Tag Archives: voodoo economics

How Much Will It Cost? (Revisited)

The questions of “how much will it cost?” or “How will you pay for it?” are always posed by the media’s journalists to the planned spending proposals of Labour and all the other parties, bar the Tories. That the Tories have dominated the economic discourse since the 1980s cannot be denied.  Indeed, political journalists have accepted the economic orthodoxy uncritically in the decades that have followed and there are, in my mind, two reasons why they do this. First, they’re not economists and second, they’re lazy. Even the economics editors of the major news organizations tend to be drawn from the Thatcherite School of Household Management Economics, and will base their analyses and their questions on its flawed logic.

Now, I’m not an economist but my instincts regarding national finances are correct: household analogies are nonsense and journalists who repeat them are foolish. The reductivist economic dogma of the Tories and UKIP has dragged this country into recessions (there were three during the Thatcher years) and have forced people into ever greater poverty, while the rich have seen a manifold increase in their incomes.

In an article by Richard Murphy of Tax Research (two days after my piece), he puts to bed the myths that have passed for economic competence and credibility for over 30 years.  He opens by saying:

The most dangerous question in political debate in the UK is the one always rolled out by every journalist, on air or in other media, which is to ask a politician ‘How are you going to pay for it?’ where ‘it’ is whatever the politicians has just proposed to do.

He then provides three reasons why this question is a dangerous one and provides handy replies to the clueless hacks who insist on asking the question.

You can read the rest here.

All governments borrow and spend money. That’s how national finances work. In seven years, the Tories have racked up more debt than the previous Labour government did in 13 years. Moreover, Labour has a better record of paying off debt. In 1976, the Wilson government was forced to take out a loan from the International Monetary Fund to pay for the Sterling Crisis, which was caused by the Heath government’s economic mismanagement. It was paid off by 1979. Thatcher’s Tories continued to use the IMF loan as a stick to beat the Labour Party even though the loan had been repaid. Yet Kinnock refused to counter these lies. Finally, the Corbyn-led party has awakened to the need to counter the Tories’ myths and lies about the national economy and borrowing/spending. And about time too.

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Filed under economic illiteracy, Economics, General Election 2017, neoliberalism

Let them eat ketchup.

On an earlier blog, one poster laughingly claimed that the class war was “over” and how the working class had become “derivatives traders”.  Such wit. This is the small state mentality of our ‘libertarian’ friends: they promote the lie that unrestrained capitalism will create greater equality.  For them it’s all about the ‘evils’ of regulation, because regulation means that someone somewhere is being protected from harm at the expense of someone’s profit margin. What a bummer! In his blog today, Hannan says that governments “always find tax rises easier than spending cuts” and claims to have noticed a ‘concession’ to the poor contained in the budget. But he still isn’t happy. He wants those poor people to pay,

Not that this concession has appeased Left-wing pundits, who are insisting that the budget is unfair to the poor. It is true, of course, that any spending cuts will necessarily affect net beneficiaries of state expenditure more than net contributors.

Ah, nothing like a simple binarist rationalization: it’s all about the economy’s contributors and beneficiaries.  The poor really do get it in the neck from you, don’t they? I get the feeling you’re one of those Randists…something to do with rational selfishness…no?  But hang on, what about the Train Operating Companies? They receive massive state handouts yet none of you want to mention them or any of the other private interests who receive state funding. Are they all worth the money? It’s highly debatable, particularly in the case of the TOC”s who raise fares for the benefit of shareholders while providing a shoddy service for their passengers. But this is risible,

As Art Laffer says, if you pay people to be poor, you’ll never run out of poor people.

And Art Laffer is a numbskull…we know all about about his infamous curve and how that curve became popular with St. Ronnie and co. We remember ‘voodoo economics’ too and how ‘trickle down’ was meant to raise up the poor. The poor? To hell with them, let them eat ketchup. Next you’ll be telling us how flat taxes are ‘fairer’.

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Filed under ConDem Budget 2010, Government & politics