Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More
Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


Sludge Report #61 – Revolution Edition

In This Edition: Revolution Edition - Why Sludge Supports The May Day Revolution - Do You Know Who Owns Your House? - The Revolution Will Not Be Motorised - Dick Cheney’s Energy Crisis – Here Is Something This GOP Stooge Knows About - The Wisdom Of The Dialectic

NOTE: Authors of this report will be anonymous and wide ranging, and occasionally finely balanced. Indeed you are invited to contribute: The format is as a reporters notebook. It will be published as and when material is available. C.D. Sludge can be contacted at The Sludge Report is available as a free email service..Click HERE - to subscribe...

The Kids Are ALL Right

Sludge Report #61

Revolution Edition - Why Sludge Supports The May Day Revolution

Ideally this edition of Sludge ought to have been written before the recent May Day celebrations around the world. Then perhaps the events around the globe may have made a bit more sense to some of Sludge’s more skeptical readers. But there is no time like the present, so here goes.

Sludge has always been a bit of a pinko. In earlier days Sludge backed Central American struggles against CIA backed drug smuggling puppet governments and guerillas.

More recently Sludge must confess to having spent a few years thinking that the neo-liberal framework for global commerce sounded vaguely convincing. But then Sludge wised up.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

One of the key causes behind Sludge’s epiphany has been the New Zealand experience over the past decade and a half.

New Zealand post 1984 has pursued the sort of policies that would give any self-respecting IMF/World Bank gnome wet dreams.

We have eliminated capital controls, emasculated our central bank, floated our currency, tamed our government deficit, sold the jewels among our state assets and unilaterally removed all tariff barriers. We have introduced full accrual accounting to the government budget process and have adopted a piece of legislation “The Fiscal Responsibility Act” which in effect prevents any future government from ever thinking for itself ever again.

In theory following the plans of the Zurich gnomes was supposed to bring New Zealand prosperity, progress and growth.

In theory, after we tamed the deficit we would then be able to start to get on with building a welfare safety net for our children, our elderly and our poor.

Fat chance, as we in New Zealand all now know.

Instead New Zealand has, by following the Zurich gnome prescription, sold itself almost entirely to Foreign interests.

Back in 1984, when we started selling off state assets to “pay off the debt”, we had around $10,000 of foreign debt per capita. Now our foreign indebtedness per person has risen to close to $30,000.

Meanwhile, as New Zealand has achieved a goods and services trade balance (that is we export as much as we import in dollar terms) we are now so indebted to the gnomes that nearly one third of every export dollar earned is immediately exported again as an “invisible” item in the balance of payments, i.e. as payment for interest.

And when one complains about all of this, what is the response of the gnomes? And not only the anonymous Zurich based variety, but our own domestic gnomes too?

The chorus-like response of all gnomes is the same. “Greedy New Zealanders have been spending more than they have been earning for too long. It is time to tighten those belts and start saving if you ever want your country back.”

But what about the standard of living? Surely that has improved as a result of all that foreign borrowing and profligate household spending?

This is best answered with an example. Back in 1986 Sludge had a temporary job as a builders labourer earning around $300 a week in the hand. From recollection this was around $10 an hour before tax. Then, a pint of beer cost $1.50, a packet of cigarettes $2.50, and you would be unlucky to have to pay more than $20 a week in rent for a room.

What do temporary labourers in 2001 earn? Around $10 an hour before tax, i.e. the same as in 1986. But beer now costs $4 a pint, cigarettes $8.50 a packet and you would be hard pressed to find a room for rent in the city for anything less than $100 a week.

On wising up, Sludge has decided there are two groups principally responsible for the oppression of the people of New Zealand, and by extension the world: bankers and the car industry (oil companies and car companies). The rest of this column explains why.

Do You Know Who Owns Your House?

If you are one of the great unwashed in New Zealand, and do not have a student loan, then the majority answer to this question would be “me and the bank.”

And most probably - if the bank owns part of your house, in a mortgage - then over the last decade you have increased your overall indebtedness through refinancing your mortgage to cover the “plastic”.

Meanwhile you believe you are doing reasonably well in the grand scheme, as the increase in value of your house has outstripped the expansion of your mortgage. In theory at least you now “have more equity”. (In fact you are most probably paying more money on a weekly basis to the bank as interest, but who’s going to quibble.)

But that doesn’t really answer Sludge’s question. Who really owns your house? That is, who owns the bank?

The simplest answer to this is the bank shareholders, but even that is not really correct as the bank is just the intermediary. The people who really own your house (the bits you don’t own) are the bank depositors.

And who are they?

Well you might logically try asking the Reserve Bank that question. And they will point you to their monetary statistics (See… http://www that show that there is $43 billion of “household funding” (deposits) in the “M3 institutions” (banks and insurance companies).

This, the tables will show you, is just one third of the total funding behind M3 institution loans and compares to $67 billion in “household claims”, i.e. household debt. This $43 billion includes all the superannuation investments of NZers as well as the balances of their savings accounts.

But these statistics fall a long way short of telling you who the depositors are.

If you ask the Reserve Bank for statistics on the breakdown of the depositors, that is, how many depositors have more than $10,000, how many more than $50,000 etc. you will be told that that information is “not available because it is too expensive to obtain”.

Pressing further you will be told that the Reserve Bank itself is keen to get some information in this form itself, but has so far failed in its negotiations with the banks.

The next thing you might do is ask a friendly banker.

Sludge knows one friendly banker who says that one recent study by a big NZ trading bank found that there were 2402 people in New Zealand who had more than $400,000 in net deposits in the bank accounts.

This, thinks Sludge, is proof positive that the banks do have these statistics and are just not providing them to the Reserve Bank. Which begs the question, why?

Meanwhile Sludge also reckons this is not a lot of people, which kind of proves the point Sludge wants to make.

One of the simple truths about the banking system is that you cannot find out who owns your house. We have a financial system that intentionally conceals this information from us.

One thing can be said with a reasonable degree of certainty about this, and that is that it is likely that a relatively small number of people – mainly foreigners – own most of New Zealand’s debt.

So, do you have a right to know who your landlord is?

Apparently not.

The Revolution Will Not Be Motorised

Sludge’s second source of motivation to support the May Day revolution comes from a series of recent discoveries about the nature of the world’s energy supply.

Did you know?

 That more than half the world’s electricity is generated by burning oil and gas;
 that since the invention of the internal combustion engine in the early 20th Century the small proportion of the world’s population who have electricity on tap and motorised transport have already used up more than half of the total reserves of oil and gas on planet earth (according to the oil companies own estimates);
 that for each of the last ten years new oil reserves have been discovered at just 20% of the rate that the consumption of oil has increased. That is, that for every one barrel of oil discovered under the ground each year five extra barrels have been consumed;
 that since the 1970s the quantities of oil consumed per capita have been steadily falling;
 that according to the best estimates of some (admittedly not the oil companies) oil production is likely to peak in around seven or eight years.

No. I didn’t think so. (For people interested in this information see…, it appears to be a whole apocalyptic genre of its own.)

The thing is, if you – or the Kyoto Protocol negotiators for that matter - knew just a few of these gems of wisdom, then the 50-year-time-scale Kyoto debate over greenhouse gas emissions, and for that matter the debate over building the Transmission Gully motorway would seem kind of irrelevant.

We are not going to be consuming ever increasing quantities of oil if we are about to start running out. And similarly we will not be needing a Transmission Gully Motorway in 10 years time if by then petrol costs $10 a litre and cars are governed by government regulation not to travel at more than 50kph.

Those who remember the 1970s will recall that the debate over the dwindling world oil supplies were a big deal back then. They might also recall that the prognosis back then was that the proverbial would start to hit the fan in around 30 years time. Funny that, by Sludge’s calculations that is now.

Even since Sludge came across these revelations, attempts have been made to find out whether there is any official cognisance of the issues raised by these apparently significant observations.

For example, is the Ministry For the Environment concerned at all that the planet is about to run out of oil?

It seems not. Such thinking, like monetarism (the view that money supply has something to do with the health of the economy), is well out of vogue.

In fact, just about everybody Sludge has spoken to about these matters has come up with the same answer, namely, that by the time the oil crisis becomes serious there will be new “water powered” cars to solve the problem. It appears the Shell adverts with the scientist working on this problem have successfully done their job.

But Sludge wonders, where are these mythical hydrogen fuelled engines that the bureaucrats of this world are so confident will save us? Isn’t it a little odd that such an apparently beneficial form of technology has been so slow to make an appearance?

The informed reply that BMW has produced a hydrogen powered engine already. To which Sludge replies that the fuel for BMW’s masterpiece requires more energy to produce than the car delivers – which takes us back to square one. Ditto compressed air and electricity powered cars, a shortage of oil means a shortage of electricity too, only a genuine water powered car would make a difference and with crunch-time approaching perhaps as early as 2006 the inventors better get their thinking hats on.

Dick Cheney’s Energy Crisis – Here Is Something This GOP Stooge Knows About

I imagine most readers will remain unconvinced at this point – the idea of a world without cars takes some getting used to Sludge admits - which brings me to some recent remarks of the US Vice President.

Earlier this week the brains trust of the White House Dick Cheney delivered an address warning about a coming energy crisis.

The US, he said, needed to immediately start investing in new oil exploration programmes – including looking in the pristine Alaskan wilderness - and investigating the construction of new nuclear power stations.

Greenpeace and Ralph Nader are of course outraged. This, they no doubt think, is just yet another attempt by Bush and his cronies to push their “exploit and pollute the world” agenda.

However, Sludge suspects that Cheney, as a former oil company executive, possibly knows a great deal more about the background to this issue than meets the eye. Just as Cheney and Bush’s banking mates knew about the coming US recession well before it eventuated, here we have what might be described as another case of inside information.

Like the tobacco company executives who knew for 30 years before the public that cigarettes caused cancer, so oil company executives have been well aware for decades that they are selling a product with a limited lifetime, but which enjoys an ever expanding demand.

If more evidence of oil company preparedness for the coming crisis is necessary look no further than the Shell and BP rebranding exercises currently underway. Not to mention Mobil’s latest attempt to rename petrol “synergy”.

As Cheney pointed out in his address, existing US domestic oil production is falling well behind demand. Unless new sources of energy are found, and soon, there will be a major crisis.

And faced with a choice of going cold and remaining motionless, or looking for more of the fuel that powers their prosperity, what are the US public going to choose?

Though it pains Sludge to admit it, Cheney is most probably onto a political winner here.

But that said, even if all the oil in Alaska and all the oil in central Asia comes on line in the next decade, there still will not be enough, and at best it will just delay the inevitable another decade.

Hence the need for a revolution.

The Wisdom Of The Dialectic

Most people on planet earth would probably agree that the way things are in this world of ours is highly unsatisfactory.

On the path we are presently on we are slowly but inevitably killing both our planet and our hopes for a better future. The gnomes in Zurich say things are getting better – that we are “growing” - yet it is obvious to everybody with their eyes open that this is a lie.

Fortunately however there is a source of balance in our universe which fights on the side of righteousness and life. Whenever things swing too far in the direction of unsustainability, the forces of life come into play to bring the world back to its senses.

And so Sludge reckons a revolution of sorts is now inevitable thanks to the coming energy crisis.

Banking and financial structures that have served the expansion of, first empire and then the industrialised world, for the last 300 years have now reached their used by date.

These privatised capital systems (did you know the Federal Reserve Bank of the USA is a private bank which has never been audited) have delivered us a handful of oil companies and a handful of car companies, which, it seems, have been lying to us for decades, and which show every sign of continuing to lie to us for the forseeable future.

Elementary mathematics shows that the world now faces the prospect of a massive transformation if it has any hope at all of coping with coming shortages of oil without descending into chaos.

The free-market has failed to deal with these problems, and in any event, simply on a matter of scale these obstacles appear to be too big for the free-market to cope with.

Hence we need a change.

And we need it now.

Anti©opyright Sludge 2001

© Scoop Media

Top Scoops Headlines


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.