Thursday, October 21, 2010

How can we fight the Cuts?

< Source: Treasury via BBC

Here is the chart of the impact of Osborne's spending review, showing how it will affect each
section of the British economy, divided into 10 groups (deciles).

We see that it is divided fairly evenly between the deciles 3-9, that the poorest decile is hit worst, the second decile is hit more than the average, and that the richest decile is hit least.

This is proof, if any were needed, of the pathological unfairness and inequity of Osborne's thinking. He hates the poor, and loves the very rich.

In fact, it is far worse than this graph shows. The rich could bear a 0.5% cut in income without noticing it. For the poor, already straining to make ends meet, the 0.5% cut is nothing short of devastating.

Any sane response to the deficit would have reversed the decile order of this review, with the rich paying more as a proportion of their income, and the poor paying less.

The Government of the UK has been captured by the very rich. 20 out of a Cabinet of ~35 are millionaires. Aside possibly from IDS, they have no insight into the lives that people live on the estates.

Trumpeting "fairness", a message obediently relayed by their stooges in the Mail, Telegraph, Express and the Murdoch slaves, the Times, Sun and News of the World, the Tories, supported by a hoodwinked set of top LibDems, have produced a monstrosity of unfairness.

There will be strikes, (which will lower GDP and tax take), demonstrations, some marred by violence (which will impose costs on the police, possibly increasing their budget requirements rather than reducing them), and a recession, which will completely wreck Osborne's plan, which depends entirely on economic growth to provide employment in the private sector to compensate for the million jobs that are forecast to be lost through Osborne's choices. Demand on NHS spending will increase, as it always does in times of high unemployment. Minor theft, such as car crime will also increase.

These are reasonable predictions that are supported by the majority of mainstream economists, and supported only by ideologues who believe with fundamentalist intensity in the virtues of the "small state".

This argument will be resolved not through debate, but by the new, as history unfolds over the coming months.

Enough grumbling already. What we need to do is to form alliances, not just alliances of protest groups to stage demonstrations, but alliances of political parties (Greens, Respect, Labour, a rump of decent LibDems, and Scots and Welsh nationalists), possibly supported by NGOs, to form a credible Government-in-waiting, ready for an early General Election, which now seems more likely. The Alliance with a fully costed, open alternative budget, which would contain the cancellation of Trident and other military white elephants, a one-off wealth tax on the richest 10% sufficient to cancel or vastly reduce the public (national) debt, a Robin Hood tax, bonus supertax, closure of tax avoidance loopholes, and efficiency savings through grass roots intelligence. Central to their anti-slump measures would be a Green New Deal, expanded to stimulate the green sector of the economy.

That is the only rational response to this desperate situation. What will block it is the tribalism of political parties, who are driven by electoral politics to hate each other.

 It is just possible that as the cuts begin to bite, and the recession kicks in, the realities of the political situation will overcome the irrationalities of the political system.

A vital component of this alliance is that it should include the police, the Civil Service and the Army. It is when the army and police refuse to fight against the dissenters that peaceful revolutions succeed.


Anonymous said...

Don’t fight the cuts – embrace the cuts. Our obsession with measuring success in material terms has made us spiritual and moral bankruptcy. It’s not made us happier and it’s destroyed our eco-system. Time to hijack the Big Society and build new social consciousness of local mutial self-help. We must learn to live with less "stuff", for the sake of our own sanity and for the good of the people-plagued planet.

DocRichard said...

(this is really confusing - arre you the same anon as the other anon? Why not give yourself an identifying name on sign-off?)

I fully agree with you about non-materialism. However, this is not the way to do it. It is not right to force unemployment poverty and stress on others and tell them it is good for them.

We could make an orderly transition to a sustainable economy, with gradual general downshifting.

I have shown here how the transition can be made.

If we do hit a big recession, what you indicate may come about. Out of necessity.

But Osborne is still wrong. Big time. He is not implementing green economics, he is doing Chicago economics, in which people do not matter, only figures matter.

Anonymous said...

"Pathological unfairness" I disagree.The lowest income decile in the graph comprises largely of students and benefit recipients. Benefit recipients receive money largely from the working poor and the squeezed middle, quite simply that decile’s welfare payments come from the taxes of the rest of us. The only way that reforms can be made to fit the 'progressive' template would be to pay the non-working and students more money taken from the working poor and the squeezed middle. It is in no one’s interest to increase the poverty trap by increasing the payments to those who aren’t working at the expense of those who are working – it might not be ‘progressive’ but it is fair.

DocRichard said...

Are you the same anon who posted before?

"The lowest income decile in the graph comprises largely of students and benefit recipients".

Please find a breakdown of students/benefit recipients and come back on this.

See here for my contribution to breaking the welfare trap. It is vital.

The richest decile should contribute more, much more than a similar proportion of their income to the poorest - a grotesque equivalence, in any case, because they have such a huge superabundance of wealth, due to the way that the creation of money through debt pumps up the wealth of those that have excess wealth.