An Important Policy-Based Moral Argument for a Lib/Lab Coalition…

As we wake up to the prospect of a hung Parliament, there is much argument about who would have the “moral authority” to rule the country.  Constitutionally, the answer is clear: the standing Prime Minister has the first opportunity to create a coalition government that gains the acceptance of the House.  But the Conservatives are making the argument – superficially sensible – that, as they have the most seats, albeit not a majority, they should have first chance at creating a workable government instead.

Something important seems to have been forgotten amidst all the speculation: an important moral argument as to why a Labour/Liberal Democrat coalition is more in line with the people’s will than a minority Conservative government.

The most important difference between the three parties throughout the campaign was on the question of cuts in public spending.  The Conservatives were alone in endorsing the idea of immediate cuts this year, whereas both the Labour Party and the Liberal Democrats believed that taking money out of the economy now could jeopardize the recovery, and instead proposed waiting until 2011.

On this key difference, the Liberal Democrats and Labour are agreed.  In both their manifestos they state caution about making cuts too early, and on this crucial election argument on which the Conservative Party made their case – do we cut now, or do we wait until 2011 – the British public appear to have spoken: they do not want cuts in public spending this year, as the Conservatives are offering, and have voted majoritively for those parties which endorse continued investment in 2010.

This is a vital matter in terms of who gets the moral authority to form a government now, as the issue itself is specifically time sensitive.  If a minority Conservative government took power and forced through immediate cuts that have been rejected by the majority of the population, where is the democracy there?  More importantly, as, traditionally, coalition governments in the UK seldom last longer than a year or two, does it not make perfect sense to establish a union of collaborative parties this year who agree, along with the majority of the country, in the direction that the economy should be going now?  Then, if that government fails, if their popular economic policies falter and get us into trouble, the Conservatives have a fair and demonstrable argument a year from now to hold a vote of no confidence, win an election, and introduce their immediate austerities.  They do not have that mandate now.

There is also another important area of policy agreement: electoral reform.  If this election shows anything, it is that our first-past-the-post system is absolutely useless at truly representing the views of the people.  Indeed, the very party who so vehemently oppose electoral reform – the Conservatives – on the basis that only first-past-the-post politics can provide strong governments, are today realizing that this simply isn’t true.  On numbers alone, they have seemingly “won”, but their chances of forming a strong government are absolutely nonexistent, yet still they refuse to consider the idea of proportional representation.  The people are desperate for this outdated system to be scrapped, and it is only the Liberal Democrats and the Labour Party who have been proposing electoral reform, not just today, when it is politically convenient to do so, but in their manifestos.

On the two major issues facing our country today – the economy and election reform – the Labour Party and the Liberal Democrats share a joint, and publically endorsed, vision.  The Conservatives stand alone, and their policies on these issues – when looked at collectively – have been roundly rejected by the majority of people, giving them absolutely no moral authority to rule.

  

Technorati Tags: Politics,UK Politics,General Election 2010,General Election,UK General Election,Hung Parliament,Economy,Electoral Reform,Lib/Lab Pact,Labour Party,Liberal Democrats,Conservative Party

Shock and Poor

Gordon Brown’s announcement today that he will be trying to sell off £16bn worth of government-owned assets is another worrying sign of the people in power using the current economic crisis to push through any old policy that they want, all in the name of saving our economy.

Echoing the MO illustrated so thoroughly in Naomi Klein’s excellent book, The Shock Doctrine, the chaos of last year’s banks and business collapse has already seen the mass plundering of the welfare state by our governments in order to needlessly bail-out the rich.  Now, with the public’s coffers completely depleted through the expense of all these bailouts (and the continuing funding of two seemingly never-ending wars in Iraq and Afghanistan) we are seeing phase two of disaster capitalism at work: the manufactured claim that the welfare state – no longer financially solvent – cannot, therefore, be afforded.

The money isn’t there, we are told. 

The country is in terrible debt. 

Things will have to change.

But instead of raising the taxes of the rich business-owners and bonus-claiming bankers who created this economic mess in the first place, and who have benefitted tremendously from the daylight-robbery of the bailouts, we are told that the only solution to our financial problems is to make cuts in public spending for the poor; to enact drastic pay freezes for public sector workers; to enforce cost-cutting redundancies all across the workforce; and now, to sell off yet more of the public’s collective assets to private businesses so that they can use them for private profit.

These are not the only solutions, but the sheer shock of the the scale of economic disaster – or at least the perception of such a disaster, as was sold to us in the press – has made us vulnerable and bewildered.  In the wake of all this trauma, we’re too stunned and confused to question the policies are leaders continue to insist are “good” for us, or “vital” for economic recovery, but by the time we wake up from the numbness of our stupor, it will already be too late and the theft will be complete.

Our benefits axed, our assets sold, our pensions stripped and our jobs lost forever; we will finally come to our senses and find that, in its sleep, the country has been robbed.

Technorati Tags: Economy,Economic Crisis,Gordon Brown,Shock Doctrine,Naomi Klein,Public Spending,Public Assets,Cuts,UK Politics,Politics

Alternatives to Austerity

Here’s why the debate has to change: cuts, pay-freezes and benefits witch-hunts are not the only solution for sorting out the mess of debt and deficit that we are told ails the treasury. 

Indeed, they are not even the best solution.

In a twenty-four hour period that has seen Labour announce a year-long pay-freeze for top civil servants, then be derided for doing so by the Tories, only for Conservative shadow chancellor, George Osborne, to pledge to do the exact same thing in 2011 if the Conservative Party get elected, it is easy to get wrapped up in the panic-stricken dominant narrative that our economy is in trouble, and the only way to save it is by taking a hatchet to our out-of-control spending.

But that is simply not true.

The economy is in trouble alright, big trouble.  Some of it has to do with the crisis of faith that led to last year’s global downturn, and some of it has to do with the billions of pounds pissed away on unnecessary wars in Iraq and Afghanistan, but none of it has to do with paying out too many benefits, paying public-sector workers too much money, or – despite the International Monetary Fund’s myopic and ideologically distorted opinion – providing decent healthcare.

We are not drowning in a mire of debt and destitution because we spent too much on schools and libraries; nor are we suffering because of the BBC’s licence fee.

The economy is in trouble because billionaire investment bankers decided to gamble with poor people’s mortgages; the economy is in trouble because taking control of the Middle East turned out to be a little harder than we thought, and the richest 2% are not yet getting the return on their investment.

At bottom though: the economy is in trouble because, although the money is there, no one has been bold enough to get it.

I am talking, of course, about raising the taxes of the rich.

Not George Osborne’s meaningless “man-of-the-people” gestures from earlier today – taking the Child Trust Fund away from wealthy parents who don’t need it anyway; denying tax credits to those who earn over £50,000.  Those sorts of superficial measures merely take with one hand whilst giving with the other (ask a person earning £50k a year whether they’d rather have a £250 Child Trust Fund Voucher and a thousand pounds in Tax Credits each year, or get to keep £5,000 more of their money at a lower rate of tax and guess which option they’ll choose?)

I’m talking about finally saying enough is enough, and taxing the rich properly.

I’m talking about finally admitting that, if you earn £100,000 a year or higher, you’re probably earning too much money.  That there is a point at which wealth becomes an obscenity; there is an acceptable limit to how many homes you should own; how many cars; how many yachts.  That, if you can’t live well on a salary of £5000 a month (£100,000 a year, taxed at 40%, and divided by twelve) then you have probably lost all sense of perspective.

When one considers that the much-lauded Tory proposal to cut down on Incapacity Benefit fraud is based around the idea that the £17.50 a week difference between Jobseekers Allowance and Incapacity payment is important enough to claw back that annual saving of £910 per person, it puts such figures into perspective. 

Raise the 40% “higher rate” of income tax to 50% for those earning 100k a year (as it is if you hit the £150k number), and you can add an extra £10,000 a year per person into the national budget immediately: the equivalent of nearly eleven individual Incapacity cuts, and all without having to pay the salary of an “assessor”, or the subsidies for the New Deal on top.

If the Conservative figures are correct, and one in five of the 2.6 million currently claiming Incapacity Benefits can be moved to standard Jobseeker’s Allowance, then they are claiming that taking £910 a year from 520,000 people will raise £1bn over a five year period. 

Yet if you taxed just 20,000 people earning £100k a year that £10,000 (10%) extra, then you would be able to get that extra billion over five years without making a single cut.

In 2007 there were 500,000 people earning £100,000 a year in the South-East of England alone!  By raising their income tax that extra 10%, over a five year Parliament, you would bring in a monumental twenty-five billion pounds in extra funding – twenty-five times the amount of the Tory Incapacity Benefits plan; and that’s not even the whole of Great Britain. 

But the Tories would rather force a disabled or mentally ill person to live on a £3,297 a year Jobseeker’s Allowance than force someone who earns £100,000 a year to pay an extra £10,000 in taxes and still keep £50,000 a year – a take-home salary almost £20,000 higher than the current pre-tax national average.

And this isn’t even mentioning the earnings of the super-rich.

Do you know what ten percent of a million pounds is?  It is £100,000.  Ten percent of a billion: one hundred million.

By raising the taxes of the super-rich millionaires and billionaires to 60% or 70% – even 80% – you could fix the hole in public spending immediately and still leave the ludicrously wealthy with ridiculously high annual incomes.

One million pounds a year, taxed at 70%, would leave our humble millionaires with £300k a year to live on.

One billion pounds a year, taxed at 80%, would leave billionaires with an eye-popping annual income of two hundred million pounds! 

One moderately taxed millionaire (a 20% raise) and one moderately taxed billionaire (a 30% raise) would therefore bring in one billion, five hundred and one million pounds worth of brand new money over a five year Parliament, on top of what they might already pay.  Two millionaire and two billionaires would bring in over three billion pounds in new investment.

I cannot understand why we don’t start talking seriously about doing this, and why taking £17.50 a week from the worst-off in society and freezing the pay of doctors and teachers is the best economic solution our political leaders can come up with?

Technorati Tags: Conservative Party Conference,George Osborne,Back to Work,Cuts,Economy,General Election,Incapacity Benefit,Labour Party,Public Spending,Taxation,Tax the Rich,Redistribution,Rich,Poor

The Next Sub-Prime Collapse…

Robert Fisk reports in today’s Independent, that Gulf Arabs, China, Russia, Japan and France plan to end dealing in dollars for oil.

The demise of the dollar - Robert Fisk, The Independent

There are many who have argued that it was Saddam Hussein’s decision to start trading oil in Euros, rather than dollars, that was a key factor in the decision to invade Iraq, and the US have long been opposed to any change in this current trading system because, without the world needing US dollars in order to buy and sell their oil, the United States’ role as economic superpower could be severely undermined.

Without the need for US dollars on the international oil market, central banks across the world will want to replace their stock of US dollars with the new oil-buying currency instead. When the banks stop buying dollars, then the value of the dollar will fall. When the banks get rid of the dollars that they have, and flood the international money markets with the now unwanted and unusable currency, the value of the dollar will plummet.

If you have ever wondered how a country as rich as America can still be in over a trillion dollars of debt, and yet maintain their appearance of affluence, it is because their unsustainable economy has been propped up for years by loans from countries eager to receive pay back in oil-friendly, US dollars.

Can you imagine what happens to that debt, however, when the dollar becomes unfit for purpose?

This might just be the most important news story of the next nine years…

UPDATE: 8/10/09: http://www.guardian.co.uk/business/2009/oct/08/gold-breaks-record-weak-dollar

Technorati Tags: Oil,Dollars,Euros,Petro-Dollars,US Economy,Economy,Economic Crisis,Robert Fisk,Robert Newman,Iraq,China,Russia,Saudi Arabia,France,Japan,Politics,US Politics

Darling’s Choice…

On Tuesday, the Prime Minister announced that it would be necessary to make some cuts in public spending.  Today, Alistair Darling will hold a series of one-on-one meetings with Cabinet colleagues to discuss which areas should receive the cuts, and which areas should be spared.

But has it ever occurred to the Chancellor that there is a simple, far more democratic, way of adjusting government spending than asking a cabal of Cabinet colleagues what they think we should do?  Namely, asking the citizens – the ones who pay the taxes – what it is they want their money to be spent on.

Imagine, if you will, a once-a-year form from the treasury, sent to every tax-paying individual in the country, whereby each citizen can designate the specific areas in which they want their taxes to be spent.  The results of these polls are then tallied and processed, and the total taxed income of everyone is divided according to a national average.  (i.e. if 62% of the population wish for an average of 58% of their yearly taxes to be spent on the NHS and associated services, then that is what will happen.)

How hard could that be?

Instead of the relatively unaccountable Chancellor dividing the budget into what he believes to be the best interests of the nation, we let the nation do it themselves.

On my own personal form, I would ask that the majority of my money went into healthcare, education, and other important areas of the underfunded welfare state, and I would prohibit any of my money being spent on “defence” and the ongoing illegal wars in Afghanistan and Iraq.  To some, that simply highlights the major flaws in such a plan – if everyone were like me, the military would have no money; conversely, if everyone thought the opposite, defence spending could skyrocket whilst schools and hospitals suffered.  But the fact is, the genius of such a system is that by averaging the total national results, extreme views such as my own will be tempered down by more sober-minded and utilitarian citizens.  In reality, the likely outcome would simply be an accurate reflection of what the nation really wants: institutions the public need and care about would receive the most money, and those they think are bloated or over-budgeted would get cuts (the wisdom of crowds and all that).

Under such a radical change of system, government would be forced to listen to the true demands of its people; the public would hold the purse-strings, and thus the key to policy. 

With this new distribution strategy being an annual, or even six-monthly, occurrence, as national priorities change, so too would our individual designations, making it a much more flexible and responsive system than our current budgetary procedure, beholden each year to outdated historical precedents and Whitehall in-fighting. 

Underfunded schools failing our children?  Give ‘em a little more cash.

Overfunded schools still failing our children?  Take the money away until they produce results.

An inflated military budget allowing never-ending and unjustified overseas wars that kill thousands of innocents each year?  Put the money somewhere else and bring “our boys” back home until they learn to behave.

Mass unemployment because of an ongoing financial crisis for which the majority of people are not responsible?  Refuse to give more hand-outs to the banks and corporations that caused this mess, and help ensure nobody gets kicked off their Jobseeker’s Allowance because of lack of funding.

It’s simple Mr. Darling…at least, it would be if we actually lived in any kind of democracy.  As it is, I expect the result of the Chancellor’s meetings will be pretty predictable: cuts in benefits, welfare, education and healthcare; no major changes in defence spending (there’s an illegal war to win in Afghanistan you know!); and a further extension of insidious public/private partnerships (such as the Private Finance Initiative) that claim to cut public expenditure by selling our souls – and institutions – out to big business.  

In other words: same shit different day in the corridors of power.

Technorati Tags: Economy,Economic Policy,Alistair Darling,Gordon Brown,Politics,Afghanistan,Democracy,healthcare,welfare,education,military budget,the wisdom of crowds