I have had time overnight to read what was impossible for me to do yesterday due to broadcast and interview commitments and sheer fatigue, which is read the Office for Budget Responsibility report that supports the autumn support.
It is a genuinely quite shocking document at a number of levels. Firstly, it is shocking for its implicit endorsement of the claim by the government that the deficit is the matter of the highest priority to the government when there is not a shred of evidence that this is the case. The well being of the people of this country should be the highest priority of the government and yet there is no evidence I have yet found that this is highlighted in the document.
As a result the report is shocking for its tacit acceptance of the scale of cuts that are proposed. This paragraph is key:
On the Government's latest plans and medium-term assumptions, we are now in the fifth year of what is projected to be a 10-year fiscal consolidation. Relative to GDP, the budget deficit has been halved to date, thanks primarily to lower departmental spending (both current and capital) and lower welfare spending. The tax-to-GDP ratio his risen little since 2009-10. Looking forward, the Government's policy assumption for total spending implies that the burden of the remaining consolidation would fall overwhelmingly on the day-to-day running costs of the public services — and more so after this Autumn Statement. Between 2009-10 and 2019-20, spending on public services, administration and grants by central government is projected to fall from 21.2 per cent to 12.6 per cent of GDP and from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts would have been delivered during this Parliament, with around 60 per cent to come during the next. The implied squeeze on local authority spending is similarly severe.
To put this in context, this scale of cuts has the following impacts when expressed per person:
The data shows that schools, health and development spending are ring fenced (although this appears to be little comfort for education, which is worrying), but then shows the impact on all other spending. This will fall from £3,020 a head in 2009 to £1,290 in 2019 if Osborne's plan is to work. The cut is 25% to date. The total required cut is 57%. The cut to come is 44% of current service supply.
This is not trivial stuff. This is defence, the police, social security and most spending that protects the vulnerable. It is the environment, foreign relations, housing and day to day flood defences. It is business regulation and health and safety (including things like food). It is the basic infrastructure on which our society is built. And it is going to disappear, very fast.
This is because it is assumed that the economy will be balanced by cuts and not by additional taxes, as this table shows:
Tax revenues are forecast to bump along as they have done for 25 years: spending is forecast to be slashed to levels not really known for decades.
And this is assumed to happen despite the fact that some estimates suggest that 1 million people will lose their jobs in the public sector as a result of the planned cuts.
In fact, the suggestion that the economy will rebalance and grow modestly despite these cuts does itself look wildly optimistic. As I have often said there are only four drivers of GDP: consumer spending, business investment, foreign balances on trade and government spending. The FT has summarised the expected contribution the OBR thinks each of these will make to the creation of the government's desired outcome as follows:
The OBR is suggesting that the government will achieve a surplus because the trade deficit will fall, considerably (when the EU is in the doldrums and is by far out biggest trading partner), business will start investing much more than it has even though recent signs are that they have reversed this trend and are saving again and that households will move from net saving into taking on considerable debt again to fuel spending way ahead of earnings growth. In other words, George Osborne is assuming that a consumer credit boom, probably based on a house price boom, will create growth even though he will be slashing pubic services but will make no change to net taxes.
All of this is deeply delusional on Osborne's part. It's almost impossible to decide where to start to explain how unlikely it is that these plans can be fulfilled.
First, cutting most public services and benefits by 44% over the next five years is impossible. We will have a break down in law and order, in public health, in housing, in safety and more. We will have bankrupt local authorities. We will have massive numbers of people homeless children living on streets.
Second, people will not accept such massive cuts whilst being expected to pay the same tax: the bargain between people and state will fail.
Third, if people realise that all social safety nets have failed they will not spend more: they will do all they can to save because that is the only way they will have to protect themselves if things go wrong. There will be no credit boom.
Fourth, house price growth is cooling already.
Fifth, there is no hope of improved trade.
Sixth, tax receipts are already £23 billion below expectation and the OBR now seems to think that this trend is permanent. That may well be right; new jobs are low paid and the self employed have no one left to police their declarations because HMRC is to be further decimated and so the tax gap will rise, considerably.
Seventh, business will not invest. Against this background there is no reason for them to do so. After all, most business investment is known to be stimulated by demand from their biggest customer, which is the government, and there will be no such demand.
At all levels this plan does not work. Worse than that: trying to deliver it is wrong. We have no deficit crisis. We have a crisis of shortage of tax revenues. And we have no need to balance the books: people want to buy government debt. Why deny them the chance? Economically, all the objectives of this plan and all the analysis in it are wrong.
But worse, it is a recipe to destroy society as w know it just as the government is trying to destroy democracy as we know it.
Labour will sweat the small stuff, like whether or not the NHS is to get £2 billion of extra funding. But there is a giant elephant in the room and it is whether the society we built post war in which all can participate will survive. That is what is at stake here. Osborne is presenting a plan based on his desire to destroy not just the welfare state, but much of the state itself and wants to take us back to an era where fear was pervasive for most, with a few being able to exploit that for gain.
The reality is that the OBR report makes that clear. And it is time all politicians talked about it. We're not dealing with the small stuff any more. Society is at threat. What are we going to do about it?
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This future horrific reality occurred to me while watching economists bickering on newsnight last night. The 40% inroad into the cuts was casually thrown in along with other OBR stats, scary but even scarier when I read this. This way madness lies.
Why isn’t Osborne raking in some of the obvious £90-120bn p.a.cash from corporate tax “dodging” and using that to pay down the deficit. Or is he and I havent noticed?
Evan Davis is a nightmare on this issue
A Tory to the core
But did you see the debate with Arthur Laffer, Martin Sorrell and Mariana Mazzucato? I thought Laffer was dead but there he was talking the most complete b*ll*cks I’ve ever heard from an economist.
I am in debate with him in Oxford tomorrow night….
Destroy him please – intellectually of course.
Do you have a link to the event where you will be debating with Laffer?
Is it open to the public?
It’s at the Oxford Umion
I have no clue on tickets
The only reference I can find is to Medhi Hassan interviewing Laffer at the Oxford Union tomorrow. There’s no mention of you. Am I looking at the wrong event? If you are you on some sort of a panel with the other two it’s pretty disrespectful of them not to mention you!
I am on the panel with Mark Littlewood and Ann Pettifor
I have in any case just withdrawn from the programme
It is clear I have been over-ambitious this week and am not up to another recording and night away
They will have to survive with Ann carry the left wing baton – I am sure she is more than up to it
@Richard – where are you speaking in Oxford this evening?
Helen
I have had to pull out
This is my first week back at work and by last night I was shattered
To have extended the week into Friday evening and a Saturday return home was just too much
Sorry
Richard
Sorry to hear that Richard, but better you are well. We need your expert analyses! Look after yourself, and have a calm and restful weekend.
Do you know my sons? 🙂
I too went to bed last night wondering why the deficit is the matter of the highest priority to the government and loads of the electorate when there has always been one and the well being of the people of this country should be the highest priority of the government.
As a Labour Party member I am due to go out canvassing this morning but they too are obsessed by the deficit and cannot articulate a way forward that benefits the population at large without bringing misery to some sections of the population at large.
I truly depressing day caused by the grreed of the bankers and the dogma of the Tory Party
Time to go Green my friend!
I have maintained the view that Osborne’s sole economic objective is to accelerate the concentration of wealth; and, measured against his objective, he is the most effective and successful Chancellor that we have ever had.
Yesterday’s statement is all about his secondary objective: using the levers in Number 11 to increase the likelihood of re-election.
It is reassuring to see that the prospect of Conservative reelection remains unlikely, if not as remote as it could be.
Less reassuring, is the knowledge that his primary objective – destitution and desperation for the poor, indebtedness and insecurity for the middle class, and ninety percent of all the money in the hands of a privileged band of the Right Sort Of People – appears to be the economic policy of the Labour Party.
I hear the usual ineffective bleating and some superficial criticism, but I do not hear anything like a principled commitment to a better economy and a better society; there is every reason to believe that this unnecessary austerity is tolerable to the Labour front bench, that the tax gap is acceptable, that nothing more than gestures will be seen of housing policy, and that the generosity of a narrow overclass of rent-seekers in suggesting further targets for commercialisation is the guiding light of their 21st-Century socialism.
It seems that we have a new ‘Post Postwar’ consensus: I might even go so far as to say that our esteemed Chancellor is at the forefront of the political zeitgeist as well as an outstanding economic operator.
Liking it, and him, is optional. However, this might not be the case in a society prepared to take the measures necessary to maintain order and the preservation of property amidst the levels of inequality and economic desperation that are consequences – the objectives! – of our policy consensus.
So I would suggest that we should all find something nice to say about our Chancellor, the Right Honourable Mr. Osborne.
Here’s my contribution: he’s not a twin.
Unless there’s something I don’t know about the front bench of the Labour Party.
Had a chat the other day with a member of Labour’s National Executive and was informed that there’s no secret plan, behind all the neoliberal claptrap, to put things right – that it’s a shambles – and self-confessedly so, was the impression I came away with. Penny’s dropping again amongst Labour activists? I really hope so.
There’s more in our intellectual heritage than the pusillanimous corporate left you know.
Labour activists are in a complete panic and the leadership are also in a deeply apathetic malaise that doesn’t care about that panic; it’s bizarre. Try and criticise or call to account Labour on social media and see what happens; people have been removed as administrators from ‘anti-cuts’ facebook sites for being critical of Labour. I myself have been mobbed on twitter for criticising Labour, for retweeting comments critical of Labour on the Sheffield People’s Assembly account, being told that the People’s Assembly is to ‘unite people against austerity’. How censoring all comment on Labour’s austerity plans helps with that I don’t know. If and when Labour are in power, I wonder how many people who have been vociferous in action for the alternatives to austerity will go quiet because of their partisan blindness towards Labour? People who seem to think that the whole grass movement that’s been building over the last half decade is simply a little boost to Labour’s electoral ambitions? BluLabour propaganda has moved to a situation where the parameters of their ‘socialism’ are being defined by the very neoliberal market that it should be seeking to destroy, supported by the ‘establishment’ left’s top down position of ‘we can go this far and no further’. If Labour gain popular support from that stance, the argument for those who are fighting austerity and want the real courageous reform needed will enter a new phase; it will mean that, ultimately people are being told to accept a fictional ‘middle ground’ between austerity and growth. But this ‘middle ground’ will ultimately be a continuation and acceleration of the current wealth dividing, corporatist thinking currently being talked about by the exponents of austerity. If we are fooled into believing Labour can deliver what society needs then neoliberalism and the market will try to shape shift again, this time as a wolf in sheep’s clothing and hi-jack the ‘social contract’ for ends which equate to a more of an anti-social contract.
I can only say I agree
And that Labour baffles me
I suspect many of the more vocally active Labour supporters are very ill and counting on Labour to reverse the Coalition’s benefits changes before they die from the effects of them. They’re terrified, and consequently they simply won’t hear criticism of Labour. It’s difficult to be critical when one understands their position.
I know of the intellectual heritage: but the economic history is less distinguished – although I will concede that it is a shining beacon beaming down from the Olymplian heights, viewed from our current degradation.
The future engine for front-bench policy may well be a Gadarene rush to outdo the last administration’s former ministers in demonstrating the advantages of ‘Third Way’ public-private sector partnership : do, please, take a look at the glittering careers of former Secretaries of State for Health, or the Home Office.
Then again, it might not. I could be wrong: I can assure you that I hope so; but Labour has made a public commitment to maintaining austerity, and commitment to maintain the minimum wage below starvation levels until 2018.
And, for all I know, forever after. What kind of person commits to that?
Meanwhile, a determined and effective government with a cast-iron majority would need a full term of five years to get up to speed with building the two hundred thousand housing units that we need to build, every year, to reverse the slide into Victorian conditions of overcrowding and disease.
Do you hear any sound of that – let alone detect the necessary determination and unity of purpose – within the Labour Party?
Meanwhile, would anyone take a bet on how many London Boroughs will have more than ten percent of households with children living one-family-to-a-room by 2030? There are some interesting figures missing from the Budget, no matter what you hear from Bicester.
David
My view about Labour is that as the Tories have become more ideological, Labour have become less so, and may even be behaving as ‘pragmatic’. Maybe they know that if they win, the financial situtation will be quite dire because of Osbourne’s incompetent management of the economy. Let’s face it – Osbourne was in a win/win siutation – if he has truly screwed up the economy he will either be voted in again (because of voter enthusiam for austerity because although many voters are in debt themselves, Governments aren’t allowed to be because the Daily Mail told them so)or he has laid a trap for the next Government that will probably see them in power for one term whilst they try to unravel the mess.
I have said it before and I’ll say it again – the Labour party are more keen on being in power – particulalrly the Blairite faction who are totally unprincipled as far as I can see. The rest of the parliamentary party have not only no real opposing ideology but have also lost faith in the electorate – the British people. Being in opposition for so long after 1979 has almost crippled the party and all that tosh about the ‘third way’ has left them somewhat rudderless.
As others have noted here, the cost of living crisis is REAL. For example, I work for a social landlord who has been fitting solar panels to homes to reduce power bills for tenants. All of those people who have had these fitted complain to us that they have not saved money. However, this is because the cost of gas and electric has risen so much. We have to point out that their actual consumption of energy units HAS been reduced when we compare before and after unit consumption but the price rises negate any actual financial savings.
So by raising the cost of livivng crisi, they’ve had a go – but it’s not enough.
I’d love to see Labour carry out a John Smith style Social Justice exercise – boy do we need one now. Current Labour timidity based on the factors above (pragmatism? loss of faith in the electorate? confused ideaology?) doesn’t make me confident that they would do anything like the the Scoial Justice Commission again. And that is very sad indeed.
I see this as a problem of ‘path dependency’ – we’ve been trying neo-liberal market fundamentalism for so long that we just can’t see beyond it – literally no one knows what to do next – even when it so manifestly fails us (as it did in 2008 and too many times before that). Even though we know neo-lib thinking hurts us, we still somehow feel comfortable with it or seek other excuses for its failure (not enough benefit cuts; not enough deregulation).
According to path dependency theory, the dependency only ends or changes when there is a ‘punctuation’ – something that is so big and beyond the control of where the dependency lies that a change is forced because there is no choice. The force for change is usually external.
In my view, the punctuation will either be environmental or social or may be both. As I’ve said before, I think things will need to get worse for the majority before this anti-goverment Government stops what it is doing.
The punctuation has to be external because increasingly even our politicians come from well-off backgrounds who are not affected by cuts in public services. Because austerity does not affect them, there is no internal need within parliament to stop.
As for me, well I suppose I can continue to try and discuss these issues in this blog and others to try to raise awareness but I can tell you from experience that although the problem in Westminster may indeed be ‘path dependency’, the problem out here in the real world (amongst the electorate) is ignorance.
I agree that path dependency is a big part of the problem; few if any politicians have a cue (although they talk confidently to disguise that) so they carry on as normal and blank out any evidence to the contrary.
What will ‘punctuate’ this? One candidate has to be the sudden withdrawal of foreign credit and consequent collapse of sterling. We are able to carry on as normal for now only because the UK is seen as less risky than the Eurozone but someone on R4’s Today earlier this week put our overseas debt at 400% of GDP and rising fast which is the real way we’re “not paying our way”. Osborne’s obsession with the government deficit only obscures that that is a internal distributional issue – which he naturally doesn’t want to highlight.
Is it significant that just in the last few days I’ve suddenly started to see reports by the more alert financial types that sterling is a sell? Some are quietly beginning to short it apparently.
I think the sterling risk really low: our debt is at least as good as the market’s in general
I cannot see this as the catalyst for change
I could also be wrong
Mark – the IPPR did carry out a John Smith style “social justice exercise” over the last 2 years, published as “The Condition of Britain” – sadly it wasn’t very good. See my review at: http://www.renewal.org.uk/articles/kayte-lawton-graeme-cooke-and-nick-pearce-the-condition-of-britain
Thanks – I will ahve a look-see.
“Do not trust the cheering, for those persons would shout as much if you or I were going to be hanged.” Oliver Cromwell.
BTW, recalling Christopher Hill, Quakers weren’t pacifists at all in their early Civil War days were they?
Early Quakers were pacifists: the position was clear very early on
They were obstreperous though!
I think some of the early Quakers were part of Cromwell’s New Model Army, though by 1660, Margaret Fell made this statement to Charles II:
‘
‘All bloody principles and practices we do utterly deny, with all outward wars, and strife, and fightings with outward weapons, for any end, or under any pretence whatsoever, and this is our testimony to the whole world. That spirit of Christ by which we are guided is not changeable, so as once to command us from a thing as evil and again to move unto it; and we do certainly know, and so testify to the world, that the spirit of Christ, which leads us into all Truth, will never move us to fight and war against any man with outward weapons, neither for the kingdom of Christ, nor for the kingdoms of this world. ‘
raise import duty ,make things .buy british
Is the industrial capacity just going to spring out of the ground with this measure?
Why should it if people have increasingly little discretionary spending and what they have will be hoovered out through monetising necessity?
Richard, why do you think that none of the other parties are coming out and saying that the deficit is not a problem, as per your analysis above? Labour have an opportunity to make themselves look like a genunine alternative, but instead are tacitly accepting the terms of the debate – the debate is being controled by the conservatives
The narative is as follows as far as I can see:
The deficit is a problem therefore vote tory as they are the only ones tough enough to make the necessary cuts, otherwise we’ll end up like Greece or Ireland
Labour’s response generally (although it does seem to be changing slightly) is “no no – we are also tough enough” rather than denying the premis
I wull do a blog on this
You may want to have a read of the telegraph’s take on it: it is not what you might anticipate and basically bemoans the failure of the government to invest in infrastructure and skills, noting that the main problem with the economy is one of lack of productivity: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11271845/George-Osborne-has-missed-his-chance-to-end-the-British-disease.html
Because, deep down, they agree with all of this. There is no political imagination in the labour leadership and even less courage.
Thgey are sitting this one out,
I think you have hit the nail on the head the defict is not the problem as the bloke who has just come round to fix my leaky roof it is the cost of living which is the problem .
Labour is half way there but are not saying strongly enough that raising wages will stimulate the economy raise Tax Revenues and bring down the deficit but most of all will make people happier and better off.
Having more cuts certainly will not
The problem with raising wages is that it raises costs. If the person stacking shelves in the supermarket get’s a 10% pay rise and the person delivering goods gets a 10% pay rise the goods at the till will cost 10% more so nobody is better off at all: prices and wages have risen in tandem and if tax thresholds don’t keep pace people will be worse off. In fact, as costs rise businesses will try to outsource more and so the effect could actually be bad for the economy.
I think the Telegraph hits the nail on the head: the key is productivity. The UK is useless at being productive. Too many low skill jobs, too much emphasis on the service industry and academic qualifications, not enough on practical and technical skills. And probably billions wasted each year due to crap infrastructure. What we need is investment that increases productivity. We are 20% behind France: that is a huge amount and would make all the difference.
I thought you were Green?
Don’t you realise productivity is increasing Caron input per unit if labour?
It’s a dead measure
@Gareth,
I agree 100% and i would like to add that all the parties are the slave of the City of London, when will have someone strong enough to tackle the tax evasion properly and not having the rhetoric every time near a general election then the british people will vote in masses.
Here it is not Cameron or Blair or Gordon or future Miliband who govern this country but the Mayor of London not Boris but the mayor of the City of London (the square mile)well defined.
That is the reel problem and still today the rich and super rich are celebrating the non taxes for running their sheep across the City and when last time i watched Cameron addressing the people at the night of the mayor of the City ( meal),please notice how he starts who is the first he is addressing
The Green party is the only major party (and I think at 7% in the polls it is fair to call them a major party now!) challenging austerity.
Caroline Lucas has become, in effect, the leader of the opposition in the House of Commons – a quite remarkable feat for an MP whose party only has one MP!
But as nobody else seems to want to bother to oppose the coalition, I think the Speaker (and the electorate) should recognise that that is exactly where we now stand: with just the one solo voice speaking out against this harsh, despicable and totally unnecessary regime of austerity for the poor, while the rich carry on as normal.
Caroline is stunningly good, and it places an enormous burden on her
There is also a real chance she may not be re-elected
I hope Labour supporters in Brighton realise the value of having her in the Commons
I guess I should add that as her occasional co-author I am biased
“Caroline Lucas has become, in effect, the leader of the opposition in the House of Commons — a quite remarkable feat for an MP whose party only has one MP! But as nobody else seems to want to bother to oppose the coalition,”
Come off it. Have you never heard John McDonnell, Jeremy Corbyn, Dennis Skinner … speak in the HoC?
They’re all good
Caroline has more clout
If society as we know it is destroyed I’ll be happy. I gather since the Dutch bankers managed to get their man installed as king here some centuries ago we’ve been nothing more than a battery farm for the banks anyway. I suspect we were forced off the Commons and the industrial revolution happened not for the benefit of mankind but because these events benefited the banks by exacerbating the need within society for what we accept as money, that same ‘money’ being created by those same banks for nothing or next to nothing and given value by their mates in governments by being accepted as taxes. This has had the effect of having all economic activity serve to enrich them to our detriment. ‘Our’ battery-farm society is a bad, bad place then so if Osborne wants to end it, great, I’m with him. When it’s in pieces we’ll have the opportunity to build a better one.
It mostly likely will come to that.
The problem is Bill, collapse hits those on the ground floor hardest.
The conservative coalition are gradualists anyway. They’ve been concentrating on the unempoyed,students and the disabled this term, UC will start putting the screws on the working poor in the next and after that its the middle class.
They seek to work at just the same rate that people will abandon/forget any notions of social justice and security.
I think they must be rather releived how reluctant people are to recognise them for the ruthless aristocracy they are.
A supine, lobotomised opposition and a vigorous vanguard in the media sure helps though.
First they came for…
You are right on the gradualist approach
UC is a front, a prop, nothing more. In practice it’ll never happen. This is where these guys fall down, they might want to be all-powerful world-dominating oligarchs but all they are in real-life is intellectually limited overgrown schoolboys. They need their bums smacking and firmly putting back in their obscure places. I can see that happening eventually but first the general public will have to grasp what’s really going on and many are too busy even to view the propaganda-laden media let alone ferret out accurate reporting. I don’t know how to get past that unless, as I say, Osborne really does destroy society. Go Osborne then 🙂 Perhaps we should all go out and vote Tory next year 🙂
The Tories have gone beyond neoliberalism and into neofeudalism. Only activity which benefits the greedocracy is worthy of support, in their belief. Fortunately it is not true that all “other parties” fail to see this: making it all the more important for the Green voice to be heard, including in televised debates.
Richard, don’t you think you may be crediting Osbourne and co with to much intelligence. Remember the were brought up under the tutelage of the iron lady from Grantham who had a very simplistic view of economics. The fact that this view is also easy to put across to the average punter and is beneficial to Osbourne’s rich friends makes it almost irresistible even to Labour it seems.
Much of this is depressing reading and it appears that the Daily Telegraph is also challenging Osborne’s economic presentations now. I still think that he is trying to carry out the agenda of the international bankers where, in time to come, he thinks he will find a safe retreat.
I think these things are able to happen because we have a tired and stressed populace and a political class that is being deliberately uneducative at best and cowardly, craven and mendacious at worst. The vast majority of the populace is being condemned to spin their treadmills every faster to compensate for the wealth syphoning of the financial sector. Once the treadmills get to a certain speed, the exhaustion and despair might well switch on a light bulb but we are clearly not there yet.
let’s be clear: we are living in a one party state or even a non-party one consisting of an illusory democracy led by marionettes.
I’ve been a bit slow on this as I’ve been laid low with some kind of heavy cold bug (or perhaps mild flu bug – I don’t know what it is) over the last 3 days, and so I missed pretty much all the coverage of the Autumn Statement. I think if these cuts are implemented we are in for a revolution. Osborne’s suggestion on Radio 4 today that the cuts up to now had been achieved without pain is simply ludicrous as anyone who uses public services, particularly in a deprived area, will know; many services are already falling to bits, and working age social security claimants are around £30 bn worse off. At some point – maybe pretty soon – people will start thinking “this isn’t working for me, it’s time to seize the levers of power”.
Howard
The IFS says these cuts are achievable
I wonder what Paul Johnson is on
Making a spreadsheet balance is not the same as holding society together
And the risk it is falling apart is real
I met two women yesterday who appreciate that – Natalie Bennett and Frances O’Grady
Few other leaders do
Richard
Howard-I don’t share your optimism regarding the time scale. The insouciance and narcolepsy in the face of the dominant neo-lib narrative is scarcely believable.
I think treadmills will have to be spinning a lot faster before the light bulbs go on.
I think (as someone implied above) the psychological strain of ditching the dominant narrative when nothing else is effectively circulating makes it harder.
The failure of Labour to tell another story is stunning
IF not now, when?
I’ve never commented on your posts before – ~I’m not an economist and I hesitate a little to speak in such exalted circles – I became very interested in US politics a few years ago – I was writing about sustainability and somehow every obstacle to political action on issues like climate change, renewables etc seemed to lead back to the USA.
At first it was very difficult to unpick the situation there – it’s so far beyond rational it’s hard to find a starting point. With perseverance the picture of astroturfing, false front networks, PACS, colonisation of the machinery of political administrative and democratic process, media collusion with corporate objectives gradually coalesces. The picture that emerges is unbelievable – It smacks of all those paranoid conspiracy sites – it’s so difficult to credit that I’m reluctant to even write about it because I don’t want to be taken for another internet crazy.
Then I start to find out about organisations like ALEC – the American Legislative Exchange council – a nationwide vehicle to promote right wing legislation that has a powerful influence at almost every level of US governance – it’s composed of businesses, right wing legislators and the like. The Tea Party, main funders – the Koch brothers – who own the biggest private energy company in the world. And – goodness me – at it’s height Tea Party activists would have mass rallies and afterwards sit in groups reading Atlas Shrugged – a science fiction book that has somehow almost become a sacred text to the US right. It preaches that poor people deserve to be poor and greed is good.
It’s author – Ayn Rand, developed a political philosophy called Objectivism – George Monbiot wrote about this in one of his blogs a few years ago – and there’s a detailed account of her life in “Ayn Rand Nation” by Gary Weiss. Rand was vehemently anti-communist and had some success as a scriptwriter. In the 50’s she established a rather odd community, one of her acolytes was Alan Greenspan – chairman of the US Federal Reserve for 19 years – and a huge influence on Regan and Thatcher. He denies that the Rand days influenced him – but the development of the neo-liberal political philosophy appears to owe a great deal to Rand’s crazy theories – and the “greed is good” narrative seems to have become the zeitgeist among the US right.
The power of the anti-tax, anti statist stance that has somehow grown from this movement is extraordinary – follow the political news from the states and it is clear that the neo-liberal right actively want to destroy all state institutions – European style social democracy is characterised as “communism”, sustainability is “back-door socialism” things like our health service is anathema to them – the principle tactic of the right in US politics has been to stop government from happening – there’s an active war on the middle classes in the states – ordinary working class people were reduced to minimum wage zero hours contracted service industry workers a long time ago.
The modern US right is utterly opposed to any form of state owned institutions – ideally it would like the role of state reduced to law enforcement and defence. During the last presidential elections not a single candidate would admit to the existence of climate change, all professed more or less fundamentalist christian views – I still feel like I’m a little crazy writing this stuff – but everything I say comes from mainstream sources – it’s not oddball web sites – but openly stated political objectives.
What does this have to with politics in the UK? Remember Liam Fox – Cameron’s minister of defence who was disgraced for malpractice involving a charity called Atlantic Bridge? Atlantic Bridge was established to built stronger links between the right in the UK and the right in the USA. It had strong links with ALEC. I believe Gove and Osbourne has an involvement in the charity – and there’s little doubt it and other mechanisms (Fox News and the Murdoch media empire is another vehicle for neo-liberal ideology)have been a strong interest in the thinking of the British right through the Blair / Brown years.
For me, familiar with the utterings of right wing US politicians, Coalition objectives are very familiar. It’s not really “as if the government want to destroy the british middle classes” it exactly what they do want to do. The kinds of initiatives Cameron and Osbourne have developed and the kind of media manipulation they have used to get it accepted are almost identical to those of the US right – Austerity, tax cutting, subsidies of fossil energy, cuts in essential public services, squeezing public sector wages, cutting public sector work forces, the constant marketing of fear, privatisation – and even the techniques used – no mandate – no manifesto commitment to privatise teh NHS – just do – get in there – wreak maximum havoc – if the other side get in they will be so weak and the scale of the task so great a destructive agenda to transfer wealth from state to private hands will always win in the long term.
The tories used to be the party of the middle classes – they are not any more – they are the party of a hellish elite who only care about accumulation of wealth – they don’t give a damn about duty to the British people – they are in the front line of new age feudalism and want to become it’s Lords
Thanks
You’re welcome
Read any comments section on Murdoch’s “Marketwatch” site (connected to the Wall St Journal), and you’ll get the flavour of your post (“Obama is a communist, etc”). People utterly opposed to democracy, worshippers of the rule of The Laws Of The Market And The Republic and Their Enshrined Freedom To Do As They Damn-Well Please. It was, however, another world until the Tories got in – then it was immediately obvious that they had developed a generation of MPs (remember that they replaced about 2/3 of their candidates after the expenses scandals) whose every utterance was seeped in the attitudes of these US crazy gang Ayn Rand worshippers.
Rand’s idea was that the super-achievers were worth every penny and would simply shut down their corporations if the working class got too uppity. Whereupon we’d all starve because only they were capable of the organisation and innovation required to run a society.
My reaction was that if they tried that they’d actually all be swinging from the lamp-posts’ crossbars by nooses.
I’m glad, however, that more people are coming to understand that this UK government is not making “mistakes”, nor is it “out of touch” – its behaviour has nothing to do with any of these things, nor are they interested in democratic opinion – they organised a fixed-term Parliament, after all. They are simply carrying out, step by crazy step, the requirements of the section of capitalists that pay the most. Bought-and-paid-for, utterly disingenuous and ideologically wedded to moral corruption, they are showing the same face to the British working class that they showed to those of India and Africa in the days of Empire.
Tim
You might want to look at Richard Curtis’ film ‘All Watched over by Machines of loving Grace’ which starts off with a vintage interview with Ayn Rand. She was definitely one egg short of an omlette – and then you find out that Allan Greenspan no less was one of her circle and heavily influenced by her. Even though she created this monster called objectivism, she was far from objective herself.
I’m no conspiracy theorist myself but I’m reading Thomas Piketty’s book at the moment and he does say that the long-term trend is for capital acquisition by the rich – the post WWII period was an anomaly – albeit a good one. Since communism’s been well and truly knocked into the long grass, the ultra-capitalists just smell blood and are going for it big time across the western world and want this all tied up and sorted pronto. How an earth they got away with it after the 2008 crash is just incredible and shows us how weak the democrats in the USA and Labour in the UK have become. Political and economic thinking is now firmly entrenched in the right to the extent that a move to the left would take us to where the poper centre would be.
Paradoxically, the more people who are affected by this, the more likely it might be that a mandate for change will occur but I say that with gritted teeth and with a dollop of uncertainty.
BTW – loved your post.
“Relative to GDP, the budget deficit has been halved to date, thanks primarily to lower departmental spending (both current and capital) and lower welfare spending.”
No it hasn’t!
“Many journalists have fallen for the conspiracy theory of government. I do assure you that they would produce more accurate work if they adhered to the cock-up theory”
–Bernard Ingham
I prefer: “educated beyond their ability, educated without humanity, educated into insanity”
I find it quite staggering that only 2 month ago the people of Scotland went through a very devisive referendum where the result was only accomplished with a late vow (lie)of greater powers to Scotland ,did the people of the rest of the UK keep abreast of all the scare stories ,the lies ,the false promises this present UK government promised in cahoots with the labour party (when have labour and tories been in bed together before)They have lied to Scotland and they will lie to you they are trying to create a division and when you are divided you will never achieve your dreams.