Wednesday 13 May 2015

The Tory "economic recovery" mantra is a lie

The Tories are always harping on about their "economic recovery". Aside from all of the smears, fearmongering and divide and conquer tactics in the right-wing press, this endlessly repeated recovery narrative was the keystone of their re-election campaign.

I've detailed how they used distorted figures, revisionism and out-of-context big numbers to support this recovery narrative in a previous post, so I won't go into that too much in this one. This one is about something called per capita GDP.

I know a lot of people struggle with economics stuff, it's totally understandable given that the vast majority of our state schools do not teach economics to their students. This means that the 93% of us who go to state schools are very unlikely to get training in the economic basics, whilst the 7% of children with parents wealthy enough to send them to private school are almost certain to learn about economic issues. Whether you want to believe that this is a deliberate conspiracy to keep the general public in a state of economic ignorance is really up to you, all I'm saying is that I understand why so many people find economic stuff difficult to understand.

Per capita GDP is an economic indicator that tells us the economic activity of a country divided by it's population, which gives us a measure of how much economic activity there is per person in the economy.

What a lot of people fail to realise is that the the UK GDP per capita is still significantly lower than it was before the global financial sector insolvency crisis of 2008 (see graph). This means that if the economic activity is divided equally among all of us, then our share is significantly smaller than it was back in 2008.

The reason that people fail to realise this is twofold. One is that the mainstream media abjectly fail to hold George Osborne and the Tories to account for the failure of their economic plans. For example, when the Tories completely failed to eliminate the budget deficit as they promised back in 2010, journalists didn't challenge them about this failure, they instead allowed the Tories to completely reframe this abject failure as a success by constantly repeating "we've cut the deficit by a third" rather than forcing them to admit that they'd missed their actual target by two thirds. Thus most economics journalists are very unlikely to confront the Tories with damning statistics like the per capita GDP figures.

The second failure is that of the Labour Party, which also failed to challenge the Tory recovery narrative with anything. No facts, no evidence, no appealing and easy to remember counter-narrative, nothing. All they offered their supporters was a desperately dispiriting prescription of austerity-lite, which makes the cardinal mistake of accepting the premise of the other party (that the austerity con is even necessary in the first place).

What Labour should have been pointing out is that even after five years of grueling Tory austerity, on average we are all still significantly poorer than we were before the reckless gambling of the banks crashed the economy. But they didn't say that, they essentially said that they want to do exactly the same thing as the Tories, but just not be quite as mean about it!

Another factor to consider is that the tiny super-rich minority massively increased their share of the national wealth, in fact the wealthiest 1,000 families actually doubled their wealth.

Now think about it this way, if there is still significantly less economic activity per person than there was before the economic crisis, and the very richest people in society have massively increased their share of the wealth, what does that mean for the rest of us?

The fact is that the majority of us are worse off than we were before, not least due to the fact that the Tories oversaw the longest sustained period of falling wages since records began.

Millions of people voted Tory in 2015 because they imagined that they would get a bit richer, but the evidence is absolutely clear that for the last five years the Tories have been overseeing a prolonged economic stagnation (the slowest post-crisis recovery on record) in which the extremely rich got much richer and the rest of us got poorer.

Adolf Hitler once said that "if you tell a big enough lie and tell it frequently enough, it will be believed", and as much of an unspeakably evil tyrant he was, he was right. Millions of people voted Tory because they believed the big lie that austerity is good for them and that the economy has recovered, when the actual economic evidence says that it's not and it hasn't.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

Austerity is a con
Anti-austerity = Epic Win / Austerity-lite = Massive Fail
How austerity-lite ruined Labour's election chances
How George Osborne has created more debt than every Labour government in history combined
The "all in this together" fallacy
The Tory ideological mission
Austerity and economic illiteracy
David Cameron's "austerity to infinity" speech

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