Thursday, 7 January 2016

If the UK faces a toxic "cocktail of threats" then George Osborne is obviously the barman

In January 2016 George Osborne made some utterly ludicrous statements on the state of the UK economy including an assertion that the UK faces "a cocktail of threats" from abroad, and a staggering piece of revisionism about how the UK economy is performing "better than almost anyone had dared to hope"! 

As is always the case the majority of the mainstream media gave him a free pass on the absolute nonsense he was spouting, so I'm going to criticise some of it here.

Getting his excuses in early

George Osborne knows as well as anyone that his policy of faking economic growth re-inflating the housing and stock market bubbles is completely unsustainable.

What the UK really needed in the wake of the global financial sector insolvency crisis was massive investment in public infrastructure and modern high-tech industries and a complete over-haul of the financial sector to prevent them from recklessly gambling themselves into insolvency again.

What George Osborne delivered was precisely the opposite. Ideological austerity involved slashing public investment at a time when the economy needed it the most (2/3 of economists say that austerity damaged the UK economy), neglect of the UK manufacturing sector and a free pass for the bankers who caused the economic meltdown in the first place to set about re-inflating the UK property bubble and gambling on the almost completely unregulated global derivatives casino, whilst paying themselves ever increasing salaries and paying almost nothing in UK tax!

Osborne knows that this lethal cocktail of severe underinvestment in government spending and the re-inflation of the housing and stock market bubbles is completely unsustainable, he knows there's another economic crash coming, so he's clearly getting his excuses in early.

Surely it's always the government's fault?

The Tories and the right-wing press have crafted the ridiculous narrative that the Labour Party were entirely to blame for the last economic crisis. According to the Tories Labour "bankrupted" Britain with their overspending, and the global financial sector insolvency crisis had nothing to do with it!

Given that the Tory "blame Labour" narrative relies so fundamentally on the idea that the UK economy is completely immune to global events and that the government of the day is entirely responsible for economic crises, it seems a tad hypocritical for the Tories to suddenly start blaming global events for the crisis they know is coming, and will be exacerbated by their socially and economically destructive ideological austerity agenda.

Creeping complacency 

George Osborne also said that he worries about a "creeping complacency" that the UK is immune from global events. I'm not sure where he gets this ridiculous idea. The only people daft enough to believe that the UK economy operates in complete isolation from the rest of the global economy are the people thick enough to mindlessly rote learn the tabloid propaganda that the Labour Party were entirely responsible for the consequences of the global financial sector insolvency crisis.

If anyone is guilty of complacency it's George Osborne, who has seen his ideological austerity experiment continually fail to deliver the promised economic results (remember how in 2010 he promised the budget deficit would be completely eliminated by 2015?). Yet he persists with exactly the same policy in the pathetic hope that doing the same thing over and over and over again will somehow one day produce better results.

The economy has "performed better than almost anyone had dared to hope"!

Of all of the ludicrous drivel George Osborne spouted, the idea that the UK economy has outperformed the expectations of almost everyone is the most delusional. The idea that almost everyone is surprised by how well the UK economy has been doing is so out-of-touch it defies belief.

If we think back to 2010 we'll remember how George Osborne promised that his ideological austerity agenda would have eliminated the budget deficit entirely by now. The budget deficit hasn't been eliminated, in fact it actually got bigger in 2015 than it was in 2014!

Reclassifying an abject failure to achieve what you promised to do as such a wonderful success that almost everyone is shocked by it is a staggering example of revisionism, and if it was a Labour chancellor talking up their gigantic failure as an widely unexpected success, then we can only imagine the barrage of bile and fury in the mainstream media, however, as usual, George Osborne gets a free pass.

The UK economy is sick

The signs do point to a severe global crisis at some point in the next few years, but this isn't really the main problem. The whole art of good economic policy is to ensure that your own economy is in a strong position to weather economic storms, because even if the global financial sector doesn't melt down again, there's always the possibility of something like war or natural disaster causing global economic chaos.

The UK is clearly not in a healthy position to weather any economic storms. The UK's balance of trade is absolutely appalling, UK worker productivity is suffering a severe decline relative to other advanced economies; public services and infrastructure have suffered years of ideologically driven under-investment; levels of household debt are rising back towards pre-crisis levels; the unreformed financial sector has been pumping up even bigger unsustainable speculative bubbles than the last one; the disposable income of UK workers continues to dwindle; and public debt has pretty much doubled since George Osborne came to power.

Add into the mix George Osborne's plan to conduct the biggest ideologically driven fire sale ever of the UK's national silver in 2016, and we've got an absolutely appalling situation should the UK need to resist the consequences of a major global economic crisis.

 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.

Ideological austerity is a con
How on earth do some people believe George Osborne is a genius?
The Tory "economic recovery" mantra is a lie
What is ... Fiscal Multiplication?
George Osborne's free pass on the failure of his economic plans
What is ... the difference between a debt and a deficit?