Monday, 23 October 2017

Tory MPs are struggling to explain the abrupt Tory conversion to Corbynite investment economics


The Tory party have decided to openly pilfer one of Jeremy Corbyn's core economic policies, and in order to defend this astounding U-turn on borrowing to fund public investment, they've resorted to bizarre displays of meaningless economically illiterate jabbering.

This latest screeching U-turn came when the Tory Communities Minister Sajid Javid announced that the government should borrow money to invest in building affordable housing.

The reason this investment strategy is such a massive U-turn is that it completely contradicts the insane Tory austerity narrative, which relies on the economically illiterate fairy story that the only way to balance the national budget is to impose harsh across the board cuts in spending on public infrastructure and services.

After Ed Miliband and Ed Balls torpedoed Labour's chances of winning the 2015 General Election with their insipid and catastrophically uninspiring "austerity-lite" campaign, Jeremy Corbyn was elected Labour leader and began to inject some actual economic sense into the political debate, including a clear manifesto commitment to invest money in the construction of affordable housing.

Under Jeremy Corbyn Labour have never suggested that the national finances can be resolved by just turning on the money taps and splurging on whatever, they've proposed a costed programme of investment in things that actually generate more economic activity in the long run than they cost. Stuff like affordable housing, public infrastructure, transport, and education.

The backbone of Labour's economic policy is the concept of the investment based recovery. The idea that you can't cure the economy by wildly slashing spending as if all forms of government investment are essentially waste, but that it takes a process of identifying which areas of spending create good returns on investment to invest more in, while restricting spending cuts to areas that create poor returns on investment.

It's astounding to see the Tory party come so late to the investment based recovery game after imposing their socially and economically ruinous austerity dogma for seven torturous years and overseeing the lowest rate of house building since the early 1920s.

By suddenly admitting that the nation needs to borrow to invest in affordable housing, the Tories are essentially demonstrating that the critics of their ruinous austerity agenda were absolutely right all along. And they're also proving that their ideologically driven cuts to housing, infrastructure spending, and public services were driven purely by ideology, not by need.

We all know that had Jeremy Corbyn and the Labour Party announced a strategy of borrowing some £50 billion to create affordable housing last year, the Tories and their bully boys in the right-wing press would undoubtedly have all shrieked in unison "reckless spendthrift Marxism", but because this kind of investment economics is suddenly a Tory policy, they're completely wrong-footed and floundering.

This latest screeching Tory U-turn has created confusion and panic amongst Tory MPs. For seven years they've been defending their ludicrous "let's cut our way to growth" austerity agenda and slandering anyone who talks of investment economics as if they're crazed far-left madmen. So they're now struggling desperately to align their anti-Labour propaganda with this complete reversal of their own position in order to actually imitate Jeremy Corbyn's headline economic approach.

The Tory MP Nick Boles exemplified this confusion and panic over this Tory adoption of a Corbynite economic strategy in an absolute mess of a Tweet in which he said "[The] key difference between borrowing to build houses and borrowing to fund deficit: house building creates new assets which can act as security".

The first thing to note is that "borrowing to fund deficit" is absolutely meaningless gibberish because funding or creating a deficit is precisely the result of borrowing, so he's comparing the suddenly pilfered Labour policy of borrowing to invest with the policy of borrowing for the sake of borrowing which he's just plucked straight out of his arse.

The next thing to note is that the borrowing to invest strategy he's suddenly found himself having to defend is precisely the kind of economic strategy the Tories were ferociously attacking during the 2017 election with demeaning economic baby talk like "there is no magic money tree" and absolute idiot fodder like comparisons between the national economy and a simple household budget.

The next thing to note is that Boles' actual reason supporting this sudden Tory conversion to Corbynite investment economics is pure gobbledygook. There are many good reasons that investment in affordable housing is good for the economy, not least jobs growth (architects, engineers, builders, electricians, plumbers, labourers ...), increased demand for building materials and tools (secondary job growth), and increases in aggregate economic demand (as the people employed to build the houses spend their wages, and younger generations are released from the penury of rip-off private sector rents as they move into affordable housing).

Boles' clever-sounding "new assets = security" reason on the other hand is precisely the kind of half-arsed drivel you'd expect from someone who has been completely wrong-footed by suddenly having to defend the kind of economic strategy he's spent the last seven years furiously attacking.

The big problem the Tories are facing now is the exactly the same kind of problem faced by Ed Miliband and Ed Balls back in 2015. 


When the two Eds came up with austerity-lite, the average punter was left wondering why on earth they should vote for Labour's meek imitation of austerity when they could have the real thing from the Tories. 

Now that the Tories are openly mimicking Jeremy Corbyn's investment economics with investment-lite, the average punter is surely going to end up wondering why they should pick the Tories' weak and opportunistic ersatz version of investment economics when they can have the real thing from people who actually believe in it.

Presumably Nick Boles and his ilk believe that ordinary people are such uneducated halfwits that they won't even spot that by 
encroaching on Jeremy Corbyn's economic territory the Tories have performed yet another massive screeching U-turn, and furthermore they clearly imagine that us plebs must be so thick we'll just forget all about seven years of socially and economically devastating Tory austerity madness because they've rapidly cobbled together some half-arsed pseudo-economic gobbledygook on Twitter to justify its sudden abandonment. 


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