Saturday, June 6, 2015

The crumbling case for austerity

I truly believe that people in years to come will look back at the economic policies of the UK government since 2010 and shake their heads in disbelief. Moreover, they will struggle to understand how on earth the supposedly left-of-centre opposition could fail so completely to expose these ideology-driven and destructive policies.

In Business For Scotland today, Gordon MacIntyre-Kemp argues that the myths underlying austerity policies are set to crumble. Such is the unreconcilable conflict between the political narrative and the economic reality, something eventually has to give. 66% of 33 macroeconomics experts surveyed earlier this year stated that coalition policies had not had a "positive effect" on the UK economy. Even the IMF, who are hardly known for their radicalism, are now advising that there is no reason for the UK to rush to cut back debt and, rather, that paying down debt too quickly could take an unnecessary toll on investment and growth.

However, in spite of all this, the opposition continues to derelict its duty to fight this economic nonsense. If you listen to Labour leadership candidates discussing the economy you'd be forgiven for thinking that they are completely unaware of any of the vast and growing body of evidence that austerity policies are actually damaging our economy.

As of last Wednesday, however there's hope for change. Jeremy Corbyn announced that he is standing for the Labour leadership on a clear anti-austerity platform.

Andy Burnham has indicated that he would support further welfare cuts, including a benefits cap, and has failed to use his platform to combat pro-austerity myths, along with...

...Yvette Cooper, who like Burnham served in the shadow cabinet throughout the coalition's 2010-15 term in office. This opposition failed miserably to oppose the economic narrative of the Tories and the right-wing media. She also supports welfare caps that government figures show will result in more children living in poverty through no fault of their own.

Liz Kendall is a complete disaster. It's not an exaggeration to say that her election as leader would mean the end of the Labour party as an effective opposition. She actively assists the Tories in promulgating the myth that Labour spent too much before the financial crisis, and  Phil BC over at All That Is Solid sums her candidacy up as follows: "Your candidature condenses all the faulty analyses and mistaken policy conclusions that are not only most egregious, but potentially most ruinous for our party over the tumultuous five years ahead".

Mary Creagh is currently lagging behind Corbyn in nominations (with 6, to Corbyn's 11) despite having announced her candidacy much earlier. That may be because she has proven unable to articulate any kind of vision for the future of the party at all beyond empty sloganeering.

In summary: In selecting a leader, Labour must look ahead to the next election, which will surely take place after the disintegration of the current flawed economic dogma. The consequence of failure to see beyond 2015 will be irrelevance.

H/T for bringing the Business For Scotland article to my attention: Linuspoint (Twitter)


  1. Spending more than you earn is not austerity; are ypu aware of what a deficit is? Denying the need to live within your means (your chosen fiscal policy) has worked out really really well in France, Greece, - and even Venezuela! Are you aware of this year's GE results?

  2. Jeremy Corbyn is not going to stick his neck out. If he was he'd be all over the idea of linking bankers' top-rate of income tax to the percentage level of unemployment, and making the bank-levy the cost to the state of paying unemployment benefits.
    Have these dynamically adjusted every month with ONS Labour Market Statistics

    You think it won't work?
    Here's why you are wrong!

    Or put simply; to deny this will boost the economy is to deny the credit crunch crashed it.

  3. From:
    Invisible Banks: Unseen authors

    ...Miliband and Balls joined in with this silent re-write of history in removing the banks from the narrative of the deficit and debt. Suddenly absolutely no one was talking about how to reform the banks so that they repaired the damage they did to the economy....

    Is Jeremy Corbyn really any different?


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