George Osborne would have us believe that the economics of the state are the same as the economics of the household. In that sense he’s Thatcher’s true heir.
He is wrong. She is wrong.
I’ve blogged this video before (I think), but it’s worth noting again:
Please watch it.
The message is simple: what’s good for a household is disaster for a state.
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[…] Which is obvious — see this. […]
I have followed Mr. Murphy’s blog on and off for a while because buried in the thinly veiled mid-20th century “let’s get the rich” proletariat agenda are some interesting calculations.
Unfortunately this video, designed to enhance the site’s credibility is a bit of a joke. Is it just me or do other people that suffered from the mismanagement of the Darling Brown clown show find it intensely annoying to be lectured to in a mid-Atlantic Scottish brogue by an academic who appears to prefer the lower taxes and higher pay of US academia to say, Glasgow? Any bets on him having a Green Card and tenure? Anyway, the video contains nothing new. It is the first chapter of Keynes’ theory with lots of fancy visual effects. Keynes we should note was the guy who made significant amounts of money engaging in what would today be called insider trading and therefore not a proletariat chap. The video selectively ignores key facts such as three terms of Labour have damaged the hitherto reasonably good UK national balance sheet, severely crimping the government’s ability to continue to spend on worthy programs. It also omits to say the second chapter of Keynes argument which is that governments are meant to run surpluses in good times to pay for stabilizing expenditures in bad times. Sadly for the UK today, Darling Brown only read the first chapter and squandered the rainy-day money. So go ahead Mr. Murphy, have us borrow trillions more and watch the stretched UK credit rating implode, taking the pound to US$0.75 with consequent inflation and reduction of living standards. Listen then to the wailing about how it is all the fault of tax evaders and the ordinary working people of the Isle of Man. The UK will join Ireland, Greece etc. I lived through the 70s, ridiculous tax rates, big unions effectively running the country and socialist governments telling us they knew what was good for us taxpayers. It didn’t work for the UK and it didn’t work for the socialist workers’ paradise of the Iron Curtain either. Take this site with a grain of salt because it really is more of a left-wing think tank trying not to appear like one. In its favour, the interesting research is done by someone who is actually an accountant. You can like Thatcher or not but she left the UK in better shape than Darling Broon.
@rwj4
Oh dear, diatribe and abuse, but no argument
Let’s summarise
1) You love Thatcher
2) You hate Brown but he was also a neoliberal
3) You hate Samuelson#s version of Keynes but don’t understand Keynes
4) You’d rather send the economy to hell than admit neoliberlism has failed
I’d rather we got out of this mess
Labour’s neolib policies did help make it – but you like Neolib policies
I don’t care about what went wrong though
Unlike you I only want them to go right now
And only Keynesianism can do that
There is no alternative
@rwj4
I presume you consider that the 80s and 90s under the Tories were halcyon days. They were for some. But not for those who experienced prolonged periods of unemployment. And lets not forget that whilst millions were thrown on the scrapheap and benefits reduced, state coffers were piled high with north sea oil revenues and privatisations.
@Carol Wilcox The 80s and 90s under the Tories were aweful especially for people in what were our industrial heartlands. I lived in the West Midlands and witnessed first hand the deindustrialisation of Britain as we moved to ‘the post industrial society’. Here we go again, but this time it is supposed to be ‘in the national interest’. OK if you are a millionaire like members of the Cabinet (many of whom have never held a proper job in their lives) but disastrous if you need to earn a living from employment. McDonald level wages for the majority will not sustain us for long.
“I lived through the 70s, ridiculous tax rates, big unions effectively running the country and socialist governments telling us they knew what was good for us taxpayers. It didn’t work for the UK and it didn’t work for the socialist workers’ paradise of the Iron Curtain either.”
And after 30 years of neoliberal right wing economic and political policies we’re better off than in the 70’s? If your preferred form of capitalism is so great, and right wing policies are so superior to social democratic ones, why did we have a near total collapse of the entire economy that was only averted by the state stepping in to rescue the uber-capitalists in the City from the consequences of their own mistakes?
We have a far more unequal society now than then, far more people unemployed or unemployable, and political and financial elites who have less and less in common with the average citizen.
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It repeats standard neoliberal mantra
Dear Richard please keep up your good work.
I’m sick and tired of being preached at by neoliberals, who appear to have most of the free press in the UK under their control.
I too lived through the seventies, eighties and nineties. The neo liberals offer nothing to the ordinary person, who has to provide his labour in return for a pay check. The credit boom was the illusion that made us believe that we were better off.
The reality is that the gap between not just the rich and the poor, but the ordinary working person and the rich has grown unabated since 1979.
The North Sea oil revenues were squandered and not invested in industry, which must exist and underpin any economy. In simple terms we must make things that people the world over wish to buy. Instead Mrs T and her accolytes put all our eggs in one basket (financial services) and belated attempts to redress the balance proved disastrous – does anyone remember DeLorean?
The financial services industry led by the banks has been nothing but a farce, which does not create wealth and at best only manages to protect wealth. This is one large “smoke and mirrors” act whereby high commissions and fees are extratced for “clever” financial products – anyone for an incomprehensible derivative that promises lots and delivers nothing?
The likes of Goldman Sachs have been allowed to dupe governments with their clever financial alchemy.
It is time that all the banks, without exception, were reigned in as the so called “free market capitalism” has imploded in dramatic style and had to be propped up by the state. The truth is though that the “free market” never actually existed – instead poweromics reigns supreme.
It may interest you to know that I am a tax adviser and while I help people minimise their tax bills, I do not condone the highly artificial and contrived schemes that have very little, if any, substance and yield neglible, if any, economic benefit.
Take film schemes – an original idea to incentivise capital raised to back high risk feature films was perverted and used to fund the production of lower risk “soap operas”. This was simply done so that sales could be made to the rich. I could go on and I’m sure some readers will be familar with charity schemes marketed by Vantis. The schemes share one thing in common, they are morally dubious and targeted at those amongst us, who despite having benefited most from society, appear to want to contribute the least in proportionate terms. A number also display an indifference and a lack of empathy to ordinary people, which borders on psychopathic and the concept of “Noblesse Oblige” is totally alien.
Yes, the likes of Philip Green should put something back into society and the fairest way they can do this is to contribute an appropriate amount of tax so that it benefits us all. Not to do so is corrosive and will ultimately bring an end to the society from which his or her privileges have derived. The history of civilisation is littered with examples of societies that have failed because the gap between rich and poor has grown too large and taxation in the absence of any other alternative remedy is the best way to restrain this imbalance in the absence of any other better remedy.