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Let us now take Osborne apart

George Osborne greenish hueYou have to hand it to Osborne, he’s managed to manufacture an entirely false story about the economy and get it accepted as the official narrative explaining what’s happened.

First he has tried to make out after 2010 that the financial crash in 2008-9 occurred because the Labour government splurged on spending. But this is flatly contradicted by three sources: one is the IMF report of 2011 which calculated that of the 37% increase in UK public debt from 2007-11, only 2% was due to an increase in public spending (overwhelmingly it was due to loss of revenues due to the deep international recession and to support for the stricken banking sector). Second, the UK budgetary record shows that the Thatcher-Major governments consistently ran up larger deficits than the Blair-Brown governments. The third source is himself: Osborne certainly did not think Labour had messed up since he confirmed in September 2007 that he would match Brown’s spending plans and that “under a Conservative government there will be real increases in spending on public services year after year!

Second, that didn’t stop him saying in 2010 that Britain was in danger of going the way of Greece and that austerity was the only way to avoid a British sovereign debt crisis and to keep the markets happy. This was an outrageous canard (as Osborne himself well knew) since Greece was locked into a single currency system with fixed interest and exchange rates which could not be unilaterally altered whilst the UK had its own currency and its own ‘lender of last resort’ central bank to backstop its bond issues.

Then Osborne manufactured another lie, that government spending was ‘crowding out’ more efficient private sector spending and thus damaging recovery, so the deficit had to be targeted by a programme of austerity. This is the opposite of the truth: in a slump increased government spending doesn’t take resources from the private sector, it brings into use resources that are idle. Osborne then concocted a political narrative out of a ragbag of falsehoods- linking folklore economics (‘the government can’t spend money it hasn’t got’) to the politics of blame (‘cleaning up the mess left by Labour’) to the politics of fear (the Greek bogey) to a make-believe economic theory (‘reducing the deficit is a necessary condition for sustained recovery’). So how did Osborne get away with these blatant lies and pretences? Partly because his pronouncements chimed with the dominant market fundamentalist ideology serving the interests of the economic-financial elite, and partly because Labour lamentably failed to contest Osborne’s gallimaufry of falsehoods with a true commanding narrative of its own.

Labour even allowed Osborne to make the shaky recovery brought about in 2013 by the easing of austerity (i.e. an acknowledgement of the failure of his own policies) into the rhetorical puff that the UK was growing faster than any country in Europe, so austerity works! Letting him get away with it again and again has enabled Osborne to turn his disastrous economic record as, almost unbelievably, a political triumph.

5 Comments

  1. Jeffery Davies says:

    Well parliament alowed him to get away with it putting a failed banksters from canada into the bank of e two people who manipulated the figures in any other country they be done for it its called fraudulent only britain can this happen jeff3

  2. R.B.Stewart says:

    Good points but where I am the incumbent is a Lib Dem and we also need to take them apart.
    It could be argued that the Lib Dems practice “fake community politics” – they bombard areas with non-political leaflets claiming credit for everything under the sun, and cynically attempt to divide working people for their own political gain (No wonder some call them the Tory 2nd X1).
    I went to a local hustings meeting on Sunday and the Light Weight Lib Dem kept saying we should depoliticise the NHS and Education until he was slapped down by the Green candidate (in the best line of the night) who said, “Politics is life, and life is politics ” (to the best applause of the night).
    The Lib Dem also claimed credit for leading a campaign in the city to save a children’s heart surgery unit (this “Great man of history”) when it fact is what a cross-party campaign widely supported by the community so we can add Paternalism and Opportunism to the charges!
    It is also disempowering – we don’t need to campaign, protest, lobby etc. just leave things to this Lib Dem Great Man of History and he will sort all our problems out for us!
    He is also in the local media constantly often on the most trivial of issues and someone once called him a Publicity Junkie!
    Some argue at times he is known to sit on the fence (waiting to see which way the wind blows?) and he has been known to abstain on some Parliamentary issues.
    The local Labour Party did a good (and genuine grassroots campaign) to save a local GP Surgery (which included lobbying and a petition signed by 500 local people) – he probably wrote a letter and I wonder if he will also claim credit for this?
    His only potentially radical point all night was to support the piddling 0-1% Robin Hood Financial Transaction Tax when 1%+ tax would bring in a huge amount and address austerity in the EC and those that caused the financial mess in the first place would be made to pay!
    So you beat the Lib Dems by genuine community politics and by being genuinely progressive; this MP claims he is independent from Government but the Lib Dems helped the Tories to bring in the bedroom tax, corporation tax cuts, tax cuts for millionaires, tax cuts for private landlords with multiple properties, a massive top-to-bottom re-organisation of the NHS, £145m of tax cuts for Hedge Funds (who gave £50m to the Tories) etc. perhaps to quote an Amy Whitehouse song some would say, “The boy does nothing, nothing”.
    But the polls show the Lib Dems may have a lead of a slight lead over Labour (after 10 years of bombarding the community with leaflets claiming credit for everything and these often include infantile personal attacks on political opponents on the lines of: “She/He doesn’t live in the area”).
    But the Greens may take 5,000 votes and whist I have a bit of time for the Greens, they won’t win, and they are Green and a Bit Socialist whilst I am a Socialist and Green!
    The best hope for progressives I would argue is to support the fairly progressive Labour candidate.
    The local RL club has mascot and this mascot it could be argued is probably more progressive than the Light Weight Lib Dem!
    It’s going to be close.

  3. Barry Ewart says:

    Yes Michael and as democratic socialists let’s start offering hope to the World!
    The Greeks used to say, “From crisis comes opportunity” but unfortunately austerity has been an opportunity for the Tories (on behalf of their friends the rich and powerful) to massively reduce the size of the state and to continue with the Neo-Liberal project of the marketisation and privatisation of everything in the pursuit of cheap labour.
    But we have to start from the premise that it is the labour of working people globally that creates the wealth and makes societies work and our collective surplus labour is legally nicked by the rich and powerful, so we should not be afraid of getting our share of the wealth back.
    There was never any need for austerity, as Pettifor argues here big business in the UK is sat on £800b which it won’t invest, “Probably for ideological reasons.”
    So we need a windfall tax to take a sizeable chunk of this back plus tax the rich and global corporations; have more democratic public ownership plus tax land (and what of these lands do we own?) and have a sizeable EC Financial Transaction Tax (not the piddling Robin Hood Tax of 0.1%) but more of 1% + which would bring in a trillion plus in the EC to address austerity.
    As Burke and others have argued we need state-led public productive investment which would attract other sectors.
    But the Worlds problems are not a threat they are an opportunity as John Lennon sang in ‘Watching The Wheels’, “I tell them there’s no problems, only solutions.”
    We should work with sister parties in every country for a global living wage and decent homes etc.
    For example we could (in partnership with host countries) help to make toilets for the 2.5b in the World who don’t have access to them; we could provide health and safety improvements in factories around the World so there are no more deaths in Bangladesh etc; we could equip health centres in the poorest countries in the World; we could fund a globally publicly owned Trust to fund solar panel farms in some of the World deserts to harness the free energy of the sun and to address climate change; and all this doing good for humanity as well as stimulating economies would generate a global feel good factor.
    But we also need to unite diverse working people of all religions and of none.
    Yours in hope and international solidarity!

  4. David Pavett says:

    It has been repeatedly pointed out that blaming the financial crisis on Labour profligacy doesn’t tally with easily verifiable facts. This worth repeating and Michael Meacher does so here.

    MM also comments on Labour’s failure to present an alternative narrative. It is important to know the reasons for this failure. It clearly is not because the facts are unknown or difficult to verify. So why is it?

    It could be that Labour thinks the general public is too stupid to be able to understand that the Tory accusations do not bear comparison with a few simple facts. But even in the rarified atmospher of Westminter politics this explanation is not credible.

    This leads me to the view that those who direct Labour Policy and political strategy are very keen to avoid detailed debate about Labour’s economic policy both past and future. Such a debate would encourage probing and alternative analyses. It would become hard to avoid examination of why Labour introduced privatisation into the NHS and more generally in public services. It would lead people to ask about Labour’s massive off-the-books debt through PFI. Questions would be asked about the thinking behind Labour’s deregulation of the finance sector. And in the conditions of informed debate many would ask some economic detail behind Labour’s current hand-waving approach to economic policy. And, horror of horrors, they might even ask what economic ideas lie behind Labour current economic thinking and what analyses of the economy it uses to evaluate our economic problems.

    Such a debate is, I suggest, something that Labour leaders want at all costs to avoid. It would require them to be explicit about their economic ideas and these would be repellant to many Party members and to that section of the public that believes that Labour wants a radically different type of economy. Better then to mumble ineffective criticisms of the Tories than to open the floodgates of a real debate about the economy.

  5. David Pavett says:

    This issues raised are dealt with in this article by Paul Krugman.

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