Tuesday, 18 October 2011

Shake Your Moneymaker, Mr Osborne

"I've got the brains, you've got the looks. Let's make lots of money"
Prior to the World Cup in 1998, the England football squad famously amused themselves by dropping song titles into media interviews. Talismanic centre-half Tony Adams declared “I’m so excited” about the upcoming championship whilst Alan Shearer insisted the team were keeping their feet on the ground and not “dancing on the ceiling”. It was a bunch of rich kids playing a harmless game. And even Alan Shearer was funny.

Fast-forward 13 years and a different bunch of rich kids – the coalition government – are playing a much more dangerous game with our economy. Where Shearer and co. referenced well-known 80s tunes, we now have Osborne et al regurgitating stale references to the "economic mess" the previous Labour government left us in. And whilst England's japes earned them a few quid in bets with teammates, the coalition's financial tomfoolery is going to cost us all dearly. The only 80s throw-back being cited now is Maggie Thatcher. 

Re-worded, re-packaged and repeated ad infinitum, the phrase has prefixed Conservative and Lib Dem responses to every question since the formation of the coalition:
"How many slices of toast for breakfast, George?" asks Mrs Osborne.

"Two please – although if it wasn't for the economic mess Labour left us with, I could probably afford to have three ... and make sure you serve them on our Ming Dynasty plates," replies our humble Chancellor.
We have been pummelled into merciless submission and bitter acceptance through its endless repetition. It has allowed the government to force through ruthless cuts by sidelining Labour and marginalising economic alternatives.  

However – although it is a powerful political weapon to relentlessly demonise Labour's economic record – it is also a double-edged sword. It does indeed damage Labour's credibility, but it also creates a culture of gloom and cynicism that undermines consumer and business confidence. The irony is that – whilst the economy under the Con-Dems flat lines – Labour’s more interventionist policy saved us from depression and sowed the seeds of growth through positive action and investment.

According to Ernst & Young Item Club, our recovery has slowed and our economy has "stalled at a dangerous junction". The simple reason for this stagnation is that – because government economic chauvinism has engendered low confidence – banks are not lending and people are not spending. Furthermore, draconian austerity and rising unemployment further erodes confidence.

As David Blanchflower, Professor of Economics at Dartmouth College, states in an open letter to George Osborne: 
It hasn't helped that you have described the economy as "bankrupt" when clearly it was not, and also compared the British economy with that of Greece, Ireland, Portugal and Spain, which are locked in monetary union, do not have their own central bank and cannot depreciate their currency or engage in credit easing. With such unpatriotic talk, you and other coalition leaders have caused business and consumer confidence... to collapse. They are at frighteningly low levels and I suspect they will fall a lot further unless you act quickly. 
Negative rhetoric is essential to force through ideological cuts to public services and welfare provision, but by constantly talking-down the economy, the government has undermined our chances of recovery. The economy requires positive language and action to flourish. From cutting VAT, payroll tax-breaks, bringing back the Future Jobs Fund, linking corporation tax to unemployment or introducing a Robin Hood Tax and Tobin Tax, there are numerous policies which would increase employment and stimulate growth.

If economics – like football – is a game of two halves, then now is the time for some inspirational half-time words and positive substitutions from the gaffer. The coalition might be committing economic suicide, but with unprecedented and irreversible public sector cuts, they’ll go down in history as hard-nosed neo-liberal martyrs.

1 comment:

Jonty said...

What a bunch of bastards.

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