increased living standards like never before. It went with the feeling ‘we’ll never let (the poverty of the 1930s) happen again.

Certain problems that arose in the 1970s mistakenly gave rise to the end of Keynesian economics.

Inflation and unemployment rose

It was wrongly thought that Keynesianism was dead

It was wrongly thought that something else was needed

Global factors that would quickly pass were ignored and the wrong actions were taken regarding them.

The main factor was two oil price hikes

The oil price hikes caused other prices to rise

Unions sought pay rises to match the price rises.

Government panicked and made things worse. It wasn’t Keynes that failed it was government actions regarding the oil crises and price and wage rises that failed. (and is still failing)

1in 1971 the world dropped the link to the gold standard

The Bretton Woods international money agreement formed in 1945 came to an end.

Everything went OK with this but. The British government tried to over value the pound. It was this combined with the oil price shock, price rises and corresponding wage rises that caused inflation.

It was not the Keynesian economic policies – they were working OK. If the government had held it’s nerve the crisis would have passed like a wave underneath. The same things were happening in America.

Unknown persons acting as advisors were able to influence Margaret Thatcher and Ronald Regan. Or Thatcher and Regan were stumped as what to do and asked unknown advisors what to do. Or both.

I think it was Oliver Letwin in Britain that more or less said why don’t you try a ‘Free market’ approach. Whatever happened a major mistake took shape that has caused ongoing damage that is still going on today.

The economic fringe ideas, (that were considered crackpot ideas) of Milton Friedman suddenly became popular and the go to ideology in Britain and America. Then it spread across the west, more slowly and less completely across Europe but stronger in the UK.

These new ideas said…

•       State spending was (and still is) too high
•       Free markets are good Public sector is bad
•       Private sector spending is good
•       Government spending is bad.
•       High profits are good
•       Wage rises are bad
•       Entrepreneurs and business in general is good
•       Unions are bad

Keynes ran the UK economy behand the scenes in both WW1 and WW2. Keynes was a major influence in winning both of these wars. Keynes was as much a factor in winning the wars as Churchill for example.

State intervention and state action was required during the wars.

Keynes knew that inflation was a result of three interlinking factors.

Government consumers capital

There’s a kind of power battle between these three economic groups

Governments are the most powerful and can influence the whole economic activity. Under the influence of Friedman governments dropped their level of economic influence and forced the level of influence of consumers down in favour of capital (or profits). This is where it all went wrong. This is where and why things are still going wrong!

Dennis Healey was the first chancellor to get it wrong by not controlling resources.

Reeves is continuing the errors that started in the 1970s

Wages are still forced down and low pay is the main underlying problem with the UK and the US economies.

Thyere is no such thing as free markets so oligopolies formed along with capitalist oligarchs. Yes they are here as well as Russia.

Low paid rentier economy emerged and is still growing.

Pay is going down.

YES pay is actually going down. Prices are going up. Small number of people are profiting most are suffering real income reduction.

The Friedman so called free market ideology was originally called Thatcherism but is popularly called neoliberalism.

The move away from Keynes turned the economy from being demand or consumer led to supply or business led. where profits are the most important consideration over and above consumer spending. This benefits a small number of oligarch type millionaires and now billionaires but leaves the majority suffering low pay and no ability to spend. It leads to the inevitable decline seen in western economies, especially the UK and the USA.

The supply driven economy

·       Drives inflation up

·       Drives wages down

·       Governments are making the same mistakes

·       Making things worse.

Giving markets more and people less is plain stupid but it still goes on. Neoliberalism tries to cure the problems by cutting public spending and enforcing austerity. Exactly the opposite of what is needed. Most people fall for the neoliberal spin.

spinning a false, fake, phoney free market economy

The solution is a return to Keynes, socialism or fascism when the economy collapses and the UK and American economies are in meltdown.

Reclaim Keynes with:

• ·       Economy based on consumer demand
• ·       Consumers more, markets and profits less
• ·       State investment on a huge scale
• ·       Politics of care
• ·       Wide distribution of benefits
• ·       Role of government is to help consumers prosper not to boost profits.

Economic failure started in the 1970s and is

continuing today because governments

abandoned Keynes for fringe ideas

that are failing you and failing me

bring back Keynes

Source information Richard Murphy https://www.youtube.com/watch?v=OcrGuICZUWc

 

Manifesto to turn LINO - Labour in name only into a genuine Labour party

Enforcing Working Class MP Candidate Selection

The Trade Union movement has an institutional and democratic duty to enforce the selection of candidates drawn exclusively from working class backgrounds, preferably those with frontline work experience. We established the Labour Party to secure a direct voice for the people who create the wealth of this country. When the party’s parliamentary wing is overwhelmingly staffed by career graduates who speak the language code of the 'University Common Room,' the party is structurally incapable of hearing the voices of the shop floor, the hospital ward, the warehouse, the call centre or the factory line.

 

This disconnect is not accidental; it is a fundamental democratic failure that leaves the vast majority of affiliated union members without authentic representation, turning the Labour movement into a passive political concerto.

 

This failure of representation translates directly into political and economic incompetence, making change a strategic necessity.

 

The current Shadow Cabinet, typified by the Starmer/Reeves leadership, has demonstrated a willingness to adopt neoliberal, Thatcherite economic policies because they lack the lived experience to understand their destructive impact on frontline communities. A mandate demanding candidates with genuine working-class backgrounds would end this strategic blindness.

 

These candidates inherently possess the knowledge to prioritize domestic working-class investment over abstract geopolitical posturing and would ensure the economic policies of the next Labour Government are aligned with the interests of the people who fund the party.

 

Enforcing the mandate of recruiting MPs from frontline working class backgrounds, who preferably have front line working class job experience is the only way to re-assert the unions' stewardship and political influence over the Labour Party.

 

The Trade Union movement created, funded, and has sustained the Labour Party, yet it has allowed the party to be hijacked by a socially and linguistically disconnected elite. By using the power of the Trade Union movement and the threat of withdrawing endorsement or funding, we can force the selection of a new generation of MPs who look like the women and men operating industrial machinery, the people in the call centres, the people driving the delivery vans, the men and women in the warehouses and the women and men emptying the bins of Birmingham.

 

This is not just a call for better representation; it is the act of taking control and securing a working-class future for the party we formed built and own.

Turn LINO - labour in name only into a genuine Labour party

 

Can Keynesian economics pull us out of the mud

Advokating Keynes

Britain's is stuck in the mud of Thatcherism and is sinking more every day.

At best the Labour government is operating a managed decline.

A return to Keynesian economic policies can pull us out of the mud with positive and pro-active government action.

we don't need socialism

socialism is when the government

takes almost full control of things.

we are not ready for this yet but we might be

if we continue with Thatcherite austerity

The core argument for Keynes 

Britain has suffered from chronic low public investment for years. In 2010 George Osborne introduced austerity. Austerity is being continued to this very day by Rachel Reeves. Austerity is a Thatcherite ideology.

It is designed to do one thing and one thing only.

'ammer the public sector down as much as possible

This has bled us dry over 15 years and is still happening now in

• infrastructure decline
• low wages
• insufficient demand

Thatcherism has failed and the quicker we recognise this and take action to change things the better.

The results of not taking action will be

socialism

or Reform

The government is a massive influence on the economy

Bold action is needed 

Britain has a strong sovereign (fiat) currency.

The ability to create and use currency reserves through the central bank - the Bank of England.

A global standing where British national 'credit' is sound.

These facts of economic life give the government plenty of room to act as it did in the

from 1945 to 1975ish

in the financial crisis of 2008

in the pandemic of 2020

The government must somehow, someway change from Lino, labour in name only, to a real Labour government. Sack Rachel Reeves and put a Labour chancellor in her place (if there is one). Chnage rteally does mean change and includes a change of leadership of the Labour party

Labour then needs to invest in and boost Britain’s productive capacity. Summarised in

build ships in Sunderland again

Build the houses we need to give every family a decent home as both the Conservatives and Labour did in the 1950s and 60s. Bulldoze planning restrictions if necessary. 

Rayner and her plans have been sidelined by Reeves.

Boost public resources like the NHS to the maximum instead of starving them.

Wages need to go up and profits need to go down. This is counter intuitive because if wages go up and profits come down - profits will grow due to the increased consumer spending. the economy will also grow too.

Keynes can be summed up by adjusting Corbyn's flawed strapline into

for the many as well as the few

Summary of Keynesian economics from Investopedia http://bit.ly/4olEUvl

Learn about economics so that you can make an objective decision when it comes to voting in elections, posting on social media or discussing with friends.

Risks 

As in the 1970s there is a risk of inflation due to excess profit taking. This is checked by taxing excess profits and by taxing inflationionary price rises; or excessive wage rises for that matter. But - wages should be rising slightly faster than prices and the government uses tax to keep a happy balance.

Dispatch 21 2025 advokating a return to Keynesian economics 

 

 

a detailed breakdown of how Cummings and Aggregate IQ twisted the Brexit referendum

And why it should have and still should be declared void

Dominic Cummings, as the campaign director for Vote Leave during the 2016 Brexit referendum, leveraged the services of AggregateIQ (AIQ), a Canadian data analytics firm, to execute a sophisticated digital campaign on platforms like Facebook. Here’s a concise overview of how they used Facebook, based on available information:

1. Targeted Advertising: Vote Leave, under Cummings’ direction, spent a significant portion of its budget—approximately 98% or £2.7 million (out of a total £6.77 million)—on digital advertising, primarily through Facebook. AIQ was instrumental in creating and placing nearly a billion targeted digital ads, focusing on micro-targeting specific voter groups. They used data to identify and reach between 5 to 7 million swing voters who could be persuaded to vote for Brexit. These ads were tailored to resonate with specific demographics, leveraging psychological insights to maximize impact.
2. Data Harvesting via Competitions: AIQ facilitated a £50 million football prediction contest for Vote Leave, which served as a data-harvesting tool. Participants provided personal information (name, address, email, phone number, and voting intention), which was then processed by AIQ. This data, including Facebook IDs and emails, was used to create "custom audiences" on Facebook, allowing precise ad targeting. Additionally, AIQ used "lookalike audiences" to reach users with similar traits, enhancing the campaign’s reach.
3. Alleged Overspending and Coordination: Whistleblower Christopher Wylie and others claimed Vote Leave funneled £625,000 to a youth-focused campaign, BeLeave, which then spent this money on AIQ’s services, potentially to bypass the £7 million spending limit. This raised allegations of illegal coordination and overspending, as campaigns are prohibited from coordinating without declaring joint spending. The UK Electoral Commission later found Vote Leave breached spending limits through this arrangement, and Canadian watchdogs concluded AIQ lacked proper legal consents for using UK voters’ data on Facebook.
4. Controversial Data Practices and Cambridge Analytica Links: Wylie alleged that AIQ, described as a "franchise" of Cambridge Analytica’s parent company SCL Group, may have used improperly obtained Facebook data (potentially from Cambridge Analytica’s harvest of 87 million user profiles) to enhance its targeting capabilities. While AIQ and Vote Leave denied these claims, asserting no data was shared with Cambridge Analytica, Facebook suspended AIQ in 2018 to investigate possible data misuse. Cummings himself stated Vote Leave’s data did not go near Cambridge Analytica, but questions persist about how AIQ, a small firm, built a massive targeting operation so quickly without external data.
5. Strategic Messaging and Timing: Cummings emphasized digital over traditional advertising, believing it allowed for empirical testing and precise timing. AIQ’s role included optimizing ads to determine which messages worked best, with a heavy focus in the final days of the campaign. This strategy was credited with swaying undecided voters, with Cummings noting the referendum’s outcome hinged on just 1.8% of voters (approximately 600,000). Posts on X highlight the scale of this effort, with claims of 1.5 billion ad impressions in the last four days.
6. Legal and Ethical Scrutiny: The use of AIQ’s services sparked significant controversy. The UK’s Information Commissioner’s Office (ICO) found AIQ violated GDPR by processing UK citizens’ data without proper consent or transparency. Allegations of "cheating" and "money laundering" by Wylie suggested that the overspending and data practices could have influenced the referendum’s outcome, though causation remains unproven. Cummings dismissed these claims as “fake news” and maintained that Vote Leave operated legally, with Electoral Commission approval for donations.

In summary, Cummings and AIQ used Facebook to deliver highly targeted, data-driven ads, leveraging harvested data and advanced analytics to influence swing voters. While effective—credited by Cummings for Vote Leave’s success—the campaign faced accusations of illegal overspending and unethical data practices, leading to investigations and ongoing debate about the referendum’s integrity. For further details, the UK Electoral Commission and ICO reports provide in-depth findings.

Bureaucracies are good for us

To a certain and measurable extent...

State run bureaucracies are good for the economy.

Over staffed and not totally efficient state supported or nationalised industries are good for the economy.

Government supported jobs are good for the economy.

At this time and especially with a Labour government state sponsored jobs should be on the rise. But for some reason the so called #Labour government are following Tory ideology and are cutting jobs when they should be increasing them.

Here's why and how... (this is a Keynesian economic argument)

If you are like me your tax burden is between 70/75% of your income. Income tax, national insurance and VAT comes to about 50% of your income and every licence and 'duty' is a tax. When you get to earnings of about £90K/annum and above your tax burden starts to reduce.

Just an aside to the main argument. Higher earners have less tax burden but they don't spend proportionally more. Yes they have bigger houses and cars and holidaze etc but - and this is a big but - they are able to save.

When the economy is not doing well as it is just now, savings are bad news and should be taxed, thus forcing the affluent to spend.

With the tax burden for most employees being around 75% if the government directly employs a person, most of their wages goes straight back to the government so the real cost of employment is around 25% of their wages.

If a person is working in a nationalised or government supported industry and the government decides to employ more people than is strictly necessary the percentage of extra cost to the government is less than the notional 25% because there's a form of marginal efficiency. The person is contributing towards the overall operation of the organisation, corporation, division etc. There is a balancing act in that there can't be too much additional staffing so as to not give people enough work to do.

Government sponsored and nationalised industries can and should be overstaffed to a varying level depending on the state of the economy to mop up unemployment. calculations can be done to get the right balance.

This happened to me and thousands of others when I was a Hawker Siddeley apprentice.

The Thatcherite (neoliberal) counter argument 

I know Thatcherism is now called neoliberal but I prefer the term Thatcherism because it is a nasty ideology The term Thatcherism fits how nasty this ideology is to ordinary consumers like you and me.

Thatcherites argue that state supported and nationalised industries inefficient and they should be privatised and the excess jobs be absorbed in the wider economy.

Fair enough you might say because under this argument the savings in job losses should mean lower prices. But - instead of lower prices the savings in job cuts went into higher profits. Great for shareholders and top bosses but no good for you me or the wider economy.

It should be recognised that Thatcherism has failed because it has led to consistently excess profits combined with lower wages and a reducing standard of living.

In due course this ever reducing standard of living will mean consumers can’t afford to spend and this’ll bring an economic collapse. I don’t think this is far off!

Bureaucracies are good for the economy.

The beauty of a bureaucracy is that it can become a self-fulfilling, self contained entity. Yes inefficient from a strict economic aspect but...

It mops up jobs!

Especially graduate jobs. This is how a bureaucracy works.

1. someone instigates a report/review/research or similar (a project)
2. a group of some sort is recruited to ascertain the feasibility and then monitor the project.
3.  a group is recruited to carry out the project
4. the project needs to be assessed modified added to changed and usually grown in size.
5. a leader and another group is recruited to act on the project
6. various admin and support staff are need to support all this work.
7. some of the work needs to be outsourced.

Yes I know it means people seem busy, and can even suffer workplace stress when they are often in effect busy doing (next to) nothing.

And on it goes.

It is inefficient. 

But in reality the bureaucracy will do some good, the government is only paying about 25% of each person's wages and the level of job mopping can be calculated to suit the macro (wider) economic conditions 

In this way government sponsored jobs over and above those strictly necessary and bureaucracies are good for you, me and the economee.