The Tories believe that they have shot Labour's fox because growth has restarted in the UK's economy. Osborne's austerity has delivered the goods. All Labour can say is that most of us have not seen any benefits yet. That's absolutely correct, and we won't see any benefit from austerity ever, just losses - but it does not stop many believing that the Tories got the economy right and Labour got it wrong.
Of course there is a lot of smoke and mirrors associated with the new growth in the UK. It's led by a property boom engineered for the purpose; the economy is still smaller than in 2007; Britain's debt is still the largest proportionately of all the advanced countries after 4 years of austerity etc., etc. Nevertheless, Labour's claim, that their policy of austerity lite would have achieved more growth and sooner, sounds, well, like balls!
Why can't Balls fight Osborne on the economic programme of the Coalition as a whole? Why is he restricted to criticising poor wages and unfairness - as though the problem is that we have had the wrong sort of austerity?
Balls (and Brown before him) were/are classic Keynesian's. But both men joined all the mainstream parties consensus on the need for an austerity policy as well. (For example Labour now insists it is tied to the Coalition cuts for the first two years of their next government and will place its own legal restraints on spending!) Nevertheless Brown and Balls thought that in practise they could amend the impact of cuts through vast cash flows to the banks and, via them, to the stock exchanges which would produce growth and extra taxes (quantitative easing). This was Labour's grand Keynesian idea. Labour's project of spending your way out of the crisis of 2008 would not be wasted unproductively on wages, on government works or on benefits (as Roosevelt had done in 1930s America.) No. Instead cash would be funnelled to big Capital in order to create private investment and enterprise. Government schemes would be 'outsourced' to stimulate the private sector. Banks would get wads of cash to use as loans (from which Banks would profit.) The government's access to wealth through printing money would be directed to those private enterprises, they argued, that could produce growth in the system.
But this is exactly what the Coalition government and the Bank of England have done. They have adopted Brown and Ball's policy wholesale. £350 Billion has been handed over so far. The result is that British business has never been so rich. Big British companies hold £75 Billion as reserves - not including the banks. The stock exchanges across the world have ballooned in value since 2008 - mainly due to the US version of the same policy. None of it produced much growth in the West. Big Capital is on a virtual investment strike in the UK for example. But QE did shore up the system in its crisis. Osborne has used Labour's main weapon of choice and, just as Labour also proposed, is using austerity to pay for it.
It was the austerity drive that all the main parties publicly stated they agreed with from the start. The Labour Keynesians and the Tory Chicago school lined up together on the need for austerity in principle. Austerity was, everybody said, one necessary means to pay our way out of the crisis and reinforce the system while growth might hopefully produce more tax in the future.
But what is austerity? It is seen and discussed as though it was simply some cuts to our 'welfare state' - albeit major surgery. That is the surface of the matter. Underneath the immediate blood letting, austerity amounts to a virtually unprecedented shift of wealth from the huge majority of those who have, or who have had, to work in order to live, to those who do not. This wealth has been shifted from a variety of sources, including what economists call the social wage; health, welfare, education etc. (The poor have little cash assets.) It has also been taken from wages and via non progressive taxation. The shift in wealth has been and continues to be spectacular. This is the essence of austerity.
Where are we today with this policy?
At the moment the national debt has declined from a £1 trillion to about £800 billion in the UK since 2008. Austerity has achieved this great success! And the remaining £800 Billion debt is why austerity has still got a long way to go. The paltry growth now heralded will make little impact on tax receipts and therefore on the debt. The debts of course are owned by finance organisations and by other nations. Behind these institutions stand the wealthiest 1% of the planet's population. They will have their 'loans' re payed (plus interest of course.) And austerity is the means by which we will pay them. The shift in wealth and assets away from the majority in this country to the super-rich is about a quarter of the way through. And that's the point that Balls won't/can't address.
According to a 2014 Oxfam report, the world's 85 richest people own as much as the bottom half of the population. According to a new survey by the Hurun Global Rich List, 56 £billionaires now live in Britain. Approximately half of the country's richest residents are of foreign origin, drawn here by 'the authorities' relaxed attitude to their tax and business affairs.' Among the new wealthy are Farhad Moshiri, an Iranian-British businessman who owns 15% of Arsenal Football Club, and Indonesian petrochemicals and textiles millionaire Sri Prakash Lohia, who spent an estimated £50 million restoring his London home. They appear alongside such established UK billionaires as Sir Philip Green, the retail tycoon, and property magnate the Duke of Westminster. The rich, as in many other fields, seem to have their own immigration policy.
And what could Mr Balls do to counter the Coalition and rally a population tired of politics and politicians and desperate for new answers? Centre his policy around a progressive wealth tax, designed to begin to roll back the enormous shift of wealth away from the majority to the super rich, and develop a plan for the re-foundation of banks and the finance industry on the basis of their legal requirement to serve the interests of the whole people.
What will he do? What's your guess?
No comments:
Post a Comment