It's been my pleasure to work with Ann Pettifor over the last few years, and share her hospitality.
Ann's comments this week, summarised in the Guardian, resulting in her memorable creation of the phrase 'the Alice in Wongaland economy', are pertinent. As she puts it:
At this point, the next election began to loom on the political horizon. The government decided to deploy taxpayer resources into stimulating economic recovery. But the resources are aimed not at increasing investment in productive activity, but rather at subsidising, for instance, buy-to-let investors speculating on future house-price inflation.
So, far from pursuing a "new economic model" based on investment, savings and exports, it's back to the old inflate-the-housing-market-and-boost-consumption meme — but this time with a high-debt, low-wage economy. That is the road to Wongaland.
I fear so.
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Hi Richard,
The phrase appears to have been coined by cartoonist K.J. Lamb in the current Private Eye (p.21) which appeared on the shelves a full week before Ann’s article.
C
Oh well: Ann will just have to take credit for popularising it
I remain just astonished at Osbourne’s “Help to sell your house at a ridiculously inflated price” gimmick.
Every reputable economist knows this is a disastrous mistake.
Now, I appreciate that the opinions of reputable economists are, themselves, questionable because they’ve all bought into one theory which is, massively, flawed.
We’ve based our economic strategy on a free market theorem that requires that everyone acts rationally & has perfect knowledge. Which makes about as much sense as basing our town planning on an ideal world where everyone can fly.
But, based on that ludicrously flawed model, Osbourne’s plan is just as much of a catastrophe waiting to happen as it is in the real world & I can’t believe all those chaps(&, indeed, chapesses) in the Treasury with 1sts from Oxbridge or the LSE or ICL in Economics haven’t told him so.
The fact that he’s going ahead suggests to me that either;
1)Osbourne is so convinced of his status as a man of destiny, instilled by Eton, that he doesn’t listen to any advice anymore or
2)Osbourne is not thinking as a chancellor but as the Tory party strategist & knows that a housing boom is their best chance to get re-elected in 2015. Yes, it’ll be economically appalling but they can deal with that “down the road”.
Either alternative is horrifying.
George Osborne being Malice in Wongaland!
http://www.maxkeiser.com/2013/08/kr485-keiser-report-uk-cult-of-saving/
Ann’s comments are reported in Zerohedge too..
http://www.zerohedge.com/contributed/2013-08-17/alice-wongaland-economy
Road to Wongaland – we are there! The terminus! With pockets and wallets vacuumed by the property market! The halucinogene of house ownership still holds sway and the more the mortgage millstone weighs people down the more the benefit claimant will get kicked for it as the only available easy target. Happy days!
This assumes that Osbourne has no idea of the results of his actions.
If you factor-in other things that will happen before 2015, and may impact the election, then things look better for Him.
2014 sees the referendum on Scottish independence, a result leading to Scottish withdrawal from the UK may not immediately have any effect, even the end result of minus 41 labour seats. But what if the vote is to leave and takes effect after the general election, and labours lead in the commons is 40 seats over all parties?
In the general election we can expect loads of “poor economic planning by the previous labour government led to a much worse economy than we knew about”.
Then there is the “economy coming right, don’t upset it by voting labour”
You are also assuming Osbourne is an idiot, which would be wrong. I’m sure he is getting advice, and from many organisations, just as I’m sure that the advice is not necessarily about getting the country working, but getting a considerable amount of money into the hands of those awash with money..
I’m rather afraid that that tactic, coupled with an opposition that has been rendered impotent by a captured press/media/poor-leadership, will lead to a 2015 win for the conservatives and the eventual end for any effective democracry soon after.
Look at your header on the NHS….where did you see it reported in the “legacy” media ?
In fact, the press has been instrumental in spreading the propaganda on NHS deaths, most of which would seem inaccurate. But it serves its purpose?