It is curious that the main charge thrown against Jeremy Corbyn – apart from all the bluster and hysteria – is that his policies lack ‘economic credibility’. The assumption presumably is that the economic policies pursued by UK governments, both Labour and Tory, as well as by the EU, were sufficiently credible and rewarding as to justify or even necessitate their continuing to be followed. Even a second’s thought shows that that is an absurd proposition. The business model of free market de-regulated capitalism which has been ruthlessly taken to extremes over the last 3 decades is patently bust. It led inexorably to the biggest global breakdown for nearly a century, followed by the longest recession and the slowest recovery since the 1870s – indeed a secular stagnation with still no recovery in sight. Continue reading
Tagged with Debt
Try as he may, Osborne cannot “eliminate the deficit”
The Fabian Society invited Nicola Smith of the TUC, Dan Corry – once a Labour government adviser – and me to address their Summer Conference ten days ago. The theme: how can Labour restore its economic credibility with the electorate? The audience was large – about 300 earnest, well-informed and assertive Fabians. The discussion was lively, with a buzz, as the session immediately following was to be a hustings for Labour leadership candidates.
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Osbornomics goes toxic
Osborne’s Mansion House speech last night reverts to the old-fashioned economics of the governor of the bank of England in the 1920-30s, Montague Collet Norman, which led to the General Strike of 1926 and the Wall Street crash of 1929, followed by the desperate misery and hand-to-mouth subsistence of the 1930s which was so etched on the psyche of the nation that Winston Churchill, wartime hero though he was was, was evicted from office because the country was determined never to go down that route again. But that is precisely what Osborne is now offering. The only thing that finally pulled the West out of the biggest depression for a century in the 1930s was the Keynesian revolution that in a deep recession deficit financing made sense whilst obsessive sticking to balanced budgets did not. Yet the latter is what Osborne is now proposing. Continue reading
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Greek myths retold: confronting the ideologues of austerity
The world economy is not strong and the President of the United States is sufficiently concerned about new shocks to it that he recently met the Greek Finance Minister to urge ‘flexibility on all sides’ in the negotiations between the Syriza-led government and its creditors. US concern is fully justified.
In any attempt to reach agreement it is important both to have an objective assessment of the situation and to understand the perspective of those on the opposite side of the table. In Mythology that blocks progress in Greece Martin Wolf, the chief economics commentator for the Financial Times argues that negotiations to date are dominated by myths. He demolishes some of these key myths in turn: that a Greek exit would make the Eurozone stronger, that it would make Greece stronger, that Greece caused the crisis driven by private sector lending, that there has been no effort by Greeks to repay these debts, that Greece has the capacity to repay them, and that defaulting on the debts necessarily entails leaving the Eurozone. Continue reading
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The economy should be Labour’s turf, not the Tories’
It is astonishing that the Tories have opted to fight the coming election on their economic record (maybe because fighting on any other issue would be even worse?) – and equally astonishing that Labour has made such a poor fist of retaliation. The simple truth is, there is nothing at all about the Tory economic record since 2010 to be proud of:
- Wages will not recover their pre-crash level for a decade (if then?)
- Productivity continues in the doldrums
- Business investment has never recovered (because the FTSE-100 companies, the real money men, have no confidence in the Osborne ‘recovery’)
- Household debt is rising dangerously
- And to cap it all the deficit (the reduction of which is supposed to justify the austerity and impoverishment of the last 6 years) is now starting to rise again at about £100bn, not fall.
What is there to write home about a record like that? Continue reading
