In her new book, Not In My Name, Julie Burchill reserves her grandest fury about hypocrites for environmentalists. We are, she says, pious, sexless and contemptuous of humankind. All of us are posh and rich, and have found in environmentalism a new excuse for lecturing the poor. We tell other people to live by rules we don’t apply to ourselves.

Like all stereotypes, these claims are lazy, familiar and sometimes true. Burchill knows nothing about environmentalism and, almost as a point of pride, hasn’t bothered to find out, but when you use grapeshot you are bound to hit someone. Yes, many prominent greens are posh gits like me. The same can be said of journalists, politicians, artists, academics, business leaders: in fact of just about anyone in public life. But it is always the greens who are singled out. In truth, while the upper middle classes are, as always, over-represented in the media, the movement cuts across the classes. A recent ICM poll found that more people in social classes D and E thought the government should prioritise the environment over the economy (56%) than in classes A and B (47%).

Environmentalism is the most politically diverse movement in history. Here in the climate camp I have met anarchists, communists, socialists, liberals, conservatives and – mostly - pragmatists. I remember sitting in a campaign meeting during the Newbury bypass protests and marvelling at the weirdness of our coalition. In the front row sat the local squirearchy: brigadiers in tweeds and enormous moustaches, titled women in twinsets and headscarves. In the middle were local burghers of all shapes and sizes. At the back sat the scuzziest collection of grunge-skunks I have ever laid eyes on. The audience disagreed about every other subject under the sun – if someone had asked us to decide what day of the week it was, the meeting would have descended into fisticuffs - but everyone there recognised that our quality of life depends on the quality of our surroundings.

The environment is inseperable from social justice. Climate change, for example, is primarily about food and water. It threatens the freshwater supplies required to support human life. As continental interiors dry out and the glaciers feeding many of the rivers used for irrigation disappear, climate change presents the greatest of all threats to the future prospects of the poor. The rich will survive for a few decades at least, as they can use their money to insulate themselves from the effects. The poor are being hammered already.

Sure we are hypocrites. Every one of us, almost by definition. Hypocrisy is the gap between your aspirations and your actions. Greens have high aspirations - they want to live more ethically – and they will always fall short. But the alternative to hypocrisy isn’t moral purity (no one manages that) but cynicism.

In reality it is people like Julie Burchell – who is incidentally far richer than almost any green I’ve met – who treat the poor with contempt. So that she can revel in what she calls “reckless, romantic modernism”, other people must die. But at least you can’t accuse her of hypocrisy: she cannot fail to live by her moral code, because she doesn’t have one. Give me hypocrisy any day.

George Monbiot writes for the Guardian newspaper. The article with full footnotes also appears on [Monbiot.com]

“Outsourcing of public services to the private and voluntary sectors has almost doubled to close to £80bn in little more than a decade and makes up a far larger part of the economy than previously thought.” (Financial Times 09.07.08) A third of all public services – far more than previously thought – are now delivered by the private and voluntary sectors, according to this report commissioned by the government.

The FT goes on, “The market is worth £79bn, employs almost as many people as the NHS and accounts for 6 per cent of gross domestic product, making it a larger industrial sector than pharmaceuticals, automotive or electricity, gas and water.” The study shows that health is the largest sector of the public services industry, accounting for £24bn of spending last year, followed by social protection – which comprises unemployment, housing, disability and old age – at just less than £18bn, defence at £10bn and education at just under £7.5bn. The study by DeAnne ­Julius, an economist and former member of the Bank of England’s monetary policy committee, shows the public service now embraces everything from health to waste management, IT, welfare-to-work, training, construction and legal services.

Julius has an interesting CV. She goes around hoovering up lucrative posts with private companies. Until recently she was on the board of Serco which (guess what?) tenders for public contracts. Could this explain her view that, "Twenty years ago, too many things were being done in the public sector; it ossified"? Previously she was on the Monetary Policy Committee of the Bank of England. And she began her career as an operative for the CIA. She says she never killed anyone with her bare hands back then. She was just an economist. Well, good. But she was part of a killing machine.

Unison, the biggest public sector union, attacked the report, saying her advisory panel was made up of figures from companies with lucrative public service contracts. “We need a genuinely independent review of the public services industry,” said Dave Prentis, Unison’s general secretary, not one that “simply asks multi­national companies what would make their lives easier”. That’s right, Dave. And this drift to go private means not only that standards of service will go down, but that your members’ jobs and conditions are on the line. It’s time to call a halt to this drift.

This article first appeared on Socialist Appeal.

As I write, it is one year since the great global credit crunch began. On 6 August 2007, America’s second-largest mortgage lender American Home Mortgage Investment Corp filed for bankruptcy. Three days later, France’s biggest bank, BNP-Paribas announced that it was freezing redemptions on three of its investment funds in sub-prime mortgages. Immediately, the European Central Bank announced it was injecting E75bn into the financial system. Only a few days later, the US Federal Reserve Bank announced a 50 base points cut in its funds rate and injected extra liquidity into the system. The credit crunch had begun!

One year on, this earthquake in the global financial system has left banks, insurers, pension and municipal funds, hedge funds and private equity companies tottering and falling. Collateral damage has been immense and the after- shocks are still to come.

How did it come about? Well, the trigger (but not the gun) was the collapse of the US housing market and the debacle of the so-called sub-prime mortgage market. As in many countries of the Anglo-Saxon world (the US, the UK, Australasia, Ireland, Scandinavia, the Baltic states) and even parts of Europe (Spain, Hungary etc), there had been a massive boom in house prices, particularly after the mild economic recession in the OECD of 2001. House prices had never risen so much and so fast.

Cheap credit from the banks and mortgage lenders enabled home owners to borrow hugely on the back of their house values. At one point, according to the great guru of American finance himself, Alan Greenspan, American home owners were taking $1trn each year out of the ‘value’ of the their homes to spend. This fuelled consumer spending and economic growth, as well as the stock market.

But it was all based on a lie. No real values were being created. Indeed, US and British householders were saving nothing. Household savings rates had dropped from 13% of disposable income in the 1990s to negative in 2005.

The credit-fuelled economy was a huge bubble waiting to burst. And so it did.

Eventually house prices got so high in the US that first-time buyers could no longer get on the ladder. They had been encouraged and cajoled to do so with sub-prime mortgages, in effect loans that required no deposits, no proof of income and no initial payments for the first six months etc. These loans were cynically sold to people (often on very low incomes in poor housing areas, mostly black and Hispanic) who very soon realized that they could not maintain the payments. Eventually, the housing bubble was pricked, beginning in 2006 and gathering pace to the collapse of summer 2007.

It was then that the banks and other financial institutions realized they were in trouble. They had made these loans and had then packaged them up as bonds or securities to be sold and sold again around the world to all sorts. The risk of default on the mortgages was thus spread around or ‘diversified’. In reality, it just meant that when the housing bubble burst, it affected not just mortgage lenders but all sorts of investors, big and small.

Take one. Irvine, California, was a planned community nestling between Los Angeles and San Diego. A year ago at this time, Irvine was home to 18 sub-prime lenders, including many of the leaders in the field, New Century Financial. Irvine had become the center of the sub-prime industry almost by accident. As the business of writing mortgages to riskier borrowers grew rapidly in the middle of the decade, many top employees at the established sub-prime firms struck out on their own, setting up shop nearby.

But the industry imploded even faster than it grew. New Century had become the second-largest sub-prime lender in the US. It filed for bankruptcy last April and essentially halted operations a month later. "Honestly, some people are still sitting here with their jaws dropping, saying 'How did it happen?' It was just so fast," said Jacquie Ellis, CEO of the Irvine Chamber of Commerce. "Typically when you have a downturn, it's a slow decline. That's not what happened here."

By the end of the year, almost 9,000 subprime jobs were gone from Orange County. Many of these people have been unable to find new jobs. And economic officials say that was only part of the economic pain. Suppliers and service firms from hotels and restaurants to printers and software developers that had come to depend on the lenders for a bulk of their business have had to cut staff as well.

Ellis said one hotel in town has lost $1m in annual bookings as a result of the subprime collapse. And small businesses, such as local trophy shops that produced the monthly sales awards, have been hurt. "Everybody was riding high, it was like fat city," said Ellis. "All of a sudden you look around and think, 'Joe across the street lost his job,' or 'Oh, my gosh, Sally next door lost their job.'"

The impact of this credit crunch was global. Narvik is a remote seaport where, along with three other Norwegian municipalities, it has lost about $64m in complex securities investments that went sour.

The residents want to know how their close-knit community of 18,000 could have mortgaged its future - built on the revenue from a hydroelectric plant on a nearby fjord - by dabbling in what many view as the black arts of investment bankers in distant places.

In 2004, Narvik and the three other towns took out a large loan, using future energy revenue as collateral. They invested the money, through Terra Securities, which offered a better return than traditional investments – namely US sub-prime mortgages. In June 2007, as the sub-prime problems were brewing, Narvik shifted some money into an even more complex investment, again through Terra Securities.

Within weeks, as the sub-prime market deteriorated, this investment declined in value and Narvik got a letter from Terra Securities, demanding an additional payment of $2.8m. The chief investigator of Norway's financial regulator, Eystein Kleven, said Terra Securities' Norwegian-language prospectus did not mention such payments, or other risk factors.

The towns are now engaged in legal action against the Norwegian brokerage firm, Terra Securities, that sold them these investments. They allege that they were duped by the firm's brokers, who did not warn them that these types of securities were risky and subject to being cashed out, at a loss, if their market price fell below a certain level.

Terra Group, which is in turn owned by 78 savings banks and remains in business, has rejected calls for it to compensate the towns. Norway's finance minister, Kristin Halvorsen, has ruled out a state bailout and Citigroup, which shut down one of the money-losing investments that Narvik bought, said it had no legal obligation.

The investments represented a quarter of Narvik's annual budget of $163m and covering the losses would necessitate taking out a long-term loan, which the town could only pay off by cutting back on services.

And it was not just the small town lenders and councils that took the hit. The great credit bubble burst eventually took down some of the giants of the global finance. In March, the US Federal Reserve was forced to rescue the fifth-largest investment house in Wall Street, Bear Stearns, when the securities firm faced bankruptcy and its failure could have led to a widespread financial collapse. As Ben Bernanke, the head of the Fed put it: “The adverse effects would not have been confined to the financial system but would have been felt broadly in the real economy through its effects on asset values and credit availability''.

The Fed agreed to give emergency funding to Bear Stearns after a run on the company wiped out its cash reserves in two days. During the weekend following the rescue, Fed officials helped arrange a takeover by JP Morgan at a fraction of Bear Stearns's market value.

All this was a far cry from the comments of Bernanke when the credit crunch first broke last summer. Then he said the bursting bubble would cost no more than $50bn and there would be just a few failures of some small regional banks invested in real estate.

As we review the collateral damage now, the current score of bank losses globally (and still counting) is $500bn, ten times Bernanke’s forecast. Moreover, up to 30 regional banks and mortgage lenders have gone bust in the US; and we know about Northern Rock in the UK (bailed out by £30bn of taxpayers money); as well as the ‘rogue trader’ scandal of $6bn in France’s Societe Generale – and we could go on.

Indeed, any reasonable estimate of the total financial damage globally puts the figure at over $1trn (the IMF) or even $2trn. That’s compared to world GDP of about $60trn, or 3% of world GDP. That is how much global growth is likely to lose over the next year. Given that global economic growth, including fast-growing India and China, is about 5%, that would take world growth below the 2.5% that the IMF reckons is needed to sustain employment and incomes on average in the world. And in the more advanced capitalist countries of the US, Europe and Japan, economic growth is likely to be below 1% or even negative in the next year.

Figures for the economy in the last few weeks suggest that now all of the G7 economies (the group of the major advanced economies including US, UK, Japan, Germany, France, Italy and Canada) are already in a recession or close to tipping into one. Other advanced economies or emerging markets (the rest of the Eurozone; New Zealand, Iceland, Estonia, Latvia and some South-East European economies) are also on the tip of a recessionary hard landing.

And once this group of 20-plus economies enters into a recession, there will be a sharp growth slowdown in the BRICs (Brazil, Russia, India and China) and other emerging market economies. For example, a country like China - that even with a growth rate of 10%-plus has officially thousands of riots and protests a year - needs to move 15m poor rural farmers to the modern urban industrial sector with higher wages every year just to maintain the legitimacy of its regime. So for China a growth rate of 6% would be equivalent to a recession. It now looks like that, by the end of this year or early 2009, the global economy will have that.

At the start of this article, I said that the housing collapse and the sub-prime mortgage debacle was the trigger for the credit crunch. But it was not the gun. The gun was the anarchic and crisis-ridden nature of the capitalist system of production. The bullet was declining profitability.

Capitalism, contrary to the views of the dumbest of capitalist apologists (usually the heads of government like George Bush or Gordon Brown; or the heads of the central banks and finance houses), does not grow in a straight line upwards. The very nature of production for private profit with companies, individuals and investors competing and gambling against each other leads to excessive and blind investment and expansion. The result is a massive waste of resources and damage to people’s lives.

Credit bubbles and subsequent crunches are not new. Indeed, they happen whenever the productive sectors of capitalism start to experience slowdown, namely profitability (the rate of profit) begins to fall. Then capitalists and financiers try to compensate by investing more into areas that are less productive, but provide better returns for a while (real estate, stock markets, fine art, gold etc).

What is different about this credit crunch is that it involved new ways of expanding credit beyond the productive capacity of capitalism. Traditional bank lending gave way to loans that were converted into weird and wonderful new forms of bonds and securities that were sold onto all and sundry as ‘safe and profitable’ investments. And bets and hedges called derivatives were also sold and bought on top of them. The global credit market (including loans, bonds and derivatives) expanded from three times world GDP to 12 times in just ten years.

So this credit bubble (the expansion of fictitious capital, as Marx called it) is different because it was huge and it was global. The impact will be the same: huge and global.

As the credit boom exploded, profitability of the productive sectors began to decline, particularly after 2005 (according to my figures). The credit bubble expanded even more in response. But just like a yo yo, credit growth reached its limit and has now jumped back with a vengeance.

The credit contraction is now experienced every day by people trying to get a mortgage for a house; borrow money to invest in new equipment or expand a business; or just to make ends meet. The banks won’t lend or if they do it is at exorbitant rates. With the banks squeezing credit, households must save, not spend and businesses must contract, not expand.

The credit crunch one year later means global economic recession one year (or more) onwards. That means housing repossessions, business bankruptcies, rising unemployment, falling real incomes and more loss of productive capacity. This is the bleak reality of the capitalist system of production.

Sure, now all the talk in the councils of government and high finance is that they have learnt the lessons of the crunch and they will ‘regulate’ and ‘monitor’ to ensure that it does not happen again. It won’t – in the same way. But as sure as the night is black, if capitalism continues as the system of the human organization, there will be more crunches and economic crises, even if the apologists' lies and excuses take a different form.

Indeed, I’ll finish with a prediction. This latest global economic recession will be one of the most severe; perhaps matching that of 1980-2. Eventually, global capitalism will recover, say from 2010 onwards. But this recession won’t be the last before 2020. There will be another, perhaps even worse, before the next decade is out.

This article first appeared on Socialist Appeal.

The Foreign Affairs Committee of the British Parliament has called UK military aid to Colombia "inappropriate" and says that any future assistance to the Colombian military should be conditional on an improvement in the human rights situation. In a scathing attack on British policy the Committee also directly contradicts the UK Government position by saying that in fact the human rights situation in Colombia is not improving and that trade unionists continue to be targeted.

The new report, entitled "Foreign Affairs – Ninth Report", also criticises the lack of transparency surrounding UK military aid to Colombia and says that extra-judicial executions carried out by the Colombian military must not be ignored.

According to the Committee, "We conclude that the human rights situation in Colombia is serious and shows little sign of improvement. We further conclude that allegations of extra-judicial executions by the Colombian military, and the continued targeting of trade unionists, cannot be ignored. We therefore believe it is inappropriate for the Government to provide military aid to Colombia without any reference to human rights improvements."

The report goes on to say: "Noting recent moves by the US Congress to freeze some aid to Colombia on human rights grounds, we recommend that the Government should request the Colombian military to demonstrate measurable and verifiable human rights improvements in exchange for future assistance."

The new report, which can be read in full here, was put together in response to the annual human rights report produced by the UK Government, which itself included a chapter on Colombia. However, according to the Committee, Amnesty International argued that the Government report fails "accurately to reflect the seriousness of the human rights situation" in Colombia. The Committee also cited concerns by Amnesty, Saferworld and Human Rights Watch that UK military assistance continues to flow to "units implicated in serious human rights abuses, such as the High Mountain Brigades".

The report reproduces testimony given to the Committee by the UK director of Human Rights Watch, Tom Porteous, in which he argues that "The problem is that the military aid the British Government grant to Colombia is unconditional with regard to any kind of human rights improvements. We think that that sends a bad message. The military in Colombia will go on getting these military goodies without having to do anything in return with respect to human rights."

Porteous continued by saying that "the UK seems to be being saddled with a policy that even the American Government have moved beyond. After the Democrats took control of Congress last year, they froze some military aid to Colombia on human rights grounds. We think that the UK should at least get back into step with the policy of the Americans."

The reports criticises the Government for their lack of transparency around military aid to Colombia by saying that "the issue of examining the details of how UK military aid is deployed in Colombia [which the Government wishes to remain secret] is somewhat distinct from the issue of whether UK aid is being leveraged to extract the maximum human rights benefits in the country [which the Government has also refused to comment on], with the latter being the more important question."

The Foreign Affairs Committee is made up of MPs from all parties and has a remit to oversee the foreign policy of the United Kingdom.

A leading member of the 'Democratic Pole' opposition party in the Colombian region of Arauca has been assassinated in the town of Saravena. Luis Mayusa Prada, 46, a member of the regional Executive of the Pole, was also a trade union activist and brother of Carmen and Nieves Mayusa, two trade union leaders who were recently released from jail after an international campaign to free them.

Mr Mayusa, who worked in local government, was shot at around 8am on August 8th in the 'Galan' neighbourhood of Saravena. The town is heavily militarised and it is widely suspected that the security forces carried out the killing. The Mayusa family, originally from the region of Meta, have been the victims of systematic persecution by military intelligence agencies and other state forces.

In Meta Mr Mayusa had led the CUT trade union federation though he fled to Arauca some years ago after several attempts were made on his life. In the mast recent elections he was the Democratic Pole candidate for the Arauca regional assembly. He leaves a wife and four children.

The Venezuelan government congratulated Bolivian President Evo Morales for a successful national referendum Sunday in which Morales’s presidency was ratified by a record 63.1% of the vote. As a show of support, Venezuela, a close ally of the Morales administration, pledged to finance, along with Iran, a cement construction company to help the Bolivian government build housing and economic infrastructure.

“The President of the Bolivarian Republic of Venezuela, Hugo Chávez Frías, together with the Venezuelan people, celebrates the victory achieved by the valiant Bolivian people today,” declared the Venezuelan Foreign Relations Ministry in a statement Sunday.

President Morales and Bolivia’s state governors were submitted to a referendum on their terms in office Sunday. The referendum was a compromise between the government and a separatist movement in Bolivia's wealthiest, most natural resource-rich eastern provinces to establish once and for all whether the federal government, national constitution, and regional leaders are legitimate.

Morales, Bolivia’s first ever indigenous president who was elected in 2005 with 53.7% of the vote, received more than 63% of the vote in his favor Sunday. He received overwhelming support in the western highlands where the indigenous majority of Bolivia is concentrated.

The rural populations in the separatist eastern provinces also voted overwhelmingly for Morales. In the Santa Cruz province, for example, Morales received 33.8% of the vote in the province’s capital, while in the rural areas of that province he received 58.3%.

Morales told a crowd of supporters Sunday that the ratification of his term “consolidated the process of change,” and said his government would “continue recovering natural resources and the consolidation of nationalization.”

The mandates of the separatist governors of Bolivia’s four eastern provinces, Santa Cruz, Tarija, Pando and Beni, were also ratified Sunday. In the rest of the country, three governors were recalled; two of them opponents of the Morales administration, and a Morales ally was ratified.

The governor of Santa Cruz called his ratification “the people's mandate” and told a crowd of mostly non-indigenous supporters that the autonomy movement would now move forward against the “dictatorship” of President Morales. Opposition governor Manfred Reyes, who was ousted by the people of Cochabamba province Sunday, refused to step down.

President Chávez, whose presidential term was ratified by popular vote in an opposition-initiated recall referendum in 2004, contacted President Morales personally Sunday to express the “firm intention of the Bolivarian Government to continue accompanying the democratic and cultural revolution advanced by our brotherly people of Bolivia.”

Venezuela and Iran agreed Saturday to grant Bolivia $225 million to create a state-run cement enterprise, according to Bolivia’s vice minister of medium and large businesses, Eduardo Peinado.

“The plant will have the capacity to produce 700 tons of cement per year, and this will be destined principally for the construction of roads and houses for Bolivians,” said Peinado. He added that in Bolivia there are several private cement companies that are controlled by the elite opposition to the government, which seeks to sequester strategic resources in order to destabilize the country.

Venezuelan Foreign Minister Nicolás Maduro assured that Morales's victory would help strengthen the economic cooperation between Bolivia and Venezuela in the context of the Bolivarian Alternative of the Americas (ALBA), a fair trade bloc in which Bolivia, Venezuela, Cuba, Nicaragua, and Dominica participate as an alternative to the free trade agreements pushed by the United States.

“The empire seems to not understand the processes of change that are going on in Latin America, especially South America, which are aimed at a profound transformation away from the economic model toward the social model,” declared Maduro Monday after celebrating the referendum results he deemed to be “a ratification of the democratic, peaceful path.”

The Chávez administration faces a separatist movement in Venezuela’s principal oil-producing state of Zulia, whose governor, Manuel Rosales, was the opposition candidate who Chávez defeated in the 2006 presidential election. According to pro-Chavez Zulia state legislators, separatist leaders have met with the leaders of separatist movements in both Bolivia and Ecuador with consultation from the United States.

In a press conference on Monday, President Chávez called the Morales victory a “victory of our America, a victory against imperialism.”

James Suggett writes for Venezuela Analysis.