I said I would make no predictions for 2013. A few hours in and the weight of evidence makes me change my mind. In 2013 we will see political prevarication in defence of the status quo come to the fore, and government become gridlocked by indecision as the might of those with financial power is brought to bear on it, and seeks to undermine democracy.
The 'fiscal cliff' debacle is the evidence. The scenario is absurd, and so is the rhetoric.
Of course the USA needs to cut its deficit, but any government's deficits can, as a matter of fact, only be cut when private sector consumption, net invetsment and net exports grow. Since the Fiscal Cliff gave no reason for any of those to change then nothing anyone in the US proposed would have made its deficit better; indeed, it would have made it worse. That's as close to an economic fact as it gets.
That was not, however, the argument that was rehearsed. Obama obsessed about the most important people he said. They were the middle class. He then implied that they were about 98% of America. Actually, he chose to ignore the 50 million or so below the poverty line.
The Republicans held out for the rich; anyone else could pay but them. In the process, they argued any tax charge on the rich had to be matched with a tax concession for US corproations. The impact is simple: what they are willing to have taken from one hand they want to be given to the other. That's not a compromise: that's just deceit.
And yes, I know that this simplifies matters, but not greatly and that's because the right sees that its power lies with wealth. The left (in US terms, and certanly in New Labour terms) sees its power lies with the middle class seeking to preserve baby boomer privilege.
And all the while the reality is that inequality grows and these arguments ignore the fact that it is the imbalances that are crippling our economies.
There's the imbalance between corproations piled high with cash that they're lending to government and those governments who those corporations seek to deny revenue to.
And there is the imbalance between a financial elite and the rest, best evidenced in the short term by the changes in house prices in and out of London and in the long term by growing inequality throughout the UK and elsewhere.
Add to that the imbalance between generations, mine having it all (relatively speaking) and the one that is folloiwng facing almost insurmountable odds to achieve what we did because of the sheer impossibility of securing work paid at a decent rate and buying a house at an affordable price. In combination that's a recipe for oppression and then dissent.
And yet despite that in 2013 we'll see politicians spending yet more time pandering to their power bases, whether of wealth or middle class security, whilst ignoring the crisis of the poor and those without hope of the secutiry that is the basis for the comfort of both the baby boomer and those with wealth.
My fear? Simply that this will breed divisions, not between nations, but within nations. And that's very, very dangerous.
And since much (although of course not all) of this problem can be addressed by greater tax justice, both within the tax system and by enforcing the tax system we have got to address the tax gap, that's what I'll continue to talk about.
2013 is going to be a tough year for many. We have to change the narrative. Only then can we talk hope.
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On reading an article in the New York post the other day highlighting inequalities within American society, I was surprised at the dissent and vitriol heaped on the rich in it’s comments column. What would worry me if I was American, is that these people are probably armed,and within their constitution have that justification to bear arms if the need should arise.
A happy New Year to you, Richard, and a typically hard hitting blog to start 2013. I wouldn’t disagree with a word – nor would many of the readers of your blog, I imagine.
One interesting thing to watch through 2013 will be how and where the Lib Dems position themselves. They are currently heading for oblivion in 2015 and with the worst of the government’s package of hate measures (sorry, ‘cuts’) against the unemployed, disabled, infirm and poor due to kick in from here on in are they really going to continue to play the monkey that hears and sees no evil?
Anyway, all the best for 2013.
Ivan
And Happy New Year to you too
Thanks for your support
I appreciate it
As for the LibDems, I think “exit, stage right” beckons as their closing line
Richard
“The work and pensions secretary has issued a stark warning that some poor people are stubbornly clinging to life despite his best efforts to remove them from the welfare system by killing them off”
http://newsthump.com/2012/12/31/poor-people-still-clinging-to-life-warns-iain-duncan-smith/
Richard – when you said you’d make no predictions for 2013, I was moved to say that I would, but an enjoyable family New Year’s Eve with a bit of champagne prevented me from doing so, And now you, and Ivan Horrocks, have expressed – more comprehensively to be sure – what I would have said as my 2013 prediction, which is simply this : “Burn, baby, burn!” the slogan of the Watts riots in LBJ’s America.
Quite simply, I believe we are headed for riots and insurrection, by those who feel they have nothing to lose by rioting, (the forgotten “lumpenproletariat” overlooked by Obama, and even by the “Left”, as you note in your post above.)
However, they will be joined by those on the margin of the middle class, who are currently joining in on the demonising of the skivers and scroungers, not having realized that they too are in the Government’s sights. When they find their Housing Benefit or Council Tax Benefit and DLA and Attendance Allowance and Mobility Allowance – not to mention Tax Credits – all cut to feed the “cascade up” (the REAL meaning of “trickle down”) economics, taken together with all the cuts in local government services (my former Council, Barnet, has the mad idea of outsourcing ALL its services!!!!) then they too will join in on actions of civil disobedience, and even riots.
The ineffable IDS is busy building up a new “poll tax” in the form of his preposterous Universal Credit, which won’t work and will penalize “strivers”. People will take to the streets, and if the Government is to read anything from the Andrew Mitchell stitch-up (as it appears to have been) it is that the police detest this Government even more than, or certainly as much as, the “lumpenproletariat”, while the military don’t have much faith in them either, with their aircraft carriers that won’t have any aircraft on them.
So, I repeat – “Burn, baby, burn!” is the likely prognosis for 2013. The government really should be re-reading Marx, whose analysis of the 19th century changes in society seems to me to be as apt for the developments of the first decade of the Third Millennium, with this difference – the immiserated middle class of the late 19th century were prevented from joining the lower classes by the glitz and glamour of Empire and Victoria’s Golden and Diamond Jubilees (indeed, some of the working class were similarly beguiled).
What equivalent have we got today, when Scotland might break away, and the UK as a whole might be downgraded to second class “associate” status in the EU? Answer – nothing! Only a “foreign adventure” might do the trick; or, as you imply, internal dissension, setting class against class – something the Coalition is already doing, following in the steps of Thatcher’s “not one of us” and “the enemy within”.
Alas – I view 2013 with some trepidation.
Well, that may be even gloomier than me
But I understand why
There is also the option of cutting spending, as it relates to deficit reduction.
Only if you want to cause harm
You see, cutting spending shrinks the economy and induces recession and unemployment and more people on beenfits or in poverty and ….. I could go on
Happy New Year Richard.
One aspect of the fiscal cliff issue has been the reported fear amongst economists, politicians and “the markets” that unless a deal was done tax rises and spending cuts would plunge the US back into recession. Why aren’t the same objections made against Osborne’s similar policy of tax rises (upping VAT, freezing tax thresholds etc) and spending cuts? After all we have seen that the case is proved and that such policies do cause a return to recession.
The UK media’s silence on this anomaly is not only deafening but telling.
It would be an amusing point if not so telling