the Austerity Con or Con

[aka Calum Da Jazbo]

even so the Tgraf makes a case and an interesting comparison with the EMU

In Britain we at least have a roaring policy debate. Personally, I support the Coalition’s cuts: tightening is well-paced at 1pc of GDP each year. It is cushioned by quantitative easing. Britain has a big current account deficit (unlike Euroland), and is therefore not morally obliged to offer the world reciprocal demand (unlike Germany with a 6.4pc surplus this year). But I am thankful that we have an opposition Labour Party and the pugnacious Ed Balls fighting the policy every day. The nation can hear the arguments. There is a choice.

we may predict riots eh

[teamsaint]

thanks for the link, jazzer.

Europe is in one big mess....

[Lateralthinking1]

...my GP was talking to me about depression and mood; i said iwas not depressed i was angry; she said i should still take the pills and i did agree but said that it was not the point really - anger was the only sane and functional response to the way things are ... and should not really be medicated away ...interestingly having taken the pills i am still angry

My GP has been quite supportive over the past two years. She helped me onto medication and then off it. It was an unusually difficult time for me. The only moment when the body language indicated that she couldn't keep with my train of thought was on the last occasion. The specific sentence that did it was "politically I am now off the scale".

The pay of GPs is now such that it is a barrier between them and the general public, no matter how hard both sides try to do their best. Good relations exist despite their pay, not because of it. I don't begrudge them a decent salary given all the hours that they study to be qualified. But £1200 a night is completely outrageous and they know it.

A neighbour, late 80s, advised his GP that his grand-daughter was a recently qualified GP and had been working for a year or so. His GP feigned interest and asked him how she was finding the work. Renowned for being blunt to a fault, my neighbour quickly replied "she describes it as money for old rope". By all accounts, his GP roared with laughter.

[aka Calum Da Jazbo]

the bullet point version, in Posen's words:

The British economy is lacking productive investment, but not for want of investment opportunities. Banks and large corporations are sitting on cash, households are holding back on large purchases (including of housing), and the public sector is slashing its investment flow.
The current British coalition government’s economic policy program, however, is intended to address a lack of savings, not of investment.
This false assumption feeds back into further arguments for fiscal and household consolidation. The UK public and private sectors are paying down debt less quickly than expected to, and that means by assumption that their future ability to pay down debt is declining, so they must cut back spending and borrowing even more today to remain solvent.
The facts of recent experience, including of the recession, do not fit with [the misinterpretation that debt is the problem], but do fit with the view that investment failings are at work in the British economy.
So should the British government just go on a spending binge instead? No, clearly not. Even though there is legitimately little fear about UK government finances at present, with the large deficits largely driven by slow growth pushing down tax revenues and up benefits spending, there is nothing to be gained by making those fears more realistic.

full version here
prescription here [seems pretty punchy to me]

[Serial_Apologist]

Well it seems quite clear from many readings right across the political spectrum that global capitalism is on permanent stagnation for the forseeable, owing to the internal contraditions Marx first pointed out now manifesting in evermore exaggerated forms.

People wrongly think all you have to do is getting the population sufficiently secure and well off to spend things back to some modicum of equilibrium as per Adam Smith, but if not stopped, there is nothing to prevent the capitalist class reverting the rest to 19th or even 18th century conditions of existence, with working conditions and wages just sufficient to "reproduce the labourer" for purposes of producing luxury goods for the rich, who by then will confine themselves within fortified citadels of the kind with which we are not yet quite familiar, found in third world countries.

[amateur51]

When our special friend has finished his creepy interjections, perhaps we will be able to discuss the various points of view, Calum. I'm away and busy for a couple of days, but hope to be back by Sunday.

The usual 'post an insult, make an excuse & flee' strategy or a real offer?

We'll see

Well it does appear to have been a strategic retreat rather than an honest offer - no change there then

[aka Calum Da Jazbo]

well well a Polish economist saw it all in '44 according to this in the Graun ....fascinating eh ...

The argument for dealing with budget deficits has provided cover for attacking wages and benefits." And austerity is just code for the transfer of wealth and power into ever fewer hands.

[Serial_Apologist]

well well a Polish economist saw it all in '44 according to this in the Graun ....fascinating eh ...

Roosevelt understood this ten years earlier still - the US ruling class were caught on the hop, not realising the political implications... that would not be allowed to happen again in America. What Chakraborrty does not countenance is that there is nothing to stop this lot turning the UK economy into merely a service provider for the rich, ie a third world economy. There is no law of capitalist economics that says the health of an economy invariably depends on the purchasing power of the working class or even the lower middle class. It all hinges on resistence - they resist, we should too.

[rauschwerk]

the rich, who by then will confine themselves within fortified citadels of the kind with which we are not yet quite familiar, found in third world countries.

They don't need those when they have tax havens http://www.treasureislands.org

[aeolium]

A very pertinent article, Calum - thanks. The language of some politicians about the unemployed (in a recession principally created by the excesses of big financial institutions) has of late been truly despicable.

I recall the words of an English poet, writing a few years before that Polish economist, in the winter of another recession and facing the prospect of another European war:

"Intellectual disgrace
Stares from every human face,
And the seas of pity lie
Locked and frozen in each eye.

...

In the deserts of the heart
Let the healing fountain start,
In the prison of his days
Teach the free man how to praise."

[LeMartinPecheur]

People wrongly think all you have to do is getting the population sufficiently secure and well off to spend things back to some modicum of equilibrium as per Adam Smith....

I'm no economist but didn't Keynes show/teach that it is perfectly possible to have effective economic equilibrium if the employed and the rich are basically pretty content with life, their own incomes and current prices, no matter the number of unemployed? Then there's little incentive to cut wages still further or raise benefits unless revolution threatens amid the have-nots. To have market power you have to have at least teenzy bit of truly disposable income. Extra employment exactly 'at the margin' has little effect on profits so market forces barely act at all to reduce unemployment(?).

Wasn't this a key lesson in the US climbing back from the big depression after the Wall St crash: government spending - creating a decent bit of real disposable income close to the margin among now-employed 'labouring classes' - got it all going again? Or did they really need WW2 to finish the job?

[aeolium]

I'm no economist but didn't Keynes show/teach that it is perfectly possible to have effective economic equilibrium if the employed and the rich are basically pretty content with life, their own incomes and current prices, no matter the number of unemployed?

Did Keynes really argue this, LMP? Surely there must come a point where the number of unemployed is so great that the lack of purchasing capacity drags down the economy as a whole. Does the present 26% of adult unemployed (over 50% of youth unemployed) in Spain today permit economic equilibrium - it certainly doesn't create social equilibrium?

I'm no economist but it seems to me obvious that 20 people earning £20,000 will spend more (and cost the economy less) than 1 person earning £400,000. Having a society that above all caters for the very rich seems apart from anything else very inefficient (for the society as a whole, I mean, not obviously for the very rich).

[aka Calum Da Jazbo]

from my reading a highly unequal distribution of income and wealth is extremely damaging to society in terms of health, crime, social mobility, business performance ..... [see The Spirit Level and other research here and the seminal researh of Marmot here

imv any shred of humanitarian values should lead one, on the evidence, to be against extremes of inequality in a tough minded manner ..... but the pursuit of equality seems to me to be fraught with both intellectual, political and social difficulties that are imv insurmountable ..


the thread was initiated in the belief that this Government is perpetrating a fraud on us, it that is far more motivated by its neo-liberal and Little England Tory values that anathema to any public or state activity than any care it might express for economic prudence .... indeed one might think that they are perhaps one of the more irresponsible administrations in modern history were it not for the present Leaderships and Authorities in the EU .. [remember the old boom bust election cycle of the Tory years?] ...

[Serial_Apologist]

imv any shred of humanitarian values should lead one, on the evidence, to be against extremes of inequality in a tough minded manner ..... but the pursuit of equality seems to me to be fraught with both intellectual, political and social difficulties that are imv insurmountable ..

I don't think anybody, save possibly for the most purist of anarchists, has ever argued for the complete abolition of inequality, Calum. This has been something of a shibboleth with which to bash "the left" for as long as I can remember. Marx argued that the skilled labourer should earn more than an unskilled to compensate for the amount of time spent catching up in acquiring skills. Admittedly he was writing at a time when many if not most apprentices had to pay for their apprenticeships, but today the same principle would apply to young workers on start-up rates, (not to mention unpaid internees! ), if not to managers-to-be. The magnitude of inequality about which we are speaking today is of a totally different order, of course.

[aka Calum Da Jazbo]

true S_A but it helps to be very clear what we might be arguing .... to avoid the too familiar counter arguments and to understand the practicalities of what must be done ....

When Attlee died, his estate was sworn for probate purposes at a value of £7,295,

wicki

19s 6d in the £ ... now that is a practical measure! ... and then listen to the howling thieves lying and screaming for their ill gotten gains, accusing one of ruining the economy no matter that people are working ....