(No) stitch in time

That last Labour lot were an utter shower. It’s cos of them we’re in the mess we’re in, cos of them spending, make that wasting, all our money. Wasting I tell you.

Hold that thought for a mo ….. the scenes from waterworld/Somerset are truly gobsmacking as is the fact it appears to have been going on since Christmas. Clearly something should have been and/or must be done about this, except something already was – spending on flood defences in England and Wales was cut (in absolute and real terms) years ago by the current government.

This was part of the initial approach to austerity; routine spending e.g. benefits, are a bugger to cut as the Irritable Bowel-Duncan-Smith experience exemplifies. Capital spending on the other hand is relatively easy, you just cancel or postpone the building of new things like seawalls. Hence, in the early years of austerity, capital spending, even though it’s a relatively modest share of total government spending, accounted for a disproportionate share of the cuts. Capital spending on flood defences illustrates this perfectly, the total being cut 27% from 2010/11 (the last year of Labour spending plans) to 2011/12.

Now would a Labour government have done anything differently if it’d won the last election? Doubt it. But, some of the last Labour government’s spending looks a bit more sensible allova sudden what with them having started ramping up spending towards the £1bn a year level that’s been deemed necessary to cope with all the freak weather we now appear to have.

And there’s the obvious charge of short-sightedness that can be made against the current lot. Would keeping spending at Labour levels have prevented current events? Doubt it, but it might have ameliorated some of them, which, given what they’ll ultimately mean in terms of additional spending on tidying up the mess, lost economic activity and all our insurance premiums, suggests the spending cuts may eventually cost us all far more than they apparently saved *. Oh and it would have created jobs as well.

And BTW the above numbers are nominal i.e. don’t take inflation into account, meaning the reduction in spending is even bigger than it looks.

* you get the impression the nasty bedroom tax has already gone in this direction as well what with the time and money being wasted on chasing up newly created rent arrears and what not.

I blame Adam Smith

Really, its all Adam Smith’s fault. After all, the founder of modern economics was a Professor of Moral Philosophy and its similarly impossible to understand the dominant attitudes towards the current crisis other than in moral terms. Here’s some examples:

• The tosh about skivers vs strivers and associated notions of fairness? That’s a (supposedly) moral argument that is.

• The troika, well the German for the most part, approach to Greece? Is a moral stance; they made this mess with their spending and tax dodging, so now they have to pay the price for any aid they get so they do.

• No additional public spending today because it would be at the expense of tomorrow’s youth? Yup, that’s a largely moral stance that is.

• More generally, what I’ve personally encountered is the sense that because we had a credit fulled boom we deserve the current bust, because that’s only fair, isn’t it? Like we deserve it, really. And anyway, we need to repay the debt because you can’t go on borrowing forever.......

A big problem with such notions of morality is they’re so utterly half-arsed i.e. not thought thru. Rather, they typically operate as instincts or what adherents, if challenged, dress up as “common-sense”. Except, they’re not, they're more simply statements of ignorant prejudice.

Take skivers vs strivers; researchers have actively gone out hunting and failed to find almost any of the multi-generational unemployed households that get the Daily Mail so excited. In the meantime, the benefit cuts are clattering the incomes of the disabled and the working poor as well as the unemployed who are almost all actively seeking work.

Greece? Well, I don’t think destroying an economy via the terms attached to French and German funded bailouts that helped the French and German banks that had lent to Greece in the first place is teaching Greek people the lesson France and Germany thinks it is.

Spending more today would hurt the youth of tomorrow? If proponents of this argument were actually bothered about the youth or even the "yout" they should perhaps reflect upon the massive rise in long-term youth unemployment seen across Western Europe and the associated permanent damage this is doing to future, productive capacity (and individual lives).

As for us all somehow deserving the bust, well current UK monetary policy is geared to protecting the heavily indebted via super low interest rates whilst using quantitative easing to boost asset values. Guess what caused the credit crunch here  – no it wasn’t casino banking, it was the bursting of various cheap credit fuelled asset bubbles, which here primarily meant commercial property and company values, things yer average punter had absolutely nothing to do with.

Credit did serve a useful political purpose though in that it papered over the stagnation in average real wages seen in the run up to 2007 and the associated rise in economic inequality. I’m not sure why that’s something most people should feel especially guilty about though. Oh and the notion that a country can’t borrow forever or at least for a very long time is simply dumb.

The problem with morality is that its a big dogmatic-y i.e. engrained and purely reflexive in a lets not let dull stuff like facts get in the way. And its creating big problems. What are nasty prejudices masquerading as common-sense appear so deeply engrained, widespread and popular are having a huge influence on government policy. Right now, we really are shooting ourselves in both feet whilst blaming someone else - the disabled and the poor for the most part - for the pain.

Masochistic e.rection disguise

You know an economic policy has had its credibility chips when the more politicians try to justify it the more they sound like they’re describing a masochistic e.rection.

Hence, fiscal austerity is painful, but thankfully the ConDems are up to taking the kind of big, strong, firm and tough (and blue-veined) decisions we need if we’re to cum through these hard, oh so hard times together. Indeed.

The disguise part here stems from the reality, which is that for all any politician might claim we’re all in this together, the following are the people really feeling the pain - the working poor, the unemployed, the disabled and the infirm. That they are doing so due to policies that are actively undermining the growth they’re supposed to be promoting exacerbates this bloody awful reality.

Strategy, structure and big 'ol titt!es

As Alan Johnson proved politicians are rarely the best when it comes to economics, but they do try and talk a good game. Hence, Nick Clegg’s speech outlining how government is “determined to foster a new model of economic growth, and a new economy”. Key to this and every piece of shit politician’s speech is their use of the word “billion”*, a number that in our national lottery age represents more than most ordinary punters could ever imagine having.

Politicians know this so deliberately use “billion” to convey the seriousness and/or importance of things e.g. a debt measured in billions is a big and serious debt – cue stern faces all round. Similarly, a government initiative costing a billion – cue open hand gestures, gentle taps on lectern then a statement pronounced in a slightly higher pitched voice – means the government is serious about something. Except, when it comes to establishing a “new model of economic growth” a billion is fuck all so by implication the point of Clegg's speech - to present the notion that the current government's economic policy is about more than spending cuts - was a bag of shite.

To illustrate why here’s an concrete example of what a billion and some change will actually get you - in 2009 this company owned 42 UK hotels and conference venues in the UK as well as a chain of gyms. Am guessing the bulk of this was financed, ignoring the equity, with the £1.4bn mentioned in the article. So on a rule of thumb basis £1.4bn will buy you 42 hotels and conference venues plus some gyms.

Now back to Nick Clegg – “The Government is also committed to the creation of a Green Investment Bank, with funds of at least £1 billion, to enhance the necessary investment in low-carbon growth”. There’s lovely, except that’s not even enough to buy 42 hotels and conference venues let alone some gyms. Green economic revolution? You're 'avin a turkish mate.

But, s’ok cos Nick also said “We have announced an investment of more than £200m over the next four years in a network of technology and innovation centres, modelled on the German “Fraunhofer Institutes”. Really? So will these also do things like establish the deep infrastructure of skills, contacts, knowledge, reputation, training etc., that actually underpins the competitive advantage German’s mittelstand of mid-tech engineering and manufacturing companies have and we don’t due to the structural decline of manufacturing in Britain? I don’t fucking think so. Howzabout instead of yet another mickey mouse be seen to be doing something scheme we add the £200m to the Green Bank’s £1bn, then see if we can negotiate to buy 42 hotels and conference centres instead (but without the gyms)?

Oh, but hang on reading to the fag end of the speech it turns out we’re also establishing a “£1.4 billion Regional Growth Fund”. At fucking last, finally the government is so serious about something its establishing a fund big enough to buy 42 hotels and conference centres AND some gyms. Now we know they mean business (or is this regional growth fund made up of money taken from other initiatives?),

Back to the bullet points in Clegg’s speech though cos they sound lovely, except they're actually fucking pants.

He said: "Weaning ourselves off debt-financed growth, and onto investment-led prosperity" – Cool, except debt is used to finance investment, you can’t have either or like fer instance am guessing the Green Investment Bank will gear up each of its investment with debt as a matter of course.

He also said: "Investing in the ‘hard’ infrastructure that underpins growth, such as transport" – Cool 2x, except that’s just tarting up the fact the only fucking infrastructure spending left is on roads as opposed to additional, mad mental wasteful shit like schools. ut, he did get to say "hard", oo-er missus etc.,

Then he said: "Cultivating the ‘soft‘ infrastructure made up of knowledge, skills and education that businesses need" – Cool 3x, except how the fuck do you reconcile that with the changes to university funding? Simple. You don’t cos you can’t.

Finally, he said: "Balancing regions and sectors, instead of putting all our economic eggs in one basket" – Cool 4x except as the local authority spending review in England and Wales made clear and as public sector spending cuts will exacerbate over the next 3 years at least, those regions more reliant on the public sector are humped, which will create ever greater regional imbalances when it comes to things like unemployment, wage levels, health, quality of life and so on (but, it will also fuck scousers so not all bad)

And it turns out “Tim Stone, chairman and founder of KPMG's Global Infrastructure and Projects Group” is advising government on its national infrastructure plan, which is like turkeys asking Bernard Matthews (god rest his soul) for diet tips. Nah, all a pile of fucking shite really.

As for the alternative, the “promise” shite Labour is coming out with is almost too depressing for words. First they ripped off the US Democrats with the squeezed middle and now they’re ripping them off with that shit an’all, What a useless bunch of spod-led cocks too wank to even come up with their own empty fucking rhetoric. Instead, all we’re left with is a dismal reality where things like this, as a fabulous person I know pointed out to me are happening.



* This point originates in some comedy thing Nigel Planer did years back I think called the "Actor's Studio with Nicholas Craig"