Wednesday, November 18, 2015

Tagged under: , ,

More Money, Less Austerity

Mick Hall argues that an end of austerity will boost the economy. Mick Hall is a Marxist blogger @ Organized Rage. 
  • Sustained recovery is only possible if the middle and working classes have money to spend, more austerity makes a recovery in which we all share an impossibility.

Robert Reich, the political economist who recently condemned austerity unequivocally, cannot by any measure be described as a mainstream outsider having served in three US administrations, most recently as Secretary of State for Labour under Bill Clinton:

The austerity narrative is nonsense and it's dangerous nonsense. It's sort of the Vietnamisation of the economy [that] you're saving the economy by killing it.

He couldn't be clearer in his condemnation, he also dismissed as nonsense the Thatcherite notion that if the rich get richer, wealth will trickle down to the wider population, something we in the UK learnt the hard way during the years the spiteful women was in power.

He continued:

The human costs of sweeping cuts to unemployment benefits and to food stamps in the US and to social security in the UK needs to be highlighted urgently and in tandem with any discussion of the policy's economic futility. With austerity you have only to think for half a moment about the economic reality, The issue is not the deficit per se. The issue in all our countries is the ratio of the deficit to GDP to the entire economy. And if you embrace austerity and thereby reduce economic growth you actually end up potentially in a worse place than you started, with a higher ratio of public debt to GDP. At the same time you are generating huge amounts of human suffering unnecessarily. It takes a huge toll on individuals, on families and on communities.

He is scathing about George Osborne claim the [very slight] rise in the UK recovery means the austerity medicine is working and more cuts are necessary. Pointing out the real beneficiaries of austerity are the 1% of the very wealthy and more austerity is the last thing the UK economy needs:

The global economy is extremely fragile right now, This is the worst time to take the false snake oil of austerity economics. It's a very dangerous potion. We are doing it here in the US as well. We are not doing it as loudly as in the UK, we're not embracing it quite as much, but the fact of the matter is we do need a much more simulative fiscal policy.

Pointing out how hard it's been to effectively counter the advocates of austerity especially in the UK, the more so when until Jeremy Corbyn became leader of the opposition, all three main parties, the Tories, Lib Dems and Labour Party supported austerity measures.

I don't know how best to help the public understand how absurd this really is because it's difficult to show the public what the alternative might be. It doesn't help, he adds, that an incredibly polarising … divide-and-rule approach by politicians has been pitting the middle class against the less well off and is one reason why effective opposition movements remain muffled. You have so many people who are afraid of downward mobility they are going to put up fences and separate themselves from the people who are even more needy than they are.

In a recent documentary, Inequality for All, * Reich highlighted the massive income inequality between the very rich and the rest of us. The film was awarded a special jury prize at last year's Sundance film festival.

Having crossed the US with senator Elizabeth Warren in the run in to the Presidential primaries in which the socialist candidate US Senator Bernie Sanders is running strongly, Reich said this:

"I'm getting a groundswell of frustration, some anger, a lot of cynicism," Referring to declining US living standards, although he could equally be talking about the UK, he had this to say:

Sustained recovery is only possible if the middle and working classes have money to spend and if, rather than cuts and austerity, investment in 'public goods' is made a priority. The top tax rates do have to rise and we have to invest much more substantially in education, infrastructure and human resources and make sure our poor children and lower-middle-class children all have real chances to get ahead.
There will come a tipping point when people will demand reform of the worst excesses of capitalism and when the full folly of austerity will be exposed. In the short term I think the austerity agenda will crumble beneath its own weight. It will lead to a stagnation of a sort that will reveal itself to be a terrible mistake.

The increasing support for Jeremy Corbyn in the UK, Bernie Sanders in the US and anti-austerity parties across Europe chimes with this. We are surely approaching a tipping point, when a progressive party will not gain support, let alone office without being anti austerity? Something which the Blairite mischief makers in the LP seem wilfully oblivious to.

INEQUALITY FOR ALL is available on Netflix, iTunes, Amazon.

The information within this piece were gleaned from an article by  Mary O'Hara which was published here.

0 comments :