I tweeted this not long ago:
What are we going to do about thi Sunak, Hunt and Starmer (Johnson won't)? You all talk about' fiscal responsibility' and 'sound money'. But when you stop pandering markets how are you going to meet the needs of the people of this country? Answers, please https://t.co/zADVA1dPEi
— Richard Murphy (@RichardJMurphy) October 23, 2022
Note, I deliberately bracketed both leading parties in this as both are dedicated to austerity to appease financial markets, which is wholly unnecessary.
We need answers to this most basic of questions, which is how are services to be maintained?
The simple truth is that we can very obviously educate our children: the resources to do so exist within our society. However, in an economy where the whole focus is on meeting the demands of landowners and bankers that can't happen because they deny us and the government the resources to make all ends, personal and societal, meet.
So who is going to upturn the tables and say people, planet and community above all else?
Nothing else will do.
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I can’t see that happening to tell you the truth.
I think that what the Rentier Rear Echelon (RRE) (the economy’s back seat drivers) and the their political enablers want is debt normalised in every sphere of life.
We are expected to learn to live with it overhanging us and our institutions (schools, councils etc). Then of course with perpetual debt there is perpetual income for the rentiers. It’s perfect for them. Instead of wages, they pay us with debt plus interest.
And we are learning to live with debt aren’t we? And because it enables us to live a life close to some ideal and the keeping up of appearances, we will tolerate it won’t we to forestall shame? We are being conditioned to see debt as normal and just the way of the world.
Has anyone noticed the adverts on TV about being able to check your credit score whilst out on the fly? Do you think that is ‘accidental’? Being in debt will be OK. All that matters is that you pay a bit back – but never enough to get rid of it of course and you will be considered legit!
I’m taking my son around University’s now and all these wide eyed parents and kids (us too) turning up at open days marching into debt peonage with such high hopes for the future. I find it quite sad really. It’s a bit like being herded into slaughter house. You’re sort of trusting but you are little uneasy about it too. And then ‘whack’!
I’m in the early stages of reading Michael Hudson’s ‘The Destiny of Civilisation’ (2022) at the moment and he explains all this quite well. And it is happening right before our eyes.
Turning this around? Well it’s like stopping a landslide. The levels of debt people are carrying – as you note regularly here – are staggering. I saw one 55+ year old talking about £50K of credit card debt on TV recently. He had a new car, nice house looked middle class and affluent!!
There are ways to help turn this around of course – higher wages and investment – but the route has to come through the public sector first as a policy mechanism – getting this done through the private sector could be more difficult.
But I go back to this simple issue that arises here all of the time. People say that surely the capitalists see that you need income/wages to consume things to make capitalism work, so reducing wages does not maker sense.
But contemporary capitalism sees that and its answer is credit! Debt! And it always has been (except previously it was slavery).
It so much depends on the narrative. You say “dedicated to austerity to appease financial markets”..someone else might say “bringing inflation under control”..and inflation does need to be brought under control. Part of this involves supply issues which require longer term structural changes others are to do with the money supply and the currency. It is complicated. I really hope the benefits and public services for those at the low end of society remain a priority. I feel less sympathetic to those who geared up on property at lowest interest rates in a lifetime and believed they would stay low forever. The boom in property has been too dramatic and has gone on far too long. If it continued racing away then it would only store further problems for the future. Given the cost of land and the inflation in building costs the Government is going to have to subsidise the construction of affordable housing.
Mervyn King on Laura Kuenssberg this morning. According to him, the inflation is due to ‘printing money’ during the pandemic. It was predicted, he says. I thought it might have been profiteering. Silly of me!
I was wondering what he thought would have happened if Sunak had not used a form of QE. People would not have been able to buy food or pay the rent in many cases.
My impression is that the fall in GDP was several hundred billion and that the QE roughly replaced that.
If we are to help Ukraine King says we, “have to accept a lower standard of living and not put the burden on our children and grandchildren.”
Keunssberg is asking Starmer if he would increase taxes or make cuts. He is, IMHO, prevaricating. He talks about various measures which though welcome, don’t really address the problem. We have to wait until the election.
Keunssberg refers to the ‘black hole’ in public finances. £40 billion is about 2% of GDP? We are heading for a recession. Are we going to make it worse for most people to ‘balance the books’ ? And if we do, what will change?
Rhetorical questions. I will now walk the dog. Have a good day Richard.
King is a no deal Brexiteer
He said QE Covid was wrong
He did not say how many deaths he would have been happy with
His whole analysis was callous and abusive
Chilling.
But invited onto the program by the BBC.
It beats me why the top job at the BoE has to go to someone who reveals themselves to the world as an economic numpty.
That someone in such a responsible and exposed position is paid so much to give what might as well amount to public readings from “Economics for Dummies” – the one book on mainstream economics which uses the appropriate term in it’s title (although “morons” would be better in my humble opinion) goes a long way to explain the mess we are in.
But the politicians are worse by a considerable margin !
I thought he was inept, incompetent, and appalling, in equal measure. My blood pressure went up, I am sure, listening to his rubbish.
Wholly agree this must be the approach. I have no connection or financial interest with Kate Raworth or her book Doughnut Economics – in which she references Richard – however if you wish a relatively light but – for me – interesting read on how economics could/should change to put people, planet and community first it is worth a read. I particularly like how she demonstrates how irrelevant / inaccurate some key economic models are. Along the same lines, Mariana Mazzucato’s Value of Everything and Joseph’s Stiglitz’s People, Power and Profits.
What astonishes me is why we are stuck with damaged charlatans such as Johnson and Truss when intelligent people (such as those mentioned above) can clearly demonstrate why we must move to an economy and a way of life that is NOT founded on preserving and promoting the interests of landowners and bankers. Indeed, many of their arguments point towards taxing land ownership, etc., as opposed to taxing workers. Seems obvious – and is obvious – but we still seem stuck in this ridiculous situation of ‘tugging our forelock’s’ to the landowners, rentier economy and being led by the financial sector instead of them supporting society and wealth creating economic activity. It is completely upside down but, as indicated in Richard’s blog, Labour are also bewitched by this same economic madness that fundamentally operates solely to protect vested interests (Landowners, Big oil, Tobacco, Big Agri-industry, Finance, etc., and the super wealthy). As a former (wholly useless) former PM once stated: It. Is. A. Disgrace
I’d also add the Pitchfork Economics is a great podcast. It’s US oriented but Hanauer is an enlightened capitalist. Also have a look at the essays on Evonomics.
I can’t see anyone from this generation of politicians doing it, unless their hand is forced by events, like how COVID necessitated furlough etc.
Johnson was probably the most likely chance of shifting discourse and policy away from neoliberalism in the UK any time soon. But we know how that ended.
I’m not saying he would have taken us to a better place than neoliberalism – but he might have disrupted the overton window to the benefit of progressives in future.
It’s quid a sad indictment that someone so comprehensively unfit for public office was the most likely vehicle for that kind of change in years.