Tag: osborne

All That Is Solid Melts Into Air

By Daniel Margrain

The momentous nature of Jeremy Corbyn’s landslide victory should not be underestimated. It has to go down as one of the most sensational and politically earth shattering events in modern British political history – the impacts of which are sending tremors throughout the entire establishment. After the announcement was made that Corbyn had won, it was obvious that the smiles, handshakes and applause of the vast majority of the calculating and opportunistic labour elite were as a fake as Blair’s claim that Saddam was about to attack Britain within 45 minutes.

A pointer to the overwhelming inspiration underlying Corbynism was the fact that no less than 160,000 volunteers who seemingly emerged out of nowhere, were recruited to the cause. The grass roots support that Corbyn engendered – by far the biggest of its kind in history – was almost certainly the catalyst that propelled him to victory. Although the activists were mainly young people, they were by no means exclusively so. In fact the demographic was wide ranging.

Corbyn’s straight talking, lucidity, and unambiguous commitment to a programme of anti-austerity brought many older activists who had felt betrayed by the direction the party had gone under Blair, back into the fold. To put Corbyn’s victory into context, he secured a higher percentage of votes than Blair got in 1994  Even more significant, the 554,272 votes he achieved was more than double Blair’s, and no less than 76 per cent of them actually voted, a higher percentage turnout than Blair received.

This would indicate that Corbynmania is no flash in the pan, but on the contrary, represents a new optimism that things really can be better given the right circumstances. Decades where nothing happens can all of a sudden transform into the possibility where decades happen all within the blink of an eye. Neoliberal ideology, which for many was perceived to have been fixed and immutable has, with the rise of Corbynism ,the potential to be swept away.

The excitement that surrounds Corbyn in 2015, therefore, marks a more significant change within the labour movement than the superficial controversy of ‘third way’ Blairism in 1994. Blair’s subsequent general election victory in 1997 cemented the ideological coming together of the Red-Tory axis that this writer hopes Corbynism will shatter to the dustbin of history. What is certain is that September 12, 2015 will be remembered as the day in British political history that Blairism officially died.

When Corbyn was first nominated, he was seen by his opponents both inside and outside the party as a joke candidate. But an indication of how they are now taking him seriously is the extent to which the mainstream media are unanimously attacking him. The Tories, who apparently voted for him because they thought it would enhance their future electoral prospects, are the ones now claiming he is a danger to national security.

But the more they attack, the greater is his support. Justice Secretary, Michael Gove, Defence Secretary, Michael Fallon, Prime Minister David Cameron, Chancellor, Gideon Osborne and MP, Priti Patel have all made exactly the same public statements attacking Corbyn. Clearly, all of them have read the same memo issued from Whitehall. The fear mongering and demonizing propaganda, intended for news bulletin soundbites, is so transparent that it’s comical.

The Tories got this tactic from the Republican Party in America who repeat the same propaganda over and over again hoping that some of it sticks which it invariably does. Of course, the media play their part by uncritically reporting it. An example was the way Fox News repeated the lie that President Obama was a Muslim who was born outside of America.

The phrase repeated in the UK media is that “hard-left” Jeremy Corbyn is a danger to the security of our country, economy and every UK family. In the interest of consistency, why don’t the media who describe security-risk, Corbyn as “hard-left”, apply the euphemism “hard-right” to Cameron whose illegal wars greatly increase the risk of domestic terrorist activity? Gove said:

Jeremy Corbyn’s victory is a deadly serious demand from her majesty’s opposition that we put the future of this country in the hands of the MP for Islington North…There can be no room for doubt or ambiguity about what Jeremy Corbyn would do if he formed the next government. He would pose a direct threat to the security of our country, the security of our economy and the security of every family…. He would weaken our defenses and make Britain less safe. By choosing Jeremy Corbyn over his rivals, the party have now endorsed deserting our allies like Norway. He proposes leaving the NATO alliance just as the growing threat from Islamist extremists requires international solidarity.

Or to put it another way, Corbyn wants Britain to stop trailing after America to launch another war that got us into this mess in the first place. Gove continues:

“Corbyn would also reduce our armed forces further unilaterally, scrapping our nuclear deterrent whilst terrorists and state sponsors of terror seek to develop nuclear weapons of their own.”

Just think about that for a moment. In the unlikely event that terrorists get hold of a nuclear weapon, they are not going to put it on the back of a rocket and send it from where they are living because they will be easily detectable from space and consequently we would be able to respond in kind. Terrorists are insane but they are not stupid.

What they are more likely to do is Fed Ex some kind of small device in the hope that it would be undetectable which, therefore, totally mitigates against the effectiveness of a state like Britain to be able to use nuclear weapons as a targeted response.

Gove then goes on to criticise Corbyn for his apparent economic incompetency by suggesting that his policy of printing money would be inflationary, overlooking the fact that his own government flooded the bankers with money. The stated aim was that the banks would lend the money back to us with interest so that they would make more profit. But the bankers went one better than that by using the money to buy shares in their own companies thereby increasing the value of those shares and hence the amount of bonuses they were able to award themselves. Conversely, Corbyn’s stated aim is to give the money to the people as a means of generating growth.

Gove then misquotes Corbyn as saying that the death of Osama Bin Laden was a tragedy. But what Gove failed to mention, was that Corbyn was not describing the death as a tragedy, but the fact that Bin Laden wasn’t put on trial, imprisoned and therefore punished for longer.

Why is Tory economic dogma seen as mainstream, but Corbynism extreme?

Sixty-six years after the foundation of the welfare state, under the current Conservative government, every aspect of it is under attack. The 2012 Health and Social Care Act, for example, will remove the duty on the Secretary of State for Health to provide a comprehensive health service, while the requirement in the act that up to 49 percent of services can be tendered out to “any qualified provider” will rapidly lead to the privatisation of the NHS in England and Wales. Already between a quarter and a half of all community services are now run by Virgin Care [1].

In social care, a combination of cuts of around 30 percent to local authority budgets since 2010, increasingly restrictive eligibility criteria for services, and inadequate personal budgets will leave millions without the support they need and increasingly dependent on the family, and in particular women family members [2].

And in place of what was once called social security, unprecedented cuts across all areas of benefits, especially disability benefits, the introduction of sanctions regimes which have contributed to 500,000 people being forced to use food banks, and a bedroom tax affecting around 600,000 people will increase the number of children living in poverty by 200,000 [3].

All of this has been underpinned by a brutal ideological offensive against people on benefits which explains the reason for the growing rates of sickness benefit claims are for those who suffer from depression and anxiety [4], as well as the increase in the rate of suicide among those on benefits [5].

The ideological attack on the poor is predicated on the governments’ insistence that those able to defend themselves least, pay the costs for a global economic crisis which began in 2008 but was not of their making [6].

Over the last forty years, successive Labour and Tory governments’ have been committed to rolling back the post-war welfare settlement under the guise of debt reduction premised on neoliberalism which involves a change to the function of the state as less ‘welfare provider’ to more ‘pro-business facilitator’.

Many people believe that the neoliberal assault that embody these changes began with the 1979 Thatcher governments’ limited (by today’s standards) publicly-owned asset stripping. But this is a myth. It was actually under the Callaghan administration that preceded Thatcher that the initial structural changes happened  As Colin Leys (p.41) notes:

From 1976 onwards Labour…. became “monetarist”. It’s leaders accepted that full employment could no longer be achieved by government spending but must be sought through private sector growth. For the necessary private investment to take place, prices must reflect real values, and this in turn required “squeezing” inflation out of the system and permitting the free movement of capital. In 1978 Treasury officials began preparing to abolish capital controls

But it is the assault by the trio of Cameron, Duncan Smith and Osborne on, not just the welfare state, but the entire ethos of the public sector in general, that has taken things to a new level. This is demonstrated, in part, by Osborne’s intention to sell off £31bn of public assets in 2015-16. It is clear that the Tories are using austerity and the neoliberal ideology that underpins it, as an excuse to expand the pro-business facilitator model to areas within the public sector that Thatcher could only in her wildest of dreams imagined.

That said, this approach has limits in terms of maximizing utility to capitalists within a modern state. It is precisely this kind of rationale that explains why the former governor of the Bank of England announced that the current situation is “the worst crisis at least since the 1930s” [7].   

As this writer has pointed out previously, even venture capitalists realize that proper welfare provision for those not working as well as a substantial increase in the the minimum wage for those in work, is necessary to prevent the capitalist system that they benefit from collapsing in on itself [8].

In 1943, the Tory MP Quintin Hogg warned that “If you don’t give the people social reform, they will give you social revolution” [9]. This is as relevant today as it was then.

It’s therefore in nobody’s interest that wages are kept depressed and the unemployed and sick are continually made to suffer. The fact they continue to suffer unnecessarily is the reason why a political space has opened up for the likes of Jeremy Corbyn to move into.

Although much of the mainstream media are characterizing Corbyn’s policies as unworkable, misguided and extreme – and seemingly doing everything in their power to undermine and discredit him -, these are nevertheless policies that are, in truth, mainstream and pragmatic. This explains why an increasing number of economists have publicly come out in support of the kinds of economic policies Corbyn articulates [10].

These policies are economically credible, popular with the public and, for most of the world, regarded as mainstream:

In 2009, most of the world was following mainstream economics of the kind that Corbyn is proposing today in undertaking a fiscal stimulus to combat the impact of the financial crisis. But in the UK a certain politician decided to ignore ‘economic credibility’, and instead proposed doing the opposite: what has subsequently become known as austerity [11].

The imposition of 40 years of neoliberal economic dogma pursued by successive Labour and Tory governments’ has failed the people of Britain who rightly, in my view, see Corbyn as the catalyst for change. As time goes on there will be increasing pressure not just from below, but from the top, for the Tories to change course.

As the open letter to the Guardian by over 40 leading economists illustrates, this is already starting to happen. If the government refuse to acknowledge that austerity and neoliberalism have failed, and thus continue to stick rigidly to their failed ideology of cuts and austerity, the British people will eventually elect a figure like Corbyn into power on a mandate to do something about it. That time is coming closer with every passing day.

The Benefit Sponging Elite

Last night another row erupted after it emerged that hedge funds rushed to gamble on RBS shares falling in value after government plans to start selling its stake were leaked last week. (file image)

I was in my local cafe earlier today and nearly choked on my bacon sandwich at the sheer audacity of the banksters. I happened to glance over at the adjacent table at the copy of the Daily Mail somebody had left open. I generally detest this rag, but have to admit that every now and then it does come up with the occasional nugget.

The paper does appear of late to be on a mission to undermine Osborne and the Tories. As I alluded to in post on August 4, it was clear that the Tory Aristocrat had garnered some insider knowledge prior to the part sell off of RBS thus providing the opportunity for his mates in the City to, once again, pillage the public purse- this time to the tune of a cool £1bn (1).

This was money which no doubt could have been better spent on bailing out a non-taxable status charitable organisation like, for example, Kids Company run by Camila Batman (and robber?) ghelidjh. Maybe an extra billion added to the £3 million Cameron nodded through to the bankrupt charity would have saved it?

But anyway back to the latest banking scandal. With her insider knowledge and connections as a former City banker, it’s highly conceivable that Treasury minister, Harriet Baldwin. who defended the sell-off, would have advised Osborne on the matter.

The Daily Mail’s Banking Correspondent, James Salmon, revealed that hedge funds rushed to gamble on RBS – a ploy known in the market as ‘shorting’ – “may have generated profits of more than £10 million, This is because the bank’s share price fell in the days before the government sell-off.” (2).

Labour MP John Mann, a member of the Treasury select committee, said: “Yet again hedge funds and bankers are making money and the public are losing out.” (3). A few days ago former City trader, Tom Hayes,was given a 14 year sentence for his role in rigging the Libor interest rate. (4). But he is merely the sacrificial lamb for a much wider and systematic corruption that begins at the very top. The fact that these kinds of abuses are allowed to continue in the context in which people struggling on benefits are jailed for stealing food (5), is the scandal of our time.

The former Republican analyst Mike Lofgren, disgusted with what his party had become, said the following about the economic elite in the United States:

“The rich disconnect themselves from the civic life of the nation and from any concern about its well being except as a place to extract loot. Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it ” (6).

He might as well of been talking about the UK, which is basically little more than the 51st state. Osborne and Cameron identify more readily with a transnational elite than with the other people of this nation. The proof is in the pudding. On behalf of this elite, the government gives away a staggering £93bn a year in corporate welfare – a sum bigger than the deficit.(7). It champions the Transatlantic Trade and Investment Partnership; a graver threat to the interests of this nation than Islamic extremism.

And yet there is a iron-cast consensus between the Tories and the Labour hierarchy in terms of their unwillingness to tackle the problem. This explains why the latter distance themselves from the populist Jeremy Corbyn who wants to put and end to this kind of revolving door political cronyism.

The real benefit spongers are not those who feature on low brow documentary programmes, but rather they are the elites who occupy the corridors of the plush buildings within the City of London.