Recent polling for the general election has started to show the Tories slightly ahead of Labour. This can only be explained by "floating voters" starting to be swayed by the "message" that the Tories have to explain their economic plan, and the comparative incoherence of the Labour "message" (as well as people's opinion of each party's leader).
For this reason, it's worth spending some time to study the psychology of why the Tories are seen as "a safe bet", and exactly what type of "economic plan" they have.
First, some context: who exactly are "the Tories"? The modern Conservative Party stems from the old Tory party. The word "Tory" started being used after the English Civil War, to define people who supported the monarchy and represented the established gentry. This is in comparison to the "Whigs" (later to become the Liberals), who more represented the merchant class of the day, and thus in favour of greater controls on government and more effective accountability and transparency.
In this way, the modern-day Conservatives - who are essentially the same group of interests as three hundred years ago - could as well the called the aristocratic party, albeit with some cosmetic alterations to fit into the 21st century. While Margaret Thatcher arguably went the furthest to try and change that perception, the reality could never be hidden. The fact that the Prime Minister is of noble stock (more on his personality here), and many of the Cabinet went to "public school", says all we need to know about how their background influences their perception and judgement (more on that later).
The recent publicity given to the Conservatives' fundraiser, that was essentially a "who's-who" of the rich (and nefarious) elite, as well as some of the shamelessly out-of-touch antics that went on there (shopping trip with Theresa May, girls?), say more than any words could. This was the Conservatives demonstrated how the Conservatives behave on their "home turf", away from prying cameras (or so they thought). And in spite of such naked money-grubbing, many people still view the Conservatives as the most competent group to rule the country. Why?
Born to rule
It helps if, when you want to run government, you sound like you know what you are doing (even though you don't). In this area, the Conservative Party, in its leader and senior members, have a group of people who are nothing if not self-confident. One of the main reasons that Cameron became leader was his clear self-confidence in his own abilities, and his clear ability to appear statesman-like. He could talk for an hour without a tele-prompter (woo-hoo!), and knew how to "sound modern" and act like a human being. Cameron called himself the "heir to Blair", and made himself believe he was.
Since being in government, Cameron has always appeared the statesman. This explains why his leadership ratings are so much higher that Ed Miliband. The same can be said for George Osborne (who is really running the country): because he seems so self-confident, even all the people in economic institutions who criticize his policies (and are much more qualified than him) are like water off a ducks back.
These two "bright young things" are the ones who are running the show, and because they seem so self-assured at what they do, it is enough to convince those in the public, who don't have the time to check the facts. The Conservatives seem to know what they are doing; compared to them, Labour's plan is incoherent (even though it may be better!).
The character "The Joker" in The Dark Knight said that people don't panic if everything goes to plan, even if the plan is horrifying. To an extent, the same may be said of the Conservatives' economic plan.
What exactly is their plan?
As we are now looking at voting for a party that will govern for (potentially) the next five years, let's look at George Osborne's plan. As he reminded us late last year, most of the austerity measures have yet to happen. The Conservative plan is to shrink the state even further, to a point where it may not even be recognisable in its current form. Put another way, a vote for the Conservatives could be seen as a vote to destroy the UK as we know it.
Osborne's justification for this is that we can no longer "live beyond our means". But this term is highly-misleading at best, for this comes back to justifying austerity as a measure to rectify the previous Labour government's overspending. And this is based on a fabrication, or a willful twisting of the historical facts of the financial crisis. By creating this false narrative - in short, a lie - it creates a mindset in the public so that people see austerity as inevitable - or as Cameron has said "there is no alternative". In short, it is treating people as subjects.
If there is truly "no alternative", then why have elections at all (as Greece is finding out, to it's cost, at the moment)? This mentality goes back the moniker I gave to the Conservative Party - the "aristocratic party". In its heart of hearts, Britain (or more exactly, England) is a monarchy, and the centuries since the Civil War have never dimmed the instinctive respect people have for the ruling elite. Otherwise, why on earth do people find the trivialities of the royal family so distracting? The Conservatives know this. But in spite of the plethora of evidence that has damned the elite as a corrupt and instinctively self-serving institution, few people care enough (or feel powerful enough) to do anything about it.
This explains why the Conservative Party is so adept at modifying its outward appearance, and changing with the times. After all, Britain's politicians in the nineteenth century didn't give away suffrage out of the kindness of their hearts: it was a simply case of political expediency. As politicians at the time said, it was either give away some control away from the centre, or face a revolution. The Conservative Party - like the establishment it represents - has always worked to stay one step ahead of the game, predicting where future threats will come from, and seeing them off before they mature. While this hasn't always worked perfectly, the party has always done what is necessary to survive and protect vested interests - as the recent fundraiser demonstrated.
It is this self-assured quality that other politicians, and the public, naturally find disarming. But with self-confidence also comes complacency, and incompetence - and this government has been more incompetent than most.
The worst government ever?
The list of blunders of this government is analysed in the epilogue of the book "The Blunders Of Our Governments".
I talked briefly about the government's (i.e. George Osborne's) economic policy. Even according to the government's own criteria, it has failed - by a large margin - to do what it intended. Controlling the deficit is one of the government's key objectives, and it has utterly failed to do so. This is for the simple reason that those running country have little understanding about how government and the economy really works. They think they know how things work, but in reality have little idea. This is why economic experts think George Osborne's plans are, at best, rubbish, and at worst, downright dangerous for the economy.
The deficit has continued to increase because, for one thing, borrowing has not been controlled, and government tax receipts (such as from income tax) are massively down. This is the effect of the "Osborne recovery": where many jobs are low-paid, insecure and with poor employment rights. Under the Conservatives, this appears to be the "new normal", where the UK is ran like a developing country. Sadly, most people seem so distracted by the simple act of fending for themselves in this new, much more unforgiving, environment, that few have time to think who is to blame for it.
In a sense, the country seems to be in "recovery" not because of government policy, but in spite of government policy.
Osborne's other big blunder has been the "help to buy" policy, which every respected economic institution calls a potential economic disaster in the making. If continued into the next parliament, this scheme - which effectively subsidizes home ownership - could create, not only (yet) another housing bubble, but - due to inevitable, eventual rises in interest rates - create a mammoth negative equity crisis like twenty-five years ago. This scheme alone demonstrates how much Osborne cares about politicking, but cares little for proper economic analysis of policy.
The blunders continue with other parts of government, which often seems intent on making one bad decision after another.
In some ways, this government could also be called an "experimental government", as many of the ministers who run departments seem to use them as a means to try out new ideas - often without any serious appraisal beforehand. Of course, this idea is not new; what does seem unique is the scale of the "what about-ism" that many ministers possess, and also the purely ideological grounds for many of the decisions, without being based on proper evidence for its benefit to government finances. While Cameron publicly appears the statesman, his "hands-off" approach to controlling his ministers has turned departmental policy into a free-for-all. This is one of his (many) failings as a leader, despite the appearance of the contrary.
To name just a handful of examples, there was the re-organisation of the NHS masterminded by Andrew Lansley, which occurred without any consultation with those who worked in the sector. After some time, Lansley was demoted, but the policy (and all its chaos) has continued under his successor, Jeremy Hunt.
The raising of tuition fees to £9000 looks to have been a massive financial disaster for the government, because there is little likelihood of the government ever recouping much of the money from graduates. The purpose of increasing the fees was meant to make higher education better value-for-money while at the same time increasing the quality of university education, while the jury is still out on the latter (and who can say when we will know?), the former has been a complete cock-up, likely to cost the government untold sums of money in written-off loans in the future.
The government's much vaunted target to reduce immigration into the "tens of thousands" (which Cameron himself said the government should be held to account on at the end of its term) has seen immigration - at best - remain at much the same level it was at the end of the last parliament. Again, this was due to pleasing its party base, without any thought being put into the reality of what controls the UK government has over its border (regarding EU immigration, none). This is why some people have turned to UKIP. The government's targets here have been shown to be a laughing stock.
The reform of the Probation Service - while not on many people's radar - is one of huge consequence for the sector in question, and is - again - a victim to ministerial ideology and whim. The Probation Service is to be downsized and the probation services provided to lower and medium risk offenders will be open to tender from a wide number of companies. The service itself is - unsurprisingly - up in arms about these changes, which effectively privatise most of the sector. Many suspect that these private sector companies will cost more - they usually do - without there being any real evidence that this approach would have any beneficial effect on re-offending rates (and may well reduce the quality of the service).
The "bedroom tax" is a prime example of Conservatives in government having little idea about the reality of life for many people in the UK, as well as having no understanding of the UK's housing stock. It hasn't stopped them from making policy based on their out-of-touch understanding of reality. The result of this policy has been to cause a great deal of financial hardship for some of the most vulnerable in society, including the disabled, even - tragically - suicide. The idea of this policy was to make further savings, but the savings that have actually been made are much less than were originally anticipated.
The introduction of Universal Credit (UC) has been a disaster in all senses of the word, and has been a prime example of how not to do something. Again, this was another "project" due to ministerial whim. The fact that Iain Duncan Smith hasn't been sacked is a testament to the failings of David Cameron's leadership.
The reduction of the armed forces looks to be a blunder strategically, as well as being short-sighted and without using any proper analysis. This is most surprising (and worrying), considering that the Conservatives would have been assumed had good contacts with the armed forces' establishment.The reduction in the regular army was meant be replaced by a reserve army, but the numbers of actual recruits for the reserve army are currently running at more than five times less than the forecast numbers.
There are also the various fiascos of out-sourcing - for example, the A4e scandal, which completely missed its targets on the government help-to-work programme; more infamously, is the gross incompetence of G4S to provide security for the London Olympics, as well as costing the government a fortune.
The fact that the Conservatives still insist on using the private sector as the first port of call for service provision, in spite of the mass of evidence that few of these providers ever do the job either competently or prudently, tells you everything. It tells you that those in the Conservative Party who govern the country are incapable of making a judgement based on the facts, and will persist in doing the same thing again and again, even though it never works. Are they stupid, corrupt or both?
And people call them competent?
Sunday, February 22, 2015
Sunday, February 15, 2015
The War in Ukraine, European context and the Minsk II "ceasefire": Putin's power-play
A year ago, the "Euromaidan" protests in Ukraine against the pro-Russian Yanukovich government culminated in a mass shooting in the centre of Kiev, followed by the flight of Yanukovich himself. Since then, Ukraine has been the centre of a 21st-century power-play between the West and Russia.
While some people thought that such games of power, for control of "spheres of influence" were relegated to the European history books, the reality is that, in some ways, the ideological battles that dominated the twentieth century were themselves a historical aberration.
The twentieth century was unique in finding new methods to create mass human suffering, but it was also unique in finding "isms" to use as justification. The First World War was not, despite the use of modern warfare, any different from the pan-European wars of succession that occurred during the 18th century, in terms of the basic human causes. Like most wars, the First World War was sparked by nationalism (Serbian nationalism, in that case) but quickly spiralled out of control to include all other major European "players". The Balkans was the source of the conflict, but the Balkans had been the source of various European conflicts for nearly half a century prior to the First World War. Some people forget that.
"Right, where were we?"
The crisis in Ukraine has been a proxy war for the last eight months. The historical region of Ukraine has been a bone of some contention for at least the last two hundred and fifty years, ever since the Russians conquered the Crimea, creating the region now famously known as "Novorossiya".
The collapse of the Eastern Bloc saw the ideological battles that had dominated Europe (and the world) for most of the twentieth century come to a close. In that sense, with these aberrant ideological conflicts over, the "historical clock" was wound back to 1913, and old historical grievances were "re-discovered". Across the former Soviet Union and former Communist Eastern Europe, ethnic and nationalistic causes that had been on ice for the best part of a century, began to rapidly heat up - in some cases almost instantly. This explains why the wars in former Yugoslavia should perhaps be better seen almost as continuations of the First and Second Balkan Wars that immediately preceded the First World War: once Communism collapsed it was almost a case of: "right, where were we?"...
We could therefore re-phrase Francis Fukuyama's famous quote about the end of the Cold War being not so much the "end of history", but the "resumption of history".
This explains why the territory of modern-day independent Ukraine, itself a creation of the internal politics of the Soviet Union, found itself in an awkward geopolitical position. In effect it is - like Belgium, but much bigger - a country with two linguistic halves, and likewise with people looking in different directions. This was Communism trying to put history to one side for the sake of centralising authority - a very deliberate policy of divide and rule. This was carried out all across the various "republics" of the Soviet Union, including, for example, Kyrgyzstan and Uzbekistan (which explains the inter-ethnic conflict that occurred there some years ago).
In Ukraine, these issues were put on the back-burner during the nineties government of Kuchma, and it was only when the pro-West, "pro-democracy" opposition became more vocal that the problems with Moscow started, ten years ago.
Putin's playground
That is the context. Ukraine is a power-play, and it is clear that Vladimir Putin doesn't want to "let go" of Ukraine. For the past year, people have been trying to fathom the psychology of Putin, and what he is hoping to achieve. Does he want to occupy Ukraine? Does he want to divide Ukraine? Does he want to create a geographical "Greater Russia"?
By now, it seems evident that he does not want to invade every neighbouring country that has a (small) Russian-speaking population. Comparisons with Hitler are unhelpful, crude and very wide of the mark. Vladimir Putin's mind is made of different stuff - he is much more the calculating opportunist, with Ukraine conveniently serving as his "playground". In essence, he does whatever he thinks he can reasonably get away with. And because he has (rightly) calculated that no-one in the West will seriously want to stand up to him militarily, this is why he sends troops and hardware into Eastern Ukraine.
This was evident back when there was the war with Georgia in 2008. No-one in the West wanted to intervene militarily. It was the diplomatic intervention of France's Sarkozy that helped bring the conflict to a close, and prevent the possibility that Russia would drive its tanks all the way to Georgia's Presidential Palace in Tblisi.
The efforts of Merkel and Hollande in "Minsk II" are noble, but pitiful by comparison. By now, Putin knows that no-one will stop his actions in Ukraine. While the sanctions are hurting Russia, Putin is able to turn this domestically into a "blame the West" action; thus, whatever the West does, Putin wins.
With Ukraine, Putin is really the "puppet-master", able to dictate events. His hope, we assume, is that by dragging out the conflict in Eastern Ukraine, it destablises and destroys the popularity of the Poroshenko government, until he is removed from power, one way or another. Who replaces him is up to debate, but as long as the war continues, and the "Donbass" remains out of Kiev's control, Putin has a mill-stone to hang around the Kiev government's neck, preventing it from ever being truly independent.
"Mr Freeze"?
The result of the Georgia war was a "frozen conflict" in the two break-away regions of Georgia, Abkhazia and South Ossetia. These are now effectively Russian satellites, and since then the then Georgian President, Saakashvili, has gone and been replaced by one who happens to be more amenable to Moscow. Georgia no longer seriously talks about joining NATO or the EU - and even if they did, no-one in the West would ever take up the proposition.
Putin created the "Eurasian Union" to rival the EU. Indeed, it was this institution that Yanukovich had originally agreed to join in late 2013, that was one of the reasons for the protests in the first place. This Russia-centred economic association is another of Putin's power-plays. Initially with just two other members - Belarus and Kazakhstan - it now also includes Armenia, and is likely to include Kyrgyzstan in the near future.
The latter two are both economically reliant on Russia as much of their population are migrant workers in Russia, but also have ethnic problems of their own (Kyrgyzstan's mentioned earlier). Armenia has been locked in a "frozen conflict" with its neighbour Azerbaijan over Armenia's occupation of Karabakh for more than twenty years.
Obviously, this issue pre-dates Putin's rise to power, but the situation in Georgia does not, with the 2008 war seen as a "resolution", and effectively a method of keeping Georgia under Moscow's thumb. With the two "occupied territories", no-one in the West will touch Georgia's status with a barge-pole.
Ukraine now resembles the situation in Georgia, except that Ukraine is a far bigger country, and is part of Europe. With Russia's annexation of Crimea, and Eastern Ukraine locked in warfare over the status of the "Donbass", Ukraine's economy is in free-fall. Ukraine is literally paying the price for going against the Kremlin. As mentioned earlier, having the mill-stone of the Donbass War around Ukraine's neck is Putin's way of keeping the country from escaping Russia's orbit.
Having plucked Ukraine's prize fruit, Crimea, from under their noses, Putin is now clamping a ball and chain around Ukraine's feet, in the form of an unresolved conflict in the "Donbass".
While some people thought that such games of power, for control of "spheres of influence" were relegated to the European history books, the reality is that, in some ways, the ideological battles that dominated the twentieth century were themselves a historical aberration.
The twentieth century was unique in finding new methods to create mass human suffering, but it was also unique in finding "isms" to use as justification. The First World War was not, despite the use of modern warfare, any different from the pan-European wars of succession that occurred during the 18th century, in terms of the basic human causes. Like most wars, the First World War was sparked by nationalism (Serbian nationalism, in that case) but quickly spiralled out of control to include all other major European "players". The Balkans was the source of the conflict, but the Balkans had been the source of various European conflicts for nearly half a century prior to the First World War. Some people forget that.
"Right, where were we?"
The crisis in Ukraine has been a proxy war for the last eight months. The historical region of Ukraine has been a bone of some contention for at least the last two hundred and fifty years, ever since the Russians conquered the Crimea, creating the region now famously known as "Novorossiya".
The collapse of the Eastern Bloc saw the ideological battles that had dominated Europe (and the world) for most of the twentieth century come to a close. In that sense, with these aberrant ideological conflicts over, the "historical clock" was wound back to 1913, and old historical grievances were "re-discovered". Across the former Soviet Union and former Communist Eastern Europe, ethnic and nationalistic causes that had been on ice for the best part of a century, began to rapidly heat up - in some cases almost instantly. This explains why the wars in former Yugoslavia should perhaps be better seen almost as continuations of the First and Second Balkan Wars that immediately preceded the First World War: once Communism collapsed it was almost a case of: "right, where were we?"...
We could therefore re-phrase Francis Fukuyama's famous quote about the end of the Cold War being not so much the "end of history", but the "resumption of history".
This explains why the territory of modern-day independent Ukraine, itself a creation of the internal politics of the Soviet Union, found itself in an awkward geopolitical position. In effect it is - like Belgium, but much bigger - a country with two linguistic halves, and likewise with people looking in different directions. This was Communism trying to put history to one side for the sake of centralising authority - a very deliberate policy of divide and rule. This was carried out all across the various "republics" of the Soviet Union, including, for example, Kyrgyzstan and Uzbekistan (which explains the inter-ethnic conflict that occurred there some years ago).
In Ukraine, these issues were put on the back-burner during the nineties government of Kuchma, and it was only when the pro-West, "pro-democracy" opposition became more vocal that the problems with Moscow started, ten years ago.
Putin's playground
That is the context. Ukraine is a power-play, and it is clear that Vladimir Putin doesn't want to "let go" of Ukraine. For the past year, people have been trying to fathom the psychology of Putin, and what he is hoping to achieve. Does he want to occupy Ukraine? Does he want to divide Ukraine? Does he want to create a geographical "Greater Russia"?
By now, it seems evident that he does not want to invade every neighbouring country that has a (small) Russian-speaking population. Comparisons with Hitler are unhelpful, crude and very wide of the mark. Vladimir Putin's mind is made of different stuff - he is much more the calculating opportunist, with Ukraine conveniently serving as his "playground". In essence, he does whatever he thinks he can reasonably get away with. And because he has (rightly) calculated that no-one in the West will seriously want to stand up to him militarily, this is why he sends troops and hardware into Eastern Ukraine.
This was evident back when there was the war with Georgia in 2008. No-one in the West wanted to intervene militarily. It was the diplomatic intervention of France's Sarkozy that helped bring the conflict to a close, and prevent the possibility that Russia would drive its tanks all the way to Georgia's Presidential Palace in Tblisi.
The efforts of Merkel and Hollande in "Minsk II" are noble, but pitiful by comparison. By now, Putin knows that no-one will stop his actions in Ukraine. While the sanctions are hurting Russia, Putin is able to turn this domestically into a "blame the West" action; thus, whatever the West does, Putin wins.
With Ukraine, Putin is really the "puppet-master", able to dictate events. His hope, we assume, is that by dragging out the conflict in Eastern Ukraine, it destablises and destroys the popularity of the Poroshenko government, until he is removed from power, one way or another. Who replaces him is up to debate, but as long as the war continues, and the "Donbass" remains out of Kiev's control, Putin has a mill-stone to hang around the Kiev government's neck, preventing it from ever being truly independent.
"Mr Freeze"?
The result of the Georgia war was a "frozen conflict" in the two break-away regions of Georgia, Abkhazia and South Ossetia. These are now effectively Russian satellites, and since then the then Georgian President, Saakashvili, has gone and been replaced by one who happens to be more amenable to Moscow. Georgia no longer seriously talks about joining NATO or the EU - and even if they did, no-one in the West would ever take up the proposition.
Putin created the "Eurasian Union" to rival the EU. Indeed, it was this institution that Yanukovich had originally agreed to join in late 2013, that was one of the reasons for the protests in the first place. This Russia-centred economic association is another of Putin's power-plays. Initially with just two other members - Belarus and Kazakhstan - it now also includes Armenia, and is likely to include Kyrgyzstan in the near future.
The latter two are both economically reliant on Russia as much of their population are migrant workers in Russia, but also have ethnic problems of their own (Kyrgyzstan's mentioned earlier). Armenia has been locked in a "frozen conflict" with its neighbour Azerbaijan over Armenia's occupation of Karabakh for more than twenty years.
Obviously, this issue pre-dates Putin's rise to power, but the situation in Georgia does not, with the 2008 war seen as a "resolution", and effectively a method of keeping Georgia under Moscow's thumb. With the two "occupied territories", no-one in the West will touch Georgia's status with a barge-pole.
Ukraine now resembles the situation in Georgia, except that Ukraine is a far bigger country, and is part of Europe. With Russia's annexation of Crimea, and Eastern Ukraine locked in warfare over the status of the "Donbass", Ukraine's economy is in free-fall. Ukraine is literally paying the price for going against the Kremlin. As mentioned earlier, having the mill-stone of the Donbass War around Ukraine's neck is Putin's way of keeping the country from escaping Russia's orbit.
Having plucked Ukraine's prize fruit, Crimea, from under their noses, Putin is now clamping a ball and chain around Ukraine's feet, in the form of an unresolved conflict in the "Donbass".
Sunday, February 8, 2015
Cameron versus Milliband: why business hates (and fears) Labour
In the last week or so, we have seen a barrage of media stories about how Labour is "anti-business" and has few supporters from big business. The example of the head of Boots - who lives abroad for tax reasons - was emblematic.
The other side of the coin is simply that business is anti-Labour. This can be starkly demonstrated by David Cameron's piece in the Telegraph, which was a wonderful example of seeing his world-view, such as it is.
Cameron's piece was a snapshot also of his personality in some ways (more on that here), and how he sees Labour as representing "chaos" compared to the order and competence of his government. When reading this article, it's difficult to see if this is plain electioneering garbage or if Cameron genuinely believes in what he says (the latter would be almost more worrying, though).
A statement of intent (or willful self-delusion)
Why is the main thrust of such garbage? Let's look at some examples.
Cameron says "Ours is a nation that is the best place to do business ", which translates as really meaning, "ours is a nation that is the best place for foreign companies to make lots of money by having a badly-paid workforce with poor union representation and avoiding paying tax through helpfully-complex tax arrangements" In other words, under Cameron, the UK is a developed country whose economy is technically thriving, but whose economic model really resembles a third world country. The jobs which have been created are mostly low-paid, many of the paid so little they don't even qualify to pay income tax.
This is why the government's debt is still increasing in spite of the appearance of an economic recovery: the money being generated is literally going in the wrong direction - into the foreign (tax free) bank accounts of all the businesses that Cameron and the Conservatives and not into the government's coffers. The government's tax receipts are down massively for this reason, but those in government seem to think that their plan is working. Well, if their plan was to massively reduce the government's money coming in while at the same time reducing government spending, then it's worked perfectly!
Cameron also says the UK under his government is "A nation where we have the businesses paying the taxes we need, so we can cut people’s taxes "; a statement so plainly disingenuous to be laughable. As we have seen, the sadistic drive that the government has to reduce spending on benefits may have clawed back a small amount of money, but the amount the government loses each year through businesses avoiding tax dwarfs any money lost on paying "too much" on benefits by an enormous margin. But as we have seen, because the Conservatives are the "friends of business", this means turning a blind eye to blatantly deceptive and immoral practices that deny the government many billions each year. In reality, this attitude is simply financially self-defeating, as we are now seeing from the lack of money coming in in tax receipts to the treasury. This economic "blind spot" marks the Conservatives as having a plan that not only useless, but also idiotic. The people whose taxes he is cutting (or helping to avoid entirely) are the same businesses that are creating a working regime of zero-hour contracts, and insecure, poorly-paid jobs. This is the "Cameron Economy", where the real winners are the ones who don't pay tax.
How can a government properly function if it is not serious about collecting tax?
Creating a false narrative
The government's explanation for why the economic crisis happened is also - to put it politely - novel. Another way of describing the Conservatives' explanation for the financial crisis is "complete garbage".
Listen to government ministers on BBC's Question Time (Sajid Javid, the government's culture minister, for example), and they tell you that they are being responsible and paying down the debt left behind by Labour overspending. This is an interesting statement, but happens to be total nonsense.
Yes, when Labour left office there was a massive government debt, but that debt was not created by massive, irresponsible government spending.
As everyone may remember, there was an international financial crisis that was caused by massively irresponsible and amoral behavior by banks. The USA and the UK were especially-vulnerable precisely because successive Labour and Conservative governments had centred their economic model on financial markets, at the expense of the wider economy. When the banks crashed, the government bailed out the banks by taking on the trillions of debt - so that debt suddenly became the government's debt. The "austerity" that exists in the UK is the government (i.e. the taxpayer) paying-off the debt that was caused by the banks. Why on earth the taxpayer should pay for the banks' idiocy is another question, and the ultimate "con" that people have been buying for five years. But that's the first reason for the debt.
The second reason is that when the world economy collapsed, as the UK's did, unemployment shot up and consumer spending shriveled. These two things caused a large reduction in the government's tax receipts, which accounted for the government's debt going up i.e. when your spending stays the same, and your revenue goes down, you get a debt. As a result, Labour borrowed more to pay for this. In a different way, George Osborne - who is really running the show - is experiencing this truth now with the recovery that doesn't actually give any extra money to the government.
This false narrative explains why the Conservatives need people to believe that the financial crisis was somehow Labour's fault, when really the government had very little to do with the problem. If anything, it was government's lack of control of the financial industry and the regime of no rules that caused the problem. This was the regime that the Conservatives have always supported - the same regime that caused the financial crisis.
This also explains why Labour are being targeted now by business. Having made lots of money by encouraging the government to create a "light-touch" tax regime and labour market - the very same thinking in the financial industry that caused the crisis - these business leaders are terrified of the thought that they might have to actually play by the rules if Labour return to government. This is the reality.
What Labour propose is nothing terrifying or chaotic as Cameron says in his article: it is simply wanting business to play by the rules and pay their taxes transparently like a responsible part of society. But that's the problem: many people in business treat society as something to be abused, be it the tax system or their workforce. The neo-liberal economic orthodoxy of the past thirty-five years has been responsible for turning the UK now into a pseudo-developing country, at least in terms of how it is run.
Because people are accepting the false narrative and false choice about there being "no alternative" to austerity, this is why business leaders and Conservative ministers are able to turn the UK economy into a race to the bottom. There are other alternatives, and it's only by blowing the false narrative can the UK economy change tack. People must not be awed by business into thinking whatever is good for them, is also good for the country. The evidence - and the government tax receipts - suggest otherwise.
The other side of the coin is simply that business is anti-Labour. This can be starkly demonstrated by David Cameron's piece in the Telegraph, which was a wonderful example of seeing his world-view, such as it is.
Cameron's piece was a snapshot also of his personality in some ways (more on that here), and how he sees Labour as representing "chaos" compared to the order and competence of his government. When reading this article, it's difficult to see if this is plain electioneering garbage or if Cameron genuinely believes in what he says (the latter would be almost more worrying, though).
A statement of intent (or willful self-delusion)
Why is the main thrust of such garbage? Let's look at some examples.
Cameron says "Ours is a nation that is the best place to do business ", which translates as really meaning, "ours is a nation that is the best place for foreign companies to make lots of money by having a badly-paid workforce with poor union representation and avoiding paying tax through helpfully-complex tax arrangements" In other words, under Cameron, the UK is a developed country whose economy is technically thriving, but whose economic model really resembles a third world country. The jobs which have been created are mostly low-paid, many of the paid so little they don't even qualify to pay income tax.
This is why the government's debt is still increasing in spite of the appearance of an economic recovery: the money being generated is literally going in the wrong direction - into the foreign (tax free) bank accounts of all the businesses that Cameron and the Conservatives and not into the government's coffers. The government's tax receipts are down massively for this reason, but those in government seem to think that their plan is working. Well, if their plan was to massively reduce the government's money coming in while at the same time reducing government spending, then it's worked perfectly!
Cameron also says the UK under his government is "A nation where we have the businesses paying the taxes we need, so we can cut people’s taxes "; a statement so plainly disingenuous to be laughable. As we have seen, the sadistic drive that the government has to reduce spending on benefits may have clawed back a small amount of money, but the amount the government loses each year through businesses avoiding tax dwarfs any money lost on paying "too much" on benefits by an enormous margin. But as we have seen, because the Conservatives are the "friends of business", this means turning a blind eye to blatantly deceptive and immoral practices that deny the government many billions each year. In reality, this attitude is simply financially self-defeating, as we are now seeing from the lack of money coming in in tax receipts to the treasury. This economic "blind spot" marks the Conservatives as having a plan that not only useless, but also idiotic. The people whose taxes he is cutting (or helping to avoid entirely) are the same businesses that are creating a working regime of zero-hour contracts, and insecure, poorly-paid jobs. This is the "Cameron Economy", where the real winners are the ones who don't pay tax.
How can a government properly function if it is not serious about collecting tax?
Creating a false narrative
The government's explanation for why the economic crisis happened is also - to put it politely - novel. Another way of describing the Conservatives' explanation for the financial crisis is "complete garbage".
Listen to government ministers on BBC's Question Time (Sajid Javid, the government's culture minister, for example), and they tell you that they are being responsible and paying down the debt left behind by Labour overspending. This is an interesting statement, but happens to be total nonsense.
Yes, when Labour left office there was a massive government debt, but that debt was not created by massive, irresponsible government spending.
As everyone may remember, there was an international financial crisis that was caused by massively irresponsible and amoral behavior by banks. The USA and the UK were especially-vulnerable precisely because successive Labour and Conservative governments had centred their economic model on financial markets, at the expense of the wider economy. When the banks crashed, the government bailed out the banks by taking on the trillions of debt - so that debt suddenly became the government's debt. The "austerity" that exists in the UK is the government (i.e. the taxpayer) paying-off the debt that was caused by the banks. Why on earth the taxpayer should pay for the banks' idiocy is another question, and the ultimate "con" that people have been buying for five years. But that's the first reason for the debt.
The second reason is that when the world economy collapsed, as the UK's did, unemployment shot up and consumer spending shriveled. These two things caused a large reduction in the government's tax receipts, which accounted for the government's debt going up i.e. when your spending stays the same, and your revenue goes down, you get a debt. As a result, Labour borrowed more to pay for this. In a different way, George Osborne - who is really running the show - is experiencing this truth now with the recovery that doesn't actually give any extra money to the government.
This false narrative explains why the Conservatives need people to believe that the financial crisis was somehow Labour's fault, when really the government had very little to do with the problem. If anything, it was government's lack of control of the financial industry and the regime of no rules that caused the problem. This was the regime that the Conservatives have always supported - the same regime that caused the financial crisis.
This also explains why Labour are being targeted now by business. Having made lots of money by encouraging the government to create a "light-touch" tax regime and labour market - the very same thinking in the financial industry that caused the crisis - these business leaders are terrified of the thought that they might have to actually play by the rules if Labour return to government. This is the reality.
What Labour propose is nothing terrifying or chaotic as Cameron says in his article: it is simply wanting business to play by the rules and pay their taxes transparently like a responsible part of society. But that's the problem: many people in business treat society as something to be abused, be it the tax system or their workforce. The neo-liberal economic orthodoxy of the past thirty-five years has been responsible for turning the UK now into a pseudo-developing country, at least in terms of how it is run.
Because people are accepting the false narrative and false choice about there being "no alternative" to austerity, this is why business leaders and Conservative ministers are able to turn the UK economy into a race to the bottom. There are other alternatives, and it's only by blowing the false narrative can the UK economy change tack. People must not be awed by business into thinking whatever is good for them, is also good for the country. The evidence - and the government tax receipts - suggest otherwise.
Wednesday, February 4, 2015
The SNP surge and the 2015 General Election: what this means for UK politics
This time last year, no-one was seriously predicting that the SNP could wipe the board in the general election this year, and gain the majority of Scottish seats in Westminster. But now only a few months away from the election in May, barring some unexpected, massive, late recovery for Labour, this looks like the most likely scenario, according to analysis.
Analysts have said that the polling figures in Scotland seem so out-of-kilter with past polls to stretch credulity to (and beyond) breaking point. As has been said, if the results were an accurate view of the political situation in Scotland, it would have to indicate a sudden and massive sea-change in opinion. Few seem to be able to accept the truth staring them in the face: that there has, indeed, been a sudden, transformative, change in Scottish politics. It's just that these kind of things don't happen very often - but they do happen from time to time.
And now is clearly one of those times when there is a once-in-a-generation shift in politics. They do, indeed, happen: the last time it happened nationally across the UK was in 1997, and 1979 prior to that, and again going back to 1945. In 2015 we're facing the birth of a messy, five-way political scene, that is bound to put huge pressure on the existing voting system if the situation remains as it is for more than one parliament.
Reaching the tipping point
In Scotland's case, the collapse of Labour's support has not been as sudden as people think, but has been more gradual in Holyrood; it has simply gone largely unnoticed in Westminster, due to the complacency of the Westminster establishment. The SNP have been in government in Scotland now for many years, with a third term looking a shoo-in next year. They have been gradually eating away at Labour's "natural" majority, so much that by the time of the referendum last year, 45% voted "yes". With so many of those voters being from places like Glasgow and Dundee, what has clearly happened is those Labour supporters who voted "yes" last year, have now simply switched their allegiance to the SNP.
Rationally, this makes sense, as the SNP was the only large party that supported "yes". Somehow, after voting "yes" for independence, Labour grandees expected their "natural" supporters to go back to voting for "no"-supporting Labour in the election, This attitude reflects a ignorant disregard for the once-in-a-lifetime effect that a referendum can have on the politics of a nation, and a "blind spot" for not realising the dangerous position it put Labour in after the referendum. It's unclear if the SNP saw the beneficial, post-referendum, side-effects of this either, but they are reaping the rewards now regardless.
But what this means politically is nothing less than an earthquake north of the border, for whereas ten years ago Labour were around twenty points ahead of the SNP in Scotland, that situation has now reversed. The "45" who voted "yes" in the referundum are now the "45" who will probably vote for the SNP in the Westminster election. This utterly changes the political scene, in a way that politicians could have scarcely imagined.
Now that the SNP are averaging percentages in the forties in many constituencies, and are comfortably ahead of Labour or the Lib Dems in many areas, Westminster's FPTP system now suddenly works in the favour. This is the oddity of the FPTP system and how it can bring about freakish and sudden change. Once a party reaches a "tipping point", they create a "teflon" quality within the system: this explains why the Lib Dems may be polling less than ten per cent of the vote, yet still end up retaining many of their MPs. Of course, the other extreme is now facing them in Scotland: that they may lose almost all of their MPs thanks to the SNP surge.
So the FPTP system can be equally a blessing and a curse, depending on the circumstances. As Labour may well find out, if all constituencies vote the same way, it means that one party ends up with all the seats, regardless of how unfair this may seem. That's just the way the system works!
For the SNP right now, they are doubly-blessed with a surge in popularity that is giving them a comfortable hold over Holyrood, and the likelihood of having a large cohort of MPs (though "enforcers" might be a more appropriate word!) to take down to Westminster. Which leaves us thinking about where this leaves Scottish relations with Westminster...
A "rough wooing" in reverse?
Whoever forms the next government after the election. they are facing a huge headache if the SNP has the predicted number of MPs that polling currently predicts. Modest estimates are that they could win two dozen seats; higher estimates (yet still plausible, given the polling figures) talk about forty or more MPs. These are extraordinary numbers, but again, given the unique effect of the referendum, these are extraordinary times.
Tories may well be thinking they could retain power by default, with the SNP surge depriving Labour of up to three dozen or so MPs. They should be careful for what they wish for, because whichever party ends up being the biggest number of MPs, they will almost certainly not have a majority (even with Lib Dem support - more on that in a moment). and any possible coalition looks much shakier than the one formed after the 2010 election.
Here's why. Polling across the country suggests that the Conservatives are likely to lose seats to Labour in many marginals; given how historically-badly Labour did in 2010 this kind of recovery is no surprise, and their polling figures are healthier than the Tories in these battlegrounds. So the most likely party the Tories are to take MPs from is the LibDems - the very party they would want to be in coalition with. In other words, they would - at best - end up with similar numbers of MPs, but with far fewer LibDems to form a coalition. Ergo, they could not form a majority as a two-party coalition.
So the Tories have their own strategic problems, and that's without factoring-in the "UKIP effect". Apart from the LibDems, no party of any size would want to do business with them.
Labour has its own problems, due to the SNP and the combined effect in England of the UKIP-Green insurgency. So while they would expect take seats from the Conservatives, due to losing seats in Scotland to the SNP, they may well end up in only a modestly-better position than now, and short of a majority, even if they did a deal with the LibDems, as mentioned above.
This scenario, looking very likely at the moment, gives the SNP the whip hand. The question is, what kind of constitutional nightmare does this scenario result in? This is politically (and constitutionally) uncharted territory. Both main parties will be locked in squabbles over how to deal with the SNP's cohort of MPs post-election. And how would they form a government? Will the Scottish "tail" be wagging the English "dog"?
The easiest option for parliament would be to call a fresh election if the situation is looking untenable, but what guarantees are there that the result would be much different? And would there be an appetite for even more politicking?
In this potentially-febrile atmosphere, relations between Scotland and England could make the tensions during the referendum campaign seem trivial and light-hearted by comparison. The potential for venomous disagreements and shady scheming is large. But this is the situation that the UK may well face, with no-one in Westminster having a real clue what to do about it.
Calls for another Scottish referendum may come, and not only from the Scots. The UK may still be split up due to the in-fighting between the various components of the union. Whatever happens, it certainly will not be boring...
Analysts have said that the polling figures in Scotland seem so out-of-kilter with past polls to stretch credulity to (and beyond) breaking point. As has been said, if the results were an accurate view of the political situation in Scotland, it would have to indicate a sudden and massive sea-change in opinion. Few seem to be able to accept the truth staring them in the face: that there has, indeed, been a sudden, transformative, change in Scottish politics. It's just that these kind of things don't happen very often - but they do happen from time to time.
And now is clearly one of those times when there is a once-in-a-generation shift in politics. They do, indeed, happen: the last time it happened nationally across the UK was in 1997, and 1979 prior to that, and again going back to 1945. In 2015 we're facing the birth of a messy, five-way political scene, that is bound to put huge pressure on the existing voting system if the situation remains as it is for more than one parliament.
Reaching the tipping point
In Scotland's case, the collapse of Labour's support has not been as sudden as people think, but has been more gradual in Holyrood; it has simply gone largely unnoticed in Westminster, due to the complacency of the Westminster establishment. The SNP have been in government in Scotland now for many years, with a third term looking a shoo-in next year. They have been gradually eating away at Labour's "natural" majority, so much that by the time of the referendum last year, 45% voted "yes". With so many of those voters being from places like Glasgow and Dundee, what has clearly happened is those Labour supporters who voted "yes" last year, have now simply switched their allegiance to the SNP.
Rationally, this makes sense, as the SNP was the only large party that supported "yes". Somehow, after voting "yes" for independence, Labour grandees expected their "natural" supporters to go back to voting for "no"-supporting Labour in the election, This attitude reflects a ignorant disregard for the once-in-a-lifetime effect that a referendum can have on the politics of a nation, and a "blind spot" for not realising the dangerous position it put Labour in after the referendum. It's unclear if the SNP saw the beneficial, post-referendum, side-effects of this either, but they are reaping the rewards now regardless.
But what this means politically is nothing less than an earthquake north of the border, for whereas ten years ago Labour were around twenty points ahead of the SNP in Scotland, that situation has now reversed. The "45" who voted "yes" in the referundum are now the "45" who will probably vote for the SNP in the Westminster election. This utterly changes the political scene, in a way that politicians could have scarcely imagined.
Now that the SNP are averaging percentages in the forties in many constituencies, and are comfortably ahead of Labour or the Lib Dems in many areas, Westminster's FPTP system now suddenly works in the favour. This is the oddity of the FPTP system and how it can bring about freakish and sudden change. Once a party reaches a "tipping point", they create a "teflon" quality within the system: this explains why the Lib Dems may be polling less than ten per cent of the vote, yet still end up retaining many of their MPs. Of course, the other extreme is now facing them in Scotland: that they may lose almost all of their MPs thanks to the SNP surge.
So the FPTP system can be equally a blessing and a curse, depending on the circumstances. As Labour may well find out, if all constituencies vote the same way, it means that one party ends up with all the seats, regardless of how unfair this may seem. That's just the way the system works!
For the SNP right now, they are doubly-blessed with a surge in popularity that is giving them a comfortable hold over Holyrood, and the likelihood of having a large cohort of MPs (though "enforcers" might be a more appropriate word!) to take down to Westminster. Which leaves us thinking about where this leaves Scottish relations with Westminster...
A "rough wooing" in reverse?
Whoever forms the next government after the election. they are facing a huge headache if the SNP has the predicted number of MPs that polling currently predicts. Modest estimates are that they could win two dozen seats; higher estimates (yet still plausible, given the polling figures) talk about forty or more MPs. These are extraordinary numbers, but again, given the unique effect of the referendum, these are extraordinary times.
Tories may well be thinking they could retain power by default, with the SNP surge depriving Labour of up to three dozen or so MPs. They should be careful for what they wish for, because whichever party ends up being the biggest number of MPs, they will almost certainly not have a majority (even with Lib Dem support - more on that in a moment). and any possible coalition looks much shakier than the one formed after the 2010 election.
Here's why. Polling across the country suggests that the Conservatives are likely to lose seats to Labour in many marginals; given how historically-badly Labour did in 2010 this kind of recovery is no surprise, and their polling figures are healthier than the Tories in these battlegrounds. So the most likely party the Tories are to take MPs from is the LibDems - the very party they would want to be in coalition with. In other words, they would - at best - end up with similar numbers of MPs, but with far fewer LibDems to form a coalition. Ergo, they could not form a majority as a two-party coalition.
So the Tories have their own strategic problems, and that's without factoring-in the "UKIP effect". Apart from the LibDems, no party of any size would want to do business with them.
Labour has its own problems, due to the SNP and the combined effect in England of the UKIP-Green insurgency. So while they would expect take seats from the Conservatives, due to losing seats in Scotland to the SNP, they may well end up in only a modestly-better position than now, and short of a majority, even if they did a deal with the LibDems, as mentioned above.
This scenario, looking very likely at the moment, gives the SNP the whip hand. The question is, what kind of constitutional nightmare does this scenario result in? This is politically (and constitutionally) uncharted territory. Both main parties will be locked in squabbles over how to deal with the SNP's cohort of MPs post-election. And how would they form a government? Will the Scottish "tail" be wagging the English "dog"?
The easiest option for parliament would be to call a fresh election if the situation is looking untenable, but what guarantees are there that the result would be much different? And would there be an appetite for even more politicking?
In this potentially-febrile atmosphere, relations between Scotland and England could make the tensions during the referendum campaign seem trivial and light-hearted by comparison. The potential for venomous disagreements and shady scheming is large. But this is the situation that the UK may well face, with no-one in Westminster having a real clue what to do about it.
Calls for another Scottish referendum may come, and not only from the Scots. The UK may still be split up due to the in-fighting between the various components of the union. Whatever happens, it certainly will not be boring...
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