austerity

Let’s have a conversation about what our values are and where we want to go. It’s time to recognise, in the words of Howard Zinn, that ‘We can’t be neutral on a moving train’.

Published by Anonymous (not verified) on Mon, 10/02/2020 - 5:10am in

Chalk board with the words "what's next" written on itImage by Gerd Altmann from Pixabay

‘For a decent standard of living, we all need security and stability in our lives – secure housing, a reliable income and support when things get difficult. For too many there is no such security. Millions of people in the UK are struggling to get by, leading insecure and precarious lives. It’s time to take action on poverty and put this right.

Joseph Rowntree Foundation

UK Poverty Report 2019/20

 

Warning…warning…black hole ahead!  No, not of the dense matter variety but one of the financial kind. That is, of course, if we are to believe the doom-mongering headline in the Financial Times this week that ‘Javid is set to miss his surplus target as finances head for £12bn black hole’.  It suggested that if the economy followed the Bank of England’s economic forecast, it would leave the Chancellor with a £12bn deficit by 2022-3 instead of the surplus he is aiming for and he might have to consider tax rises or more austerity to fill this ‘black hole’.

On the one hand, we have some in the government promising to splash some cash on our decaying school, hospital and other public infrastructure, a situation which has arisen as a result of a decade of government deliberately harmful austerity policies. And on the other, a Chancellor promising fiscal prudence having previously, it must be said, declared an end to austerity.  There seems to be some internal conflict on the subject! Oh, to be a fly on the wall in the conversations between No 10 and No 11!

While the planet continues to burn, and our public and social infrastructure further decays, the head bean counters in the Treasury and other public institutions are still tallying the public accounts on their abacuses. One hopes that we are starting to move away from such narratives, but equally one wonders whether the usual economic mantras will again kick back in? The Conservatives have dined out for decades on their reputation of economic competence and fiscal rectitude. They have used it successfully to mount attacks on the previous Labour government with the message that they had to sort out its mess (when the banks were to blame), and to justify dismantling the public and social infrastructure.

It has given them the perfect opportunity to deliver their ideological agenda of reduced state intervention, but at the time pour public funds into private profit. It has sold the public the incorrect narrative that our public services depend on collecting sufficient taxes which, in turn, they say depends on a healthy economy which, in turn, depends on businesses being able to make money with the least regulation possible.

The public has largely gone along with this narrative since understandably it measures the public accounts in the same way as its own.  Of course, private households – that includes you and me – ARE bean counters. We get an income, out of which we must pay our bills and settle any borrowing repayments with anything left over being used for discretionary spending or saving. If there is anything left over, that is.

The same goes for local government, which relies on government funding and local tax collection to fund its services. It also applies to businesses and corporations whose success, or otherwise, depends on their profit and loss sheets.  We are all users of the currency and as such dependent on the whims of government and its ideological agenda. Neither businesses nor local government have currency-issuing powers and nor do individual citizens unless, of course, they are breaking the law!

We have been led to believe that the health of the economy is measured in whether a government can balance its budget or save for a rainy day. We’ve gone down Alice’s rabbit hole and supped the ‘drink me’ potion with dire results. We need to rethink this accounting model which puts financial health above the health of the nation and the economy and does not represent actual monetary realities.

If we haven’t already, we should start by casting an eye over the consequences of the economic orthodoxy which has led to austerity and cuts to public spending.  Only this week the Joseph Rowntree Foundation published its report UK Poverty 2019/20 which provides a stark reminder of the dire effects of both the Conservative ideologically driven policies and its austerity agenda. The CEO of the JRF Claire Ainsley described the new government as having a ‘historic opportunity [..] to loosen the grip of poverty among those most at risk’ although its criticism fails to point the finger directly at government policies which have led to rising poverty and reinforced the gap between the rich and working people. It also fails to acknowledge an understanding of the long-term agenda that austerity has been – a cover for reduced state intervention, less democratic accountability and the promotion of the notion of self-reliance and personal responsibility.

The statistics should shock us:

  • The poverty rate is at 22% with little change in recent years
  • 5m people were destitute at some point during 2017 including more than a third of a million children.
  • Seven per cent of individuals have been in poverty for more than two years
  • Around 14 million people are in poverty in the UK, more than 1 in 5 of the population made up of 8 million working-age adults, 4 million children and 2 million pensioners.
  • In-work poverty has risen from 9.9% in 97/98 to 12.7%.
  • Around 56% of people in poverty are in a working family compared to 39% 20 years ago.
  • Seven in 10 children in poverty are now in a working family
  • In 2017/2018 31% of the 13m people with disabilities in the UK lived in poverty; that is around 4 million people.
  • There are 4.5 million ‘informal’ carers in the UK, of which nearly a quarter were living in poverty. More than half were women and three-quarters of working age.
  • Rates of poverty amongst Bangladeshi or Pakistani households is nearly 50%

This is but a small snapshot of the report which you can read in full hereBeneath these statistics lie the real lives of real people struggling on a daily basis to keep a roof over their heads, bills paid and food on their table whilst at the same time grappling with insecure employment in the low-paid, part-time, gig or zero-hours economy. And these things are no longer the burden of just working-class people, middle-class professionals, from nurses to teachers and academics, are now feeling the pinch as government has, over 10 years, cut its spending and made their jobs increasingly precarious.

Some would have us believe, like the political commentator Iain Dale, that cuts to spending were not responsible for the tragic death of the young French teenager at the Tate Gallery. Incensed, he stormed out of an interview on Good Morning Britain when Grace Blakely suggested that austerity had been at the heart of this terrible event and made the entirely valid point that our most vulnerable children have been failed by a government that is supposed to protect them.

And that is the nub of the question. What is the role of government? To balance its books or serve public purpose? We have been consistently failed by a government that has put bean-counting at the heart of its policies, not because it was essential to deliver a balanced budget, but to deliver its long-held belief in its political agenda, an agenda which has been pursued by successive governments on the right and left. The fact that it is promising to spend now (with caveats) should surely be a signal to ask why if there was no money yesterday there is today and why, when it suits, the government can always find the monetary wherewithal to spend?  The next question we should ask is who will benefit from this increased government spending if it goes ahead?

While the wealthy carry on getting richer and businesses continue to benefit from public money, whether in the NHS (minus its National) or education, social care, local government or other public institutions, the public and social frameworks are decaying by the minute with no apparent let up despite all the wonderful promises.  Time will tell, as will the next Chancellor’s budget in March.

In the meantime, the stories of those affected by government policy continue to cause concern.  This week, ITV published Department of Housing figures which showed that the numbers of people with disabilities and medical conditions waiting for housing had risen by almost 11,000 in two years – a rise of more than 10%.

The National Audit Office, as a result of the concerns about links between welfare reforms and declining mental health, reported on its investigation of how government monitored suicides among benefit claimants, saying it was highly unlikely that the 69 cases investigated by the DWP over a five-year period represented the overall numbers of self-inflicted deaths. It criticised the government for not having any robust record of contact from coroners about such cases.

Furthermore, a report published by the Office for National Statistics earlier this week revealed that people’s life satisfaction fell in July-September 2019 compared to the year before and that anxiety remained high as concerns about the future economic outlook and employment prospects grew. It also revealed that real household spending per person had grown at its slowest rate since the end of 2016.

As northern cities face huge cuts to council funding, adding to the already dire financial situation being faced by councils and the prospect of more cuts or local tax rises, combined with a country facing the prospect of weak growth as a result of government’s 10 years of domestic policies and a global slowdown, the future is not looking bright right at this particular moment. We have been led down a dark alley with a dead-end at least for the majority of citizens.

But it didn’t, indeed doesn’t, have to be like this. With the knowledge to challenge the notion that money is scarce and that there is no alternative to the market-led dogma which has dictated government policies for too long, we could turn things around. We are fighting an ideological battle dressed up in household budget terms and as a result, the future of our public and social infrastructure, not to mention our planet, is at stake.

In the light of the confusion and uncertainty which currently prevails and a divided left wing which is tracking backwards, we need a conversation about where we go from here. What sort of society do we want to live in? A dystopian Mad Max society which favours large corporations over democracy and puts individuals at the top of the pyramid or one which understands that humans flourish best where there is cooperation, compassion and caring?  It’s up to us. As Howard Zinn, the political activist wrote ‘You can’t be neutral on a moving train’.

The Gower Initiative was formed to begin that conversation and challenge the status quo. You can find out more here.

If you would like to be part of that conversation, we have four events coming up in February and March. Join us if you can!  Follow the links for tickets.

London

20th February

https://www.eventbrite.co.uk/e/gower-initiative-for-modern-money-studies-seminar-tickets-88843075029

22nd February

https://www.eventbrite.co.uk/e/mmted-masterclass-tickets-88855464085

Manchester

21st February

https://www.eventbrite.co.uk/e/gower-initiative-for-modern-money-studies-seminar-tickets-88853917459

Northampton

28th March

https://www.eventbrite.co.uk/e/challenging-the-narrative-about-how-governments-pay-for-public-services-tickets-89462136659

 

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If you would like GIMMS to let you know about news and events, please click to sign up here

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The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here

 

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The post Let’s have a conversation about what our values are and where we want to go. It’s time to recognise, in the words of Howard Zinn, that ‘We can’t be neutral on a moving train’. appeared first on The Gower Initiative for Modern Money Studies.

We need to break free from the notion that a country’s health is measured by a balanced budget. Value is not judged by money, but by human and planetary flourishing.

Published by Anonymous (not verified) on Sun, 02/02/2020 - 5:48am in

Mind the gap warning painted on a railway station platformPhoto by Pixabay

Five years ago, responding to a letter from one of his constituents about food banks, MP John Whittingdale wrote that he thought food banks ‘provided an incredibly valuable service beyond the support provided by government’ and he ‘paid tribute to the hardworking volunteers involved.’ He added in conclusion that ‘work was the best way to lift outcomes’ and that ‘Universal Credit would ensure that it always pays to work.’

Five years on, the Secretary of State for the DWP, Therese Coffey, made it clear this week that nothing had changed. When she was challenged by a Labour MP who said it was a ‘gross injustice that nurses are forced to use food banks while fat-cat bosses receive obscene pay-outs, her response was that food banks were ‘the perfect way’ to meet the challenges posed by poverty. She, too, praised the volunteers saying that ‘Marrying the two is a perfect way to try to address the challenges that people face at difficult times in their lives. She also referred to those using foodbanks as ‘customers’. Yes, you read that right.  People who are hungry as a result of deliberately forged government policies, cuts to public spending, low wages and insecure employment are now ‘customers’ as if they were simply off to the supermarket to do a weekly shop! 

In her first speech at the Conservative Party Conference, Coffey also said of the increasingly discredited Universal Credit that it: ‘provides a safeguard for the most vulnerable in our society. It supports strivers, who are not content living a life on welfare…We know that work is the best route out of poverty.’

These are government ministers who show complete indifference to the reality of people’s lives and deny that their austerity policies have created poverty and inequality. These are government ministers who spout platitudes about making work pay when the evidence is to the contrary. These are ministers who sincerely believe that charitable donations are to be commended and that volunteers are doing valuable and selfless work supporting the needy. Ultimately these are people blinded by a cruel ideology; perfectly happy to consign the poorest and most vulnerable in our society to miserable lives with their inhumane policies in the belief that this is the normal order of things and that people, not government, are responsible for their fate however much government policies are skewed against them

They also achieve this public acceptance by reducing the health and wellbeing of the nation to whether we can afford it monetarily, promoting the idea that public services depend on a strong economy which in turn increases tax revenue and allows the government to spend on public services.  It disseminates the lie that a strong economy depends on wealthy entrepreneurs who are benefiting from low taxes and are not hamstrung by regulations and in order that wealth will trickle down by default.  And, regrettably, with the constant repetition of such messages, many people have been seduced by such arguments.

The evidence of the last 10 years in terms of cuts to public spending and reforms to the social security system belies the reality as distressing reports in the media portray this week.  Aside from the huge rise in the numbers of food banks across the country and the increasing numbers of people using them, which GIMMS has covered in previous blogs, almost on a weekly basis we read the harrowing stories of people who have died as a result of government policies related to cuts to public sector spending.

Just this week Errol Graham who was 57 and suffered from severe social anxiety starved to death just months after the DWP stopped his out of work and housing benefits.  Barry Balderstone who was suffering from advanced Parkinson’s disease and was deemed not ill enough to qualify for free, full-time social care died the day after he received the news that his claim had been rejected. He weighed just 7 stone.  According to a media report, health bosses said that the decisions were made following ‘faithful application of nationally-set criteria’. Helen Boughen, who has a rare genetic disease which has left her barely able to speak, eat or breathe had her benefits cancelled after assessors deemed her fit to work. A spokesperson for the DWP said ‘We are committed to ensuring that people get the support they are entitled to.’ Such statements ring hollow in the light of the indignities heaped upon disabled and sick people.

How would any of us feel if our care, or the care of our loved ones, were reduced to obeying a set of rules to meet financial tests or financial affordability?  The deaths of Errol Graham and Barry Balderstone are just two cases in a long line of deaths which have occurred, to put it bluntly, at the hands of the State as a result of government policy decisions forged in line with discredited market-led economic orthodoxy and combined with the untrue claim that such public spending is down to financial affordability or the health of the economy.

Having to undergo gruelling work capability assessments to determine whether one is eligible for support causes indignity and fear. The indignity of being rejected and having to appeal and in the meantime lose one’s benefits.  The humiliation of having to rely on food banks to feed oneself or one’s family as a result of a cruel and dysfunctional Universal Credit, a system being rolled out across the country. And the nation shaming poverty, hunger and starvation in one of the richest countries in the world. Clearly, work does not make you free.

So, when government officials express their sympathies at such deaths referring to them as tragic or complex as they did in the case of Errol Graham, the reality is that it is sham sorrow; words chosen from their box of suitable ready-made responses in a cold-hearted, cynical attempt to gloss over the human realities.

And yet, whilst it continues its brutal assault on some of the weakest and most vulnerable in our society it has no problem finding tax cuts for the wealthy, serving the interest of big corporations, pouring vast sums of public money into vanity projects like HS2 or saving a failing company like Flybe.

We seem to be regressing into another era. An updated version of the Dickensian novel Oliver Twist in which a starving Oliver pulls the short straw to put his empty bowl out and ask the well-fed Beadle for more. The era of the workhouse where the Poor Law Boards, believing that they were doing their Christian duty, sat in judgement; dishing out charity to the deserving poor whilst leaving the rest to rot.  The system perpetuated misery, poverty, malnutrition, starvation and not to mention untimely death as in the case of Oliver Twist’s mother who died alone in the workhouse.  Those very same situations are being repeated daily in many thousands of homes across the country.

We have come a long way from the Beveridge Report published in 1942 which eventually shaped the Britain we know today and created a system of social insurance to protect people from ‘cradle to grave’.

Today that welfare system is being dismantled piece by piece. We have been told by politicians that we can no longer afford this comprehensive system of support and protection which shields us from the raw realities of naked capitalism and provides security and safety when we need it most.  We are now living in a time where we are being conditioned to believe that such systems are no longer affordable, that the private sector is the only option left and that the future lies in public charitable donations or volunteering to deliver those services that are not profitable to big business. These things are being normalised in society. From food and clothing banks to food collection points in supermarkets whose bosses shamelessly promote their good works and collude in the big lie. Our goodwill and empathy are appealed to and being abused to serve the market and cut costs.

The State is dissociating itself from its role as an institution serving the public purpose by providing the public and social infrastructure to create a healthy nation and by association a healthy economy.  It is instead creating an environment of fear as it chips away at our system of social security through instigating punishment, tightening criteria for eligibility and stigmatising people with accusations that they are lazy scrounging shirkers hiding behind the curtains. It is also pushing ahead ever faster with the fragmentation and privatisation of our public services in the belief that the markets can deliver public services better, even though the evidence is clear that they do not.

We don’t have a government in denial; we have a government pursuing policies designed to hurt people and create misery all wrapped up in the ideological cloak of ‘there is no alternative’.  Whilst Boris Johnson promised a post Brexit ‘golden age ‘and his Chancellor declared that the government had ‘turned the page on austerity’ those pledges in a post-election period are now beginning to unravel.

That promised golden age and abandonment of austerity apparently doesn’t apply to northern cities. Over the last 10 years, the poorest areas in the north have borne the brunt of Conservative austerity. And now, just this week, the Local Government Association has predicted that the new government formula will impose further cuts to already battered northern cities from 2021 onwards as government reallocates council funding to Conservative-controlled, mainly southern shire councils.

Also, this week in the biggest turnaround, the Chancellor announced that he had written to cabinet ministers asking them to draw up cuts of up to 5% of their spending plans saying that they had been elected with a clear fiscal mandate to control day to day spending. He went on to say that there will need to be savings made across government to free up money to invest in the government’s priorities. Austerity was framed as a necessity in the wake of the Global Financial Crisis, with government having emptied its coffers by bailing out banks, so the population had to take a knock, dig deep, “we’re all in it together”. Lies. A lie that has taken thousands of lives, vandalised our public services and communities

So yet again, as already mentioned by GIMMS a couple of weeks ago, we have government couching its spending plans in household budget terms, claiming they have to make difficult choices to release money to spend elsewhere as if there were a shortage of it when there isn’t. The commitment by government to implement a spending programme to revitalise the economy at a time of great upheaval are vanishing into thin air.

In effect, the Chancellor is leading the public down the garden path claiming, quite untruthfully, that he will have to rob Peter’s and Paul’s departments to fund the government’s promised capital spending or infrastructure projects.  As the UK is a sovereign currency-issuer, he has no need to do this in order to spend. He could, assuming the resources to deliver the government’s policies exist, quite simply spend; vote the necessary funds into existence.  One should ask oneself how the Chinese authorities could build a hospital in six days to deal with the coronavirus emergency playing out in China, whilst our Chancellor scrabbles around for departmental savings. The Chinese government certainly weren’t checking whether enough tax had been paid or worrying about where they could find the money, they just authorised their central bank to make the necessary transfer into the accounts of an appointed construction company via a few keystrokes on a computer.

Cutting day to day spending, on the other hand, will reinforce the last 10 years of austerity which has already caused so much damage to public services, welfare provision and staffing levels in public sector environments. Essentially, that means you can build a hospital, but you might not be able to pay for a nurse to work in it. At a time when the NHS, for example, needs more nurses this would be folly indeed. Our politicians, whilst telling us there is no money to spend on public sector service provision which is fundamental to the UK’s social and economic health, will continue to pour public money into private profit, funding large infrastructure projects like HS2 to serve the corporate purpose instead.  The state as a cash cow for big business and a reinforcement of the capture of government by globalised forces.

The only way for such misrepresentations to be challenged is for a grassroots movement to get informed about the art of the possible by challenging the notion that there isn’t enough money to create a better, safer, more equable and sustainable world for those we love, our children and future generations.

As Howard Zinn, the great author and socialist thinker wrote:

‘Truth has a power of its own. Art has a power of its own. That age-old lesson – that everything we do matters – is the meaning of the people’s struggle in the United States and everywhere. [….] When we stand up and speak out together, we can create a power no government can supress. We live in a beautiful country. But people who have no respect for human life, freedom, or justice have taken it over. It is now up to all of us to take it back.’

 

 

Events

We are holding events in London, Manchester and Northampton in the next couple of months. Please see our events page for details.

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The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here

 

 

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The post We need to break free from the notion that a country’s health is measured by a balanced budget. Value is not judged by money, but by human and planetary flourishing. appeared first on The Gower Initiative for Modern Money Studies.

Therese Coffey: Another Tory Minister Who Thinks Food Banks Are Brilliant

Published by Anonymous (not verified) on Thu, 30/01/2020 - 9:41pm in

Yesterday the Canary reported that the Labour MP Zahra Sultana, who called food banks a ‘national disgrace’, wrote to Coffey about the obscene injustice of nurses having to use food banks while fat-cat bosses are rewarded with massive payouts. Sultana was understandably upset that there were now more food banks in the UK than branches of McDonald’s and that the British boss of the fast food firm had received a settlement of £30 million after they had fired him.

She got this bland reply from Coffey:

I visited a similar food bank in my own constituency that has been working together with food redistribution schemes. Marrying the two is a perfect way to try to address the challenges that people face at difficult times in their lives.

Coffey also called the people using food banks ‘customers’, thus giving the misleading the impression that they had some kind of choice over whether or not to be there.

Sultana wasn’t impressed, and neither were other commenters on twitter. She commented

I just asked the Secretary of State for Work & Pensions about the gross injustice of nurses relying on food banks while the rich get richer.

Her response? She called food banks a “perfect way” to meet the challenges of those in poverty.

The Tories are totally out of touch.

The article goes on to report that BristolLive had also said that they’d been told by one volunteer at a food bank that four or five nurses had visited a food bank in one week.

The Canary’s article also criticised Coffey for not mentioning that food banks run by volunteers are supported through donations. They’re there to help poor people struggling to feed themselves and their families because of ten years of Tory austerity, welfare cuts and Universal Credit. And Coffey certainly wasn’t going to tackle the problem of bloated salaries for fat-cat bosses and widening inequality.

The Canary further reported that the Trussell Trust had stated in April 2019 that food bank use had reached a record high point. Between 1st April 2018 and 31st March the charity had distributed 1.6 million food parcels. This was a rise of 19 per cent from the previous year. About half a million of them were given to children.

Sabine Goodwin, the head of the Independent Food Aid Network, commented that Coffey’s remarks showed how food bank use had been normalised in the UK, and that they were now the fourth emergency service.

The Canary concluded:

The DWP is not fit for purpose. And Coffey’s latest response highlights just how dangerous it truly is.

See: https://www.thecanary.co/trending/2020/01/28/dwp-minister-thinks-foodbanks-are-a-perfect-solution/

This is just the latest scandal in which a Tory minister has made a bland, evasive statement praising food banks and ignoring the underlying problem of the massive suffering the Tories themselves have caused. I think the last one was Jacob Rees-Mogg, who was similarly blasted for his complacency. In fact, food banks and the volunteers who run them are doing an excellent job. I know that two of the great commenters on this blog are involved with those in their communities. That isn’t the point. The point is, they shouldn’t be needed. There should be no benefit sanctions nor false or falsified fitness for work tests throwing people who are too ill or disabled to work off benefits. The unemployed and disabled should be given benefits at a level that allows them to live properly, paid the moment they request and need them. They should not have to wait a few days, let alone five weeks, before receiving a payment. Working people should also be paid a decent wage, so that they also can afford to feed, heat and clothe themselves and their families.

But this is precisely what Tories like Coffey do not want to happen. They are dismantling the welfare state because they wish to relieve high earners – the rich – of the tax burden of supporting the poor. They originally tried justifying this with specious arguments about ‘trickledown’. The money the rich saved would trickle down to the poor as their social superiors opened new businesses, employed more people and paid higher wages. But they don’t actually do any of that. It just stays in their banks accounts, accumulating interest while they boast about how many hundreds of K they’ve trousered. I also believe the Tories actually like food banks because they see them as the British counterpart to the American system of food stamps.

They also have absolutely no problem with rising inequality. In fact, I remember them openly being all for it. Right at the beginning of the Thatcher project in the 1980s, various Tories appeared on BBC documentaries about benefit cuts and wage restraint raving about how wonderful it was. They believed that conditions should be made worse for the poor, as this would encourage them to ‘do well’. Thatcher herself was a fan of the less eligibility system of Victorian poor relief. Like them, she believed conditions should be made as humiliating and oppressive as possible for those on welfare in order to make them get a job as quickly as possible. He successors have weaponised it further, and now see it as a means of culling the sick and poor. 130,000 people have been killed so far by austerity in a campaign described by Mike and other bloggers and welfare commenters and organisations as the genocide of the disabled.

Food banks are not a perfect solution for people people at a difficult point in their lives. They are a severely inadequate attempt to ameliorate some of the worse effects of Tory austerity and welfare cuts. It is great that people are there, trying to do something for the poor.

But it is a glaring disgrace that they should be needed in first place. Coffee is a smooth, smiling dissembler trying to put a good front over utterly disgraceful, murderous Tory policies. She and the wretched government she serves can’t fall soon enough.

New BBC Series Next Week on Universal Credit

Published by Anonymous (not verified) on Tue, 28/01/2020 - 10:45pm in

The BBC is screening a new documentary series next week on Universal Credit. Titled ‘Universal Credit: Inside the Welfare State’, the first installment is on BBC 2, on Tuesday 4th February at 9.00 pm. The blurb for it in the Radio Times runs

In-depth look at the Department of Work and Pensions, Jobcentres and claimants, during the implementation of the biggest change to the benefits system in a generation. This edition focuses of Peckham Jobcentre in south London. Rachel left a 27-year caareer in the NHS to care for her elderly parents. She’s been struggling to pay her rent and bills while paying back an advance she took out while waiting for her first Universal Credit payment. Jobcentre staff member Karen works tirelessly to support claimants but is frustrated that she has to supplement her low earnings with a second job. (p. 86).

An additional piece about the show by David Butcher a few pages earlier, on page 84, also says

There’s a key scene in this first episode of a series about benefits, where the civil servant in charge of Universal Credit, Neil Couling, shows us a whiteboard in the Department for Work and Pensions called the “motherboard”. Among the grids and numbers is a piece of paper stuck on that says, “Pay claimants the right amount of money and on time”. It seems a modest aim but, as Couling tells us, “It has defeated the benefits system for the last 35 years.”

The series helps us understand why. Its strength is that we meet not just those at the top of the benefits bureaucracy but those at the bottom – officials at a Jobcentre in Peckham, south London, known as “work coaches”, and their claimants or “customers”. In their sometimes testy encounters we see how Jobcentres have become a one-stop shop, helping claimants with food bank vouchers, housing and childcare. As unemployed labourer Declan says, unhappily, “It’s like they’ve got a hold of your life.”

I think this programme has been expected. If I recall correctly, there has been some discussion whether it would accurately reflect conditions in the DWP and the misery and despair Universal Credit has inflicted on claimaints. There were fears that it would follow the path set by a similar documentary a few years ago. This was also made with the help of the DWP, but presented a very sanitised view of the Department as government-sanctioned propaganda.

It’s to be hopedthat this will be different from the previous series, and from the ‘poverty porn’ produced by Mentorn Television like ‘Benefits Street’. But considering the massive bias on the BBC news desk against the Labour party and Jeremy Corbyn, and its general bias towards supporting austerity and the Conservatives, that may be too much to expect.

It’s time to start walking the talk to solve the big issues of our time – from climate change to social inequality.

Published by Anonymous (not verified) on Sun, 26/01/2020 - 2:23am in

Planet Earth on fireImage by Pete Linforth from Pixabay

‘We don’t think a sustainable society needs to be stagnant, boring, uniform or rigid. It need not be, and probably could not be centrally controlled or authoritarian. It could be a world that has the time, the resources, and the will to correct its mistakes, to preserve the fertility of its planetary ecosystems. It could focus on mindfully increasing the quality of life rather than mindlessly expanding material consumption and the physical capital stock.

Donella H Meadows, Jorgen Randers, Dennis Meadows. The Limits to Growth: The 30-year update.

 

This week the usual billionaires, business and political leaders descended into Davos, many in their private planes, for their annual jolly to discuss how to make a ‘better version of globalisation’. The mind boggles.

The theme for this year’s World Economic Forum meeting was ‘Stakeholders for a Sustainable World’ and amongst its delegates were the environmental campaigner Greta Thunberg and the arch climate change denier President Trump.  Whilst the President railed in his speech against ‘prophets of doom’ (in clear reference to Greta), and following previous statements in which he rebutted the scientific consensus about climate change (calling it a hoax), he boasted about America’s huge oil and gas reserves, signalling his determination to continue exploiting them.

After Greta reminded people in her speech that the house was still on fire and called for fossil fuel divestment, Steven Mnuchin, US treasury secretary, rudely and patronisingly told her to ‘go to college and study economics’ and come back when she’d learned a thing or two about economic realities. Whilst Greta’s passion cannot be faulted and despite her youthful naivety, she should not be criticised for challenging once again the paltry action taken so far by the international community and raising once again the urgency for real action. In fact, if anyone needs to go and learn about economics it must be Mnuchin himself. Despite his degree in the subject, he doesn’t seem to have learned much. He is clearly steeped in economic orthodoxy, as he made clear in an interview in Davos when he said that the government could not sustain federal deficits and they would have to cut government spending.

He, like many others around the globe including our own politicians and the current government, are immersed in a discredited narrative which bears no relationship to the real world. Politicians have used the household budget argument to serve an ideological purpose by reducing state intervention, cutting funding for public and social infrastructure, creating the legal frameworks to serve corporate interests rather than those of people or the planet and pouring public money into private profit. At the same time, they have denied that the public purse has the power to create an economy that serves the wellbeing of citizens in an ecologically sustainable and equitable way.

Years of talking shops and global agreements have not really led to the sort of change that is desperately needed if we are to limit warming and protect the land and its natural resources, not to mention its biodiversity – all that we depend upon for our survival.  In the 1970s, experts were already warning about the limits to growth and in a book of the same name Dennis and Donella Meadows posited that if the rates of economic growth, resource use and pollution continued without change, then not far down the line we would face environmental and economic collapse. As the planet continued to warm, we continued to consume – abusing nature and its resources with little thought beyond satisfying our wants and desires. We are now faced with the realities of our short-sightedness.

Not a week seems to go by without yet another disaster.  Floods this week in East Africa after years of drought have caused massive human displacement, loss of food crops and destruction of infrastructure.  And again, this week, scientists were warning that global warming was increasing the risk of wildfires in many parts of the world and, more worryingly, that the Australian bushfires will release ever more carbon dioxide into the atmosphere. Bob Ward, policy director at the Grantham Research Institute on Climate Change at the London School of Economics, said that ‘We are closer than we think to the point of no return’. A stark warning of what we face should we fail to act whilst we still have time.

And yet although there was an outward expression of concern by political and corporate leaders attending the forum, it was noted in an article by the New York Times that despite the ever-increasing risks, few companies and investors provided real detail about how they would transition rapidly away from an economy based on fossil fuels. It also noted that just a fraction of global businesses disclose the financial risks posed by climate change, and even fewer have set their own targets and timetables to do what the science demands.  It is par for the course to note that these so-called commitments are couched in the ‘tangible risks to the bottom line,’ i.e. the monetary risks to their profits, instead of considering the tangible risks to the planet and human and other forms of life which depend on a healthy planet for their existence.  It may be promising to tackle climate change but still has failed to say how or when. It has to go beyond simplistic pledges.

It is ironic in that respect that Mnuchin claimed that the US was showing leadership in confronting climate change but through its private sector rather than government; the realities do not seem to match the expectations. For example, Trump’s record on the environment is scarcely commendable, having repealed many environmental regulations with respect to air and water quality and carbon targets (despite the US already being one of the biggest carbon polluters in the world) and is giving free rein to business to do as it pleases. Only this week, he indicated his intention to scrap protections for America’s streams and wetlands which he says will be a victory for American farmers. Under the new regulations, landowners and property developers will be able to pour pesticides, fertilisers and other pollutants directly into the nation’s waterways.

In the same vein, although Boris Johnson has committed to ‘world-class’ environmental standards, he has already indicated that he sees environmental regulation as red tape which he believes makes the UK a less attractive place for industry. To that end, he has removed worker and environmental protections from the EU withdrawal bill. A presage of things to come?

Where is the political leadership to lead us away from planetary destruction to ensure a future for future generations? For the time being there is none. Corporations indulge in greenwash and politicians continue to serve their interests.  Without action, this is tantamount to signing the planet’s death warrant.

The common cause which pervades government policies across the globe from the US to the UK, Europe and elsewhere is a toxic, destructive globalised economic system.

The last forty years of market-led, ideologically driven government policies have dominated the discourse.  Aside from the devastating consequences on the environment of unchecked growth and exploitation of planetary resources, it has also led to huge disparities in wealth and equity. The consequences are visible everywhere. Public and social infrastructure in decay, increasing poverty, precarious employment and low wages and working people have suffered the consequences around the world.   Oxfam, which published its report ‘Time to Care’ earlier this week said that economic inequality was out of control. It noted that in 2019 the world’s billionaires, only 2,153 people, had more wealth than 4.6 billion people. It focused on the huge divide created by a  flawed and sexist economic system that valued the wealth of the privileged few, mostly men, more than the billions of hours of work carried out by unpaid and underpaid care work primarily done by women and girls around the world.  It challenged governments to build a human economy that is feminist and values what truly matters to society rather than fuelling an endless pursuit of profit and wealth.

When President Trump strips food aid from low-income people and wants to cut entitlement to Medicare and other social programmes whilst giving tax cuts to the rich, US citizens should be asking questions. When our own Conservative government implements a decade long programme of austerity and public spending cuts which have added to the difficulties faced by many working people who daily struggle to heat their homes, put food on the table and clothe their children and who live in decaying communities with increasingly poor public services, UK citizens should be challenging what has become a decades’ long norm of increasing intensity. When EU citizens face the consequences of austerity in increased poverty and inequality and cuts to public services and social security as a result of a dysfunctional currency system it is time to say enough is enough and indeed many already are.

Global citizens should be querying the validity of an economic narrative that places blame on individuals and claims there is no alternative to harsh cuts to public spending whilst they see the rich just keep on getting richer as if somehow their ‘hard work’ entitled them to it.

These actions by a state which is supposed to serve the interests of its citizens are cruel and unnecessary. The lives of the entitled rich versus the lives of the expendable poor. Whether in the US or the UK people are dying for the lie of austerity and people go along with it because they have been convinced by years of propaganda that there was no alternative to fiscal starvation by the state in order to save the public finances.

And worryingly, but not surprisingly, the consequences of this market-led phenomenon in which politicians have ceded power to corporations is no longer confined to working people living on decaying estates in precarious low paid employment. It is now also occurring in middle class families.

An international report ‘Under Pressure: The Squeezed Middle Class’ published by the OECD in 2019 said that middle class families are now seeing their incomes stagnate and are facing growing fears about job insecurity whilst higher income groups have continued to accumulate income and wealth. The report warned of the social consequences if the middle classes were to lose trust in the system; a trust that has already been broken amongst working class people. It noted also that worsening income inequality could threaten trust in democratic institutions and was causing ‘growing discontent’.

Indeed, only this week a report by the University and College Union highlighted the ‘alarming rise of mass casualised labour’ in British universities showing that precarious employment was not just an issue for those working in the gig economy. Chi Onwurah, the Labour MP for Newcastle Central said ‘Reliance on precarious low paid staff has become a business model’.

This forty-year-old system has proved pernicious and serves corporate interests rather than human or planetary interests. Chasing surplus value at whatever cost to serve the global lords of profit.

More than ever, we need solutions to address climate change and increasing social inequality. Bernie Sanders, the US democratic Presidential hopeful commented in response to the report from Oxfam that: ‘….as a result of extreme drought and a rise in sea levels exacerbated by climate change as many as 2.4 billion people throughout the world will be living in areas without enough clean drinking water just five years from today… now more than ever, our job is to bring people around the world together to develop an international movement that takes on the greed of the billionaire class and leads us to a world of economic, social, political and environmental justice’.

Not only do we need to embrace a new paradigm in the shape of a just green transition towards a fairer, more sustainable world, but also to develop effective frameworks for delivering it in terms of resource distribution. We have to ask ourselves difficult questions about what the economic and political priorities will have to be in order to achieve that goal? We need political leadership, not prevarication. We need to challenge the narrative of ‘there is no money’, show that it is never a question of monetary affordability and emphasise the consequences for the planet and our children’s children of not spending the cash.

 

 

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The post It’s time to start walking the talk to solve the big issues of our time – from climate change to social inequality. appeared first on The Gower Initiative for Modern Money Studies.

Tories Promised Fat Profits to Fracking Companies While Others Starved

Donald Trump made his contempt for environmentalists and public concerns about climate change and global warming very clear this week at Davos. He called them ‘prophets of doom’ and frankly denied the existence of global warming. As I pointed out in a previous post, this is not only in line with what the Republican base believes, but also the propaganda of Trump’s corporate sponsors in the fossil fuel industries. Trump has passed legislation to gut the Environmental Protection Agency and prevent it from publishing anything supporting climate change or global warming. The fossil fuel industry, particularly the billionaire Koch brothers, have also set up a network of lobbying and astroturf fake grassroots pressure groups to try and discredit global warming and the other environmental damage by the oil, gas and coal industries. Those same billionaires also use these networks to close down mainstream academic environmental research, and replace them with laboratories funded by themselves, which publish their approved material denying the reality of global warming.

Mike put up a post this week reporting Trump’s anti-environmentalist stance, and saying that this would be a problem for Britain if Boris Johnson is successful and makes a Brexit deal with America.

But the Tories have already shown their contempt for Green politics. Although Dave Cameron promised that his would be the ‘Greenest government ever’ and put a windmill on the roof of his house, that lasted only as long as he could get his foot in Number 10. The moment he won the election, those promises were dropped and the windmill came off his roof. And that wasn’t all. Cameron, like Trump, strongly favoured the petrochemical industries. While his government cut the welfare budget to leave the poor desperate and starving, he cut the tax for the fracking industry so that they could make even bigger projects. Vickie Cooper and David Whyte discuss this in the introduction to their The Violence of Austerity. They write

Indeed, some sectors have been seen as a vehicle for economic recovery and therefore singled out for special treatment. This partly explains the lack of any meaningful regulatory change in the financial sector but also why some high revenue sectors, such as unconventional oil and gas – or ‘fracking’, are being singled out for special treatment… In July 2013 the government announced that the fracking industry would receive a major reduction in its tax burden. Shale gas producers were told that they would be asked to pay just 30 per cent tax on profits compared to 62 per cent normally paid by the oil and gas industry. In response, Andrew Pendleton of UK Friends of the Earth observed:

Promising tax hand-outs to polluting energy firms that threaten our communities and environment, when everyone else is being told to tighten their belts, is a disgrace. (p. 19).

Fracking is particularly contentious, as not only does it pollute the water table but it also causes minor earthquakes. There have been major protests against it throughout the country, particularly against its operations in Lancashire. The Tories just before the election promised a moratorium on it, but did not refuse to stop it completely.

The Tories’ welfare cuts have led to people starving to death, as Mike’s report this morning about the death of Errol Graham. Mr Graham had problems with anxiety, and could not cope with unexpected changes and social situations. He was afraid to go out and could not meet or interact with strangers. Despite this the DWP stopped his ESA, which meant that he lost his housing benefit. He slowly starved to death. When the bailiffs broke down his door to evict him, he weighed only 4 1/2 stone.

Why are we learning about disabled Errol Graham TWO YEARS after the DWP stopped his benefits and he starved to death?

Obscene! Absolutely obscene!

And he isn’t the only one. 130,000 people have died due to austerity. But while the government is content to let people starve to death, it’s prepared to give vast profits to friends in polluting industries. Reading this, I think there’s little doubt that Boris will resume fracking the moment he’s given the opportunity. And that if and when he makes his wretched deal with Trump, it will signal real danger for our precious ‘green and pleasant land’.

This shows the foul pair’s priorities: the world burns, the poor literally starve to death, but they’re fine so long as polluting industries can foul the planet for profit.

 

Can we afford a better society? Yes we can!

Published by Anonymous (not verified) on Sat, 25/01/2020 - 5:12am in

Our society faces many problems that require action by our government. As much as we might wish to address climate change and reduce inequality, are the public finances able to fund achievement of these laudable goals? As I show in my new book, The Debt Delusion, the answer is a resounding “Yes, we can!” 

During the global financial crisis in 2009-2010, the US and UK public sector deficits briefly reached 10% of national income. That deficit looks small compared to the budget imbalances in the USA and UK during 1941-1945. The US federal government deficit ballooned to almost 30% of GDP, and only slightly less for the British government.  American or British politicians did not argue that the war was “unaffordable”; no-one suggested that the deficits were so excessive that governments should capitulate because of reckless expenditure.

Those were literal life or death struggles that justified whatever budgeting measures were necessary to sustain the war effort. Today climate change and inequality are no less pressing on our society than was the armed defense of democracy in the 1940s.

The affordability argument seems reasonable on the surface:  our government has a limited budget and we must live within it. Taxes are the source of our government’s funding.  Spending more than the budgeted amount results in living beyond our means. Any project that over-runs the budget is not affordable no matter how commendable.

This reasoning is wrong. Governments that manage their own currencies do not confront fixed budgets. They create their “means” either through increased tax revenue or borrowing. Expansion of our economy automatically generates more revenue. If the need for greater expenditure is too urgent to await economic expansion, our government can borrow. If immediate borrowing by sale of public bonds in capital market appears unsustainable because the market interest rates would be too high, the Bank of England or the Federal Reserve Bank can act as a backup purchaser (BoE holds 25% of the UK public debt). In fact, borrowing rates are extremely low.

Reflection suggests intention of a deeper meaning of the word “afford”.  An example of the deeper message of affordability begins with the indisputable assertion that in many countries the population is ageing. At some point the income earning of elderly people ends, replaced by public and private pensions.  In the 21st century, people are living longer, with elderly people living long enough to draw pension payments for an extended period, which is in itself is a good thing. Even though pensions are taxed, the shift of adults from taxpayer to pension recipient impacts on tax revenue. This reduced tax effect goes along with elderly people generating a high demand for public services, especially care services. 

However, in all societies the younger care for the older. As societies become larger and more complex, the elderly receive this care less within the family and more through institutions specifically constructed for that purpose. Looking after elderly people who require specialized medical care tasks occurs partly in families, but in high-income countries this care increasingly occurs in specialized institutions.

These institutions can be public or private. Since an institution will do much the same things whether public or private, the cost is likely to be much the same for a given quality of care. The commitment of a civilized society to provide adequate care for the elderly determines the total cost. The extent to which the public or private sector provides the means to fulfill that commitment is a political decision. 

We can imagine the policy process as follows. First, do we as citizens commit ourselves to ensure that the elderly have a healthy and dignified retirement? The political answer may be, “no, that is the responsibility of each family”.  Most would consider that a callous political choice that results in a rationing of health and dignity by household income. If collectively we make the opposite political decision to honor the social commitment to care for the elderly, a second question arises: to what level of healthy and dignified retirement does society commit itself? Our government will implement that collective commitment through appropriate institutions. Be the institutions public or private, it falls to our government to ensure full and non-discriminatory access, to regulate health and safety, and to monitor performance.    

The political choice between funding by tax or private income has no impact on “saving money” or shifting “burdens”. Consider the example of a family with an elderly member no longer able to carry out the routine of daily life. This elderly person moves into a care home that is funded through taxation. After an election the new government announces that it has sold the care home to a private corporation. In the future the elderly residents must pay for all their care. The consequence of the privatization of elderly care is to change the form of the household’s payments from taxation to direct payment to the private care provider. If household incomes were equally distributed, total care cost were the same for public and private provision, and the quality of care was also the same, a change from taxation to direct private payment would involve a mere shift in funding method.

In no country are household incomes equally distributed. In all wealthy countries the tax system is progressive: the higher the household income, the larger is the share paid in tax.  Taxation provides the vehicle to fund a standard of care that fulfills the commitment of full and non-discriminatory coverage. While it counters the inequality generated by market economies, the shift from public to private funding does not alter the total cost of the commitment to universal coverage. 

Affordability should refer to society as a whole and not merely the public sector. How society divides provision between public and private is a political choice. The appropriate question is not whether we can afford elderly care, environmental protection or a range of public services but “should we pay for that?” If the answer is “yes”, then democratic governments will find the means to pay by taxation or borrowing. 

Occasionally societies face the need to “tighten their belt” and cut back other spending in order to afford a service or policy action. When they do so it should be to achieve a noble purpose, such as saving our planet, not to shirk from the commitment to a just society.  Public debts and deficits are not in themselves problems. On the contrary, they can contribute to the solution of society’s needs.

Professor John Weeks’ latest work The Debt Delusion: Living Within Our Means and Other Fallacies is published by Polity.

This piece is cross-posted from Polity. Photo credit: Flickr/MOD.

The post Can we afford a better society? Yes we can! appeared first on The Progressive Economy Forum.

‘I’: ‘Poor People Getting Sicker’

Published by Anonymous (not verified) on Tue, 21/01/2020 - 10:27pm in

This morning’s I for 21st January 2020 has a piece by Joanna Crow reporting that poor people’s health is getting worse. She writes

Poor people in Britain have worse health than those born a century ago, a University College London study found.

More than 200,000 working age people in England, Wales and Scotland were asked to rate their overall health as part of the General Household Survey for 1979-2011.

The study created three-year “health” snapshots of the generations born between 1920-22 and 1968-70. 

The gaps between the richest and poorest households widened over time, with inequalities in the prevalence of long-term conditions doubling among women and by one-and-a-half times among men.

There should be absolutely no surprise whatsoever about this. Clinical studies have shown across the world that people’s health has deteriorated considerably since the introduction of austerity and the cuts to welfare, including state health provision following the 2008 crash. It’s why we still need to get the Tories out, and elect a leader of the Labour party someone who will actually strengthen the welfare state rather than continue the Thatcherite programme of dismantling it.

Getting the narrative right. Careful stewardship of the economy is not about balancing the public accounts; it is about serving the interests of the nation and delivering public purpose.

Published by Anonymous (not verified) on Tue, 21/01/2020 - 7:25am in

Hand holding note with the slogan "let's rethink"Image by Gerd Altmann from Pixabay

A month on already since the general election and as well as the usual post-Christmas/January blues, the nation still finds itself in a state of deep uncertainty about its future. The economic predictions are not confidence-inspiring. The outward signs of a downturn or a recession are building up.  Retail sales fell sharply in December and according to the ONS, it was the fifth month without growth. The Centre for Retail Research also revealed in its report that the high street had suffered its worst year of job losses for 25 years and is expecting that to increase significantly in 2020. It also reported that over 16,000 shops across the country had closed. Brexit uncertainty is blamed for the poor results, but of course, statistics don’t tell the whole story and there is more than meets the eye.

Whilst, of course, change in the way we shop may bear some responsibility, ten years of austerity and cuts to public sector spending, low wages, precarious employment and rising private debt must take a large portion of the blame.  Combine that with a slowing world economy, global political uncertainty and the prospect of trade wars, not to mention real conflict, it is surely enough to make us all hunker down and keep our wallets firmly zipped up. It has even been suggested that our fears about the environmental cost of our buying habits are making us think twice about how we consume.

This week Kristalina Georgieva, the head of the International Monetary Fund, warned that the global economy is at risk as a result of rising inequality and financial sector instability and noted that across the OECD, and in particular the UK, income and wealth inequality have reached, or are near, record highs. She also noted that social unrest is likely to be the corollary of rising wealth inequality and we are certainly seeing evidence of that around the world in Europe, the US, South America and Asia.   As an aside, it is ironic that the IMF in making these warnings seem to have no concept that it has been their own promotion of destructive economic orthodoxy which has led to this place of great uncertainty and rising inequality.

Boris Johnson promised the nation a ‘golden age’ and yet on that basis, the prospect seems elusive or more accurately an illusory pipe dream.  Whilst on the domestic front certainly the current government could do much to soften the effects of a global downturn through increasing public spending, it is still unclear as to whether they will keep their manifesto promises to invest in the NHS, schools and national infrastructure and if they do will it be enough and who will be the real beneficiaries?

Johnson would seem to have already reneged on his promise to find solutions to the social care crisis, saying that whilst the government would be bringing forward a plan this year it could take as long as five years to implement. Social care, which is already on its knees and facing further cuts and increased charges for its provision, as a result of cuts to local government funding, could find itself yet again put back in the slow lane for government action despite endless promises. The impact would be devastating for those who desperately need support now not in five years’ time.  The Stormont finance minister also said this week that the proposed financial package for Northern Ireland would keep it in an ‘austerity trap’ unless it was increased and that it would do nothing to fix the ongoing problems in health and education.

Daily media reports make it clear that austerity hasn’t ended despite the government’s promises. Our health service is in ongoing crisis due to lack of adequate funding, our school infrastructure and education system is in a state of decay and not fit for purpose, the reforms to the welfare system are reducing people to penury, hunger and homelessness while the green economy has shrunk since 2014 as a result of the substantial cuts to government subsidies, according to figures released this week by the ONS.

We were told there was no alternative to austerity and that the government had to fix the country’s finances to avoid bankruptcy and so it is perplexing to discover that the government has suddenly found some money to put right the ‘economic vandalism’ it has imposed as a result of its supposedly necessary policies.   It is equally surprising in the light of this ‘economic vandalism’ that at PMQs this week Boris Johnson defended it as ‘careful stewardship of the economy’.

It is also cause for concern to read this week that the Chancellor has hinted that there could be tax rises in the Spring or Autumn budget and that he was determined to take ‘the hard decisions you need to sometimes, especially at the start of a new government’. In the same interview, he also claimed that once the government had put an agreement in place with Europe that the UK would ‘continue to be one of the most successful economies on Earth’ which given the state of the economy at present would seem to be wishful thinking or delusional.

‘Hard decisions’ could be related to increasing taxes to fund the government’s spending plans (when of course they don’t) but equally, they suggest the same adherence to balanced-budget orthodoxy. Will the government’s attachment to fiscal discipline take precedence? Old habits die hard. Indeed, in a recent FT article, the Chancellor made it clear that money for Further Education colleges was not generally capital spending which would, under his new budgetary rules, give him scope to borrow, but was instead day-to-day spending, and as such there was little possibility of extra money. He also said that before considering increasing taxes he had told his ministers to look at their budgets and carry out an ‘exercise in prioritisation…. to release resources for his priorities’ which he hoped would provide the money to pay for rising costs of an ageing population in the 2020s which could threaten the public finances. He went on to say that low-interest rates were a market signal from investors that the cash was available to do something productive.  It doesn’t sound much like a brave new world in government monetary financing. But we shall see.

The public has been carefully groomed to accept the lie about how the government finances actually work. Careful stewardship of the economy in the case of the Conservatives implies fiscal rectitude and look where we have ended up as a result.  Whilst government continues to fob the public off with the lie that tax is revenue for spending, the wider implications for a slowing economy of increasing tax would be folly indeed. Further reducing the purchasing power of working-class people won’t mitigate the short-term problems of increases in food and fuel prices, nor help them pay down personal debts. Quite simply, he would be tightening the screw on the economy for no other reason than to inflict pain and create division. The Tories are on an ideology-affirming project; the Chancellor is an avid reader of Ayn Rand.

As an aside here on the subject of taxation, increasing it for the very rich who already have more than their fair share of the national resources might, in hands of a government serving the public purpose, be the right action to take.

More than ever, we need to convey the truth about how governments like the UK spend and that when it spends its focus should be not on balancing books but balancing the economy, in other words, matching spending to the productive capacity of the nation and ensuring full employment.

Whilst the role of government in a democracy is increasingly muddied by the involvement of global corporations in policy decisions, it is important not only that the public understands the basic realities about how governments which issue their own currency spend but also and more importantly that spending choices are the result of political decisions, not checking whether there are sufficient pounds in the public purse to pay for it.  Smoke and mirrors disguise in bare accounting terms the way in which money really works.

The reality is that a government with the power of the public purse can chose either to pour public money into private corporations to run public services, give tax breaks to the rich or indeed bail out banks and fund wars or equally choose to fund publicly delivered services, the public and social infrastructure and embrace full employment policies to deliver public purpose aims. When a government does the former there is generally silence on how it will be paid for and yet when left-wing politicians propose the latter, then the question on the lips of right-wing politicians, the media and economic pundits is ‘where will the money come from’? The fact is that such spending is a question of political choice, not whether there is sufficient money in the public purse through collecting tax or being able to borrow. A sovereign currency-issuing government needs to do neither.

We should also understand that the Conservatives, whilst framing their spending in household budget terms, already make those choices about who gets the money and who doesn’t, and we have experienced the dire consequences of those decisions for 10 years. Their spending plans have been skewed towards the interests of their rich friends and big corporations; the people of this country have been the losers.

What is important for the public to ask is who benefits from a government’s public spending programmes and whether it has the resources to deliver them, not how it pays for them.

If the left truly wishes to deliver real change and an inclusive progressive agenda which serves the interests of all working people, if it really is to challenge the status quo, it will need to change its thinking. It will have to change how it views monetary reality if it is to succeed.

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The post Getting the narrative right. Careful stewardship of the economy is not about balancing the public accounts; it is about serving the interests of the nation and delivering public purpose. appeared first on The Gower Initiative for Modern Money Studies.

Cartoon: Iain Duncan Smith as ‘Nosferatory’

Published by Anonymous (not verified) on Tue, 21/01/2020 - 5:53am in

Here’s another cartoon satirising the Tories. As I’ve said in my previous pieces, I’ve taken my inspiration from Horror films and ‘B’ movies. In this case, it’s based on Hans Murnau’s 1920’s German silent version of Dracula, Nosferatu. And who better to be portrayed as the vampire than Iain Duncan Smith, a man who responsible for so many of the 130,000 deaths the Tories have killed through austerity.

 

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