Dialogue with an Anti-Corbyn Labour supporter

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(Published now, rather than when it was written because it lost relevance when…  given the convenient coincidence of Article 50 and two tricky by-elections…. a second coup looked all too likely.  This threat has fizzled out for the moment, although another attempt to unseat Jeremy Corbyn may well materialise if Labour loses in Stoke and/or Copeland.  Posting now was also prompted by John McDonnell’s warning  ‘This daily grinding out of distortion and attack can undoubtedly have its effect on our standing in the polls and in turn on the morale of some of our supporters, who are not always close to the action and may not be experienced in past trade union or political campaigns’.)

Dear Person,

We met the other day, and you told me that you had only joined the LP to vote against Jeremy Corbyn,

I asked you if you had actually seen any of Jeremy’s speeches or the debates in the leadership contest?

You did have the grace to look shamefaced as you shook your head… Then you countered:

“But, but I do read the ‘good’ newspapers, the leftwing papers like the Guardian and the i”

Rendered speechless at the idea that the Guardian or the i were leftwing, I stuttered:

“Did you really think Owen Smith was more electable… a man who makes penis jokes??”

But what I should have said was:

Reporting in the MSM is largely without reference to context or history… and typified by criticisms such as Corbyn’s lack of success in winning back Scottish votes. This is reductive to the point of misleading but not new. However, there have been a number of recent academic led studies which have looked at media bias and concluded that the coverage of previous Labour leaders were ‘nowhere near as destructive, as vicious and as antagonistic as is the case now with Corbyn’. One such study indicated that 75% of press coverage misrepresented him and expressed serious concern for its impact on the democratic process.

Furthermore, many of these stories have been fed to the media by hostile members of the LP elite who are rabidly anti-Corbyn, and acting against the expressed wishes of the overwhelming majority of the LP membership.

They justify their behaviour by arguing that Corbyn is unelectable and not a good leader. However, this is hardly convincing when it is clear that they will fight tooth and nail to make it impossible for another more (in their view) ‘plausible’ but similarly leftwing candidate to replace Corbyn. For example, they could agree to reduce the number of nominations required from the PLP to stand for the leadership, from the current 35 to 5.

But they won’t do that because, just like Hilary Clinton, they believe that ‘it’s their turn’ and that the LP can return to being two shades left of the Conservatives and it will suddenly be electable.

This is the complacency and out of touchness that led to Donald Trump being elected. And a fact, that Peter Mandelson acknowledged when he blamed three terms of New Labour for Brexit and a majority rejecting globalization.

But in any event, the undue focus on Corbyn also ignores the plight of neoliberal social democratic parties globally.  As Stephen Bush wrote in the New Statesman:

Across the continent, just two centre-left parties regularly outpoll Corbyn’s Labour: the Portuguese Socialists and the Italian Democrats, the latter of which averages 30 per cent on a good day. And of the two politicians held up as examples by Corbyn’s internal opponents – Matteo Renzi of Italy and Manuel Valls of France – one suffered a self-inflicted defeat in 2016 and the other looks likely to join him in 2017.

Labour’s Corbynsceptics have not yet accepted that the party’s problems do not start or end with the leader. They describe him as an insurmountable obstacle to victory in 2020, but the bigger problem for them is that he has also proved an insurmountable obstacle to their thinking about the party’s long-term future.

http://www.newstatesman.com/2017/01/jeremy-corbyns-internal-critics-have-compelling-diagnosis-they-dont-have-cure

 

It’s not that I have an uncritical relationship with the current Labour leadership but I’m not going to jettison Corbyn and co with all their really good points and policies when there is no comparable candidate who would get the nominations required.   Furthermore, I have no doubt that JC is staying on for the same reason. I don’t know how on earth he stands the constant twisting of facts, delegitimisation and misrepresentation.

Then you would have replied:

172 MPs passed a vote of no confidence in Corbyn!

And I would have suggested that you read this review of Gaye Johnson’s book with its introduction by the late Michael Meacher:

A systematic analysis of the biggest internal coup d’etat in the history of the Labour Party. It contains a wealth of hitherto unreported material of how this was achieved. The Blairite machine gathered and fostered its own panel of ultra-reliable potential candidates (often special advisers of existing MPs) and helped to train and prepare them for the day when winnable seats might become available, exactly as the Blairite ‘Progress’ faction continues to do within the party to this very day.

And the legacy of this takeover remains. The leader may be Jeremy Corbyn, but the MPs, party officials, leaders in local government and many more remain the excrescence of a bygone era. Party employees especially have a long history of right-wing bias and working against left-wing candidates. A former Party Director of Communications openly boasted in 1998 of how he had worked to label the Grassroots Alliance slate for the NEC as “hard left”. Party staff are known to grade Conference delegates according to their loyalty to the leadership and harass delegates about how to vote. Staff themselves were pressured to behave in a certain way by the increased use of short-term contracts.

Many of the powers of the NEC were delegated to hand-picked subcommittees in the New Labour era. Labyrinthine policy filtering mechanisms were introduced, undermining the sovereignty of Party Conference.

http://www.organizedrage.com/2016/12/book-review-new-labour-was-gain-worth.html

 

Then I could have said:

The pivotal moment was the PLP coup when the rebel MPs revealed their true colours, either politically or indeed in moral cowardice.  It was much more important for the prime movers to remove the leftwing leadership than it was to hold Cameron and Osborne to account for their gross irresponsibility and hubris.  It said it all.

At that point, many in the LP membership realised that these rebels MPs were not on the same side as themselves and that being elected on another neoliberal, New Labour platform was worse than useless.

Blair, Brown, Mandelson and the rest, were able to do things that the Tories would not have been able to do and we let them because they did increase funding public services  but in reality it was not enough… and the door was left wide open for the Tories to walk through in 2010 and defund, sell-off and privatise.

As for Jeremy Corbyn’s electability, a friend wrote to me:

Most people want a more equitable distribution of income and sourcing of tax, adequate funding of the NHS, increased public sector funding and management of social care, and investment in services and job creation, support for the integration of migrants and prevention of their exploitation, and that a Labour Government would deliver them. None of these measures is ideological, and the people supporting them within the party or in the population are not ideologues. They are ordinary people, and they rather like Jeremy Corbyn because so is he.

I agree.  And thank you to the Person who I met the other day, who told me that they had only joined the LP to vote against Jeremy Corbyn.  You showed me how unerring George Orwell and Chomsky were in recognising that the propaganda of the elite is contained in the quality press, aimed squarely at the educated middle classes.  Needless to say I think there are a lot of people out there who need to take their blinkers off.

https://www.lse.ac.uk/media@lse/research/pdf/JeremyCorbyn/Cobyn-Report-FINAL.pdf

 

 

 

 

Emily Thornberry’s support for Labour Party Democracy

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Posted below is the Shadow Foreign Secretary, Emily Thornberry’s letter to her constituents which paints a very different picture to that presented by former members of the shadow cabinet who took part in the staged walkout of the coup.  The most significant aspect is her disgust at the way that the party hierarchy have done their best to stop Jeremy – first from getting on the ballot, then by excluding 130k new members from voting and then by the £25 ‘voting tax’ for supporters.  It is so heartening to know that some MPs have a sense of what is democratic … and are prepared to stand up for what is morally ‘right’ not what is (apparently) politically expedient.

Emily is absolutely on the money with her plea:

‘I do not understand why anyone in the Labour party would want to turn their back on that membership, in the way that the party hierarchy have tried to do this summer.

Instead, it is time to unite as a party – the membership and the elected representatives alike – and together take our fight into the only contest that matters: getting this dreadful Tory government out of office, and punishing them for the mess into which they have plunged our country.

That is what we should have spent our summer doing – uniting, facing outwards, taking on the Tories, and energising the public to our cause – and that is again why I regret so much the chaos and distraction that this attempted coup against Jeremy has caused.’

Emily Thornberry’s full letter to her constituents:

What had begun as the necessary modernisation of the Labour party in 1994, showing how a belief in a dynamic market economy could be combined with the drive for social justice and the transformation of public services, had become distorted into an agenda where the test of every new policy from the leadership was how much it would antagonise the Labour party’s core membership.

Tuition fees, the attempt to marketise the NHS, the careless disregard of long cherished civil liberties and the drive to war in Iraq were being imposed by a leadership who convinced themselves that, if the members hated it, they were doing something right.

When I walked through the voting lobbies against the attempt to impose 90 days’ detention without charge in 2005, Tom Watson –then one of Tony Blair’s whips – growled at me that I was a ‘traitor’. But a traitor to who?

Not to the country, when this was a draconian measure designed to look tough on terrorism, but one that would undermine the cohesion of communities like ours, alienate people and actually undermine our security. My members knew this and I remember when Compass polled party members – at my instigation – it was clear this was the national view as well.

So who exactly was I betraying? Just a party hierarchy and a party leadership who were trying to shore up their relationship with the right-wing press by ‘taking on’ their members, and trying to out-flank the Tories on security.

When Jeremy stood for the leadership after the disaster of the 2015 election, the difference was palpable. Here finally was a candidate interested in listening to the party’s members, reflecting their views, and promising to represent them. As a result, hundreds of thousands more joined, including huge numbers who had left because of Iraq, tuition fees, and other issues.

Here we are now, less than a year after Jeremy’s overwhelming victory, and the party hierarchy – through decisions of the National Executive Committee – is attempting to overturn that result, quash Jeremy’s mandate, and put the party’s members back in their box. And they are doing so in the most naked way.

I was disgusted to see the attempts to try to stop Jeremy from getting on the ballot. And then, if that wasn’t bad enough, hundreds of thousands of fully paid-up Labour party members were excluded from taking part in the election, having been told the opposite when they joined. Third, your membership fees were spent on securing that decision through the courts. And then lastly, registered supporters, who had been told they could be involved in the Leadership election, were then told that they must increase their donation to £25 within two days to remain eligible for a vote.

Indeed, you should probably know that even to put on the social events we have held for local members in the last two months – occasions that have been really important to welcome in our new members – we have been forced to seek permission for each event from the party hierarchy.

In short, some people have done their level best to deny the party’s full membership a fair and equal vote in this contest, or even the chance to make their voices heard. Instead of welcoming the enthusiasm of our new members, instead of celebrating the strength of our mass membership, they have been behaving as if it is something to be afraid of.

As someone who spent nearly 30 years as a grass roots activist before becoming your MP, I cannot accept this.

But even more important, as someone who believes our party and our country are best served when our elected representatives and the party membership work together, I fundamentally disagree with this attempt to take us back to the years when our members were deliberately antagonised, alienated and ignored by the people who they helped to put in power.

Islington South and Finsbury Labour Party has a proud reputation for being one of the great campaigning local parties and our election results in the past 11 years have shown what can be done when the membership and its elected representatives work together with respect.

We now have the potential to replicate this success across the country, creating a national activist base that could be unlike anything else in modern British politics, taking our message into the street and onto the doorstep, and turning the activism of thousands into the support of millions.

I do not understand why anyone in the Labour party would want to turn their back on that membership, in the way that the party hierarchy have tried to do this summer.

Instead, it is time to unite as a party – the membership and the elected representatives alike – and together take our fight into the only contest that matters: getting this dreadful Tory government out of office, and punishing them for the mess into which they have plunged our country.

That is what we should have spent our summer doing – uniting, facing outwards, taking on the Tories, and energising the public to our cause – and that is again why I regret so much the chaos and distraction that this attempted coup against Jeremy has caused.

So my plea to all members, and one I will make to my fellow MPs, is this: whatever the outcome of this leadership election, we should stop the internal division, unite as a party, and take the fight to the Tories together.

And I would like my local party to know that I will remain totally loyal to the leader of our party, whoever he shall be.

In the meantime, you all know that I have a very full in-tray with constituency business, and with representing the party on Brexit, foreign affairs, and – together with Clive Lewis – our future defence policies.

I will be concentrating on this vital work in the run up to 24 September, rather than this unnecessary and divisive leadership contest. And when that is over, I hope we can all start focusing on those bigger issues on which Britain needs an effective, united opposition.

I know that not everyone will agree with the conclusions I have reached, but I am completely confident that in Islington South and Finsbury, we will continue to debate this and other issues in an atmosphere of mutual trust and respect.

Best wishes, and please as ever, let me know your views. Looking forward to seeing you on a doorstep with me soon!

Emily

Is George Osborne failing … or succeeding brilliantly?

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Is George Osborne failing … or succeeding brilliantly?

Obviously the answer depends entirely on what are George Osborne’s actual intentions?

We are led to believe by government and commentators in the mainstream media that George is trying to ‘re-balance’ the economy, eliminate the deficit by 2017 (sorry 2018!) and create the conditions for the private sector to grow and export the UK out of recession/depression. He and David Cameron tell us that fiscal austerity or expansionary fiscal contraction, is showing signs of working and anyway, there is no alternative (TINA).

However Martin Wolf, the distinguished FT journalist, describes Cameron’s arguments for sticking to the government’s programme of fiscal austerity as ‘overwhelmingly wrong-headed’. (1)

Duncan Weldon quotes the FT leader ahead of the Budget and writes:

FT leader ahead of the Budget opens by stating:

More than halfway through the UK coalition’s term of office, the British economy is becalmed. Output is flat and confidence is perilously weak. The UK is experiencing its slowest recovery since the 19th century. Nearly half a decade has passed since the crisis erupted and the economy remains no bigger than it was in 2006 – more than 3 per cent below its 2008 peak. It is no longer fanciful to talk about a lost decade.

As we approach the Chancellor’s fourth Budget, we can already guess that much of the content will feel eerily familiar – growth revised down, borrowing revised up, an insistence that his policy is working and delivering low interest rates, some additional austerity measures to be announced for the future and some ‘more of the same’ policy in the short-term (corporation tax, the personal allowance and generic ‘deregulation’ being likely candidates). (2)

 

I could find dozens of quotes in the same vein.  So in terms of mending the UK economy, George Osborne has signally failed!

Furthermore, it is not just that he has failed on economic indicators.  His ‘austerity’ cuts have or will have severe consequences for the social fabric.  For example, more than a million more families will be living in poverty by 2015. (3)

Picture 39

Research published by the TUC earlier today shows that the decisions being made by the government will cost middle-income households £1,200 a year. By the time of the next election, nine in ten households will be worse off, and half of all children in the UK will live in families below the breadline. (4)

However, this aspect of George Osborne’s strategy is, in his own terms, a success .. a real success.

Such impacts were implicit in the CSR (Comprehensive Spending Review October 2010) which if implemented in full would result in less spending on public services in the UK than that of the US by 2014/15  (5)

However, it has to be said that not everybody accepts George Osborne’s stated agenda as being his real purpose.

Ivan Horrocks, commenting on Tax Research UK as long ago as September 2011, wrote:

 I do wonder if part of the issue you and many other commentators have with Osborne and co is that you/we are ascribing to them a primary economic policy aim which is in fact not their primary aim. We assume that Osborne and co’s primary concern (aim) is to get the economy growing again. And to be fair, this is the impression that Osborne and co promote.

But what if their primary aim is in fact to (try to) fundamentally restructure economic (and social) relations in this country (and beyond if they can) and that their belief is that to do that “austerity” is an essential tool. It can be argued that this is similar to the approach Thatcher employed between 1979-83. For example, under the cover of “austerity” we are witnessing a massive fire sale of public assets, planning laws are being relaxed, the NHS is being “restructured”, and so on and on, all to the considerable benefit not to the “big society” but to big business and big finance.

My conclusion would be that the “austerity” approach – and the narrative that’s been developed to support it – will not be dropped, regardless of any arguments put by the IMF, UN, you, Martin Wolf or anyone else – or the production of data that shows how dire the economic situation of this country is – until Osborne and his supporters are confident that their primary policy aim is sufficiently entrenched to withstand efforts to stop or undo it. Again, we see this approach reflected in the behaviour of Thatcher’s first government. And, furthermore, it resonates with the reported view of senior/influential Tory thinkers, that the first Blair government wasted their first two years in power. In summary then, we could argue that Osborne and co have simply been very good at learning from history. (6)

The passage of time has certainly vindicated Ivan Horrocks assessment. The ‘austerity’ approach and accompanying narrative (“its all Gordon Brown’s fault”) have not been dropped.  And regardless of the economic data, the arguments of the IMF, UN, Richard Murphy and Martin Wolf, we continue to witness the fire sale of public assets, planning laws are being relaxed, the NHS is being “restructured” and so on… to the benefit of big business and big finance

 

Richard Murphy is also in firm agreement that George Osborne’s real agenda is a Tory revolution  ‘aimed at creating a managed, corporately controlled, and deeply unequal ‘democracy’.(7)  (Note the quotation marks around ‘democracy)

He quotes Ivan Horrocks who is unsurprisingly, not surprised at all:

… It’s the inevitable conclusion of a strategy and process that was undoubtedly conceived while the Tories were in opposition and in concert with many of those who stand to benefit.… Now the Tories are aware they’ll only be in power for one term completing the demolition of the state, the fire sale of public assests and services, and the engineering of the corporate control of as many regulatory and governmental institutions as is possible will gain pace drastically. As will the tempo and harshness of the attack on the poor and less fortunate in our society. (7)

(edited)

Michael Hoexter makes a similar argument in New Economics Perspectives:

After the initial panic surrounding the global financial crisis of 2007-2008 subsided, an opportunistic brand of neoliberalism emerged, that continued neoliberalism’s attack on government as a stabilizing, moderating force in society.  This re-energized brand of neoliberalism advocates fiscal austerity and balanced government budgets, “worrying” that public bond issues floated during the economic stabilization process were “unsustainable” debts….

(T)hat the prime drivers of fiscal austerity were representatives of the financial industry, which had just been bailed out by government and had gotten themselves into trouble via high levels of private “leverage,” has, so far, escaped the notice of most sectors of the press in Europe and the United States and, therefore, the consciousness of the public.  Furthermore, the potential future advantages to that same industry of austerity’s selective shackling of government’s ability to create and control the liquidity of the economy have also, so far, escaped the notice of a gullible press and, by extension, a good portion of the public. (8)

So is George Osborne failing or is he succeeding brilliantly?  And does he know which agenda he is following?  Does he actually believe in the failed neoclassical nostrums?  Is he being ‘manipulated’ in some way by those vested interests who stand to benefit?  Or was it always his intention to keep the crisis going to provide the ‘shock doctrine’ which justifies asset-stripping and re-structuring the economic/social relations of the UK ?

In writing about the imperative for a macroethics, Michael Hoexter makes the observation:

… fundamental moral confusion may be mere pretense in the sociopaths and Machiavellian political operatives who are, no doubt, crucial to the success of the austerity campaign.  Yet, their (fallacious) ethical argumentation has swept along more gullible political leaders who have not paused long enough to consider the uniqueness of their role as leaders of governments.  These leaders, with the exception of the Euro-Zone countries, can move their governments to issue currency to bail their nations out of any real or imagined financial bind (though finances do not necessarily solve real economic difficulties).  Either, believing the fiscal reality of currency-issuing governments was identical to that of a business or a household or fearing their constituents would view them as immoral if they did not treat the national budget as that of a household, politicians have, so far, acted as if they do not recognize their distinct macroethical duties as regards the national budget. (8)

A similar point made by the Guardian’s Zoe Williams when she speculated about … the true division of the Conservative party – the ones who are mistaken versus those who are wrong deliberately… Some of them are simply out of their depth, do not understand the benefits system or a government’s realistic prospects of controlling the economy…Others take the Fox News approach: if you can just get enough misinformation out there, enough people who were only half-listening might half-believe you. Competing claims don’t need to relate to facts, their validity will be judged on the manner in which they’re delivered. You may have to retract later, but what does that matter? (9) 

Michael Hoexter provides a disturbing rationale for neoliberal behaviour:

Conventional neoclassical economics has normalized sociopathy in economic life by assuming the “utility maximizing individual” at every turn, which aids sociopaths in gaining positions of power and influence in our contemporary society.  In the political science derivative of neoclassical economics, James Buchanan’s “public choice theory,” politicians are assumed to be as fundamentally amoral as neoclassical economics’ model of the person, which has the effect of excusing or making invisible political corruption…. (8)

Disturbingly, I conclude with the (edited) view of Andrew Dickie, another regular commentator, on Tax research UK whose opinion is respected by Richard Murphy:

Ivan and I have been in agreement on this before – this will be a Neo-feudal state, in which we subjects in the oligarcho-democratic state we now enjoy are transformed into serfs,without rights, in a feudal state where the land-basis of mediaeval fedualism will be replaced by a “territorial” carve-up on the basis of income streams from taxation = Prince HMRC and Duke NHS and Marquess Tertiary Education, and Earl Secondary Education – somewhat reminiscent of Prohibition Chicago!…. These new “garagiste/card-sharping/rent-seeking” baronage know the price of everything and the value of nothing, and their only skills are those of rip-off and plunder, and are a universe away from the real economy and real wealth creation, which will be the task of the serfs – as it always was….. (10)

Andrew Dickie ends with the advice that “ Labour should be putting down a marker – a future Labour Government will bring all these illicitly disposed of mutually created assets back under democratic control, without compensation where possible, which, given that it is highly likely that their new “owners” will already have made more than they have paid for the assets, will be easy to justify.” 

I’ll more than second that… but in the meantime, there’s another Osborne budget….

Related Think Left Posts:

Capitalism – Neoliberalism, Plutonomy, and Neo-feudalism.

Soylent Green, George Osborne and Plutonomy.

Plutonomy – Invasion of the Political Body Snatchers.

What is George Osborne playing at?

(1)  http://www.ft.com/cms/s/0/1670a3d2-880f-11e2-8e3c-00144feabdc0.html#axzz2NQUQ6WUO

(2)  http://touchstoneblog.org.uk/2013/03/through-the-looking-glass-economics/

(3)   http://touchstoneblog.org.uk/2013/03/a-million-more-families-below-the-breadline-by-2015/

(4) http://touchstoneblog.org.uk/2013/03/next-wednesday-george-osborne-should-admit-hes-got-it-wrong/

(5)  http:// onlinelibrary.wiley.com/doi/10.1111/j.1467-923X.2011.02169.x/ful l 

(6)  http://www.taxresearch.org.uk/Blog/2011/09/06/maybe-osbornes-quite-happy-a-double-dip-that-provides-cover-for-all-he-wants-to-do/#comments

(7)  http://www.taxresearch.org.uk/Blog/2013/03/14/the-tory-revolution-is-aimed-at-creating-a-managed-corporately-controlled-and-deeply-unequal-democracy/

(8)  http://neweconomicperspectives.org/2013/03/without-an-effective-macroethics-our-civilization-is-doomed.html#more-5010

 (9)  http://www.guardian.co.uk/commentisfree/2013/jan/02/iain-duncan-smith-polemic-politics-cynical

(10) http://www.taxresearch.org.uk/Blog/2013/03/14/that-tory-revolution-and-the-rise-of-neofeudalism/

Labour’s deficit problem.

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By alittleecon

First posted on October 2, 2012 by 

You may have seen lots of posts with titles like the one above, talking about Labour’s deficit dilemma.  How can they restore the trust of the British people?  How can they set a credible plan to grow the economy without borrowing more?  Ed Balls’ speech at this year’s Labour Party Conference was all about treading that line between policies for growth, matched by spending constraint.  The question for Labour is always “How are you going to pay for it?”

In this post I want to take a different tack and look at Labour’s ‘deficit problem’ from the other side.  How can it get past the argument that deficit reduction is priority number 1?

To me Labour’s problem is not how it explains how it will get the deficit down, rather the issue is that the whole argument about debt and deficits is economically illiterate.  It misleads the public and completely hobbles any attempt by the left to take the initiative in the economic debate.

So what is the deficit argument?  Why is it so important to get the deficit down that as a consequence we have to suffer persistent high unemployment, increasing poverty and stagnant living standards?

Here’s everyone’s favourite punchbag Nick Clegg parading his ignorance at the Lib Dem conference last week:

So to those who ask, incredulously, what we – the Liberal Democrats – are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions? Not the bankers and the hedge fund managers, that’s for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on.

So but for austerity, Britain could go bust.  Really?  Where does this idea come?

The argument goes that when we run a deficit, we must borrow from ‘the markets’.  If the deficit gets too high the markets will start to worry we might not be able to pay back what we borrowed and so will start asking a higher rate of interest.  If we keep borrowing, eventually the markets will say “no more”.  Nick Clegg believes at this point, we could literally run out of money – we would be bankrupt.

In answer to this I’ll quote Chris Dillow (read his excellent blog here) who put it better than I could:

…this is plain wrong. In countries with their own central banks, governments cannot go bust because the central bank can simply print money to buy government debt: this is what QE is. Of course, this might or might not be a bad idea. But Clegg didn’t argue this. He just made a prat of himself.

So we need to get past this nonsense (and it really is nonsense) that if we don’t ‘deal with our deficits’, financial armageddon awaits.  But what about the Eurozone?  Aren’t they on the brink of bankruptcy?  Couldn’t that happen here too?

The countries of the Eurozone took the decision to give up their own currencies and replace it with a common currency, the Euro. I n doing so they gave up the ability to issue their own money, to set interest rates and to manipulate their exchange rates.  This means that Government spending really is constrained by how much they can raise in taxes or borrow from the markets.  They can run out of money because they gave up their ability to create currency.  This has lead to the markets periodically raising interest rates on Eurozone country’s debt to the point where in Greece, they actually were unable to borrow any more money on the markets and they had to accept their first (of many) bailout.  This was the backdrop to the 2010 election here when we had Nick Clegg and George Osborne running around saying we were days away from becoming the next Greece.  This was a fiction though.

As long as the UK keeps the pound, it cannot run out of money.  Nick Clegg’s idea that we can (or even already have), while idiotic, somehow still frames the economic debate in this country.  Every suggestion of a new spending plan has to be ‘paid for’ by a corresponding tax rise or pay cut elsewhere for it to be seen as ‘credible’. NO IT DOES NOT!

Until we get away from this spurious framing, we will never have a country we can be proud of.  If Labour really want to work in the interests of working people (and to me, the jury’s still out on that one), the whole framing of the economic issues needs to be moved away from deficit reduction, and onto what we want our society to look like.  To me, this is Labour’s deficit problem.

We on the left should set out a vision for what we want society to look like (for me it would be the right to a job, adequate housing, free education including university and healthcare amongst other things), and communicate the policy changes required to get us there.  The deficit should not even enter into the debate until such a time as we reach maximum potential output.  It should be allowed to float, rising in the bad times, falling in the good. Only then can we bring about real change.  The response when asked about the deficit should follow Keynes’ mantra:

It is the burden of unemployment and the decline in the national income which are upsetting the Budget. Look after the unemployment, and the Budget will look after itself.