Images like this mean nothing to Dan Hannan. who prefers to deal with fictional characters than real people and their complicated lives.
Economic growth or just ‘growth’ is the holy grail of career politicians, neoliberal economists and their hangers on in the media. We’re often told how important it is to have ‘growth’ in our economy and it is only then that everyone will see the benefit. The trouble with this notion is that those who continually spout this rubbish aren’t the ones who need to worry. They’re already comfortable. The ones for whom these pronouncements mean little, if nothing at all, are the poor and the low waged. They continue to see their income squeezed, while the cost of living continues to rise. But the media and the government will have none of it.
A few weeks ago, the BBC’s economic editor, Robert Peston, was crowing over low oil prices. He told the nation’s viewers that “everyone” would now feel “richer” because of the continued fall in petrol prices. This is not only misleading; it’s also dishonest. The only people who can feel “richer”, by definition, are the rich themselves. If you are poor, you cannot be “rich”, it’s an absurdity. Yet this does not stop the likes of Daniel Hannan repeating this meaningless tosh. In Thursday’s blog for CapX, he repeated Peston’s bogus claim that “The rich are getting richer and the poor are… getting richer”. This is a measure of how out-of-touch our media and politicians are in relation to the people they purport to serve. We can also draw the conclusion that the mainstream media, the Westminster politicians and economic cults like the Adam Smith Institute and the Institute for Economic Affairs are in a cosy conspiratorial relationship with one another. The relationship between these institutions and ordinary people themselves is one of power. They consider themselves to be the voices of authority and we must listen and obey… or so they think. So when they tell us that “things are getting better” we are expected to believe them. But I no more believe them than I believe in the existence of God, the tooth fairy or Father Christmas. I see no improvement and neither do millions of other people.
The problem with those who constantly talk about ‘growth’ is that they can only speak the language of statistics and mathematics, and can only view the world through the lens of their social status. They are incapable of relating their nutty ideas about economics to the average person because what they’re saying bears no relation to everyday life. Trickle down, for example, is one economic fallacy that is repeated ad infinitum by economic cultists and held up as a model for ‘growth’ and economic well-being. But not even right-wingers like George HW Bush believed it and derided trickle down as “voodoo economics”. Yet the Hannans and Osbornes of this world cleave so tightly to it like men at sea clinging to any bit of flotsam that comes their way.
A couple of months ago, the Labour leadership claimed that if the Tories were re-elected, they would take public spending back to the levels of the 1930s. This was enough to get all manner of right-wing economic cultists into a lather. Hannan was one of those. In this blog, he does his best to claim how the 1930s was a “time of growth”. It’s a risible misrepresentation of a decade that’s become synonymous with economic hardship.
Well, here’s a fact that may surprise you. The 1930s saw more economic growth than any other decade in British history. It’s true that there were patches of deprivation. As in all times of economic transition, some industries declined while others rose. The poverty of the Jarrow Marchers was genuine: theirs had been a ship-building town, devastated by the collapse of international orders.
Sophistry, damned sophistry. For the millions of working class people who struggled to survive the decade, this is an insult to their memory. My mum’s family was Liverpool working class and I can remember her telling me what life was like in the Thirties: if you were poor or low-waged, you had no access to affordable or decent healthcare, because there was no National Health Service (the Tories will abolish it if they are re-elected). There was very little work on Merseyside in the 1930s, so people lived a hand-to-mouth existence.
Hannan continues his fantasy tour of his romanticized past:
Yet these were golden years for new industries such as electrical appliances and aviation and cars, the years when Morris, Humber and Austin became household names. The 1930s also saw an unprecedented boom in construction, as the comfortable suburbs of Betjeman’s Metroland spread across England. The Battersea Power Station raised its minarets over the capital, a symbol of self-confidence in architecture.
Here, Hannan waxes floridly about a world that only those with the economic means could take part. The appliances and cars that he talks about were beyond the means of my family and many others. No working class people owned cars, let alone possessed household appliances. My grandmother was still using a boiler and a mangle well into the 1970s. As for Metroland, the houses that were built there were for sale. Only those with nice, middle class incomes could afford a mortgage.
Here, Hannan slaps more gloss onto his fantasy.
Britain responded to the 1929 crash by cutting spending drastically and, in consequence, soon saw a return to growth. The United States, by contrast, expanded government activity unprecedentedly under the New Deal, and so prolonged the recession by seven years. Yes, seven years. Here is the conclusion of a major study published in 2004 by two economists at the UCLA, Harold L Cole and Lee A Ohanian:
Cole and Ohanian are comprehensively defenestrated in this blog. Hannan isn’t interested in reality and like all right-wingers of his ilk, he exists in the hermetically-sealed space of privilege. The material of history is bent and twisted to shrink-fit a weak narrative. Like many of his fellow Tea Partiers, he makes the same feeble argument for cuts.
Contrasting the American and British experiences, we are left with an inescapable conclusion. Cuts work, and trying to spend your way out of recession doesn’t.
Let’s put it this way, if a company doesn’t borrow or spend money to invest when it is doing badly, it will go under. Cuts only work for the already wealthy. They are also a means by which the powerful punish the poor for being poor. Hannan makes clear his hatred of FDR and the New Deal. This is the same position held by the economic cultists at the Ludwig von Mises Institute as well as his fellow Randists.
This is perhaps the greatest fallacy of all:
Still, if only for the record, let me set down the real lesson of the 1930. The best way to recover from a crash, not least for low earners, is to bring spending back under control. Growth follows, jobs are created, and the people taking those jobs thereby gain the most secure route out of poverty.
It’s easy for those who have never personally experienced poverty to claim that “the most secure route out of poverty” is work. Low-paid and zero hours contract jobs actually lock people into poverty. Hannan is not only a fool, he’s a dangerous fool. Leaving people to fend for themselves without a safety net will lead to greater social problems. Hannan is unmoved by such concerns. Yet he would be the first to complain that shanty towns are an “eyesore”. This is the man who calls himself a “Whig”.
Talking about economic growth when people are struggling to survive is deeply offensive. Talking about GDP is meaningless because not only is it a poor way of measuring economic performance, it means nothing to ordinary people. For all his claims of how cutting public spending will improve economic performance, Hannan has never had to suffer the privations of working in a low-paid job. Like all of his pals in Westminster and beyond, he is a bully, who talks a good talk but when his words are unpacked, they reveal the true horrors of the current political system.