Why does Labour still buy these incompetent neoliberal myths?

In the first of a two-part series, MICHAEL HANRATTY considers what the left’s reaction to the budget says about the state of Labour thinking.

Budget Day being an ordinary working day, I don’t normally get to digest the nuts and bolts of policy until it’s all become more widely discussed and less opaque. But this year I caught some local news coverage from the BBC interviewing employees and employers at a Tyneside firm making submersibles about their expectations.

Perhaps the most lamentable aspect of Westminster politics is the assertion that economics is something deeply specialised, mystified and prohibitive to pursuing political imperatives. Specifically socially democratic ones, which involve public investment. Our politicians take the view that the only way the general public can understand economics is through simple allegory. Roll on the myth that the Economy is a household like our own, living beyond its means. If not this gross simplification, we get another: assessing individuals’ current living standards – important to people of course, but fairly short-termist in the bigger picture.

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Osborne’s deficit reduction is just a pretext

To fill a Budget with populist gimmicks while wholly ignoring the economic fundamentals that are remorselessly driving this country into a semi-permanent stagnation is to degrade the high office of Chancellor. The home loans scheme has more than a whiff of sub-prime about it, luring those without the means to buy a house they cannot afford and thereby fuelling a housing bubble. Continue reading

Why we need government spending now

Moody’s decision last month to downgrade the UK’s credit rating for the first time since 1978 was the final metric by which Osbornomics has proven a failed policy on every front.

The growing opposition to austerity among economists, commentators and more notably, in business, shows that austerity is disastrous for everyone but those who would be so deceptive as to impose cuts as a means to delivering a small state. At the last count, some of the most vocal opposition to austerity included Jim O’Neill of Goldman Sachs Asset Management, the IMF, and now it seems Moody’s – institutions not exactly known to be bastions of left-wing economics. Deficit hawks are fast losing the argument and if there’s any hope of a recovery then government must change course. Britain has been held to ransom by a party which prioritises poorly timed deficit-reduction over growth and jobs. Labour should capture this mood of growing disillusionment and advocate for a real alternative which puts people back to work and delivers the recovery we so desperately need. Continue reading