Tag Archives: economics

Tory ideas about money have been wrong since before 2010. Here’s the reason

Flag-waving fools: Rishi Sunak and Boris Johnson have no idea how to run a country. They rely on patriotism to blind the gullible while they take your cash – and still put us into debt.

Some of us have been saying this for years but here’s a big-league economist to back us up.

Remember all the talk about Labour having “Maxed out the national credit card” that David Cameron and George Osborne used to win just enough seats to form a coalition with oily Nick Clegg’s Liberal Democrats in 2010?

It was nonsense. I said it at the time (and many times afterwards in articles on This Site. You can’t compare a national economy with household income and expenditure.

But it seems people are still being taken in by it because the Tories are still using it as the basis of their economic model.

That is the reason the UK has fallen deeper and deeper into debt during their 10 years in office. We can only go into debt, while they continue to follow this course.

Richard Murphy explains it very well in the video clip but I’ll paraphrase: while households become better-off by restricting spending, the nation loses out because businesses don’t benefit from that spending and cannot pass the money on through the system – therefore the nation becomes poorer.

So, by restricting spending with austerity policies, the Tory governments of the last 10 years have starved the UK of its economic lifeblood and plunged us into trillions of pounds worth of debt.

The only way to improve our economic situation is by spending into the economy with wise investments that help it to grow.

But Conservatives simply do not understand this basic (macro)economic fact. They never have.

See for yourself:

Some households fared well during the first Covid-19 lockdown. The lack of any way to spend their money meant they were able to pay off debts and bank spare cash.

But that won’t last. In some cases, families are already suffering because their income has fallen below their outgoings and the lockdowns are still going on.

In fact, the Tory plan is to ensure that they leach that money away from all of us as soon as possible.

There is nothing you can do about it in individual households because the household unit is too small to stave off economic intervention from a national government.

But if you group together with others, you might find a way.

Alternatively, you can just stick your head in the sand and wait for Rishi Sunak to empty your bank account and steal your house. It’s up to you.

You’ll probably see the sense in these words on March 2, when Sunak announces his spring budget.

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There is ALWAYS plenty of money. Don’t let the Tories lie to you again!

 

Money: there’s as much of it in the world as we want. Don’t let politicians lie to you that there isn’t, just to feed their own agendas.

One of the facts that has come out of the Covid-19 crisis is the fact that money is not scarce.

The Conservative government has been telling us for years that we needed to endure the austerity policies of Cameron, May and now Johnson because there wasn’t enough cash after the big banker-driven economic crisis of 2008-10, but we can see now that this is not true.

As soon as the pandemic hit, Johnson magicked up £300 billion from nowhere. The reason is simple:

Money is artificial. Governments can create it whenever they like.

Of course, Rishi Sunak is going to try to put the genie back in the bottle by saying we have to pay that money back in extra taxes and other clawback measures, but this isn’t true. We don’t have to. He’s just saying that to perpetuate the myth.

The economist Richard Murphy has been running a series of videos on YouTube discussing this subject – taking something that many people find dry and dull and turning it into bite-sized info-chunks that are easy to digest and take away with you, and he has tackled this issue here:

So there you are. Money is artificial; we can make as much of it as we like and use it to achieve what we like. The resource that is scarce is Planet Earth.

And we all need to re-order our thinking to accommodate that potentially deadly fact.

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Three reasons Keir Starmer is a Conservative, not Labour politician

Starmer is showing his true colours.

He has provided three examples of his personal political beliefs, within a single day, that show he is a Conservative and is therefore leading the Labour Party under false pretences.

Firstly, there is his decision to return Labour to the Conservative, neoliberal economic policies of the New Labour era, that lost the party two general elections in 2010 and 2015.

Secondly,

Yes, it’s true.

Finally, his social politics is positively fascist:

The only reason I can see now for people to vote for him or the party he is defiling with his presence is, they think the only choice is between him and the Conservatives. These are the people whose argument is, “What, you think the Tories are better?”

It seems we all have to take a broader perspective.

If Labour is now the same as the Tories, we’ll have to find someone else to support.

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The UK is a failed state. When the London School of Economics admits it, it must be true

Wreckers: First Theresa May, and now Boris Johnson, have used little-known devices to undermine the UK’s constitution – to the point where it no longer functions and the country is becoming a failed state.

Core democratic institutions have been “contaminated” by Tory politicians who have rigged the system, leaving the UK’s unwritten constitution in tatters, according to the LSE.

Read:

The control of power has become dominated by a bunch of executive tricks, and an uncodified ‘constitution’ no longer provides any predictable or worthwhile constraints on government action.

Theresa May’s government demonstrated not an elite responsiveness to MPs after 2017, but instead an increasingly frenzied exploitation of a host of parliamentary micro-institutions to bulldoze the May-Whitehall compromise Brexit deal through a reluctant Commons where government policies had no majority.

This was the curtain raiser for the Johnson government’s more grand-scale effort to unilaterally rework the UK constitution so as to give the PM ‘governance by decree’ powers.

“Governance by decree” powers would be similar to the Enabling Act that gave Adolf Hitler the ability to pass laws without the consent of the German Parliament, back in 1933.

The Johnson government (advised by Cummings who is openly contemptuous of parliamentary government) has now sculpted from the equally obscure prerogative powers surrounding the prorogation of Parliament a superficially bland but deeply toxic disabling of the Commons for 35 of the 61 days remaining to avoid a no-deal Brexit.

The timings involved are clearly tailored to frustrate any efforts of a fragmented opposition to concert an effective counter-action before September 10 or after 14 October, while yet bringing a Commons tied hand and foot back in time to witness but almost certainly unable to prevent a ‘no deal’ outcome on the 31st.

That the Queen and her constitutional advisors accepted this proposal at its face value is yet another nail in the coffin of the old constitution, with the monarch’s vestigial capacity even to ‘advise and warn’ now obliterated and shown up as a fiction, for the meanest of partisan exigencies.

The author of the piece, Patrick Dunleavy, clearly accepts that the prorogation of Parliament is intended to render it powerless to prevent Dictator Johnson’s plan.

Instead of great decisions resting on the clearly expressed will of Parliament, or the consultation of voters via a second referendum or a general election, a minority government and a PM that no one has elected are apparently set on achieving their will by converting to their purposes a swarm of micro-institutions of which almost all voters, and most constitutional ‘experts’ have little or no knowledge.

Johnson’s manoeuvre must cause a further delegitimization of government, risking a spectrum of severely adverse developments that might include significant civil disobedience, some public order turmoil, a weakening of ‘tax discipline’ (‘no taxation without representation’), and in short order the break-up of the UK.

Source: After the prorogation coup, what’s left of the British constitution? | British Politics and Policy at LSE

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Poor-quality jobs are bad for your health. Why are they the only jobs our Tory government can find for us?

Department for Work and Pensions: Pushing people into jobs that are bad for their health?

You might think this research by the London School of Economics is only pointing out something we know already.

It’s true that jobs with poor working conditions and/or remuneration are known to be bad for our health, pushing stress levels up, meaning any likely benefits are lost.

Before I became a carer (and, later, an online journalist), This Writer worked for a newspaper that piled on the pressure while providing very few benefits. I – wisely – left after management made decisions that would have further harmed my standard of living.

I know poor work leads to ill-health. Many people become depressed as a result of pressure place on them by employers or work colleagues. That puts unnecessary pressure on the health service.

The research also makes it abundantly clear that people with a history of illness have less opportunity to obtain paid work than those who are more healthy.

This is something we already knew, and it has become a serious issue in recent years, as the Conservative government has imposed rules that allow civil servants to force people with long-term illnesses and disabilities off benefits.

The LSE research shows that around 800 of the 1,000 initially-unemployed people involved in the study were not on benefits at the start – they were living on other sources of income including handouts from friends and family members.

If that situation really is representative of the unemployed population, then it means 80 per cent of our unemployed people are being denied statutory benefits.

That’s a shocking figure!

Yet they are less stressed than people who have been shoehorned into low-quality work – the only work that seems to be on offer under race-to-the-bottom Conservatism.

People working in poor quality jobs have higher levels of chronic stress than those who are unemployed.

We followed up a cohort of over 1000 unemployed adults who were representative of the population of unemployed adults living in the UK in 2009-10 from the UK Household Longitudinal Study. We then compared what happened to the health and stress levels of those who remained unemployed and those who got jobs of both good and poor quality.

Unsurprisingly, those who found work in good quality jobs had a big improvement in their mental health. Moreover, those with any job, whether it is a good or bad job, had a bigger increase in their household incomes than those who remained unemployed.

However, contrary to the “any job is better than no job” assumption, we found that the improvements in the mental health of formerly unemployed adults who became reemployed in poor quality work (with two or more adverse job measures) were not any different from their peers who remained unemployed.

More significantly… those who were working in poor quality work actually had higher levels of allostatic load (chronic stress-related biomarkers) than their peers who remained unemployed.

We also examined the possibility that the unemployed adults who subsequently were employed in poor quality jobs had worse health and more stress at the start compared to their peers who remained unemployed. But this was actually not true. As many others have found, there are strong selection pressures into employment, and healthier people are much more likely to find work (any type of work, whether good or bad) than unhealthier people.

Source: Is any job really better than no job at all?


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Prize for father of infamous Tory ‘nudge’ unit means Nobel committee should be ashamed

Richard Thaler: His theory has allowed the UK’s Conservative-led governments to victimise thousands of vulnerable jobseekers.

It is a travesty that the Nobel Prize for economics has been awarded to a man whose theories were used by the Conservative-led Coalition government of 2010-15 to manipulate unemployed people into inappropriate work.

Richard Thaler’s ‘nudge’ theory acknowledged that people frequently make bad decisions in their lives, thus contradicting one of the central tenets of economics – that people will always act rationally for their own good.

The theory suggests that the way choices are phrased or presented – the ‘choice architecture’ can be framed so that it nudges people towards the most beneficial outcome without restricting their personal freedom.

That is not what has happened. Look at the Coalition’s Behavioural Insights Unit, an organisation originally attached to the Cabinet Office, that used the theory to ‘nudge’ people towards decisions that benefited the Conservative Party and not the individuals concerned.

The best example of this is the fake questionnaire put out by the Department for Work and Pensions to manipulate jobseekers into doing what the Department wanted, rather than what was in their own best interests.

In theory, Thaler may have had a point. In practice, the UK government turned it into attempted mind control.

As the Skwawkbox article in the link above states, the questionnaire was rigged to suggest people had strengths that their answers did not bear out: “Untold numbers of people running around trying to use ‘strengths’ that actually have nothing to do with their actual personality – all under the threat of losing their income if they fail to comply.”

So ‘nudge’ theory was used to lie to vulnerable people, and to threaten them with destitution if they did not do as the Tories demanded.

And for this, the Nobel committee has given Richard Thaler a prize?

A demand for an apology would be better – along with financial restitution for all those whose lives have been blighted – or ended – by the implementation of his theory by genocidal politicians.

Richard Thaler has won the Nobel economics prize for his contributions to behavioural economics.

He championed the concept of “nudging” people, through subtle changes in government policy, to do things that are in their long-term self-interest, such as saving for a pension.

“Richard Thaler’s contributions have built a bridge between the economic and psychological analyses of individual decision-making, said the Nobel committee.

“His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioural economics, which has had a profound impact on many areas of economic research and policy.”

Source: The economist behind the Nudge theory just won a Nobel prize


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Theresa May touts phony, crony capitalism. She wouldn’t know a free market if she was put up for sale on it

Reforming the unacceptable face of capitalism: Theresa May and Philip Green by Dave Brown. She said she would reform capitalism after the BHS scandal [Image: @Cartoon4sale on Twitter].


Theresa May’s attempt to lecture us all on the joys of capitalism is another howler in a series of blunders that should only end in her ejection from politics and the (self-)destruction of the political party she has been running into the ground for the last 14 months.

This Writer hastens to add that this is not because she advocates free-market capitalism as the “greatest agent of collective human progress ever created”. I don’t agree with that sentiment but I don’t think there’s anything wrong with capitalism in itself; pack that system full of good worker-owned co-operatives and I’ll be delighted.

The problem is that Tories preach free-market capitalism while actually practising something very different – neoliberalism: a sort of protectionist socialism-for-the-very-rich.

Neoliberalism demands that the benefits of scientific and cultural progress should only be enjoyed by those who can afford to pay for them using their own money.

That is why, internationally, eight people own as much wealth as half the population of the world. It is why, here in the UK, the richest 1,000 families have nearly tripled their wealth since the financial crisis (“all in it together”? I should bleedin’ cocoa) while half the country has to make do with just 8.7 per cent of the wealth.

It is why, under the neoliberal governments of Thatcher, Major, Blair, Brown, Cameron and now May, national industries and utilities have been privatised – to take their profits away from the UK’s government and into private hands (and never mind the fact that some of those “private” hands happen to belong to foreign governments). The intention was to deprive the state of valuable funds, preventing it from investing in projects that would benefit the populace at large.

It is why social housing has been sold off and cruel penalties – like the Bedroom Tax – have been imposed on those living in the housing stock that remains. The aim is to drive the poorest into the gutter, opening up the properties for resale and redevelopment as “gentrified” – read “expensive” – estates.

It is why wages have been pushed down – to increase profits for rich company owners and shareholders who squirrel them away in offshore bank accounts where they do not have to pay tax to the UK government – and trade unions’ ability to oppose this cruelty has been rendered illegal by draconian legislation.

It is why regulations that protect citizens’ rights have been removed, to make it easier for privateers to provide substandard products or skip safety procedures altogether, thereby maximising their profits.

It is why people with long-term illness and/or disabilities, considered to be “useless eaters” in exactly the same way as in Nazi Germany, are persecuted to their deaths by a perverted “benefit” system that in fact strives to remove any help available.

Ultimately, it is the reason the UK has been pushed deeply into debt (sources of funding for the government having been either sold off, scrapped or squirrelled into tax havens) – to turn the country into a so-called “zombie economy” in which the vast majority of the people labour for a pittance, their tax money used not to provide public services but to partially pay off the interest on the national debt. Only partially, mind – the intention is for the debt never to be repaid.

That is what Theresa May calls the “greatest agent of collective human progress ever created”. That is the central aim of all Tory economic policy – not an improvement in living standards, not protected jobs, but the exact opposite.

Of course she has been ridiculed:

In fact, the greatest agent of human progress every created was socialism, as enacted by Clement Attlee in his 1945-51 government and maintained in the post-war consensus years from 1945-79. Those were years of unprecedented prosperity that happened in spite of Conservatism and neoliberalism.

Tories and neoliberals hated those years. You can prove Mrs May a liar simply by pointing out that her neoliberalism was not responsible for the most sustained increase in living standards of everyone in the UK – living standards here were at their highest in 1977, under a Labour government in the post-war consensus years.

By then, the neoliberals were well on their way to power. The oil shock, engineered by the very rich, had prepared the way by creating social unrest due to inflation-stoked price rises – for which the Labour government was blamed. Margaret Thatcher had told the Parliamentary Conservative party that they now believed in Hayek-style neoliberalism and was plotting the destruction of the UK’s industrial base, in order to deprive working people of the security they had built up over the previous 30 years. Tory think tanks were filling the pages of newspapers and the time on TV political shows with pro-neoliberal dogma in order to sway public opinion.

Thatcher, and the other prime ministers since her, were all elected on a promise that living standards would improve. Instead, they have worsened.

Theresa May’s lying speech is an opportunity for us all to put an end to this insanity. Let’s denounce her version of capitalism for what it is – socialism for the very rich – and put both it and her on the scrap heap of historic failures.

Theresa May defended the free markets after Jeremy Corbyn’s criticism of capitalism by saying … that it is the “greatest agent of collective human progress ever created.”

Speaking on Thursday, May told the Bank of England’s 20th anniversary of independence conference that capitalism “is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country. And we should never forget that raising the living standards, and protecting the jobs of ordinary working people is the central aim of all economic policy.”

The prime minister said it was free-market economics that “led societies out of darkness and stagnation and into the light of the modern age.”

Source: Theresa May defends free market capitalism after Jeremy Corbyn’s criticism


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No, Iain, benefits ARE behind the rise of food banks – and Germany proves it

CPAGFoodbankslarge

Iain Duncan Smith’s feet must be riddled with self-inflicted bullet holes – if only metaphorically.

Today (December 14) he went on the record saying that it was wrong for a cross-party group of MPs to suggest that the rise of food banks was purely to do with benefit-related problems.

Germany had more generous benefits and higher pay – yet more people there used food banks, he said in an interview on the BBC’s Sunday Politics.

He said 1.5 million people a week used food banks in Germany, whereas the Trussell Trust – the UK’s largest food bank provider, has said it fed 913,138 people during the 2013-14 financial year.

“It is tiny in proportion here compared to a place like Germany which has more generous benefits and in which you have a higher level of pay,” said the man this blog describes as RTU (Returned To Unit) or SNLR (Services No Longer Required).

“So just saying it is to do with benefits is quite wrong. What I do say is there are lots of other reasons lots of people go to food banks.”

Oh really?

It seems Iain has been misreading a blog by the London School of Economics, from 2013 – a year and a half ago.

In it, author Stefan Selke does say Germany feeds 1.5 million people via food banks, but does not stipulate whether this is weekly or annually – so the Work and Pensions secretary is already off-message. Was he intentionally misleading viewers? Hard to tell with a man as stupid as him.

Now look at this paragraph from the LSE blog article: “The main growth of foodbanks in Germany began 2005, when Chancellor Gerhard Schröder’s government introduced the ‘Agenda 2010’ of tax cuts, and cuts to pension and unemployment benefits. Around the same time, a new form of unemployment insurance (‘Hartz IV’) was introduced, reducing previous benefit levels and the duration for which they can be received.”

Aren’t these exactly the same reasons people use food banks in the UK – problems caused by benefits?

In both countries, the conditions under which benefits are provided have become stricter; the amounts available have decreased; and new forms of benefit payment have been (or are in the process of being) introduced that reduce entitlement still further. In both countries, taxes have been cut, most probably justifying further cuts to public services (clearly Germany has also been Starving the Beast – a policy with which long-term VP readers should be intimately familiar). Would anybody be surprised to learn that Germany has embraced neoliberalism?

The only difference is that Germany started this process five years earlier.

Unsurprisingly, nobody at BBC News seems to have bothered to do their research on this (it took Yr Obdt Srvt less than five minutes with a search engine) so – yet again – the mass media have let the British people down by failing to do their job properly.

A worse problem is that Iain Duncan Smith has never done his job properly – and clearly wouldn’t know how to.

Follow me on Twitter: @MidWalesMike

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Watch Paul Mason put down the banks

Dear Paul Mason (@paulmasonnews, if any of you want to Tweet him your support),

Thanks for this:

(And thanks to Pride’s Purge for bringing it to our attention.)

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Are these gibbering buffoons really the Conservative Party’s hope for the future?

The caption on this picture reads: "Nick Robinson, former Young Conservatives chairman and current BBC political editor, taking a selfie with some young Tories (Photo courtesy of theblueguerilla.co.uk). Perhaps you'd like to dream up your own caption for this image of wild-eyed, slack-jawed decadence (he's the political editor at the BBC and people still think it's left-wing; the mind boggles).

The caption on this picture reads: “Nick Robinson, former Young Conservatives chairman and current BBC political editor, taking a selfie with some young Tories (Photo courtesy of theblueguerilla.co.uk).” Perhaps you’d like to dream up your own caption for this image of wild-eyed, slack-jawed decadence (he’s the political editor at the BBC and people still think it’s left-wing; the mind boggles).

How bizarre. Apparently the right-wing social media want us to believe that, even though Conservative Party membership is believed to have dropped below 100,000, the number of young people joining up or supporting that party is reaching its highest in a decade.

Never mind. If, like Alice, you try to believe six impossible things before breakfast, you still have five more slots available to you.

The new information comes from a website called Vice.com, in an article entitled ‘Rise of the Tory Youth: Meeting Britain’s Young Conservatives’.

And meet them we do, along with some of the most spectacularly ignorant and ill-informed opinions this writer has encountered in a month of Sundays.

Try this, from 24-year-old Louisa Townson, current Tory Society President at University College, London. She tells us she became a member because of Tory economics: “We’d had this huge crash and we knew we had to sort out the national debt and the deficit.” Doesn’t she know that the last four years of Tory economics have cost the UK more than Labour spent in its entire 13 years of office and reduced the deficit by a staggeringly meagre £10 billion?

Louisa thinks the tripling of tuition fees was “fair” – presumably she won’t be saddled with student debt until she’s in her fifties, then.

As for workfare, she thinks “it would be good if [the unemployed] can give something back”. So this young woman, who joined the Conservatives for their economic policies, thinks it’s a good idea to remove paying jobs from the economy by making unemployed people do them – at the taxpayers’ expense – while the rate of corporation tax has nosedived so the host companies take all the profits? How will that help reduce the national debt?

And this is supposed to be an example of the brightest Young Conservative thinking. Oh my word. Oh dear.

Oliver Cooper, president of Tory youth movement Conservative Future, is still under the impression that his party stands for “economic freedom” – the party that, in government, has pushed millions onto the dole to keep wages down; destroyed much of Britain’s remaining industrial base, decimating the economies of entire regions of the UK, to undermine working-class self-confidence and security; de-democratised nationalised industries through privatisation; created a mushrooming of homelessness by promoting house ownership, creating a chronic shortage of social housing and perpetuating it by denying councils the ability to build more; and increased inequalities of income and wealth by cutting the relative value of benefits along with wages, boosting the social exclusion of the poorest in society.

This is supposed to show that it is cool to be a Tory again? Oh good heavens no. It demonstrates the “cancerous… classist and out-of-touch view of the modern middle class youth of today”, as Theodor Ensbury states in the comment column.

“Mix privilege with a lack of life experience … and you have a heady cocktail of political and social empowerment without understanding of consequences,” he adds.

There is much more of this, but there really isn’t any need to go into further detail. Read it yourself, if you can stomach it.

Today’s Tory youth, ladies and gentlemen: Ignorant, insular and insolent.

The last thing they deserve is responsibility.

I wouldn’t give them the time of day.

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