The budget is usually the centrepiece of any government's policy making. It is also an opportunity milked for all its possible publicity worth. And a year out from a guaranteed general election a budget provides the last real chance to provide a mood changing giveaway that could alter a party's electoral fortunes.
And despite all that this has to be one of the least hyped budgets in recent years. We know the LibDems will get their £500 personal allowance increase; a measure that delivers an incredibly poorly targeted £100 tax relief, the benefit of which very largely goes to those on above average pay. We also know there will be increased tax relief for childcare and much bluster about the already announced free school meals and married couple's allowance. This will be a good budget for those who are earning £40,000, are married and have young children. For everyone else, it looks like you can forget it.
Why is that? I think there are at least six reasons.
Firstly, Osborne has nothing to sing about. In June 2010 he forecast he'd be riding on a crest or recovery by now. We have not got back to 2008 yet.
Second, the recovery is so partial even he has to admit its fragile.
Third, he can't give things away or the myth of austerity is shattered for good, and that's at the core of Conservative political philosophy now as the excuse for shrinking government.
Fourth, he's already given a lot away. What else can he give to big business when they are already the only group of taxpayers likely to see real cuts in their tax paid in the next few years according to Office for Budget Responsibility forecasts?
Fifth, maybe he doesn't want to play the economy card when it comes to the election build up. Seriously, would you when you've done so badly, most new jobs are on minimum pay or less (as will be true of many of the new self-employed) and the only reason the economy is growing is an old fashioned housing bubble paid for with government funds? I mean, what is there to shout about?
Which leads to my last reason, for now. This is that maybe Osborne is simply out of ideas. In truth he only ever had one. It was called expansionaery fiscal contraction. It was his belief that if you shrank the state then the private sector was just waiting to rush into the void that this created and deliver growth like we'd never known before. The logic was that the state had become so big it was “squeezing out” the private sector. However it's looked at that notion has proved to be untrue. First it's been hard to deliver cuts without inviting serious opposition because it's turned out that what the state does is important. Second, when there have been cuts private sector business has resolutely sat on its cash and refused to invest it. The belief in expansionary fiscal contraction has simply failed. We have to conclude Osborne is a Chancellor who never did know what he was doing and is clueless now.
No wonder there is no hype. There's nothing left for George to talk about.
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I maintain that Osborne knows exactly what he’s doing, and he is succeeding.
Deindustrialisation and de-skilling were explicit Conservative policies since Geoffrey Howe’s first budget: this continues and it is succeeding.
Tax-cutting continues, as does the de facto abolition of enforcement of taxation on the rich. Regulatory capture of the Revenue by tax evaders’ agents made heroic progress under New Labour, and has been completed at policy level under Osborne’s successful chancellorship.
The sale of public services and common goods as neofeudal rents to Mr. Osborne’s rich and generous friends continues; in fairness to our new owners, they were and still are generous to New Labour ministers. Notably the former Home Secretary. All such rents deliver less than we were used to, and in some cases are so bad as to ‘deliver’ damage; all succeed in their unstated purpose of delivering more money to the owners; no matter the increasing cost cost and losses to taxpayers. What of it? Mr. Osborne and his friends are not taxpayers and can barely hide the smirks and sniggers when they lecture us on ‘value for the taxpayer’. The sale of rents in public healthcare is accelerating and is largely irrevocable: it is a huge and profitable success for Mr. Osborne and his fellow ministers, directors and shareholders.
Mr. Osborne’s policy is now and always will be to accelerate the concentration of wealth; he is succeeding in his economic policies and is hailed as a success by everyone who matters.
It might not be appropriate to mention social policy while reporting our Right Honourable Chancellor’s success in economics; but an economy in which the major actors have reverted from investment and production to hoarding and rent-seeking – the economics of the preindustrial aristocracy, give or take destructive speculation – makes the upward concentration of wealth a ‘zero-sum’ game, as pervasive rent-seeking means a static or contracting economy. This, in turn, means that Osborne’s miserable little economic growth, if any, is actually a deep and irreversible recession for the citizens and companies below the tenth percentile. My criticism of the current social policy is that it is quite explicit in its aim of worsening these impacts on the bottom quartile of the population, and Mr. Osborne’s colleagues are quite open in displaying contemptuous satisfaction at the precarious lives of those who work and struggle, sometimes unsuccessfully, to eat.
Those contemptuous and contemptible colleagues regard our chancellor as a success, and in their own terms they are right. In terms of any measure of success that measures goals, stated and unstated, I must – reluctantly – agree with them.
I invite you to consider whether any of the Labour front bench might agree, and whether some of them are as reluctant, if at all, in recognising our successful Chancellor for what he is. And anyone who calls him an incompetent is missing the point, perhaps deliberately; a man of my suspicious mind might say ‘methinks he doth protest to much’ and wonder if these disingenuous criticisms are concealing a discreetly profitable admiration of our chancellor’s success.
I accept your point but what you are saying is that Osobrne is running a purely political agenda. On that I agree. My commentary was, however, on his role as Chancellor, where I think him a failure
What is ‘Politics’ and what is ‘Economics’?
A ‘Political Chancellor’ uses the levers of policy and economic power available to HM Treasury to buy the next election.
An ‘Economic Chancellor’ uses this power to pursue an economic policy agenda.
We are used to calling politicians ineffectual: most are. But an effective politician, who can make effective use of power as the Chancellor, is an economic actor.
Osborne is all economics: he may be called ‘politically inept’ if there is widespread public criticism of his work. Or he may be a political success as well: if he is praised by everyone who matters to him, and the criticisms do not matter in any way at all, that may well be a success: perhaps a triumph, a complete and utter victory.
Clearly , osborne (who has no knowledge of Economics himself) is clearly a puppet for the ‘rent seeking’ class -in these terms he is being very successful indeed and might well have over a third of the voting public on his side, largely due to the following:
1. effective use of the fallacy of composition myth, that Governments are like households.
2. Creating a housing bubble and the myth that there is a housing ladder for most.
3. maintaining the myth of trickle down when what is going on is syphoning ‘up.’
4. VERY effectively channeling discontent towards the poorest and most vulnerable, using methods reminiscent of economic eugenics of the 1930’s
5. pretending unemployment has fallen by shifting people onto zero income ‘self-employment’ and sanctioning benefits at the drop of a hat.
6. Having the luxury of, effectively, NO opposition in parliament.
The wheels of neo-liberalism have never been so well oiled!
Actually, Nile, it should be ‘methinks he doth protest TOO much’ but given whose blog this is perhaps we should interprest this otherwise lamentable spelling error as homage 🙂
Nile’s suggestion that I admire the chancellor is laughable
I ignorfed it
Spellings and all 🙂
Austerity has been exposed as a sham already by the Bank of England in their recent quarterly bulletin where they explain in plain language the dark secret that banks create money out of thin air when they pretend to lend it. Money then is not some scarce resource which ‘the markets’ will only continue to furnish us with if we tighten our belts and pay them back, instead it’s just stuff that can be made up at will. Banks loans? Made up out of thin air. Mortgages? The same. Credit cards? You yourself create the money when you make a purchase using the card, so when you give money to the issuing bank thinking you’re paying them back, it’s the first time they’ve ever had it. (This is the reason, incidentally, you or I can’t get a credit card for a million billion squillion quid, the banks aren’t going to let you create more money than you might reasonably be expected at some stage to fork over to them – no point in letting you create money if they never get to see it).
It follows that since the money in the economy is made up anyway, it makes far mroe sense to have it made up from money our own central banks have created at no cost to ourselves than money the private banks have created at interest. Neither Osborne nor Balls can begin to justify austerity now.
But they will do, Bill, because it has been ‘sold’ to the public who they treat like mushrooms (keep in the dark and feed them….). Politicians of quality should be educators, whereas now we have a clan of scam merchants, chancers, bluffers and blather machines. Labour is no better. Modern Money Theory clearly shows that deficits and surpluses are equally appropriate, depending on the prevailing conditions -this is rejected because it is not compatible with Klept/plut/ocracy.
Thatcher’s infamous nonsense about the Government only having the money received in Tax still holds sway even though it is another representation of the fallacy of composition. Neo-liberalism thrives in an anti-intellectual atmosphere.