There has been much, unsurprising, discussion to mark the tenth anniversary of the start of the Global Finanical Crisis this week. I think that appropriate: I still have contributions to that discussion to come. But something else caught my eye this morning. The NHS now has the longest waiting lists in a decade. And this matters: it is an issue of cause and effect.
It was bankers who created the Crisis. It wasn't Labour. It wasn't excess spending. If either had been true it would not have started elsewhere and been global. Excessive banking practices, deliberate deception and a far too relaxed attitude to regulation, based on neoliberal thinking, was what created the Crash.
Discussion on the anniversary has noted all too often how banking has recovered and is now robust and ready for the next downturn, which few now deny is on its way. I agree with the latter, I am not sure banking is that much stronger (time will tell) and like many I remain quite appropriately aggrieved at banks' and bankers' near risk free recovery.
But what has been too little noticed is the effect. The lost wages. The growing inequality. The creation of insecurity for most people as the price of strengthened bank balance sheets.
And NHS waiting lists: the sign that the state has shrunk under a wholly unnecessary policy of austerity that has let the neoliberals win and cost us all, dearly. When the economy demanded more government Osborne et al delivered it less precisely so that the bankers and their neoliberal guides could deliver lower taxes to the wealthy, which is what their philosophy demands and what they got.
They ignore the pain, the anxiety and the suffering. Preserving wealth is all that matters and if you have not got it then you do not have the right, in their opinion, to complain. This is their logic. And it has been the logic of too many politicians in this country as well.
Ten years on we - or rather, the vast majority of us - are paying the price for that. For the bankers and their clients the Crisis did not go to waste. We have to hope next time it will be different.
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Austerity has been the excuse to cut the public services and to privatise those parts from which a profit can be made.
We lose out twice, wages and salaries depressed, interest on savings low or negative, in some cases jobs lost or opportunities reduced
and on the other hand, our schools, hospitals and surgeries, universities, armed forced, police, local government , fire and rescue services are all reduced.
I’m not surprised at this.
All my family’s recent NHS appointments have all been changed at least thrice
and we not heavy users or hypochondriacs.
I have to say that this ‘phony Governance’ that we have now since the last election is very frustrating indeed. It is as though the Tories are able to rule whilst lying in state – effectively dead – as are the
Neo-lib ideas that underpin it.
This administration clings on like a bad, indelible stain on our country. And the country gets more dishevelled, ran down, unhappier and meaner every day they remain.
I found Owen Jone’s last piece very inspiring despite the warning it was also giving:
https://www.theguardian.com/commentisfree/2017/aug/09/prime-minister-corbyn-very-british-coup-establishment-backlash
I might be wrong but labour has to take some blame for the light touch regulation of the city? Just because so many other governments had a similar approach does not take that away. No? Also with the exception of corporation tax, other taxes are higher or higher in real terms than when labour left office. The NHS has been handled badly for decades judging by experiences so money is not the only issue. I suspect the plan with the NHS is keep the waste in the NHS while denying it resources in areas it could do with, so people get fed up and eventually think it would be better to have it privatized (last week there was a report saying there was a lot of waste). Could be wrong but in my neck of the woods its uncanny how the ‘private’ hospital funded by the taxpayer is better run while the ‘NHS’ one seems to lacking to say the least. With so many telling me the same thing their GP recommended they go to the ‘private’ one
I agree with everything you say. Your last sentence is not, however, encouraging, for all we can do is “hope”, it seems. In a previous thread I asked how can we implement the tax (and other social, political, economical) changes you and many of us advocate, and, more importantly, make them permanent so they can not be reversed by another Thatcher or Reagan on a misguided messianic mission. Answer came there none – from anyone. Unless there is a means to this end then we are talking amongst ourselves to no purpose.
I believe Iceland jailed their bankers, but I’m not sure if their “revolution” lasted. At least in a small country of around 300K the ordinary citizen might have a chance of making a difference. In the UK where democracy is laughable (think HoL for a start), and the oligarchs have the power and influence and politicians (and probably civil servants too) are “captured” we have no chance.
Thank you, Richard, for this interesting and highly appropriate blog. Just one simple, but possibly massive question: Bearing in mind the huge exposure to risk that our major banks have to (as I read elsewhere today) something like $222 trillion of financial derivatives, thus making any financial crisis big enough to be seen from space, what would you expect a sensible government to do with respect to the bleating of our own banks at such a time?
This is the great unspecified fear
Remember much of this is very short term indeed and much is hedging I.e. often counter- balancing but even so counter party risk is enormous
There is no backstop any capital a bank can provide for this risk
Regulation is the answer and we have not got there yet
Still some fairly brutal opinion- changing climbing to be undertaken before you reach the economically literate( ?) sunlit uplands you posit.
http://www.zerohedge.com/news/2017-08-10/more-really-bad-ideas-government-debt-isnt-actually-debt
If it was not so worrying that a well read Web site can promote something as disastrous as the gold standard would be for the world economy this would be laughable
This may seem a bit ‘off topic’ but I don’t think it is. In fact I believe it to be scarily relevant.
In spite of a growing – but still very limited – awareness of modern progressive economics and the devastating social outcomes of austerity politics, I’ve reached the depressing conclusion that nothing is going to change within the foreseeable future.
How much does anyone know about The Atlas Network? (http://www.sourcewatch.org/index.php/Atlas_Network). Set up originally by a Brit, the late Sir Anthony Fisher, it is a murky ‘non-profit’ organisation that successfully continues to promote an Ayn Rand-Hayek inspired neo-liberal agenda around the world via ‘think tanks’. It is currently run by the Alt-Right extremist Alejandro Chaufen, with an impressive cv. Financed by extraordinarily wealthy individuals, including the Koch Brothers, Atlas is influential at government & political level across the globe. It has ‘associations’ with extreme right-wing organisations like Breibart and highly-placed White House personnel such as the Hungarian-British-American Sebastian Gorka, Deputy Assistant to the President.
Why do I mention it in this context? Because nobody should be unaware of its sphere of influence and the determination of the Alt-Right to prevent the spread of progressive heterodox economics and to derail any government that shows signs of implementing a modern monetary strategy. For them it is a war against ‘the State’ they do not intend to lose, at any cost. They are already very aggressive on social media, especially YouTube.
And it’s why a right-wing UK government will never provide free, universal social services (e.g. the NHS & education) for the benefit of the population at large. If this sounds like a conspiracy theory or outlandish exaggeration, just patiently follow an Internet trail. Well, I found it scary but then maybe I scare easily!
I Gini the existence of this network is widely known and growing
See a recent George Monbiot article in the Guardian, for example, on James Buchanan who was heavily funded by this network
Just a minor point or two. Some time before 2007, the Glass-Steagall Act was annulled/rescinded, call it what you will. this was the key Act brought in by the Roosevelt administration in the Thirties after the Wall Street crash and the subsequent Depression. Its objective was to stop banks speculating with depositors’ money. The repeal was enacted by Bill Clinton (Yes! That Bill Clinton): he had been persuaded that the bankers had learned their lesson and could now be trusted.
Second point: Alistair Darling, the former Chancellor who was the incumbent when Northern Rock went belly up and steered the economy through that crisis and the subsequent bothers, went on record recently as saying that the next crisis could not be as bad since the banks nowadays have to have stronger reserves: he did not, though, rule out the possibility of another crisis. The banks’ stronger reserves are mainly down to QE which they used to bolster their reserves, rather than make loans that would have boosted the economy.
@Ian Cuthbert,
“The banks’ stronger reserves are mainly down to QE which they used to bolster their reserves, rather than make loans that would have boosted the economy.”
Banks do not lend out their reserves. They create their loans out of thin air.
The lack of bank lending on anything other than property is due to a lack of demand, caused by stagnating wages, and low productivity.
Thanks Richard. Another one for my framed collection – to be hung strategically on the bathroom wall to enlighten the casual visitor during moments of contemplation.
Wow
Is it possible the increased demand placed on the NHS since 2000 caused by the policy of in controlled immigration has accentuated the problem?
Not in the slightest
Because we have not had a policy of uncontrolled migration, for a start
I think you will find that net immigration was below 50000 pa from the beginning of history until the late 1990’s. Since then it has been at levels in excess of 300000 pa.
Are you claiming that an extra million people almost every three years since 2000 has had no effect on demand for NHS services?
You can’t even get basic data right
Please don’t call with your racism again
It’s the immigration policy that keeps the NHS staffed.
At A&E last Thirsda nighty/Friday morning, the staffing was nearly 100% non-British.
The cardiologist on call was Asian, the nurses were east-European.
I for one, am fed-up with the “blame immigrants” rhetoric.
So am I
About one third of NHS doctors were not born in the UK