CSR

The Elephant in the Room


At the start of this academic year, I bought myself a clock radio, so I could wake up to the radio rather than whatever annoying noise my phone conjures up. Now, in Brighton I can’t get Absolute Radio. I personally cannot stand Chris Evans. So with Absolute and Radio 2 ruled out, I plumped for Radio 4. I quite like the Today programme, and John Humphrys’ voice isn’t an unpleasant thing to wake up to. (Quiet!)

This might seem an odd way to begin a blog entry, but it leads into something more substantial now. This morning I was half awake, listening to a bit about how dire Ireland’s economic state is at the moment, and how it looks like the EU is going to have to bail them out.

I wanted to use a picture of an elephant painted with the Irish flag, on fire, but unfortunately my lack of photoshop skills and the internet's lack of imagination has meant that I can only go with this particularly idiotic picture of Osborne.

Now, I might have missed a bit, as I was still waking up, but nowhere did I hear any parallels drawn between the Irish situation and our own. They suffered in the recession. So did we. They gained a large deficit as a result of bailing themselves out of the recession. So did we. They ended up with a Coalition. So did we. They set out on a program of radical cuts. We have just begun a near identical program.

And here’s the problem. Before the election, back when he was Shadow Chancellor, rather than axe-wielder-in-chief, George Osborne wrote an article in the Times newspaper about Ireland. You can read the article for yourself, but it contains the key quote.

I’m not an Osborne fan. I think he’s a moron, and I wouldn’t trust him with my pocket change, let alone the Treasury. But still, I’d have a lot more respect for him if he could let go of his damned cutcutcut obsession and looked at the bloody facts. It’s particularly galling when he himself laid out the sensible advice back in 2006.

“[Ireland] have much to teach us, if only we are willing to learn.”

And right you were, George. They taught us that sudden, drastic cuts when the economy is still unstable are a bad idea, and can result in a plunge back into recession. Not the lesson that he imagined they would teach us, granted, but important nonetheless. And yet despite eschewing the benefits of paying attention to Ireland and learning from their blunders, he seems not to be willing to learn himself.

It’s not surprising, of course. The Coalition government have set out on a program of economically-destructive cuts, and damn it they’re going to carry it out. That’s ideology. That’s politics. Any climbdown now would be tantamount to the lumbering mutant creature shooting itself in the face. But why are the rest of us not shouting louder about this?

Alan Johnson pointed out Osborne’s raging hypocrisy re: banking regulation, back when the CSR was delivered. But no one is waving Ireland around as an example of him ignoring the red lights and warning signs. Is there some reason for this? Is Ireland a no-go area for some reason?

Whatever, some brave MP (from either side of the House) needs to table a question to ask Osborne- or that Tory-apologist Danny Alexander- to explain why they are now ignoring the Irish lessons which they were so adamant we should learn from.

Despicable Him


 

"I'm havin' a bad bad day/If you take it personal that's okay/Watch, this is so fun to see/Huh, despicable me"

No, this doesn’t have anything to do with the film Despicable Me, good as it was. This is about George Osborne and his Comprehensive Spending Review (CSR).

 

I know it’s over a day late, but to be honest I was so shocked and disgusted with Osborne’s announcements yesterday that I didn’t know what to say. I’d been expecting it to be bad but… I somehow failed to appreciate how awful it would be when it actually came around. Now, I could go on and on about the various people who will be horribly affected about this, but frankly you already know.

No, what I’m going to do is a lay person’s assessment of the economic madness this constitutes.

Now, the financial crisis was caused by the banks, behaving irresponsibly and taking outrageous risks. They did this because they were greedy bastards. They were able to do this because of poor regulation, which I accept was Labour’s bad. However, as Alan Johnson pointed out yesterday, Osborne himself was arguing for less regulation leading up to the crisis. So it’s fallacy to believe the Tories would have done anything different.

But it was Labour’s mistake. Their only real mistake in all of it, in my opinion. When the crisis hit, Brown and Darling responded immediately by nationalising the banks and pouring money into the economy. It worked. The recession ended, and we started the slow road to recovery.

Unfortunately, it left us with a deficit. A rather large deficit. But the decision at the time was that a deficit was better than a collapsed economy. Personally, I still agree with this. But anyway, along came the election and the Tories painted a picture of imminent financial disaster, making (false) analogies with Greece, and saying that everything needed to be cut immediately to plug the deficit as quickly as possible.

Now, the majority of people didn’t agree with this, but the Tories ended up in government and pursuing their cut-cut-cut agenda anyway (thanks to a spectacular U-turn by the Lib Dems). Which brings us to the CSR. The cuts are just as massive as we were promised, but somehow they come along with the promise that they will save the economy. To my mind, this doesn’t stand up.

The prediction is that this will result in half a million jobs being lost. Half a million. Given that the recovery has been faltering over the summer, this doesn’t seem smart. These people are going to have to be paid redundancy packages. Then a lot of them will end up on job-seekers allowance, unable to find jobs that don’t exist in the private sector. And those who are lucky enough to find jobs will be further inconvenienced by the hike in rail fares, making commuting all the more difficult.

This, it seems to me, is not going to help an already fragile economy. Especially when you look at the Republic of Ireland, who Osborne used as an example of how it should be done. They had a coalition government. They launched a similar program of massive cuts. They slipped back into a second recession. Funny how the coalition aren’t shouting about Ireland any more.

But aside from this gambling, this risk taking, this economic idiocy, there was something that disgusted me more yesterday. If you watch the footage back, Osborne is loving every minute of this announcement. Never mind that these cuts will cost at least 500,000 jobs. Never mind that they will cause misery for millions more. Never mind that they risk destroying the economy. He was enjoying it.

And so were the rest of the government benches. Why? Because these cuts are nothing to do with necessity. This is what Tories have longed to do, ever since Thatcher cut public services in the 80s. Even if there was no deficit, they would still want to cut back the state, this just gives them the opportunity. And the fact is that these measures will hit the poor hardest. The news is filled with economic analyses that show this. And meanwhile, the bankers, the tax dodgers and all of Osborne’s chums get off scott free.

That’s Tory fairness for you.