Saint Socrates Pray For Us

Originally posted on Origin of Specious:

So said Erasmus to some dickhead. So should every modern Greek say to the man who wrote this:

‘Get off your high horses, lefties – Big Government, not ‘austerity’, has brought Greece to its knees’

Here are some juicy cuts of choice stupidity:

 Go to any high street bookstore, and you will find that the politics section consists of little else but the tomes of Naomi Klein, Noam Chomsky, Russell Brand, Owen Jones, Ha-Joon Chang, George Monbiot and the other usual suspects. If that is a “neoliberal hegemony”, I dread to think what a left-wing hegemony would look like.

That, of course, proves that there is no neoliberal hegemony, since we all know that the important political decisions that affect our lives are taken by books for sale in the high street shops. They leap off the shelves at night, form a parliament, and then send off their decisions to be…

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Breaking: ECB states that Euro is reversible and not irrevocable

Originally posted on Real-World Economics Review Blog:

Why all tis attention for Greece and not for Croatia or Slovenia? Because Greece is where the main battle is fought. But on this blog more attention will be paid to other countries. Anyway: a Greek referendum about the euro is a very good idea – but this might be the worst time to hold one. You can do this when you still have a lot of cash somewhere. Or when you’re already in default. But announcing a referendum when you’re on ELA – it’s not a good idea. Surely when the creditors have one overriding goal: they want you out of government. And they play to win. Which means that you have to kill them. Or lose. Inflicting a wound and crippling them (which surely happened) is not enough.

Some links:

A) Breaking (and I can’t stress enough how important this is): the wound is really deep…

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Explaining the Conservative attitude to social security

Social security has been in the news a lot recently, with speculation about where the Conservatives’ £12bn of cuts will fall. It is thought that tax credits will be targeted, with some saying support to some of the poorest working and out of work families will be cut by up to £1400 per year – a significant amount. This comes after cuts during the last Parliament,including the Bedroom Tax, harsher sanctions and cuts to disability benefits (which are still ongoing judging by yesterday’s protest in Parliament).

But why are the Conservatives doing all this? The stated aim is always “to get the deficit down”, “clearing up Labour’s mess”. Opponents have labelled this “balancing the books on the backs of the poor“, but it’s not really about the deficit. Social security acts as an automatic stabiliser, preventing an economy from sinking too far in bad times. Cutting automatic stabilisers in times of slump is a really stupid idea if your aim is to help the economy recover, but if you have other aims it might be more rational.

Some want to label Tories as evil, haters of those at the bottom who are declaring war on the working poor. This seems a little simplistic to me, and to most people sounds unconvincing. Many (most) Brits are rather unsympathetic to those at the bottom, periodically agitating for cuts to “welfare”. I have lost count of the times I’ve heard people complaining about “scroungers”, or using the old cliche about immigrants coming here to claim benefits while those who are already here “get nothing”. This also seems a little simplistic to me to say the least, but why do so many people think this way, why are the Conservatives embodying this sentiment in their policies, and what can we do about it?

Image result for iain duncan smith

If you listen to this twonk for more than 5 minutes, you get a good idea where he (and other Conservatives are coming from). He genuinely believes social security or welfare is immoral. If social security benefits are too “generous”, it makes people dependent and they won’t stand up on their own two feet (or “work hard and get on” as the catchphrase goes). He is quite open and honest about this. Here is a good example from the other day where he accuses Labour of bribing voters with working tax credits. IDS and many on the right genuinely believe Labour tried to build a client state where more and more people became reliant on the state for “handouts”.

If you subscribe to this view, cutting benefits becomes moral, a kind of tough love, forcing people to “work hard and do the right thing”. Someone who works hard and has the right attitude will always succeed under this mindset. The idea that someone can work hard and still struggle does not compute with people like IDS. The potential cuts to working tax credits fit quite nicely with this viewpoint, as if people are claiming tax credits, they must not be working hard enough, maybe working part-time when really they should be working full time. Cutting tax credits then provides the tough love needed to push people into full time work.

It seems to me though that there is very little evidence to back up the beliefs of the likes of Duncan Smith. Belief though, trumps evidence every time to these people. It makes logical sense to them and so must be true. There is fairly good evidence though that cutting social security benefits does not improve the lot of people, rather it entrenches poverty. and drives people to use food banks. Incidentally, food banks seem to be rather a blind spot for those on the right, where beliefs collide. They should hate them because they are giving support to those who haven’t earned it, but on the other hand, they are charity, and charity is good because it involves people choosing what to do with their own money rather than having the state confiscate it from them.

Frustrating though I find it however, many people are fully on board with the “tough love” message (and seem to vote accordingly). But why is this? On theory is the one espoused by linguist George Lakoff – framing. He posits that there are two main types of moral frames people view issues through; the strict father frame, and the nurturant parent family. Lakoff believes all people think it terms of both frames to a greater or lesser extent, but that conservatives are much more proficient at framing their policies in a way that appeals to people’s strict father frame. With social security they continue to do this rather well.

So how can this be countered? It seems to me that noisy protests about “evil Tories” can only take you so far. People may sympathise on a human level or if they have experienced the cuts at first hand, but it’s not a very positive message and others will still be swayed by the Tory’s strict father framing. Lakoff argues the left (or liberals to Americans), need to create their own frames and relentlessly hammer away in these terms. If we are thinking about social security for those unfortunate enough to want a job but are unable to find one, we could build a frame around offering a ‘helping hand’ to those down on their luck. Not doing everything for them, but simply offering them a solid chance to prove themselves. In practical policy terms this could manifest itself in terms of an offer of a real, living wage paying job. This is a much more positive and salable message than the one Labour tried to sell at the recent elections, and it is one that should appeal to people’s feeling about the “nurturant parent family” rather well. Labour are still trying to be stricter fathers than the Tories, but it’s so unconvincing, nobody is buying it at the moment.

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Germany vs Greece. The end game?

Originally posted on Modern Monetary Theory: Real Economics:

It looks like it’s crunch time. Either there will be some last minute cobbled together agreement to prolong the agony, or Greece will be forced to leave the Eurozone. Most neo-liberals take the simplistic view that Greece borrowed the money and has an obligation to repay come what may.

When bankers issue loans they have to be sensible and only issue loans to creditworthy customers. If the customer cannot repay the days when they were placed in a debtors prison are long gone. In any case we should not look at macroeconomic problems in microeconomic  terms. Germany has a net annual surplus of over €200 billion which, by definition, it is not re-spending. Another few billion euros, extracted under duress from Greece, would make no difference whatever to the living standard of German workers – many of whom are not at all well paid.

It would make much more difference…

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Inequality and the 1%

Just came across this video on Youtube of a presentation given by geographer Danny Dorling on inequality and the 1%. He gives a lot of facts and figures about inequality. I have heard similar numbers bandied about before, but it always gives pause for thought to hear things like:

  • You are in the top 1% of earners if you are a single person earning over £100,000
  • The top 1% take 15% of income in the UK
  • Inequality has been falling but only amongst the bottom 99%. The gap between the 99% and the 1% is growing every year
  • Barclays bank employs over 300 people of salaries in excess of £1m, more than the whole of Japan.

A lot of politicians are quite blase about inequality, and are desperate to avoid saying anything that could be construed as being anti “wealth creators”, but Dorling’s conclusion here is quite stark. He says (slightly tongue in cheek I think) if current trends are to continue, we could return to the age of Downton Abbey where parents think about which of their children to send off to work in domestic service for the 1%.

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Polly Toynbee – With Friends like These…

Originally posted on Origin of Specious:

If you want to understand the intellectual bankruptcy of the Labour party in the UK, look no further than Polly Toynbee’s recent column in the Guardian. Toynbee is ostensibly attacking George Osborne’s attempt to pass his religious commitment to austerity into law. Against this nightmarish pro-austerity rhetoric, Toynbee musters the forces of light in the form of… more pro-austerity rhetoric! Here is the argument:

Yes, the deficit needs to keep coming down each year: at 5% of GDP it’s too high. But of course the government can borrow, as all governments do, if it borrows a bit less than the growth rate. Growth is everything.

Why is 5% ‘too high’? Toynbee doesn’t tell us. The government’s deficit is just the annual net savings of the non-government sector – that’s all of us. Toynbee wants to reduce this flow of savings to us. Why? That flow was helping people to pay…

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Osborne’s ‘clever’ games should come back to bite him in the end

In a sane world, the news today that George Osborne’s wishes to enshrine in law a new ‘fiscal framework’ to ensure future governments only borrow in ‘exceptional circumstances’ would be greeted by laughter followed by the Chancellor’s immediate resignation for economic illiteracy.

Unfortunately, we do not live in a sane world. We live in a world where the idea that a governments finances are comparable to a households finances is a zombie that just won’t die. Many people – including many who should know better – will nod sagely at this news and think it’s a great idea.

This latest wheeze from Osborne is clearly designed to expose Labour’s perceived weakness on the economy (as if they could get any weaker). Faced with this, what should Labour do?

Their immediate reaction appears to brand it a ‘political stunt’, which is exactly what they’ve said every other time Osborne has tried one of these tricks. Labour haven’t said whether they will support this measure or not, but I think they should congratulate the Chancellor on his excellent idea and support it wholeheartedly. Then, when the mythical surplus proves illusory, they can batter Osborne with his own words. And if they ever do get back into power, they can just pretend they are sticking to the rule while doing the opposite. That’s pretty much what the Coalition did for 5 years, but hey, that’s just politics right?

There are a lot of reasons why Osborne’s surplus is not attainable for more than a year or two as Ann Pettifor sets out pretty clearly here:

“…

no matter how determined he may be, the Chancellor cannot eliminate the deficit – the balance between government income and expenditure.

While you and I can cut our overdrafts by cutting our spending, or by increasing our income – the all-mighty Chancellor cannot do the same. The public sector deficit is not dependent on his actions, or the government’s policies. It is dependent on economic activity in the economy as a whole. If the economic ‘cake’ (that is employment) shrinks, the government deficit will rise. As the ‘cake’ expands, the government deficit will fall.”

And for a longer explanation of the damaging effects of austerity, I can recommend todays Billy Blog.

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