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‘What if the Public (really) Understood How Money Works?’ Just think what we could achieve!

Published by Anonymous (not verified) on Sun, 28/06/2020 - 5:54am in

Line graph with downward trend, virus image and word COVID-19Image by iXimus from Pixabay

“There’s something invigorating about people freaking out about modern monetary theory (MMT). They treat MMT as akin to the Ark of the Covenant in the first Indiana Jones movie. They are petrified that knowledge of the financial equivalent of the “holy of holies” will be released to normal people because they project their greatest terrors onto the possibility that the public will be transformed and empowered by their knowledge of matters that much of the financial world has understood for at least a century.”

Dr William Black

 

After having previously been ignored and disparaged for decades by mainstream economists and politicians, MMT has been making the headlines and finding its way into a growing public conversation.

Two significant publications over the last few weeks are challenging the very basis upon which government policy is determined; ‘does it fit with our political agenda, is it affordable’ and ‘how can it be paid for?’

The Deficit Myth’ by Stephanie Kelton was described by Professor Hans G Despain in a review in the LSE blog as a ‘triumph’ challenging, as he explained, the false idea that ‘deficits are irresponsible and ruinous towards the productive political activity of deciding which spending programmes should be prioritised’.

Hot on its heels came Pavlina Tcherneva’s book ‘The case for A Job Guarantee’ described by James K Galbraith as the ‘next big, common-sense idea for economic reform’. And in the words of Paul Prescod in the Jacobin Mag, the Job Guarantee ‘offers an inspiring vision of what society would look like if we utilized the various talents and skills working people possess’

Both these publications have stirred an already growing interest in that hitherto boring subject of economics, showing that far from being irrelevant to people’s lives it is critical to them in terms of human and planetary well-being.

Hitherto sceptical economists are now saying things like ‘well we knew it all along really’ and sovereign currency-issuing governments across the world have suddenly discovered the fiscal levers they denied us previously, to keep their economies from foundering as a result of the deleterious effects of Covid-19. Until now, there has been a depressing failure to make the critical connection between government spending and economic and societal well-being which are fundamentally two sides of the same coin. Whilst people may not make the technical connection, they are now beginning to understand the impact that government policies and spending decisions have on their lives. They live them every day.

Whether on the right, where politicians defer to the market as the wealth-maker, claiming that public services depend on a healthy economy to generate sufficient tax revenue, or the left, who scrabble for a limited pot of tax revenue, preferably from the rich, or through borrowing at low interest to deliver their political agenda, the orthodoxy prevails on both sides of the political spectrum.

After decades of being in the wilderness, MMT is happily beginning to make headway and that is very encouraging. However, over recent weeks, the Empire seems to have been striking back! Sensing a challenge to its economic and political hegemony, recent newspaper headlines are reinforcing the orthodox narrative of the public finances being like a household budget. Fake news to keep the population compliant in the false understanding that there are real financial constraints to public spending and to prepare them for the possibility of more austerity to pay back the enormous, eye-boggling sums spent by the government during the Covid-19 crisis.

In an article last month, the FT asserted that the Chancellor would ‘face tough choices’, and that ‘at some point, taxes will have to rise’. While tax increases would be an unpopular move, it said this ‘would send a signal that ministers are getting the deficit under control.’

And just this week, headlines aimed at eliciting a negative public reaction have dominated the news.

‘Britain nearly went bust in March says the Bank of England’.

And:

‘Borrowing cost set ‘set to rise’ as Bank sells off stock of gilts’

On the right, John Major waded in with a call on the government to ‘borrow heavily…to improve living standards’ and claimed that ‘taxes will eventually have to be increased to pay for an extremely expensive programme.’

And on the left, the Shadow Chancellor Annaliese Dodds said again this week that ‘it is only right that those with the broadest shoulders’, should make a bigger contribution as the UK recovers from the economic effects of Covid-19.

Whilst the IFS think tank couldn’t resist the following:

It is clear that the COVID-19 outbreak – and the public health response to it – will dramatically reduce economic activity in the second quarter of 2020. This in turn will depress tax receipts and add to government spending, increasing government borrowing and in turn adding to government debt […] A key issue is how quickly – and how fully – the economy, and with it the public finances, recover over subsequent years.

The economic pundits, institutions and politicians are reinforcing, as a deliberate tactic, that at some unspecified time in the future there will be a price to pay for all this spending. As Aldous Huxley, author of Brave New World said; ‘Sixty-two thousand four hundred repetitions make one truth’ the implication being that the more a statement is repeated, the more credible it is seen to be. And certainly, over the last decades in terms of discussion about the public finances, the household budget version rules in the public consciousness – even at the expense of its own well-being.

Just a quick look at recent headlines show the pernicious nature of such repetition on the health of the economy and its citizens, who compare the public accounts with their own finances.

It was reported this week that some of the UK’s largest councils may have to declare bankruptcy unless the government stumps up extra cash to cover the extra expenditure needed to deal with the impact of Covid-19. Nearly 150 authorities have predicted a combined budget shortfall of at least £3.2bn. Having already been struggling to deal with ten years of cuts to central government funding for local government, the chickens are now coming home to roost. Even the government’s proposed additional funding package will struggle with an already slimmed down local government infrastructure which includes people and services. However much money is allocated, local politicians and their officers will not be able to repair those losses to essential services quickly.

Also this week, the IFS reported that families who had become unemployed during the Covid-19 crisis would get £1600 less in benefits, on average, than they would have done without the damaging decade of Tory austerity. It warned that the UK, which had entered the crisis with an already less than generous welfare safety net combined with the worst decade for income gains since the 60s, would not ‘provide a good blueprint for a bounce-back’.

Pascale Bourquin, a research economist at the IFS, said that in the last decade the country had ‘witnessed the slowest growth in household incomes since records began as earnings and productivity stalled and working-age benefits were cut sharply’. And added that ‘we now have the dual challenge of trying to recover the ground people have lost in their careers and employment prospects and addressing the problems we already had’.

The narrative of household budgets is pernicious and yet it pervades the public discourse. On the one hand, the IFS recognises the damage austerity has caused and yet on the other still blathers on about the public finances and the national debt, hinting about the future cost we will all have to bear for this increased spending.

When Helen Barnard at the Joseph Rowntree Foundation, which funded the research, talks about ‘Finding a lasting solution’ she is demonstrating, just like the IFS, a woeful lack of knowledge about how governments actually spend. The solution is staring them right in the face.

The government has the power of the public purse to find solutions to unemployment, low productivity, poverty and inequality, not to mention the coming threat of climate change. It doesn’t matter which end of the political spectrum you sit on, whether you are on the right or the left, a healthy economy and societal and planetary well-being go hand in hand and should be a top priority for both.

This week the IMF warned of a deep global recession. This will, without doubt, lead to further poverty and inequality which will be worsened by the prospect of a world ravaged by human-induced climate change if we fail to act now. It is time for the public, politicians and institutions to put away childish analogies about how governments spend – that is if we really want to secure a stable future for those that will come after us.

In the words of Dr William Black ‘What if the public understood how money works?

Well, there might just be a revolution!

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The post ‘What if the Public (really) Understood How Money Works?’ Just think what we could achieve! appeared first on The Gower Initiative for Modern Money Studies.

Radio 4 Programme Next Week Claiming Universal Credit during Lockdown

Published by Anonymous (not verified) on Thu, 25/06/2020 - 8:18pm in

According to next week’s Radio Times, for 27th June – 3rd July 2020, Radio 4 is broadcasting a programme next Monday, 29th June 2020, on Universal Credit claimants and their experience of having to wait five weeks for their first payment during lockdown. The programme’s title is Your Call Is Important to Us, and the blurb for it simply says

The personal stories of people claiming Universal Credit for the first time during lockdown, waiting in isolation for up to five weeks for their first payment to arrive. (p. 119).

The addition piece on it by Tom Goulding on the previous page, 118, runs

In times of prosperity, it is easy to feel detached from the conversation surrounding benefits. But with around three million applying for Universal Credit since the start of the coronavirus lockdown, more people are finding themselves at the sharp end of the process, made all the more torturous by weeks of isolation. This programme delves into some of these individual stories, including a warehouse manager who has been forced to shield and saxophonist who has moved back in with his parents. For balance, we also hear from staff of the Works and Pensions department on how they have coped in the crisis.

I think part of Tory policy towards the poor, the disabled and the unemployed was always about keeping the numbers below a certain level so that they voting base wouldn’t become too alarmed and start to wonder if it would happen to them. If it did, then some of them might actually catch on to the fact that they really aren’t doing anything to help people, just punishing and victimising them for being poor and daring to be a burden on society, or rather, the super-rich. This strategy is obviously threatened when a significant part of the workforce is suddenly thrown out of work, or furloughed, as has happened during lockdown.

Labour should have been protecting these people and holding Johnson and his gang of thugs and profiteers responsible for their continuing persecution of the unemployed and the disabled. Despite everything, the Tories have continued with their dreadful, murderous policy of austerity. But Starmer has said zip about all of this.

As for the DWP and its staff, I dare say some are genuinely conscientious people, who care about their clients. But those are not the qualities desired or encouraged by the Department’s chiefs, like the odious Iain Duncan Smith. Their concern is simply to get people off benefit. If they can’t find them work, then they invent utterly fake, spurious reasons to sanction them, all to provide the tax breaks the Tories give to the 1 per cent. When questioned about their policies, the Tories simply lie, and I have no doubt that is exactly what many of the staff interviewed on the programme will do in order to justify what is frankly unjustifiable.

The programme’s on at 11.00 am, if you want to listen to it.

Score! Football Marcus Rashford Gets Government to Provide Free School Meals During Holidays

Published by Anonymous (not verified) on Sat, 20/06/2020 - 5:50am in

Kudos and respect to Marcus Rashford, the Manchester United and England footballer, for managing to get Boris Johnson to supply free school meals during the summer holidays. Rashford had written an open letter to our comedy Prime Minister urging him not to end the current scheme of supplying vouchers for school meals to families, who otherwise could not afford to feed them at lunch time. Rashford was interviewed on BBC news, where he remembered having used food banks and free school meals when he was a child. He also raised £20 million to help poor families avoid starvation and other problems with the charity FareShare.

Johnson, as your typical Tory, initially refused. He said instead that he was going to make £63 million available to local authorities to help the poor obtain food and other necessities. But this is only a fraction of the £115 million that would be spent on free school dinners. Robert Halfon, a senior Tory, also broke ranks to argue that, under Johnson’s scheme, the money would never reach those who needed it because it was too bureaucratic. Johnson also tried palming Rashford and his supporters off with another scheme, in which the government would spend £9 million on holiday activities and feeding 50,000 needy sprogs. This is 1.67 per cent of the three million or so children going hungry thanks to the government’s wages freeze and destruction of the welfare state.

Mike one of his articles about this has put up a number of Tweets from people decrying Johnson’s miserly, spiteful attempts to stop children continuing to receive school meals. One of them is from Damo, who pointed out that the government can find £150 billion to help out big business, but can’t find £115 million for hungry children.

Ghoul Johnson spits on footballer’s school meals plea – he wants millions of children to STARVE

Finally, after realizing just what a public relations disaster this was, Johnson gave in. Rashford duly Tweeted his appreciation of the support he had received from the British public. But as Mike reminds us, Johnson only finally conceded to grant the meal because the campaign was led by a celebrity. Mike concluded

England in 2020 is a place where the government deliberately tries to harm its citizens…

… and where it only gives anything back in fear of harmful publicity from a campaign by a highly-visible public figure. If Joe Bloggs from a small village had run this campaign, your children would be skin and bone by September.

See: https://voxpoliticalonline.com/2020/06/16/tories-cave-in-to-rashfords-school-meals-campaign-with-scheme-for-holidays/

And where was Starmer during all this? 

As far as I am aware, Starmer said and did precious little. I think he might have made some approving, supportive comment after Rashford won his victory, but that’s it. And it’s not good enough from the head of the Labour Party.

But what do you expect? Starmer’s a Blairite, and Tony Blair’s entire strategy was to take over Tory policies in an attempt to appeal to their voters, while assuring them and the Tory media that he could do it better than they could. Meanwhile the British working class was expected to continue to support him out of traditional tribal loyalty and the fact that they had nowhere else to go. This resulted in Labour losing many of its members, to the point where even though he lost the elections, Corbyn had far more people voting for him than Blair did.

The result is that Starmer is dragging us back to the situation of the late 90s and first years of this century, when a genuine left-wing opposition fighting for working people and traditional Labour issues, was left to organisations outside the political parties. Organisations like Disabled People Against Cuts, who fight for proper welfare support for the disabled, anti-austerity groups and campaigns to save the NHS from privatisation. They’re doing what Starmer should be doing and conspicuously isn’t, afraid he might offend all those Tory voters he wants to support him. As against a real Labour leader like Jeremy Corbyn.

Marcus Rashford deserves full plaudits for his work to get deprived kids proper meals.

And Johnson and Starmer, for their initial lack of support for the scheme, are nothing but a disgrace.

 

Boris’ Lockdown Delay Killed 30,000 People

Nonessential shops reopened on Monday, and the Beeb news was all about hordes of people queuing outside Primark. This will no doubt boost the spirits of Boris and the Tories, who care more about the economy than human lives. Boris’ lead in the polls has collapsed over his mishandling of the Coronavirus epidemic. The last time I heard anything about it, he was at -2 and Starmer was way ahead of him. And after the scandals of the government’s failure to provide adequate supplies of PPE, of deaths from the disease now having reached 40,000 and still climbing, of the massive increase in the deaths of the elderly and vulnerable in care homes there have been the additional scandals of Dominic Cummings breaking the lockdown rules to drive 240 miles to Durham and Robert Jenrick approving the development of Westferry in London after Richard Desmond sent the Tories a £12,000 donation. And then there’s the mass BLM anti-racism protests. BoJob is therefore going to be looking for some good news to distract attention away from the real problems his vile government is in. He’s no doubt hoping that people will be so delighted at the partial lifting of the lockdown and being able to get out and spend their cash again, that they’ll forget all about the deaths, misery and corruption.

So let’s remind them. Last Thursday Zelo Street posted a devastating piece about the news from Channel 4, the Financial Times and the Groaniad that Professor Neil Ferguson of Imperial College had estimated that if Johnson had imposed the lockdown a week earlier, the death toll from the disease could have been halved. This is the real death toll from the disease, which is believed to be above 60,000 instead of the government’s figure of 40,000. Prof. Ferguson believes that if this had been done, 30,000 lives could have been saved. Despite Matt Hancock appearing on Andrew Marr’s show telling everyone that he was sure that lives wouldn’t have been saved if this had happened, Newsnight’s Lewis Goodall considered otherwise. Zelo Street’s article quotes him thus:  “Neither Vallance nor Whitty directly demur from Neil Ferguson’s assertion that the death toll could have been halved if lockdown measures were introduced earlier. They both say, in various forms, that lessons will have to be learned. PM chooses not to answer”.

Paul Waugh on Twitter also noted that Whitty, one of Boris’ advisers, had said that we were not at the end of the epidemic, but in the middle of it. He also reminded everyone that Boris had also said, nearly 12 weeks ago, that in 112 weeks’ time Britain would have beaten the virus and sent it packing. Well, we haven’t. It’s still there and killing people. Then Channel 4 announced that it had seen a leaked paper from one of the government’s advisory committees calling for a lockdown two weeks earlier than when Boris finally bothered to do it. The paper was by Dr. Steven Riley, also at Imperial College London, who believed that the policy Boris was then following of mitigation would lead to 1.7 million deaths. He therefore called for the government to turn to the strategies adopted by Hong Kong, Japan and Italy of ‘successful ongoing control’ – in other words, lockdown. Prof. Ferguson said that the epidemic had been doubling every three to four days before the lockdown had been imposed. If it had been done a week early, the death toll could have been reduced by at least half. And on ITV’s Good Morning, the former government chief scientific adviser Sir David King said that if the country had gone into lockdown a week earlier, the final death toll would only have been less than 10,000.

Zelo Street quotes a Tweet by Tom Hatfield, who declared that the government didn’t impose the lockdown when it should because Boris and the Tories were more concerned about the economy than keeping people alive. They failed at both, because it’s ‘bollocks’ that any one country can come up with a trick in today’s globalised economy to prevent a global economic crisis. ‘They killed people for nothing’, he concluded.

The response of the Tory press was predictable. They poured scorn on the estimate, and carried on their personal attacks against Prof. Ferguson, despite the fact that he was supported in his beliefs by the other scientists Anthony Costello and David King.

Zelo Street concluded its article with

‘The deflection, pushback and whataboutery confirm this is news that cannot be merely swatted away. Alleged Prime Minister Alexander Boris de Pfeffel Johnson got it horribly wrong; he and his ministers misled the public deliberately and shamefully. And as a result, tens of thousands died needlessly. That is the reality of the situation.

The families of the 30,000 should get an explanation. But they probably won’t.’

https://zelo-street.blogspot.com/2020/06/boris-legacy-30000-more-deaths.html

Absolutely. And governments, the WHO and other international health organisations have known that something like Coronavirus was coming for a very long time. Meera Senthilingam in her book Outbreaks and Epidemics: Battling Infection from Measles to Coronavirus (London: Icon Books 2020) quotes Mike Ryan, executive director of the Health Emergencies Programme at the World Health Organisation, said that an airborne version of Ebola or a form of SARS that was even slightly more transmissible would be enough ‘to bring our society to a halt’. And she observes that this prediction has been confirmed with the emergence of the Coronavirus and the subsequent national lockdowns, the border and school closures and the cancellation of events and their disastrous consequences for business.

Mike, Zelo Street and other left-wing bloggers and news sites have posted endless reports revealing how the Tories cut the preparations the Labour government had put in place to guard against an emergency like the Coronavirus. They’ve also revealed that Dominic Cummings and other senior Tories were so taken with the eugenicist doctrine of the survival of the fittest and the desire to protect the economy, that they were determined not to impose a lockdown. And if that meant a few old people dying, ‘too bad’.

Well old people have died, along with the disabled, children, and even those, who were in otherwise excellent health. It’s also carried off the dedicated, heroic doctors, nurses, carers and other vital workers, who have been doing their level best to treat the sick and keep the country running. We’ve all been impressed by their immense dedication and how they’ve worked long hours at great personal risk.

The opposite has been true of Johnson. Not only was he murderously complacent, he was personally idle. The Tories have been trying to portray him as a heroic leader, who has himself worked long hours to combat the disease. But this is a myth, a conscious piece of propaganda, like the way Mussolini put a light in his window at night to convince Italians that he never slept. Boris didn’t bother attending the first five Cobra meetings, and doesn’t like working weekends.

Deaths were unavoidable. But if Boris had acted sooner, if we hadn’t had ten years of Tory misgovernment, during which the NHS has been run down and privatised, poverty massively increased and government preparedness decimated, all in the name of austerity and giving tax cuts to the rich, 30,000 people would still be alive.

Boris Johnson and the Tories are definitely hoping that the reopening of the High Street will bring good news from now on, and that everyone will forget this horrendous death toll.

So let’s keep on reminding him and them.

Boris has killed 30,000 people. And that doesn’t count the hundreds of thousands already murdered by austerity.

Nothing is written in stone. There is an alternative. Let’s make this the era of people power; we can do this!

Children wearing school uniform holding a chalkboard with the slogan "We are the future"Image by Gerd Altmann from Pixabay

‘Our economic and social prospects in the coming decade depend on today’s policies. The recovery will not gain steam without more confidence which will not recover without global cooperation.  Governments must seize this opportunity to engender a fairer and more sustainable economy. Prospects come from dialogue and cooperation at national and global levels.’

Laurence Boone – OECD Chief Economist

In the week that it was reported that in April the UK economy suffered a record slump with GDP plunging by 20.4%, the OECD suggested that it would likely suffer the worst damage from the Covid-19 crisis of any country in the developed world. It also noted in its most recent report that the global economy was now experiencing the deepest recession since the Great Depression in the 1930s, with GDP declines of more than 20% and a surge in unemployment in many countries.

It is clear that whilst many countries are now coming out of lockdown, the fear of a second wave and ongoing public and business uncertainty will continue to impact on future economic activity. Just this week there has been a slew of redundancy announcements.  BP is planning to cut its workforce by around 10,000 worldwide and in the UK British Gas by 5000 and the Chemicals firm Johnson Matthey by 2500. Heathrow is also launching a redundancy programme as the number of flights and passenger traffic has plummeted, with no sign of any recovery as travel restrictions continue.

This, unfortunately, represents just the tip of an iceberg threatening to sink economies around the world without continuing and adequate state intervention through increased spending. The ManpowerGroup, in its employment survey published this week, found that companies in all the major sectors of the economy are more likely to cut jobs than to hire over the next 3 months and revealed that it was the weakest forecast since records began in 1992. It has been estimated that the unemployment rate in the UK could reach 10% during the second quarter of 2020.

A report by Pro-Bono Economics also published this week reveals that despite the government bailout in April, one in 10 UK charities are facing bankruptcy by the end of the year as a result of financial shortfalls triggered by mounting demand for their services and lost fundraising income due to shop closures. The study said that two-thirds of smaller, local charities had made significant cuts to their services and one in eight were expecting to have to terminate their operations. According to the report it had also forced some big-name charities to use public donations to support those services provided under contract to local authorities and central government (we will return to this later on).

Alongside the economic consequences of the pandemic, Sara Caul, Head of Mortality at the ONS (Office for National Statistics) noted in the statistical report of deaths occurring between1st March and 30th May, that people living in more deprived areas had experienced Covid-19 mortality rates more than double those living in less deprived areas.

Not only are we faced with the very real tragedy of Covid-19 and its effects on the lives of those who have lost loved ones and those that have witnessed the ravages of the disease in our hospitals and care homes, the IFS (Institute for Fiscal Studies) in its Deaton Review observed this week how existing deep-rooted inequalities lay at the heart of the current disparities identified between UK regions.

The IFS then suggests that inequality can only worsen if ministers fail to act, and risks entrenching already deep divides. But confusingly and at the same time as recognising this, then goes on to suggest that the crisis is likely to leave challenging legacies for inequality given that the government’s capacity will be constrained by record peacetime levels of debt.

LET’S STOP RIGHT THERE.

Whilst the IFS deplores the existence of inequality and identifies some of its causes, it fails to grapple with the primary reason why inequality has risen and indulges in a false story which suggests that addressing it will be hindered by the already high levels of government debt.

What the report fails to mention, is that those disparities exposed via the pandemic are linked to the systemic frailty of a decaying economic paradigm. The decades of low wage growth which have left households unprepared financially to face involuntarily imposed unemployment as a result of Covid-19, the stark inequalities that have arisen as a result of an economic system which has penalised working people and impacted on access to good healthcare, education, housing and essential public services. It reveals how government, via its policy decisions and through a decade of austerity and cuts to public spending, has left a landscape ravaged by rising poverty and inequality. It has impacted communities across the country, particularly in the South West and the North, where cuts to local government spending, combined with increasing job insecurity and low wages have affected both poor white and ethnic populations to also create fear and societal division.

David Cameron’s big society, namely the charitable/voluntary sector, has also been affected by fallout from austerity, combined with the economic effects of Covid-19 on its finances.  Years of cuts to local government grants have, in their turn, affected many local charities who were already financially stretched. Closure of fund-raising avenues has left many faced with difficult decisions. This highlights what happens when government shifts responsibility for the provision of essential services to the charitable, voluntary sector whilst at the same time cutting public expenditure.

We are facing a disaster of monumental proportions. The economic fallout from Covid-19 is bad enough, but when combined with the threat posed to human existence by climate change, it is ethically and morally indefensible to hide behind false narratives which are designed to limit the actions a government can take to address these issues.  The crisis is systemic and it is incomprehensible that our leaders, along with think tanks such as the IFS and media hacks, are still working hard to keep the hierarchies of power in place with false narratives about how money really works whilst a credulous and uninformed public accepts the dominant paradigms as being unquestionable and unassailable.

For the moment the public purse has been opened to avert economic disaster but as GIMMS has discussed before how long will it be before the old narratives about unaffordability and paying the debt back creep back into the political and public discourse?

As Professor Prem Sikka wrote in a recent article ‘the right will try and push for a new round of cuts after this crisis. It would be economically illiterate to do so…It’s time to bust some neoliberal myths about debt’

If we continue to allow such myths to dominate, the consequences will be dire for the current and future generations.

As Covid-19 has dominated the news for weeks, it has already been made clear that health and wealth inequalities have played a tragic role in deaths, which combined with the future challenges posed by climate change will be a make or break moment for real and sustainable change.

In an open letter this week the UK Health Alliance on Climate Change, formed in 2016, urged the government to follow its six principles for a healthy recovery from Covid-19. It made clear its position that the health of the planet and the health of people are intimately connected and as such future government action must prioritise the health of both.

Whilst those principles are vitally important and essential to any future governmental policies it will be, as Prem Sikka has already observed, only be a matter of time before the issue of affordability and increasing government debt to pay for it will be raised.

However, without a sea change in the political market-led ideology which currently guides government policy, along with the acceptance of the very real resource constraints which all governments face when making their spending decisions, then those six principles will see little chance of being enacted to deliver those public purpose goals to secure the future.

Furthermore, whilst we remain mired in the household budget version of how government spending happens, we will equally accept its spending limitations and thus our own demise as a species.

This is our wake-up call to protect future generations, not from tax burdens as the orthodoxy prescribes, but from the burden of environmental decay and increasing climate uncertainty.

An economic recovery will depend on a new economic paradigm which puts people and the planet first – not more of the same with an environmental extra tagged on.  A Green New Deal combined with a Job Guarantee to allow a smooth and just transition is the way forward. That can only be underpinned by an understanding that government is not limited by money, but by the resources it has at its disposal to deliver its objectives. We can’t allow past narratives to dictate the future.

As a nation, it will be up to us to decide whether we go forward or stay stuck in the exploitative and destructive paradigm which is currently dictating the economic recovery in terms of more unsustainable growth, more futile consumption to feather the bank accounts of global corporations and more eco destruction.

Our future depends on understanding what is possible and what is not. And getting informed is the first step towards a better understanding of the choices we have.

As such, GIMMS can’t end this blog without a mention of two important books which were published this week, and which complement many others before them.  Firstly, The Deficit Mythby Stephanie Kelton shatters the myths that prevent us from taking action because we can’t get beyond the question of how we can pay for it. Whilst written for an American audience, it is equally applicable for the UK.

And secondly, ‘The Case for a Job Guarantee’ written by Pavlina R Tcherneva, which challenges the idea that unemployment is unavoidable and necessary for an efficient economy and invites us to imagine quite a different world where unemployment is eliminated and which has implications for the wider context of a Green New Deal.

And if you missed this first time around, readers interested in historical background and learning more about how money really works in the post-gold-standard era couldn’t do better than ordering Bill Mitchell and Thomas Fazi’s jointly co-authored book Reclaiming the State’.

And finally, don’t forget GIMMS website, which is a fount of information for anyone – from beginners through to those wanting more detailed information. Starting with our information sheet An introduction to Modern Monetary Theory’.

 

 

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The post Nothing is written in stone. There is an alternative. Let’s make this the era of people power; we can do this! appeared first on The Gower Initiative for Modern Money Studies.

To talk about the future is only useful if it leads to action now

Environmental protester at a demonstration holding a sign with a clean Earth and a dirty Earth and the slogan "You Decide"Image by Dominic Wunderlich from Pixabay

‘To talk about the future is only useful if it leads to action now.’

E F Schumacher: Small is beautiful: Economics as if people mattered.

The Bank of England in its Monetary Policy Report for May 2020 noted in its summary that the ‘unprecedented situation means that the outlook for the UK and global economies is unusually uncertain.  It will depend critically on the evolution of the pandemic, and how governments, households and businesses respond to it’.

Already, the consequences are being felt around the world and there remains great uncertainty about the future.

In April the price of oil plummeted into negative regions as world economies slowed due to COVID-19.

At the end of April, it was reported that two million Bangladeshi jobs could be at risk as western high street clothing shops closed their doors for lockdowns. Bangladesh is a major garment exporter and reliant on European and American orders with some 83% of its export revenue linked to the garment industry.

Factories across the textile sector in countries like Bangladesh and India are still struggling to stay afloat. There have been closures or reduced working hours which have had a devastating effect on jobs and income for those employed in a sector which already relied on poor wages and bad working conditions to compete.  The dependence of globalised trade on outsourcing and just in time logistics to be competitive is exposing structural weaknesses and emphasising its exploitative nature on both domestic and foreign populations. Pull one piece from the jigsaw and the whole edifice comes crashing down.

Since lockdown, many high street businesses have been forced to close their doors as well as those with a global reach.  Airlines have scaled down their domestic and global operations, grounding planes and staff with the prospect of thousands of job losses. Rolls Royce has also confirmed that it would be making significant redundancies in its civil aerospace business both here and abroad.

In response and across the piece fiscal interventions have become the ‘mot du jour’ not the least in the UK.

Whilst one can argue the detail about how it was done and point out the flaws of the schemes which has left many working people without support, Sunak’s fiscal intervention was the right thing to do. However, whilst the Chancellor acted quickly to protect working people, he did so in line with Conservative neoliberal ideology by channelling money into big business and not just through signing contracts with already discredited companies like Serco to provide government services with no accountability built in.

Last month the Treasury and the Bank of England, following a campaign by Positive Money announced that the names of those companies which have been bailed out through the Covid Corporate Financing Facility would be made public. The scheme allows ‘investment-grade’ companies to sell short term debt to the Bank of England thus allowing access for Britain’s biggest corporations to billions of pounds of cheap funding. Fran Boait from Positive Money said ‘“The Covid Corporate Financing Facility was serving as a secret bailout vehicle, allowing Britain’s biggest corporations to access public money without the public having to know.”

It has been revealed that among the companies which have benefited are Stagecoach, G4S, Rolls Royce, Easy Jet and Intercontinental Hotels. So far 152 companies have taken over £16bn with an expected total bailout of £67.7bn.

However, as the SourcenewsScot reported this week, one in five of firms receiving bailout money are airlines, oil and gas or car manufacturers and ‘the only strings which are tied to this cheap money is a request by the BoE to be restrained in paying dividends. It doesn’t matter if they are climate polluters or tax haven users or have exposed their workers to harm during the pandemic, the BoE will bail them out if they are making a ‘material contribution’ to the UK economy just so long as they are also corporate giants.’ So much for the government’s expressed commitment to a green economic recovery at a time when such commitment is vital.

Positive Money has also warned that it may not be long before they are back for more given that this crisis is unlikely to be over anytime soon.

It is yet again more evidence that the UK government with the power of the public purse can bail out whomsoever it chooses, just as it did the banks in 2008, with not a taxpayer in sight.

For many small high street businesses and medium-sized enterprises which are struggling and desperate to get back to some sort of normality, the future remains an unknown. The economic and employment uncertainty is likely to continue. This, along with the cumulative effects of reduced incomes on salaried workers and reliance on minimal state support for many self-employed (for those who are eligible for it at all) may cause people to be cautious about future spending.

Figures show that during lockdown consumers have been spending around £17.9bn less per month into the economy as spending habits shifted to accommodate the new normal. According to figures published by the Bank of England, in April households also repaid record amounts of debt accumulated on credit cards and personal loans amounting to £7.4bn. Whilst at the other end of the scale, figures from the Bank exposed a sharp increase in business debts as a result of the drop in sales.

At the same time, the New Policy Institute calculated that the richest 20% of UK households will have likely saved £23bn by mid-June, which is more than six times as much as the savings made possible by the poorest 20% of households. Even if the pandemic were to stop dead in its tracks or restrictions were to be eased or lifted, with so much uncertainty confidence may not return for some time yet.

Many businesses, with increased debt and little hope of regaining the sales ground they have lost, may yet go under, thus increasing unemployment. In the light of failing confidence, people may have no alternative but to continue to retrench and/or continue to save.  And those who have suffered cuts to their income, been laid off or furloughed or face the prospect of redundancy and who have never been in a position to save, will further be impoverished thus deepening the wide gulf that exists between the rich and poor and those of ethnic origin in what is an already divided country.

Shockingly it was revealed by the Health Service Journal (HSJ) this week that the government had removed a key section from Public Health England’s review of the relative risk of COVID-19 to specific groups which suggested that discrimination and poorer life chances were playing a part in the increased risk of contracting the disease amongst those with BAME backgrounds.

The HSJ noted Matt Hancock’s response articulated at a daily coronavirus briefing this week when he said that ‘he understood why many were ‘understandably angry about injustices’ and that he felt a ‘deep responsibility because this pandemic has exposed huge disparities in the health of our nation’ [saying also] that ‘much more work’ was needed to be done to understand ‘what’s driving these disparities’ before adding: ‘We are absolutely determined to get to the bottom of this and find ways of closing the gap.’

In the light of his response one has to ask oneself the question where has the government been? The last 10 years of government-imposed austerity, cuts to spending on public sector services, its ideological attachment to low wages and precarious employment to serve the business agenda had already taken their toll before COVID-19 even arrived into our midst. It is incomprehensible that politicians and their appointees don’t know where the inequality and poverty have come from! Wilful ignorance comes to mind.

So where might we be going now?

Rishi Sunak, the Chancellor, announced last week that the Coronavirus Job Retention Scheme (aka the furlough scheme) which has helped protect 8.4 million jobs is to be extended until October and those who were eligible for Self-Employment Support will be able to claim a second and final grant in August. However, his plan to taper pay-outs from August onwards from the current 80% will mean that employers will have to cover the difference.

The ending of the furlough scheme at such a crucial moment will, without doubt, have exactly the opposite effect to the one desired.  It is likely to lead to a steep increase in unemployment as businesses are forced to downsize their operations or go bust; making people redundant just at the time when the world is entering a recession, or worse. The UK does not exist in a bubble – it is also affected by world economic conditions, which are equally distressed.

The impact is likely to be devastating. An analysis published by The Institute for Public Policy Research (IPPR) this week suggests that by the end of 2020, 1.1million more people face poverty as a result of the coronavirus pandemic and that 200,000 more children will be among those expected to be below the pre-virus poverty line as job losses hit family incomes. It says that without urgent action to protect families from financial hardship it would bring the total number of children living in poverty in the UK to 4.5 million – an increase of almost 5%.

Its figures are drawn from Bank of England estimates that unemployment is likely to reach just under 10%, or around 3.3 million people, by the final quarter of the year. Claire McNeil, Associate Director of the IPPR, said ‘The government must apply the same level of ambition it had for supporting businesses and workers … to prevent a new generation of children and their families falling into poverty through no fault of their own.’

What we need now is the combined and continued power of the state and the public purse, to both stave off further damage and begin the vital move towards globally sustainable economies and the pursuit of a more equitable and sustainable sharing of global resources.

The economic policies of the preceding decades have been framed around three false narratives: That global corporations and financial institutions are the wealth makers and must be privileged, that the State is powerless to act in the public interest and that the public accounts are like our own household budgets with spending limited to income (in this case taxation) which requires a firm hand and iron fiscal discipline to keep them in balance.

We are now by dint of this tragedy discovering that the magic money tree, like the magic porridge pot, is showing no signs of running out of funds as Rishi Sunak is also apparently contemplating yet another package of measures to help the economy. The release of information about the details of this package have now been put back until the autumn as Sunak seemingly waits to see what happens. Perhaps he’s expecting an economic miracle!  It has to be said that this is a moment for bold thinking, not delay or prevarication.

In fact, what we now need is a revolution in thinking, not the stale economic orthodoxy which has already done so much damage down the decades.  It is disappointing when three former Chancellors of the Exchequer still frame their arguments in household budget terms when talking about the challenges ahead. It is also disappointing to read the OBR’s analysis of the furlough scheme which speaks in terms of costs to the public finances and debt, when the focus should be on the real benefits of government spending to the nation and its economic health at a crucial time and in terms of investment in the future.

In the case of Osborne, the architect of austerity, it was frustrating to note his continuing adherence to ‘handbag’ economics when he commented in an article in the Telegraph that ‘sadly we are poorer than we thought we were, and either we’re going to have to raise more in revenue or spend less than we were planning’.

It is clear that whilst the cash is being splashed for the moment, the magic money tree is likely to have a limited life or perhaps more accurately will only bear fruit to serve the interests of the global corporations and other wealthy elites. If this remains unchallenged it will not bode well for the future of the UK, not to mention the planet.

If some of us thought that COVID-19 might act as a wake-up call for the future, that scenario is still unclear. Not only in terms of the government’s priorities about who is to benefit from government spending but also looking at the general situation. Pollution levels are once again rising in China and it is expected that Europe will follow suit. The pictures of long queues outside Ikea paint a depressing picture as do the piles of rubbish left in beauty spots by people who travelled hundreds of miles in their cars to get there. It seems that while people were obliged to stay at home, they would bake, connect with one another through Zoom or contemplate a different way of doing things, they are still just as eager to pick up where they left off once the restrictions are lifted.

And yet while we are all dying to get back to normal there is still an existential threat to civilisation which we must address swiftly if we care at all for the fate of future generations whilst we still have some time left.

COVID-19 offers an opportunity to rethink everything and most importantly to challenge the received wisdom that ultimately there will be a financial price to pay for government spending too much! The price we will really pay for continuing with the narrative of financial unaffordability will be the health of our ecosystem and all those who depend upon its resources to enable and enrich their lives in every sense.

We can all play a part in bringing about positive change. However, it is only government with the power of the public purse and an understanding of the resource constraints that all governments face, that can demonstrate the real resolve through its legislative powers at national and local level to deliver public purpose goals. A green recovery is only possible with a government committed to real change in its spending priorities and through pursuing full employment policies. This could be through a combination of an expansion of the public sector combined with a Job Guarantee to allow the transition towards the green economy we need by providing the necessary economic stability.

Let’s not let this opportunity slip through our fingers.  It is only the people that can demand the change we need. It is only people with the correct knowledge that can pour scorn on politicians who continue to adhere to false narratives about how governments spend. The future is at stake now more than ever before.

If you want to know more the GIMMS website is a good place to start the journey to that challenge

https://gimms.org.uk/mmtbasics/

 

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Dispatches: Boris’ Lockdown Delay Killed 13,000

Despite the Tory party and its lapdog media’s attempts to portray Johnson as some kind of Churchillian heroic leader, successfully battling the Coronavirus just as Winston did the Nazis, Channel 4’s documentary series, Dispatches, was much less than impressed. The programme was unfortunately overshadowed by the news that the German police had a suspect for the abduction of Madeleine McCann. That’s a pity, as the programme’s exposure of the sheer indifference and arrogant incompetence of Johnson and his team of eugenicist murderers and looters was devastating.

Earlier this week, Zelo Street posted some of the revelations it made. Senior health experts and medical professionals appeared on camera to say how horrified they were that Johnson was shaking hands with people and criticized Bozo’s announcement on March 12th that the containment phase of the disease was over as ‘leaving an open playing field for the virus’. The Italian health minister, Pierpaolo Sileri stated that he had been told by President Conte that Boris had told him that he – Boris – wanted herd immunity. The Tories have since denied that. But perhaps the most devastating of the various statements made by the politicos, scientists and medical people was that of health analyst George Batchelor. He stated that had the lockdown been imposed earlier, 13,000 may not have died.

13,000 people killed by Boris.

They were killed because the Tories were fixated on running down the health service and implementing austerity. They died because May and Johnson scrapped the plans and the various measures in place for dealing with a pandemic. They died because Boris wanted to ‘get Brexit done’. They died because, unlike every other prime minister, Boris couldn’t be bothered to get of his ample, Eton-abused backside and attend the first five COBRA meetings. They died because he preferred to go home at weekends rather than work.  They died because Tory efficiency measures created an organisation that couldn’t procure the PPE medical workers need to stop themselves dying instead of allowing hospital trusts to get them themselves.

They died because Dominic Cummings was on the SAGE committee and actively interfering in scientific assessment and the framing of an effective policy, regardless of the lies told about this by the Tories.

They died because Cummings and the Tories are eugenicist monsters, who see the poor and disabled as biologically inferior. They are, as the Nazis put it, ‘lebensunwertigen Leben’ – ‘life unworthy of life’. The Nazis murdered the disabled in Aktion T4, murdered in clinics with poison gas, the same technique and ideology that led to obscenity of Auschwitz, Bergen-Belson and the other murder factories. The Tories aren’t doing that – they just simply consider that the state has no business helping the poor at the expense of the rich, and they should be left to die. Cummings said it at one of the Tory meetings. He wanted herd immunity, and if a few old people died, too bad.

13,000 people have been killed by Johnson, Cummings, May and the rest.

If this country actually had real politicians, instead of the politely-bred gangsters now occupying power, this would have caused a scandal and they would have had to resign.

But instead Boris and his chum Cummings hang on like limpets.

Get them out! They have killed too many already.

See: https://zelo-street.blogspot.com/2020/06/maddie-is-new-squirrel.html

 

If you clapped for the NHS and key workers, now it’s time to ACT.

Published by Anonymous (not verified) on Sun, 31/05/2020 - 3:43am in

Chalk board with Together written on it and stick figutes holding handsImage by Gerd Altmann from Pixabay

“Governments stand because people sit; if people stand, governments will sit!”
Mehmet Murat İldan (Turkish writer).

Did you clap for the NHS and key workers? Did you cheer on Captain Tom? Have you been angered by what has happened to some of the most vulnerable in our society both in care homes and in our communities?  If so, then it’s time to take it a step further. Not putting too fine a point on it, clapping and anger are empty gestures without real action and sadly also have acted as a distraction to what is happening under cover of COVID-19.

Before it is too late to reverse the on-going creation of an all-powerful corporatocracy serving the few through government diktat, it’s time to recognise some difficult truths about what has been happening. Not just to our NHS but also to vital national and local public services which have been starved of cash, forced to reduce services and staffing levels and compelled to outsource or privatise those very services upon which we depend for national economic well-being. We are living the destructive consequences of an ideology that claims that private is more efficient, that our public services are dependent the state of the economy for funding and by association the false public assumption that a healthy economy increases tax revenues and enables public services to be paid for.

We are seeing first-hand what happens when the public purpose is subverted to deliver public money into private profit.  As George Monbiot put it in an article this week in his blog: ‘There is a consistent reason for multiple systemic failures the pandemic exposed: the intrusion of corporate power into public policy. Privatisation, commercialisation, outsourcing and offshoring have severely compromised the UK’s ability to respond to a crisis’.

The campaigning organisation WeOwnIT in partnership with the University of Greenwich published a report just over a week ago Privatised and Unprepared: The NHS Supply Chain which suggested our government is ‘asleep at the wheel’ although one might challenge that description for a more accurate one being ‘wide awake’. These are not failures of misdirected policies, they are deliberately constructed market-oriented strategies to favour corporations and serve a revolving door.

In a clear indictment of government actions, it describes a system which has been privatised to supposedly deliver efficiency savings but which in reality has left the country totally unprepared to address the COVID-19 emergency as well as seriously undermining the operation to protect the NHS, care staff and patients. Just in time systems, a fragmented supply structure in the hands of private profit-oriented organisations left the NHS and indeed care homes unable to access sufficient supplies of PPE. Privatisation and outsourcing have proven in the most tragic way that they are not the magic cure-all that was promised.

Worryingly but predictably the government, instead of stopping, is still pressing on with its plans as more and more public contracts are handed out to private companies without any accountability; fragmenting the emergency response even further at a time when it is essential for the government to act in the public interest, not to the advantage of private profit.

However, a privatised supply chain is just one piece of this complicated jigsaw. For decades and almost imperceptibly at least to the public the NHS has been undergoing a radical transformation. Behind its well-recognised public logo now sits a structure which has been infiltrated by private healthcare companies which have been directing the orchestra all with the approval of successive governments towards the creation of a US-style two-tier healthcare service. As our sister organisation, Public Matters, wrote in an article in 2017 ‘the Americanisation of the NHS [is] happening right here, right now.’  It is not a dystopian vision of the future.  Furthermore, this vision goes well beyond the national borders of the UK as Professor Steward Player (co-author of ‘The Plot against the NHS) wrote in an article published in the Socialist Health Association in 2017 in which he indicates that the ‘basic strategy now adopted for the NHS in England has its origins in the business-dominated international circuit of which the WEF (World Economic Forum) is the apex…[and] what is planned for the NHS in England is not a home-grown response…but what the global policy-making elite at Davos sees as a way of avoiding further growth of spending on publicly-provided health care.’

He noted that in early 2012 the WEF had considered that ‘national healthcare systems were increasingly caught between a rock and a hard place as fiscal crises were creating pressures to curb expenditure’. Professor Player also noted that as a result, it had set about the task of helping ‘existing models become sustainable’. The first report, co-authored with McKinsey and Co, looked amongst other things at the financial sustainability of health systems in the context of the level of public debt and declining tax revenues and the second at offering solutions which included ‘rationing, shifting the cost burden onto individuals and raising healthcare ‘productivity’ through delivering more services with fewer resources.’

It is instructive that once again we see the use of a false narrative about public debt and unsustainable spending which has underpinned government policies aimed at delivering a corporate, profit-led world serviced by public spending taps which can be switched on and off at will depending on the political objectives. And again, with the caveat that we’ll need more austerity in the public sector to pay down the debt incurred which in turn will lead to services being sacrificed, yet again, on the altar of efficiency and profit.

And now following Brexit, as if that were not enough, the health service which is already minus the ‘N’ for national’ is also being threatened by a trade treaty with the US. Even if the government has promised that the NHS will not be on the table, given the government’s obfuscation and lies trust in that promise has to be questioned.

COVID-19 is providing the perfect #disastercapitalism opportunity to drive these policies as we remain locked down and fearful for the future and also the daily reminders of the dishonest claim by politicians and their pals in the media who labour the point that someone will have to pay up in the end. Even when that is not true!

The same situation also applies to the Care Sector where, as covered in previous blogs, for the last few decades services have increasingly relied on market provision with tragic consequences, historically and as a result of the current pandemic. David Rowland who is a Director of the Centre for Health and Public Interest noted in a recent article in LSE Blogs that ‘using the market to deliver social care on a low-cost basis had manifestly failed even before the current pandemic’ pointing out that ‘one in five care homes are rated as inadequate or needing improvement, personal care is provided to people in their own homes in 15-minute slots, with the sector as a whole suffering from a 30% turnover rate – a fact which might explain why there are currently over 120,000 vacancies.’  

Like healthcare, the social care system is dominated by private residential and home care all competing for a share of the market, thus creating pressures on wages and quality of care. The workforce has become casualised with increasing reliance on zero-hour contracts.  As David Rowland points out ‘because the state has driven the cost of delivering care down to a bare minimum and because off-shore investors have sought to extract the maximum short-term profit out of the residential care sector, many care providers were teetering on the brink of collapse even before COVID-19 hit. He notes that this has ‘left the financial structure of the industry in such a fragile state that it is not able to withstand even a minor downturn in income or increase in costs’.

Austerity driven from the top has percolated into every aspect of our lives, leaving our local governmental structures unable to provide the necessary expert and logistical support. Privatisation equally has proved to be a killer. In short, whether it’s the NHS or the care sector as TJ Coles notes in his book ‘The Privatised Planet’ ‘the less care you give the more money you make’. And that is the crux of the threat that faces not just us but our fellow planetary citizens

Never has there been a more important time to challenge this ideology that the needs of the ‘market’ should trump public purpose and the creation of a healthy, educated, purposeful nation.

One million people have signed a petition calling for the resignation of Dominic Cummings and tens of thousands have written to their MP. His actions have stirred a wave of disgust at a time of national emergency and solidarity in a way that the loss of our public services has not.  Campaigns and demonstrations organised by committed individuals over the last 10 years have done little to raise real awareness amongst the general public about what has been happening with little or no public accountability.  When you are struggling to pay your bills, rent or mortgage, working for poor wages and in insecure employment, living in bad housing or unable to access good healthcare and education there is little time left to be concerned about the future when the here and now is all-consuming. A rotting economic system has deprived many of the will and energy to stand up.

With a media that has also reinforced the perception that our public services are either unaffordable or reliant on a healthy economy and taxes being paid, the public has not stood a chance to make its voice known. Until now perhaps?

The public has had a full-on very personal encounter with the vital nature of our public and social infrastructure and if change is to happen then it now needs to stand up and demand that our vital public services are not only funded properly but also restored to public provision. As part of that demand and with the knowledge that a sovereign currency-issuing government is not short of cash but more accurately short on political will, it must also challenge politicians and media pundits who are already talking about how it will be paid for.

The message is simple.  The government has the power of the public purse and the power to serve the public purpose if it chooses to do so. As the currency issuer, it neither needs tax or to borrow before it can spend, and that spending will not be a financial burden on future generations. Britain’s national debt which is predicted to hit £2 trillion for the first time will not be ‘the grim milestone’ it is claimed to be by a media pundit yesterday.

The real burden will be a government that has failed to spend sufficiently on delivering public purpose aims for today in the light of the damaging effects of COVID-19 on the economy which will continue for some time to come, and for future generations who will benefit or not as the case may be from government spending policies.

The political institutions, corporations and wealthy elites have gamed the system for their own purpose through domestic legislative means, trade deals and by subverting public funds into private profit. They are still gaming the system.  As Arundhati Roy put it in the Progressive International Our Task is to Disable the Engine’.  

 

 

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Principles for a Post-COVID University

Published by Anonymous (not verified) on Fri, 29/05/2020 - 3:16am in

Statement from the American Association of University Professors chapter at New York University

In ordinary circumstances, most of what AAUP chapters do is reactive—stepping up to advocate for the protection of faculty and student rights when they are under threat. At a time when higher education’s morbid expectation of its future is one of crushing austerity and, for some colleges, extinction, our NYU group decided to be proactive and assemble some principles for a post-COVID university. This was not done because we labor under the illusion that a university can be a morally purified space. Instead, we wanted to honor (by gathering together) the ideas and suggestions and arguments for reforming our institution that we have heard being made by faculty and students over the years. Of course, many of the action items on the list are far above our pay grade, but, at some point, we have to start behaving like self-organizing employees of the more humane workplace outlined here. --Andrew Ross, Professor of Social and Cultural Analysis, NYU

****
Principles for a Post-COVID University
How should NYU play its role in a “just recovery” from the COVID crisis? How can we build on the experience of the crisis and from the opinions, grievances, and solidarity that circulated in NYU communities during this period? In thinking about how the university can sustain and rebuild itself, the AAUP envisions NYU as a more transparent, democratic, caring and resilient institution, prioritizing the equitable treatment and rights of its students and employees, minimizing the cost of attendance, and striving more single-mindedly to live up to its motto—“a private university in the public service.”

For too long, NYU policy has been dictated by debt-leveraged expansionary growth, domestically and overseas, and by an institutional desire for upward mobility as measured by national and international rankings. Post-COVID, and in the spirit of social and ecological sustainability, we would like to see NYU focus on thriving in place rather than reaching after “performance” goals that are defined by financial institutions or managerial value metrics. 

Transparency

With the university’s finances under pressure, now is the time to provide faculty, students and staff full access to NYU’s fiscal affairs.

Participatory budgeting should be a key component of the transition to transparency

Executive policy-making should be open to faculty review, and senior administrators should draw more routinely on faculty expertise

Top-level decision-makers should consult and solicit input from the faculty body before making large-scale policy moves, especially on GNU matters

The terms of operation of global branches – in Abu Dhabi, Shanghai, and other GNU “nodes” -- should be transparent to the entire NYU community.

Democratic

The faculty role in shared governance, as recognized by AAUP principles, should be fully restored and clarified.

The NYU administration should agree and affirm that the Faculty Handbook is contractually binding.

Faculty and students should be represented on the Board of Trustees.

Faculty who are elected, and not handpicked, should serve on committees to choose senior administrators, including the Provost and President.

Minutes of BOT and administrative leadership meetings should be accessible to faculty and students.

The right to organize (including that of contract and tenure-track faculty) should be upheld and encouraged, and NYU should recognize any bargaining unit formed by a majority of its eligible members.

Community-driven town halls and plenary assemblies should be instituted on the NYU Calendar to inform and review institutional decision-making.

Caring
NYU should be a sanctuary campus, prioritizing safety and sanctuary to members of the university and its host communities.

Resources and legal assistance should be extended to vulnerable and marginalized community members.

NYU should not operate branches of the university, domestic or overseas, in breach of its nondiscrimination policies.

Employees and students should have (free) access to comprehensive health care at Langone-Grossman if they choose.

Workplace welfare councils (with faculty, student, and staff representation) should be elected in every university unit to safeguard employee well-being and workplace quality.

Affordable

Every effort should be made to lower tuition and retire NYU’s reputation as poster child for student debt.

NYU’s unequal pay structures should be addressed, including gender salary gaps, salary compression, and the role of underrepresentation of minority faculty.

Senior administrator salaries should be sliced, and nonacademic administrative personnel positions downsized.

NYU should establish a much more equitable range spread between the highest and lowest paid of NYU employees, with total compensation packages included in these re-adjustments.

Salary and student fellowship increases should be tied to COLA, and not merit evaluations.

NYU should secure the steady conversion of NTT into TT faculty positions at every GNU location and in its US campuses; as a preliminary goal, NYU should aim for not more than 25% NTT positions in 5 years across the university.

NYU should extend protections comparable to those that accrue to tenure to all full-time faculty who have served continuously for seven years.

Faculty housing rent should be capped at an affordable percentage of income.

Sustainable

NYU’s carbon footprint should be minimized and its endowed funds should divest from the fossil fuel industry, and all enterprises involved in incarceration, immigrant detention, and military production.

Air travel, to global sites and to academic meetings, should be curtailed.

Cross-disciplinary climate crisis research and study should be prioritized.

New environmental justice and climate justice initiatives should be targeted and funded.

NYU should adopt an environmental stewardship role in downtown Manhattan and downtown Brooklyn, modelling and propagating just practices.

Public Service

Since NYU sits on occupied lands of Lenni Lenape peoples, it should fully adopt a charter of decolonial ethics and practice.

NYU should extend public access (for meetings, workshops, assemblies) to its underutilized classrooms and buildings when they are not being used. It should also seek to provide students across the city access to its libraries and online research resources.

NYU should prioritize pathways for students from New York public schools and community colleges to matriculate at NYU; it should also extend and deepen support to such institutions in other ways that those institutions identify as arenas for collaboration.

NYU should make special efforts to support DACA and undocumented students.

NYU’s reach as a landlord and real estate owner should be surveyed and redefined to help address the city’s urgent housing crisis.

Representatives from Lower Manhattan and Brooklyn communities should have the right to review and participate in the approval of all new building and expansion plans.

Local community representatives should have the right to serve on a committee for developing university-community initiatives that will benefit from NYU’s research and resources.

Racial and Social Justice

Indigenous study and engagement should be instituted and encouraged in all university programs.

NYU resources should prioritize the reduction of institutional inequalities for students, staff and faculty of color, along with LGBTQ, disabled community members, DACA and undocumented students.

NYU should insist on staffing reforms on the part of departments and units with an overwhelming majority of white instructors.

Gender balance and racial diversity should be adopted as an institutional principle of all NYU workplaces.

Truly affordable housing should be made available for faculty of color and first-generation academics who often have higher student debt burdens than their peers and cannot rely on family wealth.

Global University?

NYU should convene a community-wide review of the GNU mission and its record.

Free movement of students and scholars across borders and GNU sites should be guaranteed by NYU and host authorities.

NYU should loudly and visibly protest travel and enrollment restrictions at its GNU sites and NYC campuses and lobby the relevant political authorities to lift those restrictions. In cases where there are boycotts of NYU campuses by faculty and students in other parts of NYU because of these restrictions, NYU should recognize these as fundamental expressions of academic freedom.

Academic freedom protections, in all of the forms and expressions recognized by the AAUP, should be guaranteed across all NYU sites.

NYU should uphold the right of all employees, including those contracted to construct and maintain GNU buildings, to be protected by the ILO's basic international labor standards.

NYU should insist that US authorities remedy the challenges faced by international students and faculty--travel restrictions, embassy closures, and impractical visa protocols.
     
      The Executive Committee of the NYU Chapter of the AAUP
       
         Rebecca Karl, President
         Paula Chakravartty Vice-President
         Andrew Ross, Secretary
         Anna McCarthy, Treasurer
         Fred Moten, Member-at-large
         Vasuki Nesiah, Member-at-large
         Mohamad Bazzi, Member-at-large
         Marie Monaco, Immediate past President
     

‘Two roads diverged in a yellow wood’. The question is which one will we take?

Man standing in a wood at a fork where paths divergePhoto by Vladislav Babienko on Unsplash

Two roads diverged in a yellow wood’ are the opening words of a poem by the celebrated poet Robert Frost. Whilst he was writing about his own personal life’s journey, they are words that could not be more appropriate to the situation that not just the UK, but the planet, finds itself in. The COVID-19 pandemic which has brought world economies to a standstill and threatens a deep recession is uppermost in our minds, particularly those people who have been directly affected by the disease or by loss of their employment. But those immediate threats, devastating enough as they are proving to be with no immediate solutions and a government anxious to get the economy going again regardless of the potential human consequences, are overshadowed by another peril. Climate change remains the biggest challenge of all, risking as it does the very survival of the planet’s ecosystems and by implication human existence.

Our daily routines have until now imposed a false sense of permanence. The illusion that despite the cyclical economic instability which capitalist societies are prone to, everything always, eventually, returns to ‘normal’. Even when normal has patently shifted. We have accepted this as part and parcel of how things are, even when it hurts people. But the severity of the pandemic is challenging that view. We are finding that in addition to the risky nature of life which COVID-19 has revealed, danger also comes from the fact that our economic system has been built on shaky ground indeed – one might say quicksand. The rolling death toll and the degradation of our public services is a daily reminder.

As the country moves towards a lifting of lockdown and a return to semi-normality, we are seeing more cars on the road, beaches crowded with day-trippers, people travelling hundreds of miles to visit beauty spots, the prospect of schools re-opening amidst huge controversy and airlines proposing to recommence flights, the question hangs in the air about what sort of future lies ahead. Whether we can indeed continue along the perilous path of growth we have been travelling along without some sort of future reckoning. And if not, what should our world look like?

COVID-19 and its associated threats have revealed in the starkest way possible that the economic system which prevailed for the last forty years and more has left the world unable to meet the challenges so cruelly posed by the pandemic. All as a result of a toxic neoliberal ideology which has left our public and social infrastructure in ruins, impoverished people as a direct consequence of a globalised world which has kept wages and living standards down and focused on the primacy of the individual over collective action. Politicians have listened to the so-called economic gurus and put their faith in a mystical market as if somehow it alone can direct the orchestra from the celestial podium. Letting it rip to find that non-existent perfect equilibrium by serving global corporations through legislative means, promoting the lie of trickle-down, and claiming that the public infrastructure depends on so-called ‘wealth creators’.

We have paid a heavy price and we are indeed at a fork in the road. Where we go from here is not clear. And yet the choices we make next will make all the difference.

Earlier this week, the President of the World Bank said that ‘the pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty’. The Chancellor of the Exchequer in the same week warned that Britain was facing a ‘severe recession the likes of which we haven’t seen’ which would cause severe damage to the UK’s economy. He also went back on earlier predictions of an ‘immediate bounce back’ as the lockdown was lifted and said that there would be more hardship to come.

This came as the Treasury confirmed that around eight million UK workers have now been furloughed and two million are expected to receive support from the government. The government’s spending has risen massively to support those affected and keep businesses ticking over until such time as a recovery is underway.

Although there has been some talk of more austerity to pay for this spending, even the most hawkish of commentators from neoliberal institutions like the Adam Smith Institute recognise that the last thing we need now is to worsen the prospect of a full-scale depression, even if those observations are still couched in household budget terms. Borrowing whilst interest rates are low or growing the economy to improve tax revenues are the oft-repeated caveats to that spending. Clearly, this is not closing the door to such false household budget narratives.

It is politically expedient to accept the need for spending to stop the economy from collapsing and causing infinite damage to the business infrastructure and profits much as the Labour government did in 2008 when it bailed out the banks. But in time, those narratives will likely be given a fresh breath of life at least in terms of continuing to deliver a political agenda.

It will likely bring the next instalment of austerity for public services and their employees’ wages and carrying on along the well-trodden path which favours corporations by delivering a legislative framework not just at national level but international level through the pursuit of free trade deals.

The state with its power of the public purse being used, not for the public purpose, but for quite a different estate – the corporations and a few wealthy elites. Indeed, this week the media, economists, politicians and political commentators have been priming the public for the acceptance of more austerity by reinforcing the message that governments have to borrow or that government has to collect money from tax revenue or other charges before it can spend.

Both the Huffington Post and the BBC ran articles this week discussing how governments pay for the government’s increase in spending through bond issuance. Peter Hitchens tweeted that Rishi Sunak’s furlough billions were just giant payday loan that the country will have to pay back with interest (at some future date). And Boris Johnson when challenged about the decision to continue charging health and care workers to use the NHS (before the decision to rescind the charge) suggested that the money was needed to run the NHS. Indeed, Captain Tom has been knighted for his work in raising money for the NHS as if the institution was a charity and not a publicly funded organisation which does not require tax or other contributions to fund it.

The narrative being reinforced in in the public’s mind is that at some time down the track it will all have to be paid for through more austerity or increased tax. It is worth repeating here that a sovereign currency-issuing government does not need to borrow in order to spend. Indeed, logically speaking how could it borrow money unless it had been spent by the government first? What looks like borrowing isn’t and bond issuance has quite another role. It is instead a smoke and mirrors exercise designed to give the appearance of borrowing and continue the narrative that governments are beholden to money lenders in private markets or that the markets call the tunes.

Dispelling the myths about how governments spend is a priority if we are to give ourselves half a chance to make a different and better world. As was indicated at the beginning of this blog COVID-19 and recession are just part of this picture. The talk about ‘getting back to normal’ overshadows the biggest threat that we still face – climate change and what our response should be. The false narrative of the burden of debt and paying it back will, if allowed to persist, persuade people that action to deal with any of those threats whether unemployment caused by a COVID-19 induced recession or climate change is unaffordable in the long term. That there is always a financial price to pay.

The reality is that the price will not be monetary, it will be in the lives of people who are unemployed, and a trashed planet not fit to live on. We will be rulers of a dead planet, poisoned by our own hand.

There is an alternative. It starts with knowing about how money works and being able to challenge the current narrative that success is to be judged by how well our politicians managed the public accounts.

Contrary to Mrs Thatcher’s oft-repeated slogan ‘there is no alternative’; there is one.

This is the moment to think about a permanent Job Guarantee to manage both the catastrophic effects of COVID-19 on people’s lives and the economy in terms of stabilising it through ending involuntary unemployment and facilitating the transition towards a green and sustainable world. So much potential but will our government act?

Maybe that time is coming; only time will tell. The political discourse has so far been dedicated to a return to normality, growth and rising GDP.

Fiona Harvey, the environment correspondent in the Guardian began an article this week with a stark warning:

‘Global leaders must heed the lessons of the financial crisis of 2008 when they look to repair the damage from the coronavirus pandemic, leading experts have warned, to avoid entrenching disastrous social, health and environmental inequalities and hastening climate breakdown.

The stakes are high.

Earlier this month the Oxford Smith School of Enterprise and the Environment published its paper ‘Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?

In its introduction, it noted that the crisis had demonstrated that governments can intervene decisively once the scale of an emergency is clear and public support is present. It went on to say that:

‘The climate emergency is like the COVID-19 emergency, just in slow motion and much graver. Both involve market failures, externalities, international cooperation, complex science, questions of system resilience, political leadership, and action that hinges on public support. Decisive state interventions are also required to stabilise the climate, by tipping energy and industrial systems towards newer, cleaner, and ultimately cheaper modes of production that become impossible to outcompete’

Its recommendations for contributing to achieving economic and climate goals were:

  • clean physical infrastructure investment
  • building efficiency retrofits
  • investment in education and training to address immediate unemployment from COVID-19 and structural unemployment from decarbonisation, — natural capital investment for ecosystem resilience and regeneration
  • clean R&D investment.

A state-run Job Guarantee implemented to serve both national and local community objectives offers the perfect vehicle to deliver a green-led recovery and reduce the inequality of past decades. Retrofitting existing buildings, creating cities which are cyclist and pedestrian-friendly, digging trenches for broadband connections, planting trees or putting in networks for charging electric-powered vehicles are just a few examples of the work that Job Guarantee participants could accomplish. Our imagination can determine the rest. Serving the public purpose must be the quest.

A Job Guarantee provides an immediate solution to the problem of rising unemployment to stabilise the economy, an opportunity for training the workforce and, out of the catastrophe of pandemic, also provides the perfect opportunity to start along the path towards a more equitable, greener and sustainable world.

We as a nation may also want to consider what sort of future we want in terms of public infrastructure to serve the public purpose. Do we want more state provision – a publicly provided and paid for infrastructure and employment to ensure that we can meet whatever the future holds? If the current situation is anything to go by, there are lessons to be learnt. Or do we prefer to continue as we are and move into a Mad Max dystopian type world where corporate profit is the guiding light and government is its servant?

Brian O’Callaghan, a co-author of the paper said that it was ‘this is the single biggest opportunity for the government to shape the future decade…’ which indeed it is.

Robert Frost ended his poem:

‘Two roads diverged in a wood, and I —

I took the one less traveled by,

And that has made all the difference.’

Therein lies the challenge. Not directly a personal one in this case but one which involves us all. Do we continue as we are or choose another path for the sake of the future and those that will inherit it?

 

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The post ‘Two roads diverged in a yellow wood’. The question is which one will we take? appeared first on The Gower Initiative for Modern Money Studies.

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