Tag Archives: economics

Now I am ashamed to be British

My world view is broken, as finally and completely as the mirror I dropped that shattered into a thousand fragments each of which reflected back a splintered version of my shocked face as I gingerly attempted to gather them up without slicing the skin of my fingers.

I grew up believing that for all its faults (and it has many not least the blood drenched imperial past so beloved of the right wing) Britain had in the second half of the twentieth century come to stand as for a liberal, tolerant world view that was outward looking and inclusive. That it really did strive to ensure equality, fairness and justice for all. That vision of my country has been ripped up, trampled and spat on. Mirrors once broken, even if repaired, remain cracked and reflect a distorted view. In the eyes of the world and many of its bemused, dismayed and shocked citizens Britain is now broken as comprehensively as that mirror.

Birmingham this week has been brutal. Racist, xenophobic and disgusting speeches largely unchallenged by a supine, subservient and self-serving media. I remember Enoch Powell’s ‘Rivers of Blood’ speech in 1968. Interestingly also delivered in Birmingham. It caused howls of outrage and his instant dismissal from the shadow cabinet. The conservative party leader at the time, Edward Heath stated “I dismissed Mr Powell because I believed his speech was inflammatory and liable to damage race relations. I am determined to do everything I can to prevent racial problems developing into civil strife… I don’t believe the great majority of the British people share Mr Powell’s way of putting his views in his speech.”

The Times newspaper declared it “an evil speech”, stating “This is the first time that a serious British politician has appealed to racial hatred in this direct way in our post war history.”
The Times response to equally nasty, if more subtle, incitement to hatred 48 years later is the feeble “May Takes Centre Stage in Appeal to Labour Voters”. Really? When did racist, xenophobic rhetoric become the centre ground of British Politics? I dare say if Edward Heath was alive today he’d be considered as unelectable as Jeremy Corbyn.

Powell’s speech was a more overt incitement to hatred but the vileness of the stuff Theresa May and Amber Rudd have been spouting is no less fascist, dangerous and incendiary. What happened to the 48% of people who voted remain? How can a 4% majority be overwhelming endorsement? A fair number (certainly more than 4%) of the Brexit camp was in favour of retaining membership of the EEC (the so called Norway option) and the concomitant commitment to freedom of movement. They, like the Remainers, have been airbrushed out. It was apparently always a  referendum on immigration and the people have spoken.  The hope that this is some kind of negotiating ploy for Brexit is rapidly receding over the horizon and we need to face the fact that Britain seems to have suffered a fascist coup. Not surprisingly the speech was applauded by Marine le Penn who is the current leader of the National Front in France.

Socrates (someone who knew a thing or two about Democracy) said “I am not an Athenian or a Greek, but a citizen of the world.” Theresa May said “A citizen of the world is a citizen of nowhere” – right now that sounds better than being British.

Austerity, Capitalism and Collateral Damage

A follow up to my last week’s blog on the autumn statement and a further exploration of what is wrong with the policies of austerity being so relentlessly pursued by the British Government.

The report from the Office for Budget Responsibility, Britain’s the tax and spending watchdog stated that low wages force Britain to spend £900m more on tax credits than planned.   A simple and compelling illustration of why austerity does not build prosperity.  The greatest growth in poverty has been among those in work, so how can the Chancellor delude himself that people who need tax credits to bridge the gap between wages and what it actually costs to live on or about the breadline are going to generate consumer spending of the sort needed to fuel a recovery.   The simple answer of course is that the Chancellor is not deluded and is perfectly aware of the consequences of the policies this government is pursuing. The low paid and unemployed are collateral damage in the vision of the new world order of unrestrained capitalism where wealth is concentrated into the hands of the few at the expense of the many.

The ugly truth is that free market capitalism requires boom and bust – shaking the tree dislodges those with a precarious hold on wealth and prosperity and frees assets to be acquired at knockdown prices by those with liquidity.

The haves buy up repossessed properties and rent them back to those who because they lost their jobs failed to pay their mortgages but who still need somewhere to live.  Those with spare capital can buy repossessed properties cheaply.   Buy to let mortgages are easy to obtain for landlords who already have a portfolio of properties so they can grow their assets with relative ease.   The State will pay housing benefit for rent although it is parsimonious in the extreme in helping those in trouble with their mortgage payments.
My Aunt taught in Glasgow in the poorest of areas in the 1930’s and the hunger and destitution she saw stayed with her for life.  She taught children who shivered barefoot to school through the snow with no food in their bellies.  It made her an ardent socialist who wanted a just world where no children were denied a hot meal, a warm coat and boots, not much to ask you’d think but it was then.  People died of hunger and from treatable illnesses because they couldn’t pay for a doctor.  My partner’s mother had rickets from malnutrition as a child because her father had no work in the great depression and no money for food.

Our parents’ generation grew up in hard and bitter times and survived the pain and the loss and destruction of the Second World War and were determined to build a better future for the generations that came after them.  Free health care so that people like the sister of Harry Leslie Smith, a 91-year-old RAF veteran born into an impoverished mining family, do not die untreated in a workhouse at the age of ten because their family cannot pay for medicines.  He spoke vividly and movingly at the Labour party conference this autumn about his experience as a child he said

“Wages were low, rents were high and there was little or no job protection as a result of a post war recession that had gutted Britain’s industrial heartland. When the Great Depression struck Britain in the 1930s, it turned our cities and towns into a charnel house for the working class, because they had no economic reserves left to withstand prolonged joblessness and the ruling class believed that benefits led to fecklessness.”

This sounds a chilling echo in what we hear today about the culture of workshy families and benefit fraud, about immigrants and poverty  being your own fault and other such myths and in the cuts the Chancellor proposes that the Institute for Fiscal Studies say would mean cutting the size of the state to pre-war 30s levels.   All the gains our parents thought they had made towards a fair, just and equitable society that looked after the poor, the old and the vulnerable are being taken away from us and we seem powerless or paralysed in our attempts to stop it.

Voices like Harry Smith are vital because the generation that remember the 1920’s and 30’s are dying out. Soon there will be no first hand witness testimony to these times. Like the First World War where the last few surviving servicemen have recently died it is passing from living memory into history and history we all know is a fairground hall of mirrors in which the present distorts the past to serve its current needs and purpose.

We have  a simple choice,  each of us as an individual needs to ask the question- ‘what sort of world do I want to live in, want my children and their children to live in?’ – If the answer is that you want a fair and just world where they can be healthy and prosperous not hungry and desperate then I have to I open my eyes to the reality of what is being taken away and  stand up and say ‘enough no more!’

Society and government are the ties that bind us and we need to protect the poor and vulnerable not vilify them and pretend it is their own fault they need help.

Electronic money does not make the World go round

Last week I wrote about the Chancellor’s autumn statement and I tried to express the anger I felt about the continual pursuit of austerity by this government.

There are voices speaking out against it in ever increasing numbers, Russell Brand being simply one of the better known in the UK at least.   I am a small voice in the multitude but I’m in good company not only famous comedians but also heavyweight fiscal institutions are lending their voices to the argument against further cuts.  May be, just maybe, the whole thing will blow up in the government’s face and an opportunity will be seized by bankrupt local authorities, struggling families and radical activists who want an end to the corruption and greed that is free market capitalism.

My friend John Rogers has for many years been engaged in the development of and the economic theories behind alternative local currencies.  The truth is that much of the problems we are suffering are the direct result of the Banking industry’s creation of and speculation in imaginary money to generate inflated profits and massive bonuses.   Local currencies return money to its original function as a medium of exchange rather than a commodity in which you can speculate and thereby cause economic instability.

Local currencies also keep wealth circulating in the local area since they are not backed by the national government then they cannot be used outside the area.  Multi-national business cannot, therefore, send their money off to whatever tax haven the have located their head office in to avoid paying their taxes. Needless to say this type of business sees no benefit in participating in local currency areas!

Local currencies are an interesting idea and I’ll be exploring it further in future blogs.  In the meantime for anyone who wants an introduction to the subject John blogs on the subject and I recommend a read of his recent posts  http://valueforpeople.co.uk/spark-blog/

 

Christmas, Secret Squirrels, Economics and Humbug

Christmas is cranking up – TV smothered in festive cheer and adverts for really expensive toys.    Black Friday and Cyber Monday are behind us – I spent nothing on either day proving that as a capitalist consumer I am a total failure YEAY!   My other half and I buy each other a nice big book and then we sit and read it for the rest of the festive season thereby avoiding even eye contact and the risk of resultant jollity.  Secret squirrel is the invention of a malevolent entity and should be ejected from this galaxy through the nearest wormhole; the damn squirrel as well as its inventor.    As practiced by the sadists in our office it requires you to guess publicly who has bought you the cheap bit of crap that you hate.

So we have a frenzy of spending conspicuous consumption by those who have and misery and guilt for those who do not.  Children stoked up to want incredibly expensive toys, adults to want designer clothes, perfume and booze and adverts showing happy families and friends round tables groaning with sumptuous feasts.  Dickens Pickwick Papers, Christmas at Dingley Dell what a wonderful world to be sure.

This is the background to Woeful Wednesday otherwise known as the Chancellor’s Autumn Statement.  I almost didn’t blog about it because really you can’t have every other word being an expletive, it may relieve your feelings but it doesn’t present a coherent argument nor is it good prose.   The government has continued its relentless pursuit of austerity as a cure for our economic and other woes in the face of all the evidence that cutting does not produce growth or prosperity but in fact perpetuates a downward spiral in which the poorest and most vulnerable citizens suffer disproportionate hardship.    So one has to ask what philosophy underlines the idea that further drastic spending cuts will stimulate economic growth and prosperity.

Are we really to be driven by a set of values where poverty not just relative but absolute poverty for a significant number of citizens is the norm?   Where there is an ever widening gap between the lowest and highest in terms of wealth?   Again all the indicators show that these are counter-productive in terms of national prosperity.   We hear nothing now of the ‘Big Society’ or any other pious platitudes about all being in this together.  For many this will be a truly Dickensian Christmas of the worst sort.  Food banks, zero hours contracts where you are employed but with no guarantee of any pay in any one week are increasingly the shocking reality of 21st Century Britain.  The institute for Fiscal Studies which is neither left wing nor alarmist has warned the Chancellor’s deficit reduction plans mean cuts on a “colossal scale”  The public sector spending cuts over the next five years set out in the autumn statement might force a “fundamental re-imagining of the state”, the IFS said.  We are looking at up to 40% reductions in some areas including defence, the police, social security and most spending that protects the vulnerable. It is the environment, foreign relations, housing and day to day flood defences. It is business regulation and health and safety (including things like food). It is the basic infrastructure on which our society is built. And it is going to disappear, very fast.  We are going to see local authorities who cannot meet their statutory obligations to the vulnerable, who cannot grit roads or keep open libraries.  The planned cuts are likely to lead to a million public sector workers losing their jobs.  A report into food banks was published by a consortium of charities, including Child Poverty Action Group, Trussell Trust and Oxfam, which found that the number of people accessing three days’ worth of emergency provisions had risen from 128,000 in 2011-12 to 913,000 in 2013-14.   This will continue and will get worse.  The most worrying aspect of poverty in Britain today is in-work poverty, people on zero hours contracts, people who have part time work and need tax credits and other benefits to put food on the table and pay for heating.  Last month the education and equalities minister, Nicky Morgan, wrote for the Guardian that the coalition government had reduced the gender pay gap to its narrowest ever level. The Joseph Rowntree Foundation report illustrated how this had happened: among the lowest-paid quarter of the population, women’s wages have reduced by 40p an hour since 2008; over the same period in the same sector, men’s wages have reduced by 70p an hour.  We should be proud of this?  Curiouser and curiouser as Alice famously said.

The Chancellor’s main gambit was slashing stamp duty on house purchases in the hopes of fuelling a house price boom which in turn will fuel a consumer credit boom ahead of next May’s general election giving us all a feel good factor and a nice boost to the economy.  Dream on Mr Osborne, if you fear for your job if you see services being slashed you become less not more likely to go out and spend.  You save what little you’ve got for the rainy day you can see coming all too clearly.  You don’t take risks; you don’t trade up your house or buy a new car.

Our problem is falling tax revenue, partly because many of the jobs in the economy are low wage or part time and because as illustrated by a report of the National Institute of Economic & Social Research real weekly wages overall have fallen by about 8% since 2008, equivalent to a fall in annual earnings of about £2,000 for a typical worker in Britain.  In addition the government allows multinationals such as Amazon and Starbucks among others to pay no tax on their profits.   Tax receipts are already £23 billion below expectation and the OBR now seems to think that this trend is permanent.  We drift into ever deeper and more permanent recession.

The most worrying aspect is that in all of this politics is marching to the drum beat of anger over immigration and so called benefit cheats,  poverty, inequality, homelessness or hunger are being air brushed out of the political debate.   So yes I am angry and disappointed that the country I grew up in is not just disappearing it has already gone.  There is no excuse for the dull acceptance that we cannot do anything about poverty or that somehow being poor is your own fault.  There is even less excuse for blaming it on immigrants.  Mr Farage and UKip are covert fascists and the only party that is standing up and saying this along with calling for a living wage is the Green Party and their reward is to be airbrushed out by the mainstream media.

Christmas?  Bah Humbug.  I’m not buying into consumer fantasy land I’m donating food to those who are hungry and homeless.