The real Republican agenda in the US is becoming increasingly apparent. The FT reports this morning that:
A day of cautious optimism that lifted hopes Congress might remove the threat of default from the US economy began on a bleak, rainy morning on Capitol Hill with Treasury secretary Jack Lew delivering a blunt warning.
Speaking before Republicans offered a six week extension to the debt limit, Mr Lew attacked Republican claims the administration could simply prioritise debt payments over other obligations to avoid default.
“The United States should not be put in a position of making such perilous choices for our economy and our citizens. There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets,” Mr Lew said before the Senate finance committee.
I think Mr Lew was much too subtle. What they're saying is the government should prioritise the private property right attaching to the debt over its obligations to provide a service to its citizens.
That is, of course, neoliberalism at its core. As I said during my Ebor lecture earlier this week:
The belief, held in common in the USA and UK, and which has spread far and wide from there, is that all market activity of all sorts creates a surplus for society whatever the market activity does. You can, if you wish, call this a salvation belief: it is a belief that markets will save us from all perils.
And as is common with such beliefs there has, of course, to be an opposing belief; that is a belief that damnation is possible if the route to salvation is not followed. In this case that opposing belief is the widely propagated view that any form of regulation by government, and anything other than that minimal taxation required to enforce the laws of private property will so impede the markets that the salvation they might offer can not be delivered here on earth.
That belief is wrong. There is no evidence to support it. In particular, the idea that if government retreats then the private sector rushes in to fill the void has been resoundingly debunked. Osborne tried that. He called it expansionary fiscal contraction. And we just got recession and stagnation.
Government works. Not for everything, of course. But for some things, indeed many things, it is the best mechanism for delivering services people need and want.
And to try to prevent that efficiency and to deny those services is to deliberately harm well-being. And that's what the Republicans are doing.
And it is what the Tory right want here too.
Worry.
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I think that Senator Bernie Sanders pretty much nails what the real GOP agenda is:
http://www.youtube.com/watch?v=fNj8bpY2PEY
Richard, too right Government works for some important things, a prime example of which I heard about on TV last night, in Michael Moseley’s BBC4 programme “Pain, Pus and Poison: the Search for Modern Medicines”.
The prime example was the eradication of smallpox – something achieved by the wonders of modern medicine, but crucially by international governmental will and co-operation, a rare example as such. And if the neo-liberal crazies think the market could have achieved that, they’re even madder than I thought.
No, it was international and inter-governmental co-operation that achieved this. The pity is that we can co-operate to beat the crap out of Iraq, and threaten Syria with the same, but can’t copy the model of smallpox eradication to provide clean water, enough food, enough work, a clean home and bed and a decent health service for EVERY human being, when the world has enough wealth and resources to do so. The TeaPublicans are candidates for Bevan’s “lower than vermin” observation – especially as vermin actually have a useful function in the global eco-system, and aren’t just spoilers and wreckers.
Your last sentence is a perfect description of much of the political right. Many of them come from relatively privileged backgrounds and have the power to contribute positvely to society, but as you say, they are spoilers and wreckers. Psychotically selfish, frequently vindictive (The Daily Hate) and always wanting to blame other people or put the cost of their own failures onto everybody else.
The climate change deniers are an excellent example. They don’t want to stop making money from fossil fuel exploitation, or go to the expense of changing to low or no carbon energy sources, so they constantly churn out lies, half-truths, ad hominum attacks on scientists, and conspiracy theory claptrap.
So, to make life easier for themselves (at least in the short term), and prevent their precious ‘free market’ from being regulated, they are prepared to wreck the entire planet’s ecosystem. And for that reason they are far worse than any of the animals we call vermin, who do at least have roles in the ecosystem.
“or go to the expense of changing to low or no carbon energy sources…”
Fair comment Mr. M., but if I work for a firm that is a major manufacturer and if our competitors don’t have the same costs imposed on them….they undercut us….and I’m out of a job.
You guarantee that each and every country in the world operates to UK environmental standards, then I’ll go along with your idea….otherwise every pound that HMG adds on to the business I work for in Green costs…that means that’s a cost ‘my’ competitors don’t face.
If you want to pile costs on UK industry AND promise me the job I’m in now….well that would be a different matter…..
I say it again
All you wish to do is fry my children’s world
The neo-libs want Government when it helps them -Fred Goodwin was able to breakfast at the Ritz on the same day he went cap in hand for ‘free’ money.
Richard- when you refer to the neo-liberal ‘market’ it needs to be pointed out that it is a fixed market, barely a market at all, more a club of insider traders. Of course, the neo-libs create the illusion that we can be part of it but its a bit like being invited into a casino not knowing the rules of the game. Real markets don’t get bail outs and privileged interest rates from central banks -Government Is working-working for the one percent!
You too are being unintentionally too subtle with your final sentence, Richard: it’s what the Tory right have already imposed on this country but want to impose much more of and in ever more extreme variants.
Re what’s going on in the US. They were discussing the impact of the shut down on research and science yesterday on Radio 4. One example of a project currently closed down is the next Mars mission. The lander/probe is ready to be loaded onto its launch rocket – which should have been taking place over the next couple of weeks. The launch is scheduled for early November (the 7th I think they said). However, if they miss that window then they cannot then launch until 2018!! That’s the next time the Earth and Mars are in the right alignment.
Of course, that’s just one example that has relatively little human impact – unlike the freeze the shut down has placed on medical research programmes, and so on, but I thought it was interesting in illustrating the hidden extent of the impact of the bloody mindedness and couldn’t give a f— attitude of Tea Party republicans.
If the Establsihment can’t continue to rule, they’ll happily scorch the earth. They have the attitude, if they can’t have it, nobody can.
Indeed -we can expect them to white knuckle what they have to the bitter end -how sad!
Neo liberals, particularly the Tea Party, complain about big government, yet the government is now more bloated and invasive than ever.
Hundreds if billions are spent on defence and the US Homeland Security Act has stripped away many rights.
While they have barely lifted a finger to help ordinary working people. they have moved heaven and earth to preserve banking and market profits, through QE and also through the Plunge Protection Team that manipulates markets with Fed money to make sure the markets don’t fail.
But that’s OK, as long as they are cutting medicare, social security and state jobs.
They don’t mind government spending on defence and tax cuts, but they loathe government spending on pensions, health and social security. As long as the cuts hurt ordinary people, but not banks and corporations, they are more than happy that the government spend hundreds of billions of dollars, as long as it is on the right things!!
“The climate change deniers are an excellent example. They don’t want to stop making money from fossil fuel exploitation, or go to the expense of changing to low or no carbon energy sources, so they constantly churn out lies, half-truths, ad hominum attacks on scientists, and conspiracy theory claptrap”
Maybe there will be reliable no/low-carbon power generation, but it isn’t here now. One reason electricity is up in price is the amount provided to subsidise renewable generation. The government, all of them, are betting the house on wind…but the intermittency of that is causing more problems than it is solving. Yes, we can go all-non-fossil. But we can’t operate a 24/7/365 economy on it. As for “deniers”….few of them are denying anything, most agree that CO2 is warming the planet, but the degree of that is a hot potato at the moment….and the facts are that in the last 150 years the globe has warmed less than a single degree centigrade. And nothing at all in the last 15 years.
Anyway, Lockheed says it will have reliable fusion generation in 5 years….loads of “cheap” energy….except….
I note you say “But we can’t operate a 24/7/365 economy on it.” No doubt true enough but you forget we don’t need to run anything like the economy we have once you remove the unending and impossible to meet pressure created by trying the pay back the banking sector more than society (thinks that it) borrows from it. End that nonsense and things may well quieten down to a far more managable level.
“I note you say “But we can’t operate a 24/7/365 economy on it.” No doubt true enough but you forget we don’t need to run anything like the economy we have…”
Best tell that to our competitors then….after all we compete globally now.
I note Milipede is on a roll:
http://touchstoneblog.org.uk/2013/10/the-emerging-shape-of-milibandism
Paul Krugman has an interesting post about why the right demonise the poor which has lots of parallels with the situation in the UK (for ‘race’ read ‘class’):-
http://krugman.blogs.nytimes.com/2013/10/11/the-war-on-the-poor-is-a-war-on-you-know-who/
The economic crisis should have meant the collapse of right wing ideology but the reality is the extreme right, by which I mean Afriye, Raab, BoJo, Hitchens, IDS et al, are on the ascendancy. All egged on by a rabid right-wing press who no longer hide the fact they are their proprietors’ mouthpieces and who scream ‘Marxist’ at anything that challenges their power or influence.
It seems to me the right see the world as black and white, whereas the left are, by nature, more conciliatory and rely more on evidence to support their case. Unfortunately this means the message from the right is simpler to spoon feed the masses and you get people mistakenly voting for parties who will not support their interests and impoverish them.
We can’t rely on our compliant media to mount a strong enough challenge to get any effective opposing viewpoints across. One of the huge advantages of the internet is the ability for people to bypass the often biased messenger and go straight to the evidence and make their own minds up. I see little evidence so far that this is happening on any significant scale to counteract the right-wing media’s billionaire agenda.
“One reason electricity is up in price is the amount provided to subsidise renewable generation.”
Oh – complete rubbish! The reason the “big six” are putting prices up (they all will, as sure as night follows day) is because they can, basically!
Or are you saying that these firms that made an average of over £600 million in profit can’t afford to invest or hold prices down?
And please don’t trot out that bull about wholesale prices, either. When wholesale prices dropped significantly in the past, prices still went up by more than inflation.
Let’s call it for what it is! Naked greed!!
I said one reason. Renewable subsidies, the cost of which are directly applied to electricity bills, add around 17% to the cost. And the cost of renewable power is not only applied to the renewable generators. In the past few years a number of large installations have been constructed/assembled that consist of diesel generator “farms”, the operators of which get paid even if the units are not used. We (UK) are a decade away from the “smart” grid, where power-consuming devices and businesses are powered down to allow demand to be met. In the short term, and not that short a term, the smart system will comprise metering that allows multiple charge periods. Quite how people will react to a quadrupling of energy prices around tea-time is another thing..of course, there is always nationalisation. But Labour seems to have ruled that out, and it is doubtful if people would vote for it anyway.
It makes little difference to me, at my age the government gives me a few hundred quid, and makes the energy companies give me another hundred “discount” (which is then added onto the bills of everyone)(including me).
Eventually we will have a low-carbon energy system, which may, or may not, be reliable. It almost certainly will not be as robust. As Bill says above, we no longer have the need to run large power-hungry heavy industry. I’ll keep the UPS’ to back the computers and power the radios, and use the 12-230 inverter to power the house and keep the heating working if needed. the liklihood of power outages is low, the system has considerable resilience, even if some does cost 12 times the cost of baseline generation.
“In the past few years a number of large installations have been constructed/assembled that consist of diesel generator “farms”, the operators of which get paid even if the units are not used…”
Yep, that’s the STOR…..wind power is basically underwritten by huge amounts of diesel generating capacity….
…I’m not sure how green that really is..
Not publicised too much is the amount the government will get from “hiring-out” standby generator capacity at their estates, such as military/educational/medical facilities.
http://tinyurl.com/nmkvtcr
http://tinyurl.com/pmmx49z
Since the price they are paid is many times that paid to baseline generators there is no shortage of companies installing 20MW slabs, diesel powered (sometimes biodiesel)
Why would a company that’s making ab average of £600 million in profit, that’s profit, remember, turnover is obviously quite a bit higher, would need to quadruple prices?
Why hasn’t these companies properly invested these profits into the system, which to a very large extent they haven’t?
Regarding the climate subsidy, which is just a handy excuse for companies to raise prices for juicy shareholder returns for the umpteenth time, it was the government who chose to have the subsidy paid through people’s bills. This could have been achieved by taxing the enormous profits of the utilities rather than consumer bills.
Nationalisation of the utilities would not be popular; you’re joking right? Regarding renationalisation of the railways. the majority of the public are in support! The public are NOT in favour of reasonably priced fuel bills? You jest, surely?
The utilities could be nationalised without costing the taxpayer a penny. As with QE, simply buy the shares with printed money, so the value of the interest bearing paper is matched pound for pound for the non-interest bearing paper. Ownership passes to the taxpayer and the profits can be re-invested to hold prices down and invest in infrastructure and renewables.
If we can print money to keep the banks in profit, we can print money for something that benefits everybody in general.
Electricity doesn’t cost the same to produce.
We mix-n-match from different types of production. Gas (Closed circuit and open circuit), coal, nuclear and various others, such as wind.
They all vary in price. Coal is the cheaper, which is why it is usually at the top of the stack. Followed by CCGT then, I think, nuclear (actually, nuclear is the cheapest to fuel).
Nuclear and coal are the main producers, with nuclear running to capacity most days. By 2020 the large combustion plant directive will have closed most of the coal plant, unless it uses carbon capture systems (of which none are yet working), or unless the boilers are converted to wood-chip/pellet (which is happening now at Drax)….those converted boilers qualify for a variety of subsidies…
Of course, we could go for wind….so that would be some 120GW of wind capacity needed (given that wind averages about 28% of nameplate capacity)…..but we would also need a backup system to guarantee power if no wind. Hmm. We could go for storage, except we don’t really have a storage system that would give 30-50GW for any decent period…or we could go for OCGT…quite fast to get online….but we have already decided to go “smart” (another term for “powercut”).
The next 7 years are going to be really interesting, power-wise.
Of course, you could nationalise it….but the fuel costs would be market dependent anyway. And investment in the system would still be needed, so at the end of the day the price would not drop by much, if by anything. And there is still the lurking VAT monster on the horizon.
As I said. Interesting times.
Smart it is. Just watch the power costs when the meters are installed (soon).
Or install solar (except if there are power cuts, the solar gets cut as well….grid tied)
What is worrying (for me at least) about the American situation, is that perhaps we are seeing the beginning of a long-term schism in that society, one that could (God forbid) lead to conflict and violence someway down the track.
We are being told by the media, that the Republicans have lost ground as a result of their stand. That may be the case to a certain degree. However, we have to remember that the Tea Party republicans stormed in on a platform of low taxes, small government,i.e. the neoliberal agenda.
This tells me that are a lot of Americans out there who may not see the current stalemate as a bad thing. These are people who are prepared to dig their heels into the ground and not give an inch; who don’t have an iota of interest in the poor or underprivileged of their country. This being the case are we seeing the beginnings of a war between the Haves and Have-nots?
Trends Journal editor and analyst, Gerald Celente, (who over the course of the last 30 years has been very accurate in his forecasts) makes the claim that we are already seeing the beginnings of such a war around the world now – what he calls the Great War of the 21st Century – in Africa and the Middle-east.
It may be a fool’s hope, but I hope that common-sense prevails in the U.S.
http://tinypic.com/r/148mag5/5