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Corbynomics vs Ideological austerity

47 replies

blacksunday · 11/08/2015 19:15

The incredible surge in popularity of the Labour leadership candidate Jeremy Corbyn is proof of the fact that a significant proportion of Labour Party supporters are utterly sick of their party refusing to take a stance against Tory ideological austerity.

The mainstream media reaction has been to deride Corbyn's economic plans as some kind of left-wing lunacy, but this is merely an illustration of the fact for five years the mainstream media and the Labour Party have utterly failed to challenge the Tories on their socially and economically harmful ideological agenda, meaning that anything that contradicts it now lies outside the approved spectrum of debate, not that "Corbynomics" doesn't make an awful lot of sense on a macroeconomic level.

It's no surprise that the mainstream media have given the Tories such an easy ride on George Osborne's failing economic ideology, because the media is so heavily dominated by right-wing billionaires like Rupert Murdoch (S*n, Times, Sky TV), Jonathan Harmsworth (Mail, Metro), Richard Desmond (Express, Star) the Barclay Brothers (Telegraph, Spectator). The refusal of the Labour Party to challenge Tory austerity is a lot harder to fathom. Perhaps they thought they just couldn't win the debate against the right-wing dominated media? Or perhaps it was because the Labour Party had become so dominated by right-wingers (Ed Balls, Chuka Umunna, Chris Leslie, John Cruddas ...) over the years that they actually favoured the continuation of an economic ideology that results in a massive transfer of wealth from the poor and ordinary to the super-rich minority?

Whatever the case, at least there is now a movement within the Labour Party to actually stand up and challenge George Osborne's ideological austerity agenda as the socially and economically destructive con job that it is.

In this article I'm going to outline some of the important differences between George Osborne's ideological austerity agenda and the Jeremy Corbyn's stimulus and investment policies.

How ideological austerity has failed

In the absence of any coherent criticism of ideological austerity from the Labour leadership, it was left to a few backbenchers, left-wing journalists, trained economists and independent bloggers to make the case against Tory ideological austerity over the last five years. I've written a lot of articles on the subject, so instead of detailing the case all over again, I'll provide bullet points with links to corroborating evidence.

  1. In 2010 George Osborne promised that ideological austerity would have eliminated the budget deficit by 2015, in reality he didn't even manage to halve it.

  1. Ideological austerity resulted in the slowest post-crisis economic recovery in British history, meaning the UK's GDP per capita still hasn't recovered to pre-crisis levels.

  1. Ideological austerity coincided with the longest sustained decline in UK average wages since records began.

  1. Ideological austerity resulted in George Osborne creating more new public debt than every single Labour government in history combined.

  1. The majority of trained economists agree with the proposition that George Osborne's post-crisis austerity agenda damaged the UK economy.

  1. Ideological austerity has resulted in a massive transference of wealth from the majority to the tiny super rich minority.

OP posts:
Isitmebut · 29/08/2015 00:26

Redkite2015 ..... the "extreme", nay deluded view, is that if governments bring in private sector controls, that those companies/individuals decide are non commercial, that they don't react to getting rear ended.

It is just common sense that if a landlord has a p....p... p...profit (there I said it) on the value of the property, and due to government controls they make an annual rent loss, or looks like may only be an annual 1% or 2% profit for the foreseeable - when they'll have the threat of annual bills or rental voids at any time - why wouldn't they sell and buy something else for income?

Especially if on stock markets at current prices they could achieve say 6% annual dividend yield with no government/tenant hassle.

Isitmebut · 29/08/2015 00:37

"It would be beneficial if local authorities are given free hand in building social housing,"

Redkite2015 ... They have been, and while there is a long way to go, some initiatives are already in place.

“New borrowing powers will enable councils to build up to 10,000 affordable homes, Communities Secretary Eric Pickles and Chief Secretary to the Treasury Danny Alexander announced today (7 April 2014)."

"From today councils can bid for a share of £300 million of extra borrowing, which will be made available through an increase in their housing revenue account borrowing cap, and invested in new affordable housing over 2 years from 2015."

"Ministers also confirmed that the rules about council land sales would change, so more surplus and redundant land and property can be released to build homes for local communities."

"Councils applying for extra borrowing powers will need to demonstrate maximum value for money, by including funds from disposal of surplus assets, particularly high-value vacant stock, and by bringing forward their own land for new affordable housing."

"Councils building more"

"The government has untied councils’ hands by reforming the system for council house finance. Councils can now keep their rents and receipts from house or land sales, in return for taking more responsibility for housing in their area."

"Since 2010 170,000 affordable homes have been delivered across the country, while councils have built more council housing in the last 3 years than in the previous 15 years combined."

"Today’s move will allow councils to build on this progress and ensure local people have the affordable homes they need.”

JanetBlyton · 29/08/2015 16:06

I don't think there is much chance of Labour winning in 5 years' time thankfully but we shall see.

As for housing we have 600,000 new people in the UK in the last year (200,000 from outside the EU) and 300,000 left so lots of people coming and going. Interesting times.

Isitmebut · 17/09/2015 12:32

Re Corbynomics.....

I'm watching the Daily Politics interviewing the Jezzer guru on the subject who says;

  • The People's QE to finance public spending will only be used by a Labour government in the next recession - when the BoE probably would do that anyway - NOT automatically when a Jezzer Labour Party took office.

  • The £120 billion UK Tax Gap to finance so many policies Mr Corbyn mentions in his manifesto, only £20 billion could be recoverable - and is even that ON TOP of the extra taxes Osborne recovered last year, mentioned in an earlier link?

So two very misleading statements that lasted just a week towards the next General Election.
Isitmebut · 25/09/2015 23:53

Corbynomics versus Ideological Austerity is the subject of this thread.

I have long argued on Mumsnet that trying to balance our spending from a huge annual budget deficit/overspend was NOT ideological, it was just good national housekeeping.

Despite all the vicious accusations against the Conservatives and Len McClusky saying he will not support a Labour Party ‘offering a pale shade of Tory austerity’, tah dah.

John McDonnell: Labour will match Osborne and live within our means

Exclusive: shadow chancellor says party will vote in favour of Tories’ fiscal charter but will take radically different approach on cutting deficit

Has Old Labour finally been converted to the Isitmebut/Osborne religion of balanced budgets, or is Corbyn’s Labour the worst nightmare of their leaflet editors – as like Mary Poppins, their policies stay until the wind changes?

AllThePrettySeahorses · 26/09/2015 06:59

All we hear is Labour did this, Labour did that. Labour haven't been in power for 5 1/2 years.

Labour had a lower average GDP debt than the Tories until around 2006/2007 ish, despite renewing the country's infrastructure eg schools and hospitals. I remember buckets in my classroom to catch the rain in the early to mid 90s.

The debt in 2008 was lower than the Tory handover in 1997 and it only just topped 50% in 2010 after major QE which had worked - the economy was growing strongly (obviously flatlined after Gidiot got his hands on it)

£800 billion debt has been turned into £1.6 trillion during the past 5 1/2 years of Tory austerity, despite there being no investment in infrastructure and swingeing cuts to public services.

DC has obviously been too busy getting jiggy with his piggy while losing the triple A rating to make up his mind whether the economy is getting better or he's still trying to fix a broken one. Because I can't really see any reasons why the debt has doubled in the last few years with nothing whatsoever to show for it. Interest payments are meant to be extremely low so that can't be the reason. Labour haven't been in power for years so they can't be the reason. There has apparently been no recession so that can't be the reason either. So why are we up the creek with no paddle?

AllThePrettySeahorses · 26/09/2015 07:02

*ps - affordable homes are no use to the majority of working people trapped on HB due to high rents. They may never be able to afford to buy doing those low paid jobs like caring, cleaning, emptying bins etc that are necessary for society to function. They need much more social housing to available to rent but that won't happen because the idiots in charge are fixated on buying because that's all they know.

Isitmebut · 26/09/2015 11:06

AllThePrettySeaHorses .... so rather than admit yet another Labour policy turn around, you want to go over 'stuff' we have gone over several times, when I answer it, and then you do a runner?

You really have to get your head around the fact that if one government passes to another a £153 billion annual government deficit/overspend and PFI debts on badly negotiated contract - the National Debt will go up until the cluster fuck of bad policies that contributed to that then TRENDING UPWARD annual budget deficit, with NO POLICIES IN PLACE TO ADDRESS IT - are sorted out.

Labour/socialist not only OPPOSED every cut to that £153 billion overspend in parliament and to anyone who had to listen, but until a day ago, ran elections promising to INCREASE the national debt, yes or no?

UK Debt to GDP means nothing when building an economy on increased government spending/debt/welfare/benefits/tax credits, on the proceeds of a financial bubble, which is why GDP FELL an unprecedented near 7% from 2008 to 2009 after the financial bubble burst - and those massively increased fixed costs over several years, are just left, hoping something will turn up.

The UK National Debt passed to Labour in 1997 was £403 billion, and the Conservatives got the economy back when it was £1 trillion, with that £153 bil annual overspend.

Still I can't blame you, that 'Osborne has increased the national debt' ignorance, was Farage's (an ex city trader who should know better) best Tory shot at the UKIP Conference yesterday.

Clearly a party without solid domestic policies for 25-years, struggling to find a purpose after an EU referendum, ignorantly trying to diss another party's record.

P.S. Twice the Eurozones growth, half their unemployment, a AAA rating with 2 of the 3 main credit rating agencies, as France got downgraded AGAIN last week by one saying that they have little chance of growth for years - Osborne's record is none to shabby on those beans.

AllThePrettySeahorses · 26/09/2015 13:21

Don't be a silly billy. I don't post and run - I do have a life you know and can't spend all my time on here waiting for frothers.

Osborne has indisputably mishandled the economy with swingeing cuts yet you seem to deny the debt has rocketed? The figures I found were £800 billion in 2010 and, I repeat, after the huge cost of QE. You need to get your head around that - the Tories managed to double this debt in 5 years on nothing - no infrastructure for example. There did not have to be such a steep upward trajectory in borrowing. Yet you castigate Labour for less debt with a genuine excuse for it.

Again, you have not presented any evidence whatsoever that the Tories are better suited to running the economy than Labour. And yes, I'm glad Labour opposed the cuts because when I walk around my city and libraries are shut, sure start centres are gone and yet again all the cuts fall on the poorest as opposed to the people who caused the global crash (little hint - not Brown) meaning that able, intelligent people - more so that the shower in charge, the majority of whom received the best education money can buy but seem to have a lot of 2nd class degrees - are stuck in poverty. And no, it wasn't perfect under Labour but at least people didn't starve. Austerity is pure, ideological class warfare and we have seen the effects of low tax, low welfare Tory policies in Greece until Syriza took power (although I imagine you'll probably blame them too for events that happened 5 years before they took charge).

Anyway, back to real life.

Isitmebut · 26/09/2015 15:51

The Conservatives in 1997 passed Labour a National Debt of £400 bil and an annual budget deficit that was budgeted to BALANCE by 2001/2, Brown promised to adhere to get elected and it did - it went tits after that - with Labour borrowing at least £30 bil a year BEFORE the crash despite massive increases in tax receipts, the proceeds of a financial bubble.

Osborne received a National Debt of £ 1 trillion, that Darling was expecting to increase the next year by the £167 bil he stated when putting up National Insurance - but was £153 bil by fiscal year end.

Osborne gave tax cuts to businesses and citizens not even in Labours vocab, plus other spending you don't want to see, which delayed the fall in the budget deficit - or do you disagree he did that?

Show me QE went onto the National debt figure -its on the BoE balance sheet with Gilts as collateral.

People didn't starve under Labour as any fool of a government can borrow and form the largest welfare state in Europe.

AllThePrettySeahorses · 30/09/2015 17:29

So you think that starving the most vulnerable in society due to ideology is acceptable? That David Clapson deserved to die because of the international banking sector's balls-up?

Labour overspend is a lie - GDP debt under Labour was generally lower than under the Tories until 2009 - previous to this, its highest level was 38.9% GDP in 2008. Under the Tories, from 1980, 11 years had higher GDP debt than this; the vast majority of these 11 years were (well) over 40%. The sky wasn't falling down then was it? Hmm Tory overspend, however, seems to be the actual truth.

And why did Gidiot cut CT? The UK already has one of the lowest CT rates in the west - the US has a marginal rate of 35% plus a local charge of up to 12% but there's no shortage of companies fighting for a slice of their market. If companies want lower CT, they could always bugger off to Saudi Arabia but no, they don't.

I note you still haven't fabricated anything else even remotely resembling an excuse for the doubling of the national debt in the last 5 years (not that you have to because you're not in government are you? but you generally do try to find somewhat tenuous attempts to defend Tory policy).

Tory cuts are pure ideology, shits and giggles.

Isitmebut · 30/09/2015 22:41

Labour STATED pre 2010 that their would be MORE tax rises and LESS spending cuts than the others - not no welfare cuts, in fact quite the opposite so get off your sanctimonious soap box;

March 2010; ”Alistair Darling: we will cut deeper than Margaret Thatcher”

October 2013; “Labour will be tougher than Tories on benefits, promises new welfare chief”

“Rachel Reeves vows to cut welfare bill and force long-term jobless to take up work offers or lose state support”

August 2013; “Labour to substantially cut benefits bill if it wins power in 2015”

”Labour will cut the benefits bill "quite substantially" and more effectively than the Tories if it wins power in 2015, the shadow work and pensions secretary said on Tuesday”

”Liam Byrne, a Labour frontbencher, said the coalition's welfare reforms were failing to cut costs enough, and called for cross-party talks to "save" some of the government's key schemes.”

  • Labour GDP was unsustainable how many times do I have to prove it; look at the definition of GDP, look at their huge increased expenditure on their fat government/welfare state, while the private sector was on its knees and the tax receipts from Brown's UK bank/debt bubble burst.

  • Corporate Tax was cut as all Labour had done to companies for 13-years was put taxes up (see the first 7-years below), there was the worst recession in 80-years and all they could expect from Labour AFTER 2010 was MORE taxes - businesses need to plan ahead several years so needed some basis to invest/hire Labour could never give - why am I not surprised a Labour minion doesn't 'get' that?

- Re the UK National Debt, where is your proof that QE is in the £1 trillion Labour passed to the Conservatives - and as an excuse why the £153 billion annual overspend Labour passed to the Conservatives in 2010 (Darling was expecting to go higher) - *what would you/Labour have cut from that accumulating £153 bil annual budget deficit contributing the National Debt that was SUPPORTING the fat, inefficient public sector/welfare state LABOUR built, QUICKER?
Isitmebut · 30/09/2015 22:48

P.S. All I remember from 2010 onwards, including Labour's 2015 General Election manifesto - was that LABOUR WANTED TO INCREASE THE NATIONAL DEBT - until yesterday when Corbyn/McDonnell said that THEY signed up to the cutting of the CURRENT £70 billion annual budget deficit, to flatten it by 2020.

So Labour keep moaning about cuts they knew they had to make, are NOW agreeing to another 4-years of cuts, or massive increases in taxes.

I can't wait for the detail, but then again, Corbyn's policies change every week, and we don't know if the Trade Unions have signed off on the cuts yet.

StitchesBurstinBath · 30/09/2015 23:12

Maybe Corybns policies are in a bit of a flux and he is still ironing out kinks. But the Tories have done a PROFOUND violence to this country- aimed at those least able to insulate themselves from it, those people who are voiceless.
Still, to his credit, I have not heard Cameron say 'we are all in it together' for a while.
Or big society either come to think about he still doing that?

Lemonfizzypop · 30/09/2015 23:30

Goodness me, way to bog down an Internet debate, no one is clicking your boring links.

Isitmebut · 30/09/2015 23:38

StitchesBurstinBath ... then YOU must be very proud of Labour's record, finding 3 million jobs/homes for new citizens while keeping our citizens down on benefits, and THIS housing record - as in the formation of new government quangos/employees, Labour spend well over £100 billion on them, rather than build homes they knew they had to build - but was half the rate of the previous Conservative government.

Shelter (2009); The housing crisis in numbers – and the need for spare bedrooms, never mind homes.

• Over 1.7 million households (around 5 million individuals) are currently waiting for social housing
• 7.4 million homes in England fail to meet the Government's Decent Homes Standard
• 1.4 million children in England live in bad housing. [3]
• In 2008/09, 654,000 households in England were overcrowded. [4]
• The number of new households is increasing faster than the number of house builds.

Where did all that Labour money go, and what do we have to show for it?

Isitmebut · 30/09/2015 23:41

Lemonfizzypop ... I know, why bother with the facts on Labour's record and what a 2010/2015 Labour government, when we can peddle anti Tory propaganda all day/night, right. Priceless.

Isitmebut · 30/09/2015 23:42

....I know, why bother with the facts on Labour's record and what a 2010/2015 Labour government would have done, ...

StitchesBurstinBath · 01/10/2015 00:31

What bothers me most about austerity is that certain groups are able to brace them selves from it while the many have their futures ripped away and no one hears the scream they make.
There was no need to go so gung-ho about it.
One is left with the impression George Osbourne was ejaculating in his pants about having an excuse to make cuts.
The people need a collective positive momentum pushing them forward, it bothers me the Torys did not recognise this.

Isitmebut · 01/10/2015 08:48

What bothers ME, is that if any (UK) government who massively increased government spending/benefits on the tax receipts of a financial bubble that burst - and the annual government budget deficit/overspend then reached £153 billion in 2010 - that cutting back the fixed costs of that overspend, IS CALLED 'AUSTERITY' by anyone with half a brain.

Or that people only like to look for 'screams' when unlimited benefits are no longer available those working would have needed a salary of over £32k to match, rather than those now back to work, due to Osbornes policies, when Labour had NO solutions to employment other than more taxes they admitted would COST jobs.

Isitmebut · 01/10/2015 08:58

Before May 2010; Mass UK private sector unemployment, far fewer tax receipts, a massively increased government payroll funded by taxes no longer coming in, a UK overspend Labour thought would be £167 billion in 2010 (trending higher) and UNLIMITED benefits - with Labour SAYING they will cut costs/benefits, but 2 1/2 years after the financial crash started they sat with thumbs-up-bums hoping the problems would go away. Marvellous.

Of course, having said that they would cut less but raise taxes more than the other parties, their inaction had nothing to do with that 2010 General Election and worried what 'action' might to to their vote.

Toadinthehole · 01/10/2015 09:48

I don't get this thread.

Wasn't it the Tory/Liberal government that ringfenced a whole heap of spending but - more importantly than that - did a whole heap of quantative easing, ie, the electronic age's equivalent of printing money. The fact they gave all this money to the banks looks like socialism for the rich. On the other hand, it also looks like a particularly astute bit of Keynsianism - enabling the banks to repair their balance sheets and introduce liquidity into the market by lending without causing hyperinflation.

no doubt there have been cuts but public spending consistently increasing since 2010 doesn't look like austerity to me, nor does the UK look like a particularly austere country.

And another point - it was the Tory/Liberal coalition that brought in the UK's first ever anti-tax-avoidance law. They also tightened up the rules on non-doms. The Gvt since 2010 appears to be a bit less relaxed about collecting tax than the Blair/Brown government before.


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