Tom Watson has surfaced…

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Tom Watson has urged voters to back their local Labour MP in order to avoid a “Margaret Thatcher-style” landslide that would make it difficult to hold the Conservatives to account.

Labour’s deputy leader said the party had a “mountain to climb” over the four weeks until the general election and was lagging behind in the polls with all income groups, including working-class voters.

https://www.theguardian.com/politics/2017/may/12/tom-watson-labour-jeremy-corbyn-determined-to-stop-thatcher-style-tory-landslide

 

The subtext is that Jeremy Corbyn is the reason for the ‘mountain to climb’… and that even if they are put off by Corbyn, voters can and should still vote for their Labour MP knowing that they are not Corbyn-supporters.  The idea is also that because the Labour anti-Corbyn MPs have ‘sat on their hands’ and kept quiet, Corbyn will have to take responsibility for the catastrophic defeat.  (However, I somehow doubt that it’ll work like that…)

To date, Tom Watson has been noticeably absent which is strange for the Deputy Leader of the LP in the middle of a General Election Campaign.   However, a number of other stories have also emerged in the last week.  The LP manifesto was leaked in its draft form, apparently maliciously.  Ben Bradshaw and Frank Field seem to have already rejected it wholesale, and are writing their own.

Chuka Umunna and friends have issued a demand to stay in the single market.  The new pamphlet, whose backers include former frontbenchers Stephen Timms, Stella Creasy, Rushanara Ali, Karen Buck, David Lammy, Seema Malhotra and Andy Slaughter, explicitly opposes leaving the single market because it would mean “lower growth and fewer jobs” 

And who can forget John Woodcock’s bizarre video saying that he would not vote for Jeremy Corbyn to be Prime Minister.

All this is on top of a Telegraph article reporting that 100 Labour MPs will resign the Labour whip and set up as the official opposition, probably led to Yvette Cooper.  There are quite a number of problems with this plan, not least that if that is their intention, they are currently standing under false pretences as Labour candidates.

The respected commentator Squidapedoyt responses to this suggestion are well worth considering in the light of the above:

‘One cannot help wondering just whose side these so-called “Labour” MPs are on. They waffle a lot about “effective opposition to the Tories” but when they are asked to get specific about exactly what that means, they go all vague. This is because it is very difficult to “oppose the Tories” by putting forward exactly the same policies. But hush, we had better be well-mannered and not talk about that.’

‘But hey, let’s take the silly and simplistic way out, blame [Jeremy Corbyn] for everything, and resign ourselves to life under the predators forever, ripped off for everything, with falling living standards and services everyone depends on being shredded, while the wealthy double their wealth at our expense every decade or so. That is what being “realistic” and “moderate” means.’

‘Poor old Corbyn. He has to campaign not only against the Tories but against 85% of the press and many of his own MPs too. This is his punishment for advancing sensible policies which many people long to see. Nobody could win in his place. The task is simply not possible.’

‘Good old PLP,  loyal as ever. Can always be relied on for a destructive intervention at a key point.  They have been effectively “sitting as independents” for months anyway. They refuse to acknowledge the leadership exists. If the Office of the Leader asks them to do something, they may do it, or they may do something else, or they may sit on their hands and do nothing.’

‘This story is just smoke and mirrors. it is a piece of propaganda worked up out of the usual unattributable sources just as Labour began to make serious inroads into the Tory poll lead.’

”On reflection, this story has to be a bit of malicious rumour-mongering and nothing else. Consider the position of a Labour MP who had resigned the whip and joined a new independent group. They would instantly be in serious strife with their local party branch. Many of them may feel confident they can carry the local party with them, but they will be in for a shock, especially with the recent changes in the composition of the membership. They would no longer have the help of the anti-Corbyn faction on the NEC and in the party’s apparat to log-roll for them and keep unruly branch memberships in order, because they would have cut themselves off from the party. They would lose access to funding and to research and administrative facilities. They might get expelled from their local branch offices and have to find new physical premises. If they sat as members of an independent group, they could even be expelled from the party for supporting a political organisation other than the Labour party, like those activists who recently got the push for trying to organise a progressive alliance with other parties. It’s too much for them to risk.’

‘Corbyn’s “crime” is he has put forward policies to try to change the direction of this country; “for the many, not the few”. He has been punished by having to fight not only the Tories but most of the media and many of his own MPs. Question is could anyone else have done any better? His policies are actually very popular, but “play the man, not the ball” is very effective, unfortunately.’

‘The other reason is more fundamental. Labour’s right wing (code-named “moderates”, but actually neither their policies nor their behaviour is really moderate at all) may waffle a lot about the need for effective opposition to the Tories. But when they are pressed for specifics about what exactly this means, they go all vague and start to talk in jargon and buzzwords. This is in order to hide the fact that it is very difficult to effectively oppose the Tories by putting forward basically identical policies.’

”There are two reasons why Labour has not been a more effective opposition. One is that the majority of MPs refuse to acknowledge the existence of the leadership. If the Office of the Leader asks them to do something, they may do it, or perhaps do something else, or perhaps even sit on their hands and do nothing. Then, having made effective opposition impossible, they blame Corbyn.’

 

The Corbyn-supporting membership are not sitting on their hands but are working extremely hard to help anti-Corbyn MPs be re-elected because for us, it is always better to have a Labour MP than a Tory.  It is not asking a great deal to expect that our Labour PPCs should show loyalty (in public at least) to the democratically elected leader.  Many of us had to keep our mouths shut during the New Labour years.  Unfortunately, the impression left by some is that they would rather that the Conservatives are returned to government with all that that means for the NHS, Education, those with disability, social care, the environment, climate change, children growing up in poverty and more.  They should think again about what they are doing.

 

 

 

Labour MP in urgent need of lesson in economics

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A response to Chris Evans MP by Prue Plumridge

Just before the vote on the Fiscal Charter Chris Evans MP (who abstained) said:

Labour should be proud that when we were last in government we ran a budget surplus for four years and achieved some of the lowest deficits both in UK history and in comparison to other economically developed nations.
There is nothing progressive about budget deficits. Every pound we spend on debt interest is one less we can spend on the NHS, on vital public services, on helping the poor and vulnerable.
Fiscal discipline allowed us to commit record funds to education and healthcare without damaging the public finances. This was the foundation of the trust people used to place in the Labour Party. We were seen as safe custodians of economy, delivering on the issues people care about.”

It seems from this, that Chris Evans is in urgent need of an economics lesson for dummies.*  His statement shows dire ignorance of how the State finances and money system works.

He claims that there is nothing progressive about budget deficits and lauds the fact that Labour ran a budget surplus for four years whilst achieving some of the lowest deficits in UK history.

So is this something we can be proud of and does it fit with any sort of reality?

I would suggest that politicians should actually take some time out to learn about how our economy really works before they make such assertions.

Firstly a short lesson in deficits and surpluses.  Government deficits sound bad, don’t they, when we are told that they are like of our own household accounts?  Going into the red is something we avoid if possible – the consequences of doing so as a private individual or company could be ruinous.  However we have been conned by the language used to describe our economy which equates it to a household budget and suggests that going into debt risks bankruptcy.  Nothing could be further from the truth.  A sovereign country issuing its own currency cannot go bankrupt unless we live in the Eurozone, a country like Greece, which does not control its own currency issue.

Equally, if a government aims to reduce the deficit it will take money out of the economy in the same way as going into ‘surplus’ does.  It’s back to front to our understanding in terms of our own personal income/expenditure/savings.

Firstly, taxation is not income or revenue as we are told since a government which issues its own currency is not constrained by its tax take assuming it has idle resources available.  A ‘budget deficit’ represents the money spent into the economy and is the way a government can add aggregate demand and influence output and employment levels. Whilst there is unused productive capacity the actual ‘budget deficit’ is of no relevance. The only legitimate goal that any government should pursue is the real goals of employment and output.  In fact budget deficits are simply the mirror image of non-government savings.  Government spending represents all those things we take for granted which make our country a better place to live and work.

As Professor Bill Mitchell puts it ‘The government deficit rose and generated higher levels of wealth for households and firms.’
The word ‘surplus’ is equally misleading as it implies savings.  A ‘budget surplus’ does not represent national savings at all.  Households save to increase their capacity to spend in the future. But a government cannot save in its own currency. It does not apply to the issuer of the currency who can spend at any time it chooses.

It seems that like many politicians, Chris Evans simply has no idea of how the macro economy actually works.  They, like many of us, have been taken in by decades of neoliberal economic thought which declares categorically that deficits are bad and balanced budgets and surpluses are good.  In truth they are neither good nor bad and are dependent on economic circumstances – the state of the economy, the trade account and the level of private debt.

The budget surplus of which Chris Evans is so proud was made possible by sky rocketing household debt.

As Steven Hail puts it:

‘the ignorance of this politician on the fact that government surpluses mean non-government deficits, and that countries without trade surpluses cannot run budget surpluses for long without a private debt explosion and growing financial fragility is beyond worrying.  It is pure ignorance’.

Boom and bust had been abolished so said Gordon Brown as he put his faith in financial deregulation to facilitate an economic miracle which, in reality, actually encouraged household debt and asset bubbles.  It gave all the appearance of a growing economy when in fact it was built on sand.  Financial speculation replaced the solid foundations of a real economy which should be concerned with investing in the well-being of a country’s citizens and the protection of our natural environment.

So let’s get it right Mr Evans and all those who abstained from the Fiscal Charter vote it’s nothing to be proud of at all.

John McDonnell’s decision, if a little late, was the right one to make and let’s hope that the real story of how our economy actually works will start to see the light of day sooner rather than later.

UKHouseholdDebt9311
* Unfortunately Chris Evans is not the only MP in need of a lesson in economics.