Saturday, 12 June 2010


We're all in this together.

The budget deficit racked up by the last years of 'New Labour' as Brown was trying to bring Britain out of recession "Keynesian-style", for which he was attacked by the press on the grounds of "fiscal irresponsibility". If Brown had stood back and done nothing, as Cameron claims he would have, Brown would have been attacked by the press anyway. The recession is over and we are now living under a coalition government. The media has shut up about the recession and the recovery, but is loyally spouting the party-line of "Cuts! Cuts! Cuts!" Though there are good reasons to be concerned about the budget deficit, as it is approaching to £170 billion. Cameron's argument is that the deficit is an unjust form of taxation on our children and their children, so we must cut now and take the consequences of our actions as a responsible adult should. However, there is a fallacy at work here which the media are not acknowledging, in fact they are actively ignoring it, for the sake of the nomenklatura.

As cutting public spending will inevitably involve mass job-cuts, most of which will have little productive effect as firing an employee that costs £25,000 a year would only save the state £2,000 over the same period of time. £23,000 would still be lost in tax-revenue and benefits payments to the "redundant worker". In order to pay for a deficit of £170 billion through such cuts, the government would have to cut the jobs of 85 million people which is an absurd proposition. So it would seem that there will have to be some tax increases at some point, though the proposed spending cuts could increase unemployment. The cuts also have the potential to further the decline of tax-revenue in this country, which has been a major contributor to the budget deficit. The media prefers to focus on reckless public spending as the cause of the deficit, which supports the argument that we must slash spending to save future generations from the burden of £170 billion.

It would appear that there are ideological reasons for the cuts in public spending. As seen in the US, recessions and the subsequent budget deficits provide a pretext to cutting public spending and dismantling the changes made by the New Deal reforms. These actions have made the financial sector a central part of the economy, the banks have become particularly influential in government. This is why the US Treasury Department is referred to by regulators as "Government Goldman" due to prevalence of former bankers, specifically those who used to work in Goldman Sachs, in the Department. This is a long-term consequence of Reaganomics in the US, the British equivalent being Thatcherism that has led to the financialisation of the UK economy. The cuts which George Osborne is proposing belong to this same current of dismantling the welfare state that was constructed in the years of social democratic reforms back in the 1940s.

The current, which I am referring to, is that of Thatcherism which has become the political orthodoxy in Britain, as it has dominated policy since 1979 and may do for years to come. Thatcher led the way in mass-privatisation and deregulation, which destroyed entire communities centred around manufacturing and mining. These policies were combined with a crippling attack on trade unions which led to the decline of workers' share of GDP (received in wages), this culminated in the early 90s with some of the biggest wage cuts in the world. The financial sector became increasingly important as it flourished under the Thatcherites, especially after the "Big Bang" of 1986. The rise of 'New Labour' slowed the increase of inequality but failed to reverse the massive increase that happened between 1979 and 1997. And after 13 years of Labour wages for working-people increased by 45% while wages for the upper-classes increased by around 300%. We as a society are now more unequal than we were 40 years ago. This is the ignoble current that Cameron and Osborne belong to.

The 80% cuts and 20% taxes approach of the Con-Dem Coalition is likely to harm working-people the most, whilst protecting the upper-classes from their responsibilities to wider society. The words of George Osborne "We're all in this together" only applies to the rich-white-men in government and their primary constituency in Canary Wharf, who have contributed £16 million to the Conservative Party since 2006. 18 out of the 23 Cabinet ministers are millionaires, 19 are male and 22 are white. Though this may have changed slightly since David Laws left the Cabinet following the revelations about his expenses and sexuality. But there are definitely still 19 men and 22 whites because we live in a "meritocracy". Because we live in a "meritocracy" Stuart Rose - the Chief of M & S and a supporter of the Conservatives in the face of a Labour "job tax" - has his salary and bonus increased by 140% while you can expect to see public services slashed for the  "good" of the country.

Fortunately for the Conservative Party, David Cameron and his artful oik can rely on a large chunk of the mass-media to back them all the way as he has "wooed" the media tycoon Rupert Murdoch, who stamps out dissent wherever he hangs his hat. Murdoch controls around 40% of the media in Britain and had backed Cameron in the PM campaigns. Thankfully, the kind of commentary Murdoch spews in the US is not tolerated in Britain at the moment. Even The Sun is moderate when compared to the "fair and balanced" reporting at Fox News. Nevertheless, the criticism that will inevitably land on the government will be marginalised and "diluted" by Murdoch's influence. The most read attacks will come from the reactionary populists like Richard Littlejohn and Melanie Phillips, which will likely consist of accusations that the government is "too left-wing". For them the only explanation for the failures of state-capitalism is that there is an elite of liberals and socialists who are keeping utopia.

In the end the proposed set of spending cuts and the increase of regressive taxes will probably be pushed through. When it is possible to cut the budget deficit by increasing some taxes, while cracking down on tax evasion and closing loopholes that cost this country £100 billion every year in tax revenue. But the Conservatives, despite claiming to be pragmatic, are not acting out of practicality and have a deep-rooted dedication to slashing public services that will benefit the majority of the population. A dedication to taxation would require a genuine dedication to progressive aims, while the Con-Dem Coalition has only reactionary goals. The Red Tory rhetoric is shallow and the labelling of this coalition as "progressive" is deeply deceptive. As this government appears to be dedicated to the same cause as the Blairites and the Thatcherites. Thus, Osborne's statement "We're all in this together" should be replaced with something more befitting like "From each according to his gullibility, to each according to his greed."

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