poverty

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 579 of /var/www/drupal-7.x/includes/menu.inc).

Private Eye: Starmer Appoints Pro-Tory Supporter of Middle Class as Head of Strategy

Published by Anonymous (not verified) on Thu, 22/07/2021 - 3:24am in

This fortnight’s edition of Private Eye for 23rd July to 5th August 2021 has a very ominous piece, ‘Keir Review’, reporting that Blair Stalin, I mean, Keir Starmer, has appointed Deborah Mattinson as his new head of strategy. The satirical magazine reports that when she previously held such a post advising a Labour leader six years ago, she wanted him to hold a review into the party’s economic performance, headed by a Tory, and to go after middle class swing voters. In other words, it was more Blairism after Blairism had failed with the election of David Cameron instead of Blair’s chancellor and successor, Gordon Brown. The article reads

Deborah Mattinson, Keir Starmer’s new director of strategy at Labour, has the job of relaunching his ailing leadership. The last time Mattinson advised a Labour leader in 2015, offers some clues of what’s to come: back then she wanted the party to have a review of its economic performance that would be “headed by a Tory”, and to start focusing more on the middle class.

Mattinson is a “public opinion” specialist who has worked for the party on and off since the New Labour years. She and her company, Britain Thinks, specialise in focus groups: the company has lucrative contracts with the Home Office and does opinion research for McDonald’s, Capita and Virgin Money. She will be stepping aside from her role there to work for Labour.

Starmer’s appointment of Mattinson is part of his attempt to rejuvenate his leadership with what is briefed as an undefined but “bold” new direction. Her previous political prescriptions were certainly bold, but were not popular with the party.

After Labour lost the 2015 election and Ed Miliband resigned, Britain Thinks produced a report for acting leader Harriet Harman called Emerging from the Darkness, advising how the party could recover from the defeat. The private report, which was leaked to ITV News, advised Harman to pull sharply to the right after the failure of Miliband’s modest move left.

One piece of advice was to commission an independent review of Labour’s economic performance in government “ideally headed by a Tory” – which Labour would publish because the party had to start “atoning for the past”. Mattinson also advised that Labour needed to “be for middle-class voters, not just down and outs.”

The report was based on conversations with focus groups of swing voters, relying on their opinion to form policy rather than just test potential messages. Harman did appear to follow the report’s logic, instructing Labour MPs not to oppose the government’s welfare bill or limiting child tax credit to just two children – decisions that were deeply unpopular in the party.

MPs, members and voters await the new direction the focus group guru will take Labour in now.

Basically, it’s going to be more Blairism: a return to neoliberal policies, the use of focus groups to test the popularity of policies, a concentration on the middle class to the neglect of Labour’s traditional base in the working class and absolute determination not to oppose Tory policies but to copy them. And her contempt for the working class is shown very clearly in the reference to ‘down and outs’. It comes after the massive success of Jeremy Corbyn in winning back Labour members and the popularity of his traditional Labour policies – a mixed economy, strong welfare state, renationalised NHS, powerful trade unions and strengthened workers’ rights – showed how bankrupt Blairism was. Under Blair, the party had been haemorrhaging members and the number of people who actually voted for it was lower than under Corbyn. Blair beat the Tories only because they were actually less popular than he was.

But all this has changed. It ain’t 1997 and these policies won’t work against a revived Tory party. Quite apart from the fact that they’re noxious policies that run directly counter to the Labour party’s whole raison d’etre. It was set up to defend and fight for working people, not abandon them and side with the employers and landlords who exploit them. But Starmer clearly hasn’t learned this lesson. Either he’s stupid and fanatical, pushing a set of policies long after they’ve been proved to be wrong and disastrous, or he’s deliberately trying to destroy the party. Either way, there’s a simple way to revive the Labour party:

Get the noxious Tory cuckoo out!

Care in the Time of COVID

Published by Anonymous (not verified) on Thu, 22/07/2021 - 3:02am in

The long-discounted chains of dependency in caring for humans and environment

In the midst of the smoke, fire and tragedy-filled days of early 2020 it seemed for a while impossible to imagine that resuming ‘normal’ life would ever make any sense. Climate change was upon us, searing, terrifying, deadly. Then COVID-19 came to fulfil half-made promises of radical change. Sheltering in place, working from home, the ‘new normal’ at first seemed likely to realise a decoupling from frenzied lives that had too little time left for care. 

So many desires for change flowed through this time. Long periods of watching each other only through screens connected us in new ways, even as it allowed us to glimpse a human withdrawal from the world, leaving the environmental home we have plundered to recover for a while. We witnessed wildlife reclaim the emptied streets and cities, while mountains emerging on city horizons freed from smog appeared as implacable witnesses of our transience. As we have waited for ‘normal life’ to return and release us, many have hoped that this momentary withdrawal means that the economies and politics that devour our planetary home may be reset. 

In a set of short reflections by artists on what the pandemic means for their practice, Anuradha Vikram offers a list of common beliefs challenged by the virus, including that

  • [w]orkers need to convene for a third of their waking lives or operations will derail; 
  • smog is just part of living in cities; 
  • culture is about visiting and caring for objects; 
  • childcare is something that happens outside the workplace…

The sense that the pandemic opens new potentialities and allows new aspirations forms an identifiable arc of responses to its meaning. Among the many things that could be said about the metaphorical load the virus bears is its appearance as an agent of change. 

Indeed, as a disease of populations more than of individuals, like the 1918 influenza pandemic to which it is most often compared, COVID-19 readily appears as the companion and aftermath of a kind of civilisation-ending moment. At both a grand and an intimate scale it raises profound questions of mutual obligation, of vulnerability to others, and of intergenerational justice. Its spread is driven by behaviour, including defiance of the constraints that containment demands, but also by the invisible traces of breath in air, signalling an implacable and involuntary community. It is a disease of the communal intimacy of bodies in constant but unseen gaseous exchange, but also a disease of inequalities. Described as ‘indiscriminate’ in its targets, the virus has in fact raised public awareness of racial and gendered distributions and unequal burdens of death and disadvantage. The virus is embedded in a narrative of planetary scale in terms of its sociopolitical agency, yet its inevitable impact on the home provokes deep questions about the places, routines and order of everyday things.

‘Pandemic’ derives etymologically from pandemospan, everywhere, among the demos, the people. This ‘everywhere’ has been managed through lockdowns and borders, but it has also posed thorny questions about where the responsibilities for care fall. Care for the elderly became a divisive question when the price of preserving lives was calculated against the economic cost of a lockdown. The ugliness of this debate reflected long patterns of neglect, entrenched in scandalously underfunded aged care. However, the social solidarity that rejected such calculation was also on show. Care has displayed this double face throughout the crisis: as a residual site of deep connection, the common air of vulnerability we breathe is at odds with the priorities of economic systems that foster and feed off a faith in individualism that denies and devalues the needs and dependencies that care addresses. 

When the lockdowns began in March 2020 and paid work was abruptly moved into the home in response to the global COVID-19 pandemic, the leadership line was ‘we’re all in this together’. Yet the kind of productivity that counted in GDP was to be maintained where possible. Notably, those whose work in the home is not counted as work picked up considerable extra hours. As schools closed, for some life changed more than for others. In what was optimistically named ‘home schooling’ working parents had to supervise quickly thrown-together lessons, presented on Zoom by harried teachers. Many of the teachers were themselves doing double time managing their own children. For some, it meant squeezing a corner of space to work in a cleared-out wardrobe or on a shared kitchen table. Time also had to be found for shopping and the preparation of three times the usual amount of food for families stuck at home. And for some, it meant being trapped with partners who responded to stress with controlling or violent behaviour.

As working from home was mandated, distorting metrics for counting productive work while discounting care were shaping policy responses, just as they have long shaped exploitation of the equally undervalued environment. The tax and transfer arrangements which are an extensive underpinning of economic life and play a significant role in shaping women’s fates regard the home as a cost-less resource. Many of the other ways in which we think about ‘work-life balance’ or ‘flexible work’ have as their implicit background inequitable and inefficient ways of ‘not counting’ work, especially women’s work, both in the care economy and in the home. A very significant range of assumptions shaped the ease with which the decision to move (paid) work into the home was made, and they framed the invisibility of its imposition on those who stepped up to mitigate the crisis. The backgrounds of both requirement and adaptation have roots that run deep in the gendered organisation of care and responsibility. If home was ‘free’, it was also a standing reserve for appropriation in an emergency. The way a home often functions as a site of gendered relations of care and labour did not form a point of consideration in planning. Instead, by taking employee flexibility for granted, and presenting working from home as a privilege offered by generous employers, rapid adaptation was simply required as the price of keeping a job. 

In the COVID-19 crisis that enveloped the world, lockdown served valid ends. But aside from this instrumental question, what did its gestures assert about power: the power to use, to extract value? How did it deepen entitlements that are linked to systemic violence against women, notably as these flow through the individualism supported by economic systems that both exploit and devalue care work? Although lockdown measures have been opposed by some, there has been no large-scale opposition to state mandates requiring work to take place from home. Indeed, the risk of losing jobs altogether has loomed large, making those working from home seem lucky. Employers appeared flexible and generous in ‘allowing’ working from home, rather than being seen as demanding the use of the home and its care. Yet the arrangement nonetheless asserted the power to use, to take, and to validate the needs that drive the act of taking. What I have elsewhere described as an act of requisitioning the home gave a distinctive political form to the emergency. 

The most insidious and prevalent forms of violence are those that cannot be seen. Often their systemic form is masked by ideas about the responsibility of agents whose actions are thereby extracted from wider conditions and sequences. In her recent book on violence against women Jacqueline Rose draws attention to a press photograph of a group of white men in dark suits, looking on as their president signs an executive order banning US state funding for groups anywhere in the world offering abortion or advice to those seeking it. No more funding, that’s all. This is, for Rose, a paradigmatic instance of quiet complicity in misogyny. The ‘global gag rule’ with which Trump inaugurated his presidency did not have the same shock value, perhaps, as his more overtly sexist behaviour, yet it meant an increase in deaths by illegal abortion for thousands of women throughout the developing world.

The misogyny expressed in such an order is not only casual but tied to a sense of office and duty. For those who signed or approved the executive order, the consequences of their actions, far downstream, may constitute deeply traumatic lived realities, yet these they need not trouble themselves about. Any thought about consequence is blocked by imagining that what they do is ‘morally right’—protecting the rights of the innocent unborn. Those who sign will not be among those who care for the women who must give birth or seek unsafe abortions, nor will they be among those to care for the infants if and when they are born. Here the invisibility of care, the uncounted nature of its costs and risks and who bears them, is also a support for the invisibility of systemic violence. Violence is a form of entitlement, as Rose also remarks: entitlement to a protected place in the distribution of costs and risks, entitlement to use violence with casual impunity, entitlement to a schema of selective visibility and to the disappearance of inconvenient truths. To remain entitled depends on all of this, upon distribution, impunity and invisibility remaining as they are.    

Recognising misogyny as an aspect of individual behaviour can be in tension with recognising these wider structural aspects. The present focus on misogyny in Australia’s parliament has concerned acts ranging from sexual violence to the everyday disrespect that women encounter in the workplace. The prime minister, after failing for many weeks to grasp the seriousness of any of these issues, ordered a taskforce into being under the leadership of the Minister for Women, Marise Payne, who had, to that time, issued no media statement at all on the parliamentary scandals. The composition of the taskforce tells a tale whereby being a woman is supposed to be in itself a sufficient opposition to misogynistic culture. 

Among the key players in this taskforce is Superannuation Minister Jane Hume. Just days before the taskforce’s establishment, she had tried to push through a policy in which women who were fleeing domestic violence could access money from their own super funds to support themselves and their children. The redoubling of their victimisation by ‘allowing’ them to take out money intended for their already underfunded retirement (generally, women’s superannuation holdings are far smaller than men’s) met protest and was dropped. Yet Hume was invited to take on the task of promoting ‘Women’s Economic Security’. Social Services Minister Anne Ruston, who presided over the return to poverty of thousands after rescinding benefits made available during the most disruptive phases of the pandemic, became responsible for ‘Women’s Safety’. Since Ruston has denied there is a measurable poverty line at all, let alone one below which many Australians fall, there is considerable irony in this role too. For poverty condemns many women to insecure lives, and to remaining in unsafe homes. The Assistant Minister for Women, Amanda Stoker, meanwhile, is a prominent critic of abortion rights, is a sceptic about reported levels of rape on university campuses and has been dismissive of the very claim to existence of transgender people, treating this as an illegitimate ‘choice’ of gender. Stoker was immediately called out for her willingness to accuse women of playing the ‘gender card’ and her support for people such as Bettina Arndt speaking up for men’s rights against alleged feminist overreach. 

The reasons for the inception of the taskforce (which amount to a crisis response to recent government failings in managing public perceptions, as much as anything else) risk keeping the debate at a level of judgement on right or wrong, appropriate or inappropriate behaviour. Although the wider questions of gender inequality have certainly been flagged, too little regard is given to factors such as poverty, or the more profound ways that gendered and racial distributions of entitlement and privilege are maintained through a fundamental devaluing of the kind of care work that women still predominantly do. To this extent, it seems likely that questions of violence will only be superficially addressed as they affect the majority of women in Australia. 

Yet perhaps there is cause for hope. Care has become visible in a new way during the COVID-19 crisis. The availability and limits of care have become part of the stakes of the crisis. The question of who provides it and how under ordinary conditions of life has become an issue that also matters. The providers of the supports of ‘normal life’ are often the lowest paid, and they have become noticed only as their usually backgrounded roles undergo disruption. It is also evident that, as they were required to remain at home during periods of lockdown, men have participated in care in new ways. At the same time, however, huge setbacks to previous progress on gender equality have been remarked everywhere in the world where the pandemic has brought lockdowns, as women have given up jobs to take on new burdens of care in the home, or have lost jobs in disproportionate numbers in work such as hospitality. How will our ‘taskforce’ tie these many threads together?

It is all too easy to divide them. On the very same day on which Julia Gillard made her now world-famous speech condemning misogyny, the Social Security Legislation Amendment (Fair Incentives to Work) Act 2012 was passed by the parliament she led. The Act ensured that as of 1 January 2013 those recipients of the Parenting Payment who were partnered would cease to be eligible for the payment once their youngest child turned six years old, or eight, in the case of single parents. Most of these parents would instead be moved onto Newstart, the general job-seekers’ allowance. Labor’s 2012 amendment removed a ‘grandfathered’ protection from single parents who had received single-parent benefits from before 2006, and were previously entitled to them until their children turned sixteen. The amendment saved the government $700 million. Indeed, since first introduced by the Howard government in 2006, pushing single parents from the parenting payment onto Newstart has saved $5 billion. The costs have been borne elsewhere, in the deprivations endured in the home and in lives exposed to lack of care and opportunity. 

One third of single-parent families in Australia are now estimated to live in poverty, and one in six children. Underpinning the lack of widespread shock at these appalling statistics are stories about individual responsibility, a category that again serves to conceal and distribute violence while posing as the underpinning of an economic morality of merit. Stereotypes of single mothers depict them as lazy, manipulative and out to get what they can from welfare. Aboriginal mothers, who face a long history of both racial prejudice and government interference, are especially denigrated. Yet clearly the circumstances that have brought about the conditions of these women’s lives (which include state violence, economic policy, and domestic violence) circumscribe severely the domain of ‘choice’ that women are nonetheless supposed to have exercised in electing to raise children, and the ways they manage this task. 

The misogyny that is ingrained in suspicion regarding women unmoored from the sustaining provision of a ‘breadwinner’ merely intensifies an allocation of responsibility for reproductive life to women in general. It is astounding how wedded our society remains to assuming that responsibility for the care of children lies in the private sphere—that it belongs to women to offer their lives and bodies to such roles in ways that systemically disadvantage them in economies organised around the values of paid work. Or that where women are able to pay for the care of children, it will fall to other women, and disproportionately women of colour, to do this work at minimal rates of pay.  

The lessons this economic sexism reveals connect with those that can be drawn directly from the arrangements made to deal with the public emergency presented by the pandemic. The avowed aim has been to restore normality, including the normal distribution of costs and risks and the conditions under which they become visible. The kind of crisis management that was most prevalent in the particular shitstorm that was 2020 emphasises the calculation of impacts in financial, legal or human terms, using a rational calculus, albeit one that was much disputed, in which government is seen as weighing the costs and benefits associated with planning for and mitigating specific crisis events. Emergency management, as is typical, has been focused on the level of decision-making and allocation of limited resources for care, rather than on cultivating attitudes more appropriate to the protracted lived experiences of looking after one another during crisis, or of breathing a common air. That dichotomy was visible in the rapid withdrawal of social support schemes such as JobKeeper the moment they were seen as no longer strictly essential for the good of the economy, regardless of the people this then delivered into insecurity, homelessness and poverty. 

One way to expose systemic violence is to reveal who bears costs and risks and, in doing so, to disturb schemas of selective visibility as they flow from power. Alongside this gesture of criticism, though, other forms of responsibility demand both acknowledgment and cultivation as ‘normal’ comes into question. Carol Gilligan’s account of an ethic of care contrasts the kind of thinking that calculates costs and risks with the relational work that involves ‘seeing and responding to need, taking care of the world by sustaining the web of connection’. Gilligan saw a dichotomy between calculative moral thinking, or the kind of thinking modelled on moments of decision, and the work of care, a dichotomy she related to gender roles. We might also relate it to the different contours assumed by individual responsibility, as contrasted with the ongoing rhythm of breathing air that necessarily overflows individual boundaries, placing us in common need. 

In general terms, we have come to think about responsibility in highly individualised and linear ways, as if we are only responsible for the actions we individually and intentionally take. Yet caring thwarts such boundaries. It is often unchosen and is responsive to a sense of shared life. It is true that if care has to be given to maintain or restore the order of ‘normal’ then it has to be provided by somebody, somehow. But relations and demands of care also reveal connections that exceed and support such terms of possibility. While it ‘takes a village to raise a child’, for we children of economic rationalism there can be trauma in what Gilligan describes as the ‘rediscovery of connection, in the realization that self and other are interdependent and that life, however valuable in itself, can only be sustained by care in relationships’. This trauma today presses itself upon us. It haunts us in the experience of climate change as being already here, as well as in the experience of the pandemic. Government management of the COVID crisis has intersected with widely acknowledged crises in care, both in the rich sense that Gilligan gives to care as ‘relational thinking and work’ and in the ‘crisis of care’ in capitalist economic settings. Here care occupies the delicate—or unstable—place of balance between something that has to either be purchased, transacted as part of a labour market, or given absolutely unconditionally, without price attached. 

The most fundamental conditions of life only rarely become visible as such, and the results of their becoming so is often a moment of grave disquiet. But these are also rare times of opportunity. What economists call ‘externalities’ guide and reflect what is seen and unseen. Air pollution from industrial production and practices is estimated to kill 8.5 million people a year. These preventable deaths, however, are for the most part invisible as aggregate effects. If someone sufficiently far off and low down in a chain of dependency pays the price, an enterprise remains apparently costless. Now, however, climate change is disturbing that comfortable distribution of costs and risks, and the drivers of relative wealth and poverty fail to guarantee the security of anyone. The crisis of the Black Summer gave the lie to the logic of externalities, amplifying signs of a violence wrought on climate. The effects begin to track long-discounted chains of dependency. To amplify their claims on us is to weave the threads together. It is past time to begin remaking social policy centred on practices of care and to put attention to the living world on which we all depend at the forefront of consideration.

We have choked not only on foul air but on a visceral realisation that such networks of dependency include us in their fragile support of life. The very distribution of cost and risk has been an effect of the industrial practices that our governments endorse and foster as generators of wealth and the security it brings for a few. And all that we count as ‘normal’ presently depends on its quiet arrangement of life chances. We need this time of rethinking and engagement with care to be worked into our sense of the time of pandemic, to trust it as opening new potentialities, new aspirations. Pan-demos. Everywhere, people. Not yet quite back to normal, this ever-narrowing space to do things otherwise remains at least a fraction open. 

In a Federal Infrastructure Bill, Waste Isn’t Pork

Published by Anonymous (not verified) on Tue, 20/07/2021 - 10:30pm in

Photo credit: Jamesbin / Shutterstock.com _____ There are two Americas, and of the many things that divide affluent Americans from...

Read More

Labour Anti-Semitism: Blairite MP Neil Coyle Demands Expulsion of Jewish Voice for Labour

I put up a post yesterday about Keir Starmer’s plans to purge four left-wing groups from the Labour party – Resist, Labour Against the Witch-Hunt, the Labour in Exile Network and Socialist Appeal. He and his fellow Blairites despise Labour Against the Witch-Hunt and the Labour in Exile Network because they challenge the lie that the people purged from the party were anti-Semites. They weren’t. Many of them were Jewish, like Jackie Walker and Tony Greenstein, and were very firmly anti-racist with a firm commitment to combating real anti-Semites and Fascists, such as Marc Wadsworth, a Black anti-racism activist who worked with the Board of Deputies of British Jews to fight BNP anti-Jewish attacks in the Isle of Dogs. The real reason they were purged was that they were socialists, who wanted a return to the mixed economy of the post-War consensus, a nationalised NHS and a welfare state that genuinely supported the poor, the unemployed, the disabled and elderly. They were targeted because they supported Jeremy Corbyn’s superb programme and, like him, they were opposed to Israel’s brutal dispossession and ethnic cleansing of the Palestinians, or defended those who did. Mike was smeared as an anti-Semite and Holocaust denier because he wrote a document showing that Ken Livingstone was perfectly correct when he stated that Hitler initially supported Zionism.

The left-wing members of Labour’s NEC are determined to stand against the proposed purge. They fear it is an attack on Labour democracy and will lead to further purges and the erasure of the left-wing and Bennite traditions in the party. I believe very strongly that they are correct. As news of the proposed purge broke, various noxious MPs came out howling for the expulsion of other Labour party groups. One of them was Neil Coyle, who demanded that Jewish Voice for Labour should also be expelled along with other groups because they were ‘Communists’.

Not far enough. JVL should be gone too. And other outright Communists who have their own political party/ies they can ruin.

Mike in his great article about this latest piece of factionalism from Starmer points out that this anti-Semitic.

“There’s no reason to suggest that Jewish Voice for Labour (JVL) are Communists. Or that any of the organisations Starmer will purge are “poisonous”, “toxic” or “warped”.

But it is easier to persuade doubters with emotive language than it is to actually provide a reasoned argument for the unreasonable thing Starmer is about to do.

Coyle’s tweet is anti-Semitic. JVL argues that the purge of Labour Party members on grounds of anti-Semitism is false – from a Jewish standpoint. Coyle is therefore prejudiced against these Jews because they are Jews, which is the classic definition of anti-Semitism. And Starmer is perfectly happy with that, meaning that he is also an anti-Semite, notwithstanding his familial connections to Judaism.

Absolutely. The malignant and intolerant ultra-Zionist right of the party despise Jewish Voice for Labour because they stood up for Corbyn, and denounced the attacks on the Palestinians. The Israel lobby is particularly harsh on Jewish critics of Israel, because they visibly contradict the lie put into Israeli law by Netanyahu that Jewry and Israel are synonymous and the Jewish state has the support and affection of the world’s Jews. Hence, Jewish critics of Israel are smeared as self-hating, anti-Semites and reviled as ‘traitors’ and ‘kapos’ – the last a reference to the officials in the Warsaw ghetto to whom the Nazis delegated the responsibility of selecting the victims destined for Auschwitz and the other murder factories.

Coyle’s own comment, however, is extremely close to real Nazi anti-Semitism.

The Nazis railed against ‘Jewish Bolshevism’, considering that Communism and ‘Marxist’ socialism, along with capitalism, liberalism, democracy and trade unions were all part of the overarching Jewish conspiracy to enslave White gentiles. They also claimed that Jews were disproportionately represented in the Social Democrats, the German equivalent of the British Labour party, and these socialist Jews were working to reduce the number of ‘Aryan’ members of the Reichstag as part of their insidious conspiracy. While Coyle isn’t a Nazi, his comment contains many Nazi tropes. If it came from a Corbynite group, they would be accused of anti-Semitism and expelled. But Coyle is safe because of the partisan bias of the NEC and because his noxious comment is directed against socialist, genuinely anti-racist Jews.

But it is a form of anti-Semitism, and racism in the party against Blacks and Muslims has risen under Starmer, whose followers in the NEC were responsible for the racist bullying of Black MPs and activists such as Diane Abbott.

The four groups Starmer wants to purge are not a threat to the Labour party. Starmer and his supporters in the NEC are, and it is they who should be purged and expelled as Thatcherites and racists opposed to genuine Labour values and policies.

Johnson’s levelling up programme is looking more like a sham

Published by Anonymous (not verified) on Mon, 19/07/2021 - 1:54am in

Photo by Neil Moralee on Flickr Creative Commons 2.0 licence

A system is corrupt when it is strictly profit-driven, not driven to serve the best interests of its people.

Suzy Kassem, Rise Up and Salute the Sun

 

Oh, the irony! This week in Boris Johnson’s ‘levelling up’ speech, he said: ‘It is an outrage that a man in Glasgow or Blackpool has an average of 10 years less on this planet than someone growing up in Hart in Hampshire’. He followed that by saying, ‘The Government’s mission’ was to ‘unite and level up across the whole UK, not just because that is morally right but because if we fail then we are simply squandering vast reserves of human capital, we are failing to allow people to fulfil their potential’.

Reading those words, it is difficult not to feel that one has been transported into an alternative universe, given that the poverty and inequality he is referring to can be laid directly at the door of government spending policies and the economic dogma which drives them.

Over the past year, we have learned the value of those key workers in the public and private sector who have, at some risk to themselves, kept the economy functioning during the pandemic, just as they did before its arrival.

This week, the TUC drew attention to the low pay and insecure employment which afflicts many in a variety of occupations, from social care to supermarkets and delivery drivers, and which were, it said, the principal reasons for ‘in-work poverty’. It makes it all the more difficult, then, to understand Treasury plans to cut the Universal Credit uplift, a move which will affect some of the poorest people in our communities, many of whom are in work.

Levelling up?

If Johnson’s vision for building back fairer and better is to be believed, it should start with recognising the value of those workers, as well as the economic improvement that better wages and terms and conditions could represent for the economy and people’s lives across the country. In this respect, it is the government which, through its legislation and spending decisions, has the real power to make that difference, if it chooses to do so.

And yet, even the Prime Minister’s own MPs are seeing through the rhetoric and are increasingly concerned that his words represent little more than soundbites, with little if no substance at all. This was noted by the Institute for Public Policy North (IPPR) who made the point that two years on since the promises to level up were made, there still exist ‘deep divides between and within regions’ which are continuing to grow, and that words had to move beyond mere rhetoric towards real action. So far, we have seen no sign of the promised ‘levelling up’.

This week the Birmingham Mail reported on a schoolgirl who was spotted filling her pockets with food for her younger sister, so she didn’t go hungry. It is yet another clear sign of the harsh reality of government policies over ten years, which have been reported on regularly by the GIMMS team in the MMT Lens. From the use of charities filling the growing gaps in public provision, the rise of food banks and homelessness and the decay of those public services which keep an economy and its people safe and healthy.

Yes, welcome to the 21st century. Britain regressing towards a return of Victorian values predicated, as it was then, on charitable works rather than government intervention.

In the same week, the findings of a report published by UK Children’s Charities revealed that council spending on early intervention services had halved, from £3.6bn to £1.8bn. It estimated that since 2010 a thousand children’s centres and 750 youth centres had been forced to close. The charities warned that local authorities were stuck in a ‘vicious circle’, meaning that a lack of funding forced cuts to services which then, in turn, resulted in more expensive crisis interventions and care placements later on.

The Chief Executive of The Children’s Society, Mark Russell, said: Behind the figures showing increased numbers going into care and becoming subject to child protection measures are heart-breaking stories of children facing sometimes horrific risks inside and outside the home, including neglect, abuse and exploitation.

And the Director of Policy and Campaigns at Action for Children, Imran Hussain, added that ‘An approach centred on firefighting crises is not a strategy that protects children.’

Again, this week, Channel 4 News reported on the consequences of the increased use of temporary housing on mental health. According to government statistics, more than 95,000 people in England are living in temporary accommodation which, according to previous reports, is often substandard and unfit for human habitation, with all that implies for both physical and mental health.

A study carried out by the charity Shelter and published in 2017 found a direct link, unsurprisingly, between poor housing and mental health issues. It revealed that more than half of the adults who were surveyed were suffering from depression, with children over three times more likely to demonstrate mental health problems.

That was before the pandemic. The housing crisis is not new, but the past year has made things much worse. It is a direct failure of the government to act legislatively to ensure that housing is fit for purpose and, through its spending decisions, to guarantee sufficient good quality housing at reasonable prices and truly affordable rents.

The problem has been compounded, over a decade, by the severe cuts to local authority funding from central government, which has impacted on its ability to ensure accommodation standards are maintained and that there is sufficient affordable housing stock available to meet demand.

While Rishi Sunak reinforces the concept of fiscal discipline, contrasting against the Prime Minister’s spending promises, the dire situation in social care rears its ugly head, yet again. It was revealed this week that at least 75,000 people are waiting for an initial assessment of their care needs after having contacted their local authority for support, and an estimated 159,000 (those already in the system and receiving care) were facing long delays in getting their annual care review.

Continuing lack of adequate funding has left local, government-run social care services more and more stretched and people are being abandoned at a time when they need support the most, and in some cases, may have died before getting the care they need. This is shocking and unacceptable in a civilised society. The Association of Directors of Adult Social Services said it was a ‘reflection of the parlous financial situation facing councils after a decade of cuts and a pandemic that had created staff shortages in care services.’

For a decade, this government has put fiscal discipline over the health of the public and has conned citizens into accepting the lie that there is always an eventual price to pay for its spending and borrowing. If Sunak gets his way, even after an astonishing display of the capacity of government to spend to prop up the economy in this time of crisis, that same lie is likely to be perpetuated, yet again, in the future. Already, ten years of selective government austerity has created a fragile society that is cracking under the strain and the public and social infrastructure is no longer fit for purpose. Can society cope with yet more?

And to make matters worse, it has been announced that Johnson, repeating his newly appointed Health Secretary’s suggestion that we could raise taxes to pay for social care, is backing proposals for a new tax to fund the ailing system. After having swept the issue into the long grass for too long, they have come up with a solution that continues to reflect the mistaken belief that tax funds government spending.

Great idea it is not! Taking money out of the economy, putting it into the metaphorical shredder and leaving people with less money to spend, is a recipe for more disaster. Such a solution would be harmful to an economy which has suffered from the consequences of previous government policies and austerity, and will add to the ongoing effects of the pandemic, which are far from over.

While the government emphasises its objective to get the economy ‘back to normal’, whatever that might mean, and at whatever cost to the nation or the planet, it seems that for a former Chancellor he’s not that bright. The logic of one person’s spending equalling another’s income seems to have escaped him. If you take more of that spending capacity away at such a time of economic uncertainty, you take away the income of those down the line. It is an inescapable fact. Such a solution would, quite simply, make a recovery even slower and harder to achieve.

Johnson’s levelling up programme is looking more like a sham.

Words are cheap. As Johnson promises the Earth, his Chancellor remains fixated on fiscal discipline. As always, the problem boils down to the false idea of monetary scarcity. So, after a year of vast government spending to manage the economic consequences of the pandemic, we are being wrongly told that there will be a price to pay in the end.

As we see over and over again, the public discourse is founded in both ignorance and political agendas. And again, this week, we were treated to yet another disgusting spectacle as the government won the vote to back the proposed cut in foreign aid, by a large majority, despite opposition on both sides of the House.

According to a poll, 66% of people backed the cut to aid, thus demonstrating once more the poison that spreads when people don’t understand how government really spends. That it is lying when it claims it has to cut spending because we’ve spent beyond our means, and must now tighten our belts in one way or another. It reinforces a message that then divides people in the belief that such spending could be at their expense, in terms of higher taxes or cutting their public services to pay for it.

This decision is short-sighted, particularly at a time when we need to work cooperatively globally to address the climate emergency, and also the poverty and inequality that has already derived from it and the decades of neoliberal dogma. Not just decades, but centuries, of exploitation of both the human and real resources that the west uses to maintain its people’s lifestyles, lie at the heart of the many problems faced by ‘developing’ countries.

Western institutions such as the IMF and the World Bank, through their imposition of unsuitable solutions to development, have made things worse; indebting many of those countries which then face the crushing burden of structural adjustment programmes that have ravaged them, creating yet more of the poverty and inequality which has become both endemic and destructive as a result.

In the light of the climate crisis, which is adding to those problems, it is only right that we reject the idea that we can solve them by pretending we live in a vacuum – the island mentality of pulling up the drawbridge. Our failure to act now, cooperatively at this crossroads in history, which will define what happens next, will be a failure for us all as a species if we fail to recognise that fact.

When the Prime Minister tells us that the cut is needed to keep public debt down, it is a lie. A lie with damaging consequences for some of the poorest countries in the world.

In stark terms, as Daniel Willis from the Campaigning Group Global Justice Now, commented, ‘when the inevitable death and suffering from aid cuts hits the news and every MP who has voted to sever the UK’s 0.7% commitment should know that blood is on their hands’. And, as even the former Conservative Prime Minister, John Major, said, ‘it seems that we can afford a ‘national yacht’ that no-one either wants or needs while cutting help to some of the most miserable and destitute people in the world.’

The economic ‘ignorance’, if that is what it is (and one must begin to question that assumption), is shocking. And the lack of compassion, unforgivable. This was further reinforced this week by the comments from a Tory MP, who enjoys the benefit of multiple homes and many thousands of pounds of public money claimed for hotel expenses, yet who voted for the cuts, saying, ‘we must not forget that, as my adult sons remind me regularly, every pound we spend on international aid is borrowed from future generations.’

The harm to future generations which include her sons, and any offspring, will not be future debt as a result of borrowing, or the threat of higher taxes to pay for it. Government is the currency issuer and has no need to borrow to fund its deficit. The burden of future debt is a myth promulgated by those serving an agenda. As Professor Bill Mitchell wrote:

“The idea that borrowing ‘takes money from the pockets of future taxpayers’ is nonsensical. The funds to pay for the bonds originate in the government net spending in the first place.

 

Clearly, deficits now are in part helping the current generation with income transfers and the like. But they also facilitate public education, public health and other infrastructure which provide massive benefits into the future for the current generation and their children.

 

Once you understand that then the idea that there is a future burden will make you laugh.”

The real harm to future generations will be a government that has failed people, both here and abroad, as a result of an inadequate response to the climate emergency and the vast levels of poverty and inequality deriving from a noxious economic dogma. When the suggestion is that the debt is more important than human well-being or survival, then we should start to ask questions. The so-called debt, that really isn’t one, concealed as it is by the smoke and mirrors of how government really spends, will still be there as the waters are closing over the heads of those same generations. That’s a big risk to take! Our children will not thank us.

On a connected point, it is also concerning to read, in this respect, the media headline this week ‘Global philanthropists pledge £94m to cover UK foreign aid cuts.’ At the same time as it is shameful that we have a government claiming, falsely, there is no money when we need urgent global cooperation to address the biggest challenge humanity has ever faced, it is, by abdicating responsibility, ceding power to philanthropists with political agendas, thus bypassing democracy. These are the equivalent of the Victorian ‘great and good’, distributing largesse to the deserving poor and then abandoning support when it no longer suits their corporate objectives.

This economic household budget bilge of unaffordability is not confined to the Conservatives. Labour continues to do an exceptionally good impression of bowing to the economic dogma of ‘hard earned taxpayer’s money’ which is, unsurprisingly, supported by many of the public whose ideas of how the government spends are couched in the usual household budget narratives.

A newly launched Labour group called Renaissance, rooted ironically in the language of ‘rebirth’, carried out a series of the ubiquitous ‘focus groups’ that it is so fond of, and now seems firmly committed to sticking to the notion that it will need to regain voters’ confidence in its fiscal integrity. Liam Byrne’s note left in the Treasury saying that there was no money left, which was so cleverly used by the incoming government of the day to justify its austerity programme, is still reverberating in the mind of voters today. Fiscal Discipline Rules! As for the concept of ‘rebirth’, it seems more like the promotion of the status quo. Hurry along now, nothing to see here.

Its report, which will be published later this year, reveals the concerns of voters about the national debt, and who also expressed the view that ‘it would be hard to trust Labour as the costs of the pandemic will have to be paid back for some time.’ Years of the endless retelling of the lies about the dangers of deficit and debt, or burdens on future taxpayers, continue to take their toll on the lives of working people.

Others in the focus groups were, apparently, concerned that centrally funded Labour local authorities were failing to do their job. It is regrettable that there remains a lack of public understanding of the background to some of that failure, which has affected Conservative and Labour authorities alike, forcing some even into bankruptcy.

Without an understanding of the difference between the currency issuer, which is the national government, and the currency user, in this case, local government, it is easy to appreciate voters’ concerns. And yet it is a situation that has been created by a decade of cuts to central government funding which have stretched local government budgets, forcing unpalatable decisions, either in cuts to services or increased local taxes and all that means for the health of local economies.

This is symptomatic of the hole that Labour has dug for itself over a decade when it had an opportunity to challenge this false narrative and build a new one. It rejected that opportunity and now is stuck with the consequences of that failure. Consequences that will reverberate for many years to come.

The household budget narrative is doing vast damage to future prospects both domestically and abroad, and yet we continue to accept it without question. It is doing vast damage to the prospect of managing the climate emergency, framed, as it is, in the false concept of monetary scarcity.

A report published by Vivid Economics has made clear, this week, that the commitment to dealing with the climate crisis is still lacking in real substance. It pointed out that the ‘green recovery’ promised by many governments last year had, quite simply, not materialised, and suggested that public money was being spent on things that harm the public. Jeffrey Beyer, a lead author of the report said:

 “With stimulus programmes winding down, it is the end of the beginning of the Covid-19 recovery. We can only build back better sustainably if we protect the climate and nature. Unfortunately, it is impossible to justify the fact that public stimulus money is doing more harm than good to our climate and biodiversity, which underpin our economy. Nature has been particularly neglected, with fewer than ten of the countries we studied investing in nature-based solutions such as reforestation or wetland restoration. Ignoring nature misses out on the triple-win opportunity for jobs and the economy, climate, and biodiversity.”

 

“We did not see a sufficient shift to green spending. It’s hard to be optimistic when you look at the evidence about how much climate change and nature have really not been considered in public spending decisions.”

The challenge remains, and so far, the UK’s response has been limited and lukewarm, forged as it is on fancy rhetoric rather than real action. And globally, we haven’t even got over the starting line as the key measures for change remain monetary affordability, rather than human survival.

At the same time as the excessively rich with money to burn fly to the edge of space, to create the next thrill to liven up their empty, boring lives, the government is ignoring its responsibility to drive change through its policies and spending decisions, which includes acting to restrain the irresponsible behaviour of the excessively wealthy, whose desire for pleasure come before planetary health.

It doesn’t have to be like this. There is an alternative that will protect future generations and create sustainable societies which would allow humans to flourish whilst respecting planetary and environmental boundaries.

There is still time to ‘take the road less travelled’ and move away from the maintenance of a damaging status quo. Knowing something about how the government spends could allow us to take that first step along the path.

 

 

Join our mailing list

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

Support us

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

 

Share

Tweet

Whatsapp

Messenger

Share

Email

reddit

Pinterest

tumblr

Viber icon
Viber

The post Johnson’s levelling up programme is looking more like a sham appeared first on The Gower Initiative for Modern Money Studies.

Politicians and the media coax the public to accept a new period of austerity

Elderly woman looking out of her windowPhoto by Kaspars Eglitis on Unsplash

“The political class in Westminster have failed us. They inoculate themselves against the pain that we suffer. We will not forgive them, and no, we will not be patient with their political ideology – a belief system which sees exploitation, grotesque levels of inequality, the constant threat of war and destitution as a fair price for the protection of a system which serves them and the richest so well. We have run out of patience with their destruction.

They wilfully look away at the crisis in housing, at poverty pay, they have encouraged a system of privatisation and fragmentation of our NHS, taking away more and more of our services, they stoke a despicable nationalistic racism and cultivate culture wars to distract us, to divert our attention and to obscure the truth. The truth is they refuse to serve our interests and they have disdain for our lives.”

Laura Pidcock

 

This week, the debt doomsters have been out in force! The media and politicians alike have yet again been trying to pull the wool over our eyes with warnings about public debt, handily reinforced by the publication of the Office for Budget Responsibility’s (OBR) Fiscal Risks Report.

Whilst Labour’s Rachel Reeves commits to a cosy conversation with the public about how we can pay for social care, saying that the party would be willing to put up taxes to do so, the OBR’s report has set off a spate of media articles designed to prepare the public for some ‘hard choices’, as Rishi Sunak has previously described it.

We are being primed for the government to abandon its commitment to the pension ‘triple lock’ with scaremongering about its cost, as Sunak claims that concerns about the 8% rise to the state pension due this year under the policy are ‘completely legitimate’, and that any decision will be ‘fair for pensioners and taxpayers.’ And thus, yet again, we see politicians creating and reinforcing societal and intergenerational division for a political agenda, based on the lie that taxes fund state pensions. By claiming that there is a limited pot of ‘taxpayers’ money’, they imply that the triple-lock for pensioners will deprive young people of a stable life and burden them with higher taxes in the future, leading to the conclusion that pension costs must be controlled to be fair to the young. At the same time, it ignores the ongoing reality of decades of government created pensioner poverty and the mess of government-encouraged private pensions that rely on a corrupt and unstable financial sector. Yet again, we see the government creating conflict and absolving its responsibility for its citizens on the false premise of monetary unaffordability.

Then, this week, it was announced that the government would be withdrawing the £20 a week Universal Credit uplift which gave people a lifeline during this difficult time, and went some way to repair the damage caused by 10 years of cuts to public and social security spending.

What sort of perverted logic claims that reducing weekly payments will contribute to getting people ‘back into work’? What sort of perverted logic suggests that people already in work and existing on low incomes and in precarious employment, and for whom the uplift represented an improvement in their living standards, should now be denied it?

Apart from lacking moral compass, such a decision is also macroeconomically bonkers, as it removes money that was being spent into the economy by both those unfortunate enough to have been made unemployed or indeed those receiving in-work benefits because of low incomes. In this respect, the government’s preoccupation with the economy is laughable, since it fails to recognise the role of private spending. It also fails to recognise that it is the government that is actually responsible for creating an environment conducive to the good functioning of the economy.

When asked how a cut would help people to find work, Sunak’s response was that the government was ‘making sure that people are funded by the government to get new qualifications and skills.’ However, as the parable about the 100 dogs and 95 bones (told by Warren Mosler, below) and the economist Bill Mitchell make clear, ‘training does not equal jobs.’

 

And as for job creation, we can look to the government’s Kickstart scheme which allows employers to offer a six-month work placement funded by the government. It was revealed this week by the work and pensions secretary, Therese Coffey, that just over 40,000 young job seekers had started work on the scheme out of a planned 250,000. A scheme that expires at the end of the year, and we are already halfway through. Not exactly a roaring success.

Those in government suggesting that reducing the current payments is a solution and would contribute to getting people back into work, presumably because then they will accept a low wage and insecure employment, clearly have never had a day of living with government-created want in their lives. Even former Tory work and pensions secretaries have asked that the government rethink, as government ministers have admitted that they have made no studies on how many more children the withdrawal of the Universal Credit uplift will push into poverty, with figures being suggested of over 400,000.

In that light, a report published this week by Loughborough University revealed that even before the pandemic arrived 4.3 million children were living in poverty, up 200,000 on the previous year – and up 500,000 over the past five years. It also noted that 75% of children living in poverty in 2019/20 were in households with at least one working adult, which was up 67% on 2014/15.

Anna Feuchtwang, Chair of the End Child Poverty Coalition said:

“The figures speak for themselves – the situation for children couldn’t be starker. We all want to live in a society where children are supported to be the best they can be, but the reality is very different for too many.

“The UK Government can be in no doubt about the challenge it faces if it is serious about ‘levelling up’ parts of the country hardest hit by poverty. After the year we’ve all had, they owe it to our children to come up with a plan to tackle child poverty that includes a boost to children’s benefits. And they need to scrap plans to cut Universal Credit given parents and children are having a tough enough time as it is.”

The solutions lie in a much broader and radical approach to unemployment which puts government at the heart of policy, rather than leaving the market to dictate unpalatable responses which are about maintaining a competitive environment to keep profits rolling in, but which are at the expense of working people. People who have been exploited and manipulated to serve an economic system that depends on keeping some of them unemployed to control inflation and benefit employers, by keeping wages low and jobs insecure, whilst at the same time blaming those very same people for being unemployed.

Given the huge environmental challenges ahead, we need a policy mix which includes expanding the public sector to restore its efficiency and effectiveness. We need to enable a shift in what we consider to be a healthy economy by moving away from endless growth and consumption of stuff to keep the profit wheels oiled, towards one which values human well-being and planetary sustainability as key to success.

This policy mix should be underpinned by the implementation of a permanent Job Guarantee to provide economic and price stability when the next recession hits, as most surely it will, along with a fit for purpose benefit system for those who are unable to work for any reason.

And yet while the very real challenges which will define our future remain, with respect to the consequences of climate change, the continuing exploitation of human beings, land and oceans for profit motives, we are being coached daily and relentlessly to accept the likelihood of increased taxes and more public sector austerity to pay for public debt, as the OBR’s report shows. Someone, somewhere, will have to pay in financial terms on this model.

The BBC, The Telegraph and The Financial Times, like many other news outlets covering the OBR’s report, focus yet again on debt piles and the so-called ‘eye watering’ record levels of borrowing. The Telegraph, quoting from the report, claimed that soaring costs would threaten to make Britain’s debt unsustainable, should interest rates rise to curb inflation. It painted a picture of a chancellor ‘battling to steady the public finances’, as if he is a captain straining to keep control of his ship in a raging storm. It suggested that addressing the spending pressures could require both cuts to the budgets of government departments and tax rises. It cautioned that the fiscal impact of achieving net-zero could add 21% of GDP to public sector net debt in 2050-51, that lost fuel duty due to the move towards electric vehicles would impact on the government’s fiscal position, and that investment in zero-carbon technologies would add to costs as it would only be partly offset by higher carbon tax revenues. The report also warned of the potential rising costs of servicing government debt in the event of what it called the ‘future shocks’ of higher inflation or interest rates.

The classic household budget narrative of how governments spend rules the roost, and acts to prepare the public for an unpalatable solution to rising debt.

Of course, this narrative does not reflect monetary reality, however hard the orthodoxy tries to suggest it does. The government doesn’t have a debt pile and the Chancellor doesn’t have to tackle it with tax rises or cuts to public spending in any government departments. There is no finite pot of money to share out.  The government is the financial and legislative ‘controller’.

The concerns about dealing with public debt and the potential ‘threat’ of the rising cost of borrowing, which would, according to the orthodoxy, place future burdens on taxpayers, are continuing headline themes on the right of the political spectrum. Whilst on the left, the message is that we must sting the rich to pay for public services, and that politicians must have supposedly ‘sensible’ conversations with the public about paying more tax to provide social care, or being able to borrow at low interest rates to spend on public infrastructure.

However, whilst the monetary orthodoxy prevails, it is becoming more and more difficult to believe that Rishi Sunak, at least, or his Treasury staff really don’t know how the government spends. One can only draw the conclusion that denying monetary reality allows them to continue delivering their political agenda by claiming that money is scarce. It is quite simply all part of the ongoing smoke and mirrors of how the government spends, which gives them power over the public purse and who benefits from it and who loses out.

At this point, it would be useful to revise the facts of monetary reality. It is not difficult to understand and doesn’t require the services of an economist to decipher. Such general knowledge could make a huge difference to how people view politics, which would allow them to examine the connection between government policies and spending decisions and who benefited and lost out as a result. Neither politics nor the economy exist in a vacuum; they both determine how well society functions or not as the case may be. Without that understanding, such narratives will always, in the end, put the brakes on government action, on the false count of unaffordability, and threaten the implementation of policies to deal with the climate crisis and rising poverty and inequality.

Firstly, the government is the currency issuer. It spends money into existence. That is where the story of how the government spends begins.

Secondly, as the currency issuer, the government neither needs to tax in order to spend, nor to borrow to cover its spending over and above its tax revenue. The government’s deficit, which sounds quite scary to ordinary people who compare it to a shortfall in their own household budgets, is everyone else’s surplus. That is the money in our savings and circulating in the economy, in our pockets. The use of the tax, deficit, debt and borrowing frameworks are just accounting conventions that bear no relation to the monetary reality of how the government spends.

Thirdly, by asking where the ‘money’ in our pockets and bank accounts comes from, we find that logically speaking the government must spend before any of us can pay our tax, and by extension before it can ‘borrow’, which is just another smoke and mirrors illusion.

The act of spending is the primary step, and on that basis, why would any government want to borrow money it had spent in the first place? However, the term borrowing’, which is often accompanied by the phrase ‘living beyond our means’, serves to keep the public on board with the idea of the need for fiscal discipline. Relating those concepts to people’s own budgets keeps people accepting the prospect of tax rises and cuts to public services.

In the Times this week in the light of the OBR’s fiscal risk report, the paper reported that Sunak had been warned by the OBR that the £10bn ‘deficit’ (which is the money in our savings and pockets) can be fixed only by taxation and yet more spending cuts, as apparently ‘there is no longer any easy way of cutting Britain’s debt.’

Referring to the ongoing challenges of clearing hospital backlogs, maintaining the test and trace and vaccination programmes, catch-up funding for schools and making up lost rail fare income would, it said, ‘add around £10bn a year on average in the next three years.’

 What can one say? Good luck with that Rishi! Thinking caps need to be at the ready! How will taking money out of an uncertain economy with a virus still raging and furlough unwinding help? The idea that the government needs any tax to reduce the deficit or pay down debt is quite simply yet more deliberately sowed confusion. Worse, to suggest more austerity when we are living the consequences of 10 years of public sector spending cuts, is, without doubt, absurd and would continue to damage an already fragile public infrastructure.

By extension, the false logic must surely follow that we cannot then afford to deal with the planetary emergency that threatens our existence, because there will always be a burden of debt hanging over us and a shortfall in revenues, which will require the government to make difficult decisions by increasing taxes, cutting its spending, or divvying up a finite money pot to serve its agenda. In the end, such narratives will always lead to the government putting on the spending brakes to balance the public accounts, regardless of the impact of such decisions.

The same false logic suggests that we cannot afford to rebuild our public and social infrastructure, even if we had a government with the political will to do so, rather than one that spent 10 years dismantling it. That we cannot address the growing poverty and inequality that has arisen over a decade, due to politically motivated austerity by a government which over the last year has shown its true colours, using its spending capacity as the currency issuer to benefit corporations with little or no accountability or transparency. Corporate welfare at the expense of public purpose.

By that false logic, abandon all hope ye who enter here because, apparently, we’ve spent too much and need to attend to the public finances. The deficit spending in itself, however, does not represent the material risk to the public spending outlook that is being suggested. In fact, we need to turn this argument right on its head and ask a different question.

Instead of worrying about the public finances and the size of the deficit, we would do better to consider first what the deficit represents, and who has benefited from the government spending and who has not. Secondly, rather than seeing the deficit as a problem, we need to examine how we can best address the future challenges before us through government policy and spending decisions. And thirdly, if finance is not the constraint, then what is?

If spending is always reduced to the concept of fiscal discipline to keep the public accounts in order – how much tax is collected and how much has been borrowed -then the future will most certainly be bleak. The cutting spending and increasing taxes recipe that the Chancellor will most certainly trot out on budget review day later in the year, will satisfy the Treasury bookkeepers tallying their modern computer-driven version of the public accounts, thus giving the government an opportunity to promote itself as a safe pair of fiscal hands in future elections. However, such thinking will fail at the first hurdle by creating yet more economic pain for a nation that has already had a bellyful, as delivering public purpose is relegated yet again to being unaffordable.

The real constraints we face are, as we are finding out, resource-driven, and the potential that creates for inflationary pressures. Early on in the pandemic, we experienced such pressures on the NHS when trying to source PPE and other equipment, not to mention the pressures on a service which was and remains short of over 40,000 nurses as a result of government policy and cuts to spending.

In recent weeks, the lack of HGV drivers has put increasing pressure on supermarket delivery networks. The construction industry is experiencing shortages of building materials and transport capacity and is being affected by long lead times for items coming from abroad. And then there is also a shortage of the semiconductor chips which form the basis for the technologically driven world in which we live, from TVs, PCs and cars to hospital and other vital equipment that drive our energy and water networks.

Even though the Bank of England has said that it expects these current price pressures to be temporary as economies start to open up, the inflation doom merchants continue to rattle their warnings about high levels of public debt and future financial burdens. They should instead turn their attention to the real issues related to continuing economic uncertainty and raised levels of unemployment, the all too real threat of climate change and managing our finite resources to create a stable and sustainable economy. That is the real role of the government, not balancing the books. Future shocks will have nothing to do with the rising costs of borrowing, but will be related to any government decision to cut spending or impose more austerity at the expense of people and the planet.

We have a government which must know about monetary reality by now, advocating fiscal discipline on the backs of human existence and abdicating its role in spending and legislation to drive public purpose aims. At the same time, it promotes killer growth and the role of the profit-motivated private sector as the mechanism for human betterment. A contradiction in terms. We have a government wielding the power of life and death for the supposed sake of balanced budgets and the maintenance of the status quo.

In the words of Naomi Klein:

Our economic system and our planetary system are now at war. Or, more accurately, our economy is at war with many forms of life on earth, including human life. What the climate needs to avoid collapse is a contraction in humanity’s use of resources; what our economic model demands to avoid collapse is unfettered expansion. Only one of these sets of rules can be changed, and it’s not the laws of nature.”

 

 

Join our mailing list

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

Support us

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

 

Share

Tweet

Whatsapp

Messenger

Share

Email

reddit

Pinterest

tumblr

Viber icon
Viber

The post Politicians and the media coax the public to accept a new period of austerity appeared first on The Gower Initiative for Modern Money Studies.

Alex Belfield Attacks Rishi Sunak Cutting Miners’ Pensions

Published by Anonymous (not verified) on Mon, 05/07/2021 - 10:20pm in

More from the person Gillyflowerblog, one of the great commenters here, has described as my favourite right-winger. Belfield is definitely a man of the right with some appalling views, and many of my commenters understandably can’t stand him. But here he says something that should be coming from the left. Rishi Sunak has decided that he’s going to cut miners’ pensions by £14 per week in order to save £1 billion. And Belfield begins his video by saying he’s never been so appalled. He attacks Hancock for channelling government money and support to his friends in the hospitality industry, but the government is now saying that they can’t afford to support the people who did one of the most dangerous jobs on Earth.

Belfield makes much of the fact that he grew up in a pit village. He remembers the ’80s and ’90s and how those years tore communities apart, between scabs and strikers, people who did one thing and those who did another, simply to put food on the table. That’s why he’s a fan of the film Brassed Off, because it feels so raw and captures that period so well. Miners were killed not just by accidents but also through the stuff they inhaled that damaged their lungs. Many of those, whose pensions will be cut have already died. He makes it very clear that he despise this move to cut the pensions of men, who worked extremely hard and suffered much to feed and light this country.

This, however, is what corporatist capitalism is. It’s been described as ‘socialism for the rich’, as government aid is removed from the poor and needy, and given instead to the rich and greedy in the form of subsidies, tax breaks and so on. And the government is four-square behind it. I can also remember the miners’ strike, and my mother told me today of something her mother said about remembering the miners in the Bristol area marching through town begging when they were striking, because they were so poorly paid. Yes, Belfield is an appalling right-winger, but when he attacks the government for their attacks on working people, I’ll put it up regardless. It doesn’t matter if it comes from left or right, within reason. If it’s correct, I’ll reblog it.

But if Belfield’s correct this time, then I do wonder what Starmer’s position on this is. He should be condemning it, but he’s a Blairite, who’s afraid of offending all those middle class people on the right he wants to appeal to. So will keep silent, and once again betray the working class by not speaking up?

Cartoon Kayfabe Reviews Book on the Art of Jack Kirby

Published by Anonymous (not verified) on Mon, 05/07/2021 - 8:27pm in

This is one for all the comics fans. Jack Kirby is one of the truly great figures in American comics. With Stan Lee he created some of Marvel’s best known and most beloved comics characters, like Captain America. Kirby grew up when the immigrant Jewish community in New York was still poor and rough, and like many other similar communities, riddled with gangs. Kirby said he came from the type of background where the best job a man could aspire to was being a mechanic, and I think he was seen as being a bit odd for wanting to be an artist. Nevertheless, he managed to realise his ambition and get away from the gangs, although he also said that part of him enjoyed running with them. 5′ 2” and pugnacious, he wasn’t averse to stepping up to the challenge if someone threatened him. The famous cover of Captain America beating up Hitler was published before America entered the War and upset the American Nazi party. One of the Hitlerites came into the hotel where Kirby was staying at the time, demanding a word with him. To the consternation of his workmates, Kirby got up and went down ready to sort the man. But by the time he got down to the lobby, the Nazi had departed. Probably luckily for the Nazi. Nevertheless, the fear of Nazi reprisal was so strong that Stan Lee and Kirby were both given FBI protection for a time.

One of the book’s editors/producers is Eastman, of Mutant Ninja Turtles fame, and the book is an overview of Kirby’s long artistic career, from when he was just starting out as an aspiring artist to his retirement. I was never a great fan of Kirby, as although he could do cosmic like no one else could, drawing huge, awesome machines and men and women like gods, I didn’t think he could draw the ordinary human form very well. But the book shows that he was actually a very good naturalistic artists with fine sketches of the major figures and celebrities of his time. One of whom was Adolf Hitler.

Kirby seems to have worked at anything and everything to pay the rent. At one time he was an artist on the Disney cartoons, drawing the figures for the moments between the main action. But he was learning all the time and ambitious, looking for new and better jobs and taking with him the skills he learnt. During his comics career he not only worked on superheroes, but also cowboy, commando and romance comics, turning to these parts of the industry when the superhero genre was decimated by the moral panic of the 1950s. He also did his patriotic duty and served in the army during the Second World War, and this fed into the war strips he drew afterwards. The self-portraits Kirby drew of himself before and during his army years show the immense change armed combat had wrought on him. Before he enters the army he’s clean cut, but afterwards he becomes more lined and grizzled. He shows the same effect on soldiers on the cover of one of his war comics. This features a man writing a letter home to his mother, saying that the invasion of Europe was just like a day at the beach. The man’s face betrays otherwise, and Kayfabe and his companion note the 1,000 yard stare. Apparently when the servicemen wrote home, they really did describe the War in those terms as they obviously really didn’t want to cause their families to worry about them.

Kirby’s final years were overshadowed by a quarrel with Stan Lee over who created the Marvel characters, with Kirby claiming that he was the real creator of some. He left Marvel and carried on working long after he should have retired on strips like Devil Dinosaur. Towards the end of his career it looks like this amazing artist was being helped by others in the studio. But in his prime Kirby was extremely prolific. At his height in the 40s-50s he was producing a hundred pages a month. I think that’s why his human forms are so sketchy – he was churning them out and an incredible rate, too fast for very naturalistic art, simply to put food on the table for himself and his family. He also incorporated many of the latest developments in popular art into his comics, like pop art and black light, in order to connect with readers and appeal to their changing tastes.

One of the most remarkable episodes in his career was the use of his concept art for an abandoned film project as cover for a CIA operation to rescue the hostages in Iran. Kirby had been hired to work on a film version of Roger Zelazny’s Lord of Light. Although the film wasn’t made, the CIA used the art as part of the cover for their operation, which was that they were film makers seeking to make an SF film in the country.

Kirby was indeed one of the giants of the comics industry, and Kayfabe’s review of the book, which I think came out in the ’80s or 90s, is an excellent review of his long and amazing productive career. The characters he and Lee created still continue to enthral readers across the world, and, I hope, to inspire future generations of comics artists and creators.

Neither Green Savings Bonds nor your pension money are needed for the government to invest in an environmentally sustainable recovery

Wind turbines in fieldsImage by Yves Bernardi from Pixabay

“We can pretend that extending the status quo into the future, unchanged, is one of the options available to us. But that is a fantasy. Change is coming one way or another. Our choice is whether we try to shape that change to the maximum benefit of all or wait passively as the forces of climate disaster, scarcity, and fear of the “other” fundamentally reshape us.”

― Naomi Klein, On Fire: The Case for the Green New Deal

 

This week, the Telegraph reported on a new poll saying that Rishi Sunak’s push to rein in government finances was backed by Conservative voters who were concerned that the government was spending too much and must do more to cut expenditure. According to Andrew Neil, who interviewed the Chancellor on GB News, he did not deny that he had indicated to Johnson that ‘he might have to take his credit card away’, and confirmed his statement made earlier this month that it was right that he should be ‘responsible with other people’s money’.  It would be interesting to be party to conversations between No. 10 and No.11 – Johnson promising the Earth without consulting his Chancellor – whatever next!

Whilst voters on the right worry about the state of the public accounts, on the left we have politicians supporting this narrative; Labour’s candidate for Batley and Spen stated in an interview with Owen Jones prior to election day that ‘People are … sick of thinking there’s a magic money tree, there isn’t, so we’ve got to be clear about that’.

You could not make it up! While the planet overheats, in some places literally, landscapes and oceans degrade, and biodiversity and the natural world is under threat as a direct result of human behaviour, the state of the public accounts takes precedence over addressing the vast man-made politically created poverty and inequality, and even human and planetary survival!

And while the toxic consequences of neoliberal economic dogma prevail, and people get poorer and less equal while the rich go on raking it in, balancing budgets is apparently far more important than advocating the creation of a fairer and more sustainable economy.

This ‘past its expiry date’ understanding of how the government spends spreads its noxious tentacles into every aspect of our lives, suggesting that government spending is constrained by a finite pot of money that depends on taxation and borrowing. And that is before the political pundits or orthodox economists even get started on fearmongering about the size of the national debt. And yet, as destructive as the narrative is, it forms part of public and political debate on a daily basis on the news and social media alike.

It is disappointing, to say the least, that the winning Labour candidate in Batley and Spen is happy to sign up to the right-wing narrative of fiscal discipline and to reinforce this to her electorate, a narrative so beloved by Margaret Thatcher, who claimed that there was no such thing as public money. Dealing with the key challenges of the day, including saving humanity is, according to that message, limited to the tax paid in by working people. By that token, we will have to save up for it, or not do it at all! But do not worry, it is only the planet at stake.

This week the Chancellor, in his Mansion House speech about the future of financial services, yet again reinforced the false taxation paradigm, by claiming that the financial sector contributed ‘£76bn in tax a year’, which he stated was enough ‘to pay for our entire police force and our entire state schools’ system.’ It must have made the chests of those present puff out with pride at their contribution. Of course, on paper, one can do those calculations or costings, but the truth is that government does not need their tax, or anyone’s tax, in order to spend.

The Chief Bean Counter, yet again, leads the public astray with his household budget descriptions of how the government spends, and later in his speech reinforced the lie that it needs to borrow to fund its programmes. He confirmed the ‘final part of his vision’ which would give the public, he said, an opportunity to invest in the government’s green initiatives through NS&I Green Savings Bonds. It seems after a bank bailout over a decade ago which failed to spill the beans on how the government really spends, combined with a year of government borrowing from itself to manage the economic fallout from the pandemic, it is choosing yet again to reinforce the message that government needs to borrow from people or institutions in order to spend to save the planet. However, gilt and bond sales, although presented as a borrowing mechanism, have a quite different role and do not equate with borrowing. For more information on that point, you can find out here.

The government does not have to issue bonds, green or otherwise, to fund its spending, any more than it needs to issue bonds to savers to fund infrastructure schemes and create green jobs. That is just the smoke and mirrors of paper accounting. The government is the currency issuer, and with that comes the capacity to invest in creating a sustainable economy and create jobs, both in the public and private sectors, or through the implementation of a Job Guarantee programme which would act as an automatic stabiliser to smooth out the ups and downs of the economic cycle. It is the only body that has the legislative power to do so, and it is the only body with the monetary firepower.

And again, this week, in yet another game of smoke and mirrors, it was reported that the Government had been in private talks to direct billions of pounds of pension money into infrastructure and start-up companies to boost the economy. Industry sources have apparently been discussing how a portion of workplace pension schemes – those which staff have to join – would go into a fund which will launch this year. Yet again we are faced with the same government-sponsored tall tale, but the government does not need to raid pension funds to boost an economic bounce back, or indeed pay for a green agenda.

Such false narratives strengthen the false idea, which has been drummed into the public consciousness over decades, that the financial sector and markets hold the key to economic health, and that the government relies on their expertise and ‘talent, energy and imagination’, as Sunak explained in his speech, to revitalise the economy, which, according to him, matters more for this industry’s success than any government policy.

Is that the same financial sector that crashed the economy in 2007/8? The same financial sector that operated like a casino whilst believing it was invincible, and, in doing so, ruined the lives of hundreds of thousands of people; destroying jobs, depriving people of their homes and contributing to huge economic instability, which in the end led to the poison of damaging austerity.

It calls to mind the words of another Chancellor, Gordon Brown who, addressing the City of London just two months before the run on Northern Rock said:

‘Over the ten years that I have had the privilege of addressing you as Chancellor, I have been able year after year to record how the City of London has risen by your efforts, ingenuity and creativity to become a new world leader… I congratulate you Lord Mayor and the City of London on these remarkable achievements, an era that history will record as the beginning of a new golden age for the City of London.’

No sooner had he said it than the financial edifice came crashing down. Clearly, the beginning of this new age was put on hold!

Like governments before, even in the light of the great financial crash politicians such as Sunak are following the same path, bowing to markets and the financial sector as if they are the authors of economic well-being.

And like governments before, it is relinquishing its responsibility for the state of the economy and the health of the nation or the planet, with the implication that the state’s role is a limited one. Even though its vast power has been demonstrated clearly over the last year and more and has prevented an economic meltdown.

It is government policies and legislation that make the rules by which private companies operate, and it is shameful that for decades successive governments have given the financial sector free rein to do as it pleases, with dire consequences. It is also shameful that the government suggests that it needs the money of private savers, the financial sector, or other institutions in order to spend. It is equally shocking that successive Chancellors have pulled the wool over the eyes of the public about how the government spends, by continuing to bow down to the gods of the market and the financial sector.

Wherever you look, the household budget paradigm rules, to the detriment of the biggest challenge we have ever faced. The future of humanity. And still, in the face of rising temperatures and seas, the question on everyone’s lips is: ‘who will pay for it?

This week, an article in the Guardian put the oil industry on the spot over the decades of denying the effect of their business on the climate. It suggested that whilst we cannot get back the 40 years lost to the oil industry’s climate lies, that it should now pay for those deceptions with higher taxes to fund the green agenda. Of course, again, the household paradigm rules in the same way as the left clings to the idea that we should get the excessively rich to pay more tax to pay for the radical environmental programmes that will be needed.

Again, the bottom line is that tax does not fund government spending; the only body with the real monetary capacity as the currency issuer to pay for what we must do is the State. That does not mean to say, however, that they should not be made to bear the burden of their lies, indeed they should – through legislation and taxes designed to drive a move away from damaging carbon-based energy towards developing sustainable technologies harnessing wind, water, and the sun. That is the power of the state, assuming it chooses to use it, rather than deferring to the market for solutions. So far, this government’s record on environmental action has been lukewarm and as changeable as the weather.

Again, this week, in another article commenting on the appointment of Sajid Javid to the position of Secretary of State for Health, the author focused on the problem of MONEY, or rather lack of it, writing:

‘But in every battle Javid fights from now on there will be another familiar problem: money. How to fund a reshaped, modernised health service from Treasury coffers already run bare by the pandemic. How to modernise social care without blowing another hole in the public finances, or putting up taxes, or slashing pensions

Putting aside the idea that this government has any intention of reshaping the health service or social care as publicly paid for, managed, and delivered services and has, in fact, been working for the very opposite, once again the ‘state coffers are bare’ message predominates. It reflects the strategies of successive governments for decades, on both the left and right, who have introduced the private healthcare sector into the mix, in the belief that the private sector is more efficient and uses public money wisely, regardless of the fact that public money is going into private profit and results often in poorer quality and restricted services. Corporate welfare has been the aim of the government game, influenced by those very same corporations advising on policy.

However, the idea that the government has to make choices between putting the finances straight and people’s lives, is not only cruel in its conception but also incorrect. The government does not have to blow any holes in the public finances, put up taxes or slash state pensions. Quite simply, all the government has to do is authorise its central bank to spend.

The question, as someone noted this week on social media, is not how are we going to pay for it, but how are we going to resource it? Do we have the nurses, doctors, other health professionals, hospitals, and other facilities, not to mention social care workers, to provide good health and social care? And if not, why not? Who has failed to make provision through its policies and spending decisions? Where does the blame lie? At the feet of the government, of course.

It is all the more concerning that Javid, a former chancellor who promised an end to austerity and then broke his pre-election pledges by ordering his ministers to identify savage departmental cuts, on the basis that they had been ‘elected with a clear fiscal mandate to keep control of day-to-day spending’, and who said that ‘this means there will need to be savings made across government to free up money to invest in our priorities’, is now in charge of the Department of Health and Social Care. The public should at least know what his priorities might be.

We now have a truly clear idea, based on previous and current experience, that it means pouring public money into big corporations and the pockets of relatives, friends, and mates of mates, whilst depriving the public sector of the means to function efficiently and effectively. Misusing their spending capacity for their own agenda at the expense of serving the public purpose.

The government does not need to examine the state of its finances or whether it can raise taxes or borrow to fund its spending or if it should cut back its expenditure, its role should instead be to look at the bigger picture of resource availability and decide what its priorities should be. What it does need to explore is how can it release the resources it needs to deliver those public priorities by reshaping the balance between private and public sector employment? And as the currency issuer, it certainly does not need to rob Peter’s department to pay Paul’s, or even make savings.

While the Chancellor considers his potentially cost-cutting or tax-raising moves, as a result the Prime Minister’s levelling up and other promised spending plans could be in jeopardy, if indeed they were ever intended to be more than hot air to make him look good.

Restoring fiscal discipline would put paid to those plans. You cannot do both. Government has the tools to improve people’s lives if it chooses to use them. Instead, it prefers to defer to market solutions again and again with damaging consequences.

Successive neoliberal governments have relied on the view that a light-touch regulatory environment is what is needed, and that letting the rich get richer will allow wealth to trickle down. All government has to do, apparently, is wait, and bingo! Poverty will be a thing of the past and public services affordable. And yet the evidence is now, and has been for some time, that doing so has led to the lives of the poorest continuing to deteriorate along with public and social infrastructure.

A paper from the London School of Economics (published in December 2020) which compared 18 developed countries that cut taxes in 1982, (when Ronald Reagan cut taxes on the wealthy) with those that did not, found (surprise, surprise), that instead of wealth trickling down to boost jobs and incomes, such tax cuts only helped one group – the already rich.

Over the last few years, the reality of the consequences of government spending and other policy decisions which have led to rising poverty and inequality, have continued to make media headlines. Along with the decaying public and social infrastructure facilitated by austerity-driven, neoliberally inspired government, we have seen, over the last decade, a continuing deterioration in living standards. Rising homelessness and food bank use, housing unfit for human habitation, compounded by unaffordable rents and insufficient housing stock, inadequate access to health care and good education, not to mention the hardship caused by low incomes and precarious employment.

A study carried out by an All-Party Parliamentary Group (APPG) has found that England’s poorest neighbourhoods have the biggest shortages of social infrastructure such as parks, playgrounds, pubs, shops and sports facilities. It also showed that such neighbourhoods are least likely to get government funding to support their communities and found that they were less than half as likely to have charities and community groups in their local area. These ‘left behind neighbourhoods’ as they have been called were, it noted, overwhelmingly concentrated in the post-industrial towns and cities of the north of England and the Midlands, as well as coastal areas of the south-east.

Whilst Sunak continues to tell the public that he has to be ‘careful with other people’s money’, alluding to the increasingly discredited view of Margaret Thatcher about state money, he is reinforcing in their mind that, at some point, there will be a price to pay in higher taxes or more public sector cuts, however damaging that would be to an economy still struggling to get back on its feet. He is reinforcing the idea that dealing with the key issues of our time is financially unaffordable, whether that is addressing the consequences of the climate crisis or the decades of neoliberally created poverty and inequality.

Neoliberalism is not dead, as some on the left seem to think. It is morphing into something else even less wholesome, and we still have major political parties signed up to the corporate charter of planetary destruction, whilst talking in the misleading language of green growth and the lie that we can continue as we are.

We must keep pushing back on these false ideas, which have already done vast damage to the planet and all life that depends on it being healthy to survive. We must acknowledge our connection to the natural world which sustains us and recognise our interdependence.

There are choices. We just have to decide on which path we prefer to stride. Balancing public budgets and allowing corporate control over the green agenda and the demise of our democratic values, such as they are, or accepting that an understanding of the reality of how money works must be the baseline for what comes next, and that such an understanding offers real opportunities to create the sustainable, steady-state economy that we seek.

 

 

Join our mailing list

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

Support us

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

 

Share

Tweet

Whatsapp

Messenger

Share

Email

reddit

Pinterest

tumblr

Viber icon
Viber

The post Neither Green Savings Bonds nor your pension money are needed for the government to invest in an environmentally sustainable recovery appeared first on The Gower Initiative for Modern Money Studies.

Reducing government spending now would be calamitous for the wellbeing of people

Elderly woman sitting on an armchair in the dark with her dog.Photo by Camellia on Unsplash

“If every politician asks the ridiculous question ‘how will you pay for that’ when it comes to full employment, universal healthcare, infrastructure modernisation, tuition-free university and sustainable energy, but no politician asks ‘how will you pay for that’ when it comes to military expansion, bombing other nations, corporate welfare, and bailing out banks, then that reality should tell you that something is completely amiss with the mainstream narrative that the federal government has no money of its own and must tax and borrow to pay for things.”

 Ellis Winningham – 24th June 2017

 

If it’s not the inflation hawks ruling the media roost with their dire warnings about rising inflationary pressures, then it’s those lamenting the huge rise in the national debt and discussing the options for Rishi Sunak to restore fiscal discipline. Both are positions of the economic orthodoxy, which believes that bankruptcy and inflation are the inevitable results of excessive government spending. Before long, journalists are rattling the inflationary cage, sometimes with headlines peddling false comparisons with Zimbabwe or the Weimar Republic, even though in both those hyperinflationary episodes, government spending was a response to rising prices, not a cause of it.

Those banging the inflation and deficit/debt drums ignore monetary reality by claiming there is a connection between the two, instead of looking at the real reasons why the deficit has increased and what might be causing a rise in prices. However, even that bastion of neoliberal economic thought, the Bank of England, rejected implementing an interest rate rise this week, with the Monetary Policy Committee saying that rates will remain at 0.1% until the economic picture is clearer and we see whether firms will find themselves under pressure to raise prices. A sensible decision. Even as the world economy starts to take tentative steps towards opening up, there still remains much economic uncertainty, combined with what is likely to be temporary price instability, and this is not a moment to hinder any recovery with interest rate rises. As the MMT economist Professor Bill Mitchell rightly suggested in a recent article in the Guardian, ‘price spikes’ are likely to be ‘transient and will be absorbed without any entrenched inflation emerging.’

Despite this, the media has again been rattling the debt and inflation chains loudly. From the Guardian to the Inews, Evening Standard and the Daily Mail, journalists continue to spread misinformation to the public about how governments spend. With references to government racking up its borrowing to make ends meet and rising debt mountains, along with warnings in one paper of the ‘big risk of inflation as government debt hits 99% of GDP’, one could be forgiven for thinking that the end is nigh, and we are on our way to hell in a handcart unless the government gets its spending under control. Indeed, a new poll has suggested that Rishi Sunak should ‘confiscate the Government’s credit card.’

At this juncture, a little bit of historical context would be helpful to put these alarming headlines in perspective. After the second world war, the national debt stood at 248% of GDP. Yet, the government of the day set up the NHS, an education system, a cradle to grave social security system and built hundreds of thousands of houses. The UK didn’t go bankrupt then, any more than it can go bankrupt today. If we understood better what the national debt actually was and what borrowing really is, then we might worry less about the public finances and focus on the truly important issues such as the climate emergency, rising poverty and inequality and the ongoing disintegration of our public infrastructure. When confronted with the question ‘how do we pay for government programmes?’, then we would know the answers without hesitation. The curtain would be raised on monetary realities and the con would be exposed once and for all. But we’ve still a long way to go to challenge the orthodoxy which dictates policy.

According to the INews, the Chancellor is under huge pressure to start restoring the public finances at a time when the Prime Minister has made dozens of spending pledges, including his levelling-up programme. There are also almost 30 policies listed in the Conservative election manifesto which remain to be delivered and will require additional funding if they are to go ahead. The spending pledges clearly seem to fly in the face of Sunak’s plan to cut the deficit later in the year, when he has suggested that he will begin the process of ‘fiscal tightening’. The conversations between the two politicians must be very interesting! Sunak is apparently ‘scrabbling to find other ways to raise money’ as he is restricted by manifesto promises not to raise income tax, NI or VAT. With the promises to cut business rates and lower interest rates on student loan repayments, the Inews suggest that both actions will reduce revenue overall, putting the Chancellor into yet another uncomfortable corner.

Where will the money come from?

As the above paragraph indicates very clearly, the premise that governments spend like households is integral to media messaging about government finances. But it is totally incorrect. The suggestion that there is a finite pot of money available, limited by taxation and borrowing, is not only inaccurate but is likely to be used yet again in the not-too-distant future to justify cuts to public expenditure on public services. Government promises to level up or deal with the climate emergency may yet find themselves relegated to the box entitled ‘unaffordable’. It remains to be seen.

However, from a macroeconomic perspective, reducing spending now to address a ‘debt’ that isn’t, (since the government is the currency issuer and has no need of tax revenue or to borrow to fund spending and can always meet its liabilities), would be calamitous at a time when the pandemic is still proving to be a serious challenge with huge uncertainty as to the future, when global inequality is growing, and when the climate emergency increasingly demands urgent substantial government action. The only thing we can’t afford is not to act decisively now.

While the media pundits and politicians continue to argue for fiscal discipline and the debt doomsters seem to prefer more austerity, thus logically extinguishing any hope of a sustainable future for all, one can only conclude that human and planetary well-being is at the bottom of the list of political requirements. The smoke and mirrors of the public accounts is in fact being used as a weapon over and over again against people around the world.

This week, it was announced that the government would delay its plans for the reform of social care. Yet again it is being brushed into the long grass, until at least the end of the year. How to fund social care is as equally problematic for this government as it has been for previous ones. As always, it is seen in terms of its monetary affordability, meaning how to raise the funds to pay for it. The now-former Health Secretary Matt Hancock suggested raising National Insurance, but that proposition went against government promises not to raise taxes and was rejected. Sunak seems to be relying on the prospect of better-than-expected economic growth to raise tax revenues, which it has been suggested would give him more ‘fiscal wriggle room’. On the other hand, the Prime Minister, it is said, would like to appropriate that additional taxation to fund public services and for the NHS to deal with the huge backlogs that have arisen as a result of the pandemic. According to the Guardian, Treasury officials are writing a series of papers on potential revenue-raising measures.

Again, how will we pay for it?

The household budget accounting narrative yet again pulls the wool over the eyes of the public by its suggestion that the money must come from somewhere – increasing taxation or relying on economic growth to increase revenues. Not only is this disingenuous, given that orthodox narratives are now being challenged in the mainstream, and as such politicians cannot be unaware, but it also suggests that this fiction may be used again to justify spending policies to suit political priorities.

The alleged problem of how we are going to pay for it haunts public policy and constrains the ability of government to work for the public purpose. Although of course, one might suggest that most governments are not actually working for that, rather they act on behalf of the corporations which influence their policies. As Professor Prem Sikka wrote in an article in Left Foot Forward this week:

‘The last forty years of neoliberal coup has restructured the UK state so that instead of being a provider of public services it has become a guarantor of corporate profits and the enrichment of the few.’

 And it is not just the Conservatives using this household budget construct. This week the Labour opposition, such as it is, rejected the motions of several Constituency Labour Parties calling for free social care. In the final version of the composite motion which originally contained two references to social care, stating that it should be ‘needs-based and publicly funded, free at the point of use’, all reference to free social care had been removed.

The Labour MP Thangam Debbonaire suggested that introducing free social care for disabled and older people would ‘give the Tories a stick to beat Labour with’, in a veiled reference to the accusation of Labour’s overspending, and claimed that such a policy would be too expensive. The implication of her words was that Labour has gone back on its leader’s pledge that he would introduce free social care if the party came to power.

According to the Disability News Service, a disabled member who attended the virtual meeting said that ‘Labour had betrayed and silenced its disabled members’ and ‘that the party was now run by ‘cowardly, unprincipled careerists’ who ‘wouldn’t know solidarity if it hit them with a big stick’.

Excuse us if we are blunt here. After a decade of unnecessary and harmful cuts to social security spending, which has left many disabled and older people struggling to get by and live dignified lives, Labour’s neoliberal foot soldier is saying, in effect, that people will have to die because we can’t afford to care. Once again, fiscal discipline must trump human well-being.

It is shameful, in a supposedly civilised society, that social care has largely been privatised and cut to the bone as a result of austerity, and that in 2019 there were an estimated 1.5 million people over the age of 65 living with unmet care needs (figures from Age UK).

The emperor definitely has no clothes. The emperor is definitely naked.

This is also clear in the supposed dilemma of the pensions triple lock and whether the Chancellor can afford to retain it in these supposedly cash strapped days for the government. It is yet again another prime example of how ‘monetary affordability’ is the measure which determines the level at which pensions are paid, and worse, it is used unscrupulously by politicians and other organisations to entrench intergenerational divisions and create resentment.

Professor Len Shackleton, from the free-market think tank the IEA, suggested a couple of weeks ago that as young people had lost out over lockdown, it would not be unreasonable to ask pensioners to share the pain. Flying in the face of data published this year, he claimed at the same time that ‘pensioner poverty is no longer the problem it used to be.’ However, according to Caroline Abrahams, Charity Director at Age UK, in 2019/20, 2.1 million pensioners were living in poverty after housing costs, representing a 200,000 increase over the previous year.

Labour MP Siobhain McDonagh backed up Professor Shackleton’s view, saying that ‘there is a need to step back and take a look overall’, adding that 44% of welfare spending goes on the pension, while young people are likely hardest hit by the economic damage caused by Coronavirus.

Once again both sides of the political spectrum fall back on the false, but self-serving, notion of monetary scarcity and unaffordability; that ultimately hard decisions will have to be made in terms of curbing government spending. Once again, the suggestion is that human beings can, and must, be sacrificed on the altar of fiscal discipline and balanced budgets. Worse, Labour seems to be saying that anything the Tories can do, they can do better, even if that means more suffering.

As the Chancellor juggles the economic balls, scrabbling down the back of the sofa for a few pennies, as the narrative goes, the real problem facing society is not whether there is enough money, but whether we have the real resources necessary to deliver political agendas. And whether the government has invested sufficiently in education, public services, and technology to ensure that the goods and services will be available for purchase in the future, and thus contain any inflationary pressures that might occur.

The future burden will not be one of debt or tax. It will be the burden arising from the government failing to act now. The real challenge, as demographic changes alter the balance between the young and retired people, will be how productive we can be and how we share the available resources equitably and efficiently. The only constraint faced by the government is one of real resources.

The government could pay better pensions tomorrow, it could ensure that the education system is fit for purpose, it could invest in publicly provided services including the NHS and social care. But to do any of those things it must have the real resources, whether human or other, to deliver its objectives. It is the only authority that can release (through its taxation and other policies) the resources it needs to move away from a society which has excessive consumption as the economic motivator, to one that is more publicly oriented and puts the needs of citizens and the planet at the heart of its policies. But will that be the political agenda? In the current environment, that seems doubtful.

The question is, what sort of society do we want to live in? To reiterate, in terms of monetary resources, we can afford to create a social care system that provides good care and dignity to its recipients. We can afford a publicly funded and provided NHS. Catch-up educational funding, paltry as it is (and which led to the resignation of the Education Recovery Commissioner this week) to mitigate for the past year of lockdown and its effects on children is not what is needed for schools. After a decade of funding cuts, we need the government to invest in the education system to create rounded individuals, not market-oriented automatons, with the focus on real skills and promoting creativity and imagination as a path to a better, fairer, and more sustainable society. We can afford good public services and fund local government to deliver social and economic objectives. The issue lies in how we want the finite real resources we have, which includes the efforts of people, to be used. Do we want them to be employed in creating more useless stuff, or do we want these resources to be utilised to create both real economic benefit and social well-being?

Instead, as the Chancellor claims the money box is empty (regardless of the fine rhetoric spouted by a Prime Minister about levelling up) we have a government seemingly bent on abandoning the public and social infrastructure that will sustain future generations. Regardless of what politicians promise, that is the only conclusion one can make if the household budget narrative of government spending prevails.

As the Chancellor threatens either more austerity of the public sector kind or increases in taxation to get the finances back in order, it begs the question how that can be reconciled with the need to address the climate emergency and the vast global inequalities that have arisen as a result of the toxic economic system which predominates. Perhaps he is expecting the private sector to come galloping to the rescue – he certainly has ensured their coffers are full to the brim over the last year.

But, in reality, it is only the State that can put in place the foundations for the economic and societal transformation that will be needed to address all aspects of the climate crisis, which include rising global inequality, resource use, and land and ocean degradation. It is only the State that has the monetary resources, the legislative capacity, and the political drive to do so.

As a landmark draft report from the IPPC leaked to the AFP (Agence France Presse) and reported on by phys.org made clear this week:

‘Climate change will fundamentally reshape life on Earth in the coming decades, even if humans can tame planet-warming greenhouse gas emissions. Species extinction, more widespread disease, unliveable heat, ecosystem collapse, cities menaced by rising seas — these and other devastating climate impacts are accelerating and bound to become painfully obvious before a child born today turns 30. The choices societies make now will determine whether our species thrives or simply survives as the 21st century unfolds’.

Boris Johnson made a glowing commitment last week at the G7 to address the climate crisis, and Ann Marie Trevelyan, the UK’s International Champion on Adaptation and Resilience for the COP26 Presidency, claimed in a recent Channel 4 News interview that the UK is leading the world on climate change. But we should not forget the political realities. Not so long ago the UK government, to the consternation of climate campaigners, was supporting a new deep coal mine in Cumbria, and it announced this week that it is considering allowing drilling for a new oil field in Shetland, containing 800 million barrels of oil, which will produce fossil fuels until 2050. Also, this week it was revealed that oil and gas donors gave over £400,000 to the Tories over the past year, whilst the government considered new licences to explore the North Sea for fossil fuel production sites.

This doesn’t sound much like a government deeply committed to carbon emission reduction, any more than one committed to addressing other key issues caused by decades of toxic neoliberally inspired policies which have been driven by the notion of the precedence of the market over state provision and monetary scarcity.

The path we choose today will shape our future. Grasping the real capacities of currency-issuing countries will be essential to influencing what happens next. Never let it be said by anyone that we didn’t know how governments spend, or that public purpose programmes were perfectly affordable within the boundaries set by real resources. Let’s keep PUSHing. Let’s ‘Persist until something happens!’

 

Upcoming Event

Phil Armstrong In Conversation with Mike Hall

Sat, 3 July 2021 – 15:00 – 16:30 BST

GIMMS is delighted to present another in its series ‘In Conversation.’

GIMMS Associate Member Phil Armstrong will be talking to MMT activist Mike Hall.

Mike is a retired engineer and a liver of life of many parts including as an Industrial Controls Engineer, Windfarm Engineer, General Manager of IT refurb resale small business, Worker Co-op founder and local authority Co-op Development Worker. He studied for a Masters in Business Administration at Cranfield (UK) and has been an MMT activist for 11 years. He is also a grandfather and a lover of Jazz!

Register for this free event via Eventbrite

 

Join our mailing list

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

Support us

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

 

Share

Tweet

Whatsapp

Messenger

Share

Email

reddit

Pinterest

tumblr

Viber icon
Viber

The post Reducing government spending now would be calamitous for the wellbeing of people appeared first on The Gower Initiative for Modern Money Studies.

Pages