Wednesday, 29 August 2012

Osborne's clueless meanderings

It was hardly surprising, but cheering, to read in the newspaper that Gormless George is regarded as the most incompetent member of the Cabinet.  Dimwit Dave clearly relies heavily upon the innumerate fool's political skills, further reinforcing one's impression that this foul Cabinet is an extension of an elitist sixth-form debating society, whereby the precocious little fools spout platitudes about how suffering and deprivation are good for the proles.  The only problem is that this is for real.

Osborne spouts on about there being no alternative to the current direction of economic policy, despite every indication being that the double-dip could turn into a depression of a magnitude that will make the 1930s seem like a period of explosive growth.  This is the equivalent of a child's toy with a single message that is repeated every time its spring is pulled - completely decontexualised and an image that should not be lingered over.  In the much-praised private sector, which we are all supposed to be in fealty to, this level of performance would result in a P45 and a suggestion that the protagonist should stick to tasks more suited to his skill set.

The economy has parallels with the 1930s but with the added spice of massive personal indebtedness brought on by a property price bubble and easy credit, fostered through Thatcher's deregulations of the 1980s and exacerbated by New Labour's belief that illusion flowed through to finance as well as politics.  Osborne, with his uneducated and ahistoric rightist cheer-leaders, is stuck in a delusion that the only way to get the economy moving again is through cutting the state to let a thousand incompetent bankers flourish.

As with all myths, this is partly based in reality.  The post-war period saw economies functioning at close to full capacity, and the theory of public expenditure "crowding out" the private sector gained credence as the 1970s unravelled.  The elephant in Georgie's closet is that this theory only works when there is competition for resources and the economy is working at close to maximum capability.  Not a difficult concept, but it does suggest that Plan B is not merely feasible but necessary.

The Bank of England, at the behest of the Treasury, has been printing money in billions - with a view to propping up house prices and stopping any more banks from going bankrupt.  This has all been presented as a means of encouraging small businesses to invest and people to buy homes - however this doesn't work when banks are (logically) rebuilding their balance sheets and safety.  So the next proposition is to cut taxes to business and individuals.

As anyone with a basic grasp of inductive reasoning can grasp, tax cuts at a time of debt and uncertainty will result in people doing exactly the same as the banks - paying down their overdrafts, mortgages while praying that the moronic policy position doesn't cost them their livelihoods.  So this won't result in short-term, or even medium-term spending, and the mythical increases in demand that will refloat the economy.  Reducing personal indebtedness is a desirable outcome from a whole-society angle, but it doesn't achieve the requirement of putting people back to work.

The complete failure of Osborne's economic policy is clear - and the entire deficit-reduction strategy's credibility is tending to zero.  There is a clear and present danger that a downward spiral has been created - whereby more and deeper cuts will be deemed necessary and desirable and thus making it impossible to create a recovery.  This is fine for those at the top of the tree who have insulated themselves from the consequences of such a destructive and self-serving nihilism, but is a complete dereliction of duty on the part of government.

Instead, there are a number of propositions that could form the basis of a genuine recovery strategy, but which are completely counter to the selfish and grasping approach allied to a hatred of any publicly-held infrastructure.  These are based around the recognition that the biggest contribution to financial recovery comes from sustainable growth, and from the possibility of exploiting the current climate to create a different approach to social and economic cohesion.

Firstly, in the short-term, printing money doesn't work.  However, we have cheap money available, which could be used to fund public investment projects directly.  These will generally repay over a 20- to 30-year period, and financing them through bonds sold to pension funds (who should be looking for long-term assets), and the public, would be much better than the multi-billion PFI fraud that doesn't even give the taxpayer anything at the end.  Roads, sewers, energy and other networks need to be modernised, and this would be a perfect programme of public works.

Secondly, the banks are not inviolate, and the City of London does not require special pleading.  The current calls for U-turns over airport expansion are symptomatic of the attitude that nothing happens outside the South-East of England.  Instead, there needs to be an approach that improves infrastructure and the quality of life outside this charmed elite - as well as the connectivity to and from the rest of the world that will be further denied if everything is concentrated on Heathrow.  Governing beyond the M25 is a tall order for this bunch of chancers, but it is a prerequisite for genuine balanced growth.

Thirdly, policy needs to focus on 30 years out - so that energy choices are made with a view to reducing carbon dependence, land-use planning based around reducing the need for physical mobility over long distances for essential tasks, and there is a sustainable housing, education and health policy, provided much more by the state without the adjuncts of profit and snoutage that seem to pervade all public-service delivery today.  A recognition that the state is there to provide an overall framework for individuals, communities and companies to operate within is less a counsel of despair than the anal fixation with the private sector that the current government demonstrates.

Too much to hope for?  This is gradualism, but with increasing evidence that the entire edifice of the Tory party is built on sand the choice is for a U-turn now or a much more radical, revolutionary upheaval down the line.

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