In Praise of David Cameron. Almost.
I am seriously in danger of agreeing with some of what David Cameron is doing. Notwithstanding the fact that he presides over a party that espouses an impossible and unrealistic moral code that they themselves can’t adhere to, he has actually done some good things in the past few months.
The first noticeable improvement in policy was the acceptance that Israel is the main obstacle to a two state solution in the middle east. Then he came out in support of gay marriage, despite puerile whining from the rest of the Conservative Party. Then he even backs the Forfeiture committee’s investigation into making Sir Fred Goodwin back into Mr. Fred Goodwin.
As a Lib Dem I like to believe that all these things were forced upon Cameron by Nick Clegg, but realistically I realise that Clegg’s presence is probably tolerated in Cabinet providing that he doesn’t actually say anything. It would be nice if the Lib Dems did influence the Tories into a leftward shift, but it seems unlikely that Insaniacs like Dan Hannan MEP would realise the idiocy of their ways and recant.
In any case, Cameron is looking thoroughly decent, if a bit foppish, on social issues. One could even consider voting for him (if one lived in Whitney), except for the fact that he is utterly, unforgivably, wrong on the economy.
Despite the rhetoric about a fairer economy, the current economic policy is anything but. In an effort to cleanse the hypothetical national debt the government is making people’s lives significantly worse. Until we establish who the money is owed to, how much it actually is and why the hell the government thinks that money is more important than, say, education, the people shouldn’t be paying.
What is truly galling is that we never asked for it. For the most part the British people pay the taxes we are told to in exchange for some basic services. We were never told that our taxes weren’t enough, and that several years later we would have to pay more for things we received ten years ago. The only equivalent is if you bought something from a shop in 2009, and in 2012 the shop informs you that you only paid for 20% and at the time the shop took out a loan on your behalf, but without your knowledge, to cover the rest, even though the price on the label was the price you paid. It is absurd. Had they raised the taxes to the amount needed to pay the bill people would have complained, but they would have paid. It may be that there was another party in power but it is irrelevant, all governments of all stripes do it, and we shouldn’t sit by and take it. Now we are paying for our current bills and the bills of the last two decades.
Instead of covering this massive cock up by asking the obscenely wealthy for a hand, the government has decided to cut services and raise taxes for low and middle income workers, as well as the unemployed. This is ideologically old Tory thinking. Ignore that the average salary for a FTSE 100 director is roughly 100 times the average salary for the country, focus on the undeserving poor.
Austerity is an anachronism in the 21st century, and takes its place alongside mercantalism for failed economic concepts. The government has been cutting and raising for almost two years and what do we have to show for it? Mass insolvencies. In the last few months we lost Barratts, La Senza and Hawkin’s Bazaar from the high street. In the preceding quarter there were almost 6000 UK companies involved in some type of insolvency proceedings, as well as over 30,000 bankruptcies, IVAs and Debt Relief Orders. This does not seem to validate the theory that a reduction in government spending will improve the markets. It is also interesting to see this Conservative led, friend of the people, man in the street government isn’t rushing to bail out any of these companies. It seems if you work in a bank your job is safe even if your company is technically insolvent.
To counter this, the ConDems have recently pointed out that they have convinced certain big companies to take on more staff, mostly it seems in large supermarkets. However, these jobs tend to be menial, low paid and fairly degrading. Despite seemingly endless profits the supermarkets still pay their shop floor staff a pittance. One job is also not comparable to another. Whilst shop floor retail jobs are often the same between companies, someone who has been a manager in an IT company is unlikely to want to accept minimum wage, graveyard shift work. The government has missed the point that people don’t want jobs, they want careers. They need to know that they are headed somewhere, and that somewhere has a larger salary than where they are now.
The average salary is not a decent one. People only live once; they shouldn’t have to live in discomfort. We should be encouraging a major and if necessary forced redistribution of wealth in private companies. This needs to be coupled with a Financial Transactions tax and an end to austerity. It has been suggested that such moves will make the “best” directors leave. Good. They were a major cause of the recession and we don’t want them to stay. Liquidate the boards of all companies, I guarantee you the earth will keep rotating.
As with most right wing thinking, austerity is born from a lack of thought. It is a simple fact that cutting services means fewer jobs and raising taxes means people are worse off. The more unemployed you have the greater the drain on the economy, as the Government has to pay benefits but receive no taxes. The unemployment benefit is so laughable that people on it can’t usually spend anything outside of the basics, and so the economy loses out on sales, and the government loses out on VAT. Next, because the media constantly tells us we are in recession again, those people with jobs save their money. When they don’t spend, the shops lose out and in the worst cases have to enter insolvency, thus throwing another group of people out into unemployment. Cut, paste, repeat.
Unfortunately the Labour party are incapable of thinking up anything else and so democracy will essentially be a choice between party A (Blue, policy is to make people poor quickly and get it over with. Not sure if the economy will recover after but we jolly well hope so.), party B (Red, gradual poverty because we don’t want to look like we aren’t accepting fault, but we have no idea what to do after that.) and party C (Yellow, no policy. On anything.). The government and the opposition chose austerity measures because they believed that the “Markets” would dive if they did anything else. We have done austerity for 2 years and all the markets have done in response is close companies and give ever increasing bonuses to the already insanely wealthy.
Throughout history the only successful way to beat a recession is through huge tax and spend programmes. The most famous example of this is Roosevelt’s New Deal. The principle is very simple: the more people in work, the better off the country is as a whole. Even if it is the government employing them, the economy is better off and the government actually recoups the money through taxation eventually. However, Osbourne wouldn’t be seen dead near a Keynesian policy and, despite the lack of evidence to back up his theories, many leading economists seem to favour Hayek’s conservative economics.
There is another way. Rather than arguing over which economist was wrong (they both were, since you ask), it is time the British people forced their elected representatives into action. Instead of playing by already established economic rules, we should be making our own up.
For example, to protect jobs in troubled companies the rules need to change about layoffs. When a company is floundering, the Board should take a pay cut, and continue to do so until their either reach the salary of the next rung down, or they solve the problem. If the problem isn’t solved then the senior management must again reduce their salary and so on. If, by the time the Board is being paid minimum wage, the problem is not solved, the Board is automatically fired and the next most senior person takes their place. Again, this keeps going until there is no-one left, ensuring that a) the people that do the work stay in work for the longest and b) the majority keep jobs, rather than the minority at the top.
Then, to ensure personal and nationwide prosperity, top level salary must be linked to bottom level salary. This could be any figure, but if we use a multiplier of 10, this would mean that a director who wants to pay himself £1,000,000 would have to pay his most junior administrator £100,000. In reality of course the director probably would just lower their salary, but it would make for a significantly fairer economy.
Legally, Parliament can legislate on anything it wants. This is a principle laid our by the constitutional theorist A.V. Dicey in the 1800s, and so following on from this the government could just pass a law stating that the UK owes nothing. Obviously our creditors would probably not be very happy with this, so how about suggesting to the world that we have a conference the aim of which is to set up a hypothetical float in every country’s economy. This float is accepted to be something like 40% of GDP of each country, and from this amount they are allowed to pay for education and healthcare only. They do not need to raise the money to do it, and so taxes can be dramatically lowered in most economies. This would also remove a major contributor to nation’s debt. The nation and the individual will be better off, but with the benefit of core services surviving. This would also aid healthcare in poor and developing countries.
These are three ideas that the government seems to have completely missed in its aim for a “fairer” economy. Of course, thee is nothing fair about a cabinet of millionaires in the first place, so I won’t be holding my breath for a change anytime soon. They will continue to blunder on and Cameron will look you apologetically as he takes the keys to your home to pay another RBS bonus. At least he got the Gay Marriage thing right at last.
Posted on January 22, 2012, in Coalition Government, Comment, Conservative Party, General, Labour Party, Liberal Democrat Party and tagged austerity, conservative, david cameron, economy, gay marriage, labour, lib dem, nick clegg. Bookmark the permalink. 3 Comments.