Thursday, 30 April 2015
There are few economists in the world who do not recognise that austerity as an economic principle is utter nonsense. Ever since the 1930's it has been known - known that is and not simply believed - that the only way out of recession is to stimulate the economy by deficit spending. The Tories understand this like everyone else but continue to wield the axe because they would rather the poor paid for the present recession, caused by criminal bankers, rather than themselves and their rich mates. And, it must be said, it has worked to a certain extent - the rich have grown richer while the poor have grown poorer and those in the middle have all but stood still. So why has Labour not pointed this out and advocated an end to austerity entirely? The problem is that in order to refute austerity some sophisticated arguments are needed and these immediately run into the simplistic argument that the Tories have deployed - that the British economy is just like a household budget. The British electorate, largely unintelligent, ill-educated and led around by the nose by a right-wing press, think they understand this argument and lack the attention span necessary to hear about the alternative. Labour, recognising this but unable to tell the electorate that they are thick, have no choice therefore but to pay lip-service to this Tory cliche in order to prove their economic credentials. Labour, in effect, have ducked the argument on the very sensible grounds that they cannot win. If they argue for an end to austerity they will appear dull and uninteresting and be open to the accusation that they are "out of touch". The Tories, meanwhile, will trot out the "just like a household budget" argument knowing full well that this is simply short-hand for "you're too thick to understand". Paul Krugman, the American economist, has described the Tory obsession with austerity as a "delusion" but the truth is that it is a confidence trick perpetrated by the greedy, selfish and dishonest and accepted by an electorate too dumb to walk and chew gum at the same time.