Both Labour and the ConDems have cleverly conditioned us all into believing that cuts in public spending, pay freezes and a 2.5% hike in VAT are wholly necessary to tackle the budget deficit. I for one am relieved that one MP, the Green Party’s Caroline Lucas, has joined forces with Oxfam, Save the Children and Trade Unions and called for a tiny banking tax, known as a Robin Hood tax, on large financial transactions within the foreign exchange, hedge fund and derivative markets. Just 0.005 per cent levied on the billions of pounds traded every day would raise enough money to avoid the austerity measures. The Institute for Public Policy Research has found that the financial sector can afford to pay £20bn in taxes this year alone. It is important not to forget that the bankers got us in to this financial mess in the first place. Due to poor regulation, the banks operated in a fashion more akin to a casino, safe in the knowledge that they were too big to fail - the government of the day would always bail them out.
Your paper reports that Croydon Council is facing a £4m cut in the "area support grant”. Apparently, “we are all in this together”, yet these cuts will hit the poorest in our society the most. Leaked Treasury data shows that nationally 1.3 million jobs will be lost over the next 5 years as a result of the Chancellors austerity drive. How can this be fair when Deutsche Bank analysts said the budget was a "good outcome for banks"?
One can only conclude that the Banks have got politicians from the main three parties in their pockets. Analysis shows strong connections between the ConDem cabinet and the City. Financial institutions enjoy a close relationship with Labour, too. Whilst they were in power 23 bankers were given honours.
Croydon Green Party
A local member sent me the following insightful note after reading the letter:
It is reasonable to say the informed consensus is that austerity packages will do more harm than good. An overwhelming number of senior economists, including Nobel Prize winners and ex-Heads of the World Bank, as well as Obama himself, agree that the risk of precipitating double-dip recession and stagnating any nascent recovery is simply too great.
Rather embarrassingly, the Office of Budget Responsibility – set up as political cover in the first place – concluded a week after “Slasher” Osbourne’s Budget that the bulk of the deficit would have been closed by 2014-2015 anyway, without the need for these savage, macho-posturing cuts.
This is quite apart from the fact that the UK is actually in far better economic shape than most of the euro-zone anyway.
The scaremongering of the Right is simply an excuse to attack public services as all their instincts tell them to. We are not and have never been “in it together”; that is socialism in a nutshell and they will have none of it – except when it comes to the largest corporations and banks. If we fail, the market demanded it and government are professed to be powerless to intervene, but if a bank or big corporation sees its profits threatened, then socialism will be invoked to save us all. The Tories are corporate/banking communists.
The “common sense” approach that applies to family finance does not apply to macroeconomics; we have known that since Keynes. State retrenchment during a recession not only stifles investment and consumer spending power but it naturally results in lower tax revenue, thereby actually increasing deficits. This then becomes a vicious circle.
It is clear these cuts are motivated by ideology and not economics. It is a return to the 80s and Thatcherite attacks on the very notion of a public sector. Even Friedman did not go this far however.
The fact the “Iron Lady” was among the first invited to Number 10 goes to show how far her influence still runs within the Tories and with Cameron himself; rebranded but still just as nasty.
The Right always claims that deregulation and privatization are the answers to all ills. This seems to ignore the obvious: how would a “big society” of charitable individuals have prevented the crash of 2008? They act as if the worst economic implosion for 80 years never happened. The only institution with the power to protect people from the excesses of casino capitalism is the state. We do not need a “big state” but we need a state capable of regulating bankers and corporations. Without a democratic expression of the interests of the people, money alone will rule.
What is needed is a willingness to belatedly recognise the elephant in the room and move away from fake economic “growth” as a measure of wealth and success. Now we have seen that the emperor of the City has no clothes, we need a return to an economy built on making things of value and not one of valuing made up things.
If we thought it was bad when the gamblers still had to worry about collapsing the whole house of cards, we have seen nothing yet. Now the bankers know that bailouts are guaranteed and now that the concept of “too big to fail” is firmly established in the public mind and political vernacular (indeed the survivors are now even bigger and even less likely to be permitted to fail), they will take even greater risks. After all, it is not their money and never was.
Tags croydon, greenparty