Friday, 5 January 2018

AUSTERITY AN EMBARRASSINGLY BLATANT LIE

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The long read
The case for cuts was a lie. Why does Britain still believe it?
Wednesday 29th April 2015 Illustrations by Mark Long, Design by Sam Morris and Chris Clarke
in May 2010, as Britain headed into its last general election, elites all across the western world were gripped by austerity fever, a strange malady that combined extravagant fear with blithe optimism. Every country running significant budget deficits – as nearly all were in the aftermath of the financial crisis – was deemed at imminent risk of becoming another Greece unless it immediately began cutting spending and raising taxes. Concerns that imposing such austerity in already depressed economies would deepen their depression and delay recovery were airily dismissed; fiscal probity, we were assured, would inspire business-boosting confidence, and all would be well.

People holding these beliefs came to be widely known in economic circles as “austerians” – a term coined by the economist Rob Parenteau – and for a while the austerian ideology swept all before it.

But that was five years ago, and the fever has long since broken. Greece is now seen as it should have been seen from the beginning – as a unique case, with few lessons for the rest of us. It is impossible for countries such as the US and the UK, which borrow in their own currencies, to experience Greek-style crises, because they cannot run out of money – they can always print more. Even within the eurozone, borrowing costs plunged once the European Central Bank began to do its job and protect its clients against self-fulfilling panics by standing ready to buy government bonds if necessary. As I write this, Italy and Spain have no trouble raising cash – they can borrow at the lowest rates in their history, indeed considerably below those in Britain – and even Portugal’s interest rates are within a whisker of those paid by HM Treasury.

All of the economic research that allegedly supported the austerity push has been discredited
On the other side of the ledger, the benefits of improved confidence failed to make their promised appearance. Since the global turn to austerity in 2010, every country that introduced significant austerity has seen its economy suffer, with the depth of the suffering closely related to the harshness of the austerity. In late 2012, the IMF’s chief economist, Olivier Blanchard, went so far as to issue what amounted to a mea culpa: although his organisation never bought into the notion that austerity would actually boost economic growth, the IMF now believes that it massively understated the damage that spending cuts inflict on a weak economy.

Meanwhile, all of the economic research that allegedly supported the austerity push has been discredited. Widely touted statistical results were, it turned out, based on highly dubious assumptions and procedures – plus a few outright mistakes – and evaporated under closer scrutiny.

It is rare, in the history of economic thought, for debates to get resolved this decisively. The austerian ideology that dominated elite discourse five years ago has collapsed, to the point where hardly anyone still believes it. Hardly anyone, that is, except the coalition that still rules Britain – and most of the British media.

I don’t know how many Britons realise the extent to which their economic debate has diverged from the rest of the western world – the extent to which the UK seems stuck on obsessions that have been mainly laughed out of the discourse elsewhere. George Osborne and David Cameron boast that their policies saved Britain from a Greek-style crisis of soaring interest rates, apparently oblivious to the fact that interest rates are at historic lows all across the western world. The press seizes on Ed Miliband’s failure to mention the budget deficit in a speech as a huge gaffe, a supposed revelation of irresponsibility; meanwhile, Hillary Clinton is talking, seriously, not about budget deficits but about the “fun deficit” facing America’s children.

Is there some good reason why deficit obsession should still rule in Britain, even as it fades away everywhere else? No. This country is not different. The economics of austerity are the same – and the intellectual case as bankrupt – in Britain as everywhere else.

Chapter one
Stimulus and its enemies
when economic crisis struck the advanced economies in 2008, almost every government – even Germany – introduced some kind of stimulus programme, increasing spending and/or cutting taxes. There was no mystery why: it was all about zero.

Normally, monetary authorities – the Federal Reserve, the Bank of England – can respond to a temporary economic downturn by cutting interest rates; this encourages private spending, especially on housing, and sets the stage for recovery. But there’s a limit to how much they can do in that direction. Until recently, the conventional wisdom was that you couldn’t cut interest rates below zero. We now know that this wasn’t quite right, since many European bonds now pay slightly negative interest. Still, there can’t be much room for sub-zero rates. And if cutting rates all the way to zero isn’t enough to cure what ails the economy, the usual remedy for recession falls short.

So it was in 2008-2009. By late 2008 it was already clear in every major economy that conventional monetary policy, which involves pushing down the interest rate on short-term government debt, was going to be insufficient to fight the financial downdraft. Now what? The textbook answer was and is fiscal expansion: increase government spending both to create jobs directly and to put money in consumers’ pockets; cut taxes to put more money in those pockets.

But won’t this lead to budget deficits? Yes, and that’s actually a good thing. An economy that is depressed even with zero interest rates is, in effect, an economy in which the public is trying to save more than businesses are willing to invest. In such an economy the government does everyone a service by running deficits and giving frustrated savers a chance to put their money to work. Nor does this borrowing compete with private investment. An economy where interest rates cannot go any lower is an economy awash in desired saving with no place to go, and deficit spending that expands the economy is, if anything, likely to lead to higher private investment than would otherwise materialise.

It’s true that you can’t run big budget deficits for ever (although you can do it for a long time), because at some point interest payments start to swallow too large a share of the budget. But it’s foolish and destructive to worry about deficits when borrowing is very cheap and the funds you borrow would otherwise go to waste.

At some point you do want to reverse stimulus. But you don’t want to do it too soon – specifically, you don’t want to remove fiscal support as long as pedal-to-the-metal monetary policy is still insufficient. Instead, you want to wait until there can be a sort of handoff, in which the central bank offsets the effects of declining spending and rising taxes by keeping rates low. As John Maynard Keynes wrote in 1937: “The boom, not the slump, is the right time for austerity at the Treasury.”

All of this is standard macroeconomics. I often encounter people on both the left and the right who imagine that austerity policies were what the textbook said you should do – that those of us who protested against the turn to austerity were staking out some kind of heterodox, radical position. But the truth is that mainstream, textbook economics not only justified the initial round of post-crisis stimulus, but said that this stimulus should continue until economies had recovered.

What we got instead, however, was a hard right turn in elite opinion, away from concerns about unemployment and toward a focus on slashing deficits, mainly with spending cuts. Why?

Conservatives like to use the alleged dangers of debt and deficits as clubs with which to beat the welfare state and justify cuts in benefits
Part of the answer is that politicians were catering to a public that doesn’t understand the rationale for deficit spending, that tends to think of the government budget via analogies with family finances. When John Boehner, the Republican leader, opposed US stimulus plans on the grounds that “American families are tightening their belt, but they don’t see government tightening its belt,” economists cringed at the stupidity. But within a few months the very same line was showing up in Barack Obama’s speeches, because his speechwriters found that it resonated with audiences. Similarly, the Labour party felt it necessary to dedicate the very first page of its 2015 general election manifesto to a “Budget Responsibility Lock”, promising to “cut the deficit every year”.

Let us not, however, be too harsh on the public. Many elite opinion-makers, including people who imagine themselves sophisticated on matters economic, demonstrated at best a higher level of incomprehension, not getting at all the logic of deficit spending in the face of excess desired saving. For example, in the spring of 2009 the Harvard historian and economic commentator Niall Ferguson, talking about the United States, was quite sure what would happen: “There is going to be, I predict, in the weeks and months ahead, a very painful tug-of-war between our monetary policy and our fiscal policy as the markets realise just what a vast quantity of bonds are going to have to be absorbed by the financial system this year. That will tend to drive the price of the bonds down, and drive up interest rates.” The weeks and months turned into years – six years, at this point – and interest rates remain at historic lows.

Beyond these economic misconceptions, there were political reasons why many influential players opposed fiscal stimulus even in the face of a deeply depressed economy. Conservatives like to use the alleged dangers of debt and deficits as clubs with which to beat the welfare state and justify cuts in benefits; suggestions that higher spending might actually be beneficial are definitely not welcome. Meanwhile, centrist politicians and pundits often try to demonstrate how serious and statesmanlike they are by calling for hard choices and sacrifice (by other people). Even Barack Obama’s first inaugural address, given in the face of a plunging economy, largely consisted of hard-choices boilerplate. As a result, centrists were almost as uncomfortable with the notion of fiscal stimulus as the hard right.

In a way, the remarkable thing about economic policy in 2008-2009 was the fact that the case for fiscal stimulus made any headway at all against the forces of incomprehension and vested interests demanding harsher and harsher austerity. The best explanation of this temporary and limited success I’ve seen comes from the political scientist Henry Farrell, writing with the economist John Quiggin. Farrell and Quiggin note that Keynesian economists were intellectually prepared for the possibility of crisis, in a way that free-market fundamentalists weren’t, and that they were also relatively media-savvy. So they got their take on the appropriate policy response out much more quickly than the other side, creating “the appearance of a new apparent consensus among expert economists” in favour of fiscal stimulus.

If this is right, there was inevitably going to be a growing backlash – a turn against stimulus and toward austerity – once the shock of the crisis wore off. Indeed, there were signs of such a backlash by the early fall of 2009. But the real turning point came at the end of that year, when Greece hit the wall. As a result, the year of Britain’s last general election was also the year of austerity.

Chapter two
The austerity moment
from the beginning, there were plenty of people strongly inclined to oppose fiscal stimulus and demand austerity. But they had a problem: their dire warnings about the consequences of deficit spending kept not coming true. Some of them were quite open about their frustration with the refusal of markets to deliver the disasters they expected and wanted. Alan Greenspan, the former chairman of the Federal Reserve, in 2010: “Inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.”

But he had an answer: “Growing analogies to Greece set the stage for a serious response.” Greece was the disaster austerians were looking for. In September 2009 Greece’s long-term borrowing costs were only 1.3 percentage points higher than Germany’s; by September 2010 that gap had increased sevenfold. Suddenly, austerians had a concrete demonstration of the dangers they had been warning about. A hard turn away from Keynesian policies could now be justified as an urgent defensive measure, lest your country abruptly turn into another Greece.

Still, what about the depressed state of western economies? The post-crisis recession bottomed out in the middle of 2009, and in most countries a recovery was under way, but output and employment were still far below normal. Wouldn’t a turn to austerity threaten the still-fragile upturn?

Not according to many policymakers, who engaged in one of history’s most remarkable displays of collective wishful thinking. Standard macroeconomics said that cutting spending in a depressed economy, with no room to offset these cuts by reducing interest rates that were already near zero, would indeed deepen the slump. But policymakers at the European Commission, the European Central Bank, and in the British government that took power in May 2010 eagerly seized on economic research that claimed to show the opposite.

The doctrine of “expansionary austerity” is largely associated with work by Alberto Alesina, an economist at Harvard. Alesina used statistical techniques that supposedly identified all large fiscal policy changes in advanced countries between 1970 and 2007, and claimed to find evidence that spending cuts, in particular, were often “associated with economic expansions rather than recessions”. The reason, he and those who seized on his work suggested, was that spending cuts create confidence, and that the positive effects of this increase in confidence trump the direct negative effects of reduced spending.

Greece was the disaster austerians were looking for
This may sound too good to be true – and it was. But policymakers knew what they wanted to hear, so it was, as Business Week put it, “Alesina’s hour”. The doctrine of expansionary austerity quickly became orthodoxy in much of Europe. “The idea that austerity measures could trigger stagnation is incorrect,” declared Jean-Claude Trichet, then the president of the European Central Bank, because “confidence-inspiring policies will foster and not hamper economic recovery”.

Besides, everybody knew that terrible things would happen if debt went above 90% of GDP.

Growth in a Time of Debt, the now-infamous 2010 paper by Carmen Reinhart and Kenneth Rogoff of Harvard University that claimed that 90% debt is a critical threshold, arguably played much less of a direct role in the turn to austerity than Alesina’s work. After all, austerians didn’t need Reinhart and Rogoff to provide dire scenarios about what could happen if deficits weren’t reined in – they had the Greek crisis for that. At most, the Reinhart and Rogoff paper provided a backup bogeyman, an answer to those who kept pointing out that nothing like the Greek story seemed to be happening to countries that borrowed in their own currencies: even if interest rates were low, austerians could point to Reinhart and Rogoff and declare that high debt is very, very bad.

What Reinhart and Rogoff did bring to the austerity camp was academic cachet. Their 2009 book This Time is Different, which brought a vast array of historical data to bear on the subject of economic crises, was widely celebrated by both policymakers and economists – myself included – for its prescient warnings that we were at risk of a major crisis and that recovery from that crisis was likely to be slow. So they brought a lot of prestige to the austerity push when they were perceived as weighing in on that side of the policy debate. (They now claim that they did no such thing, but they did nothing to correct that impression at the time.)

When the coalition government came to power, then, all the pieces were in place for policymakers who were already inclined to push for austerity. Fiscal retrenchment could be presented as urgently needed to avert a Greek-style strike by bond buyers. “Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can somehow be avoided,” declared David Cameron soon after taking office. It could also be presented as urgently needed to stop debt, already almost 80% of GDP, from crossing the 90% red line. In a 2010 speech laying out his plan to eliminate the deficit, Osborne cited Reinhart and Rogoff by name, while declaring that “soaring government debt ... is very likely to trigger the next crisis.” Concerns about delaying recovery could be waved away with an appeal to positive effects on confidence. Economists who objected to any or all of these lines of argument were simply ignored.

But that was, as I said, five years ago.

Chapter three
Decline and fall of the austerity cult
to understand what happened to austerianism, it helps to start with two charts.

The first chart shows interest rates on the bonds of a selection of advanced countries as of mid-April 2015. What you can see right away is that Greece remains unique, more than five years after it was heralded as an object lesson for all nations. Everyone else is paying very low interest rates by historical standards. This includes the United States, where the co-chairs of a debt commission created by President Obama confidently warned that crisis loomed within two years unless their recommendations were adopted; that was four years ago. It includes Spain and Italy, which faced a financial panic in 2011-2012, but saw that panic subside – despite debt that continued to rise – once the European Central Bank began doing its job as lender of last resort. It includes France, which many commentators singled out as the next domino to fall, yet can now borrow long-term for less than 0.5%. And it includes Japan, which has debt more than twice its gross domestic product yet pays even less.

The Greek exception
10-year interest rates as of 14 April 2015


Chart 1 Source: Bloomberg

Back in 2010 some economists argued that fears of a Greek-style funding crisis were vastly overblown – I referred to the myth of the “invisible bond vigilantes”. Well, those bond vigilantes have stayed invisible. For countries such as the UK, the US, and Japan that borrow in their own currencies, it’s hard to even see how the predicted crises could happen. Such countries cannot, after all, run out of money, and if worries about solvency weakened their currencies, this would actually help their economies in a time of weak growth and low inflation.

Chart 2 takes a bit more explaining. A couple of years after the great turn towards austerity, a number of economists realised that the austerians were performing what amounted to a great natural experiment. Historically, large cuts in government spending have usually occurred either in overheated economies suffering from inflation or in the aftermath of wars, as nations demobilise. Neither kind of episode offers much guidance on what to expect from the kind of spending cuts – imposed on already depressed economies – that the austerians were advocating. But after 2009, in a generalised economic depression, some countries chose (or were forced) to impose severe austerity, while others did not. So what happened?

Austerity and growth 2009-13
More austere countries have a lower rate of GDP growth


Chart 2 Source: IMF

In Chart 2, each dot represents the experience of an advanced economy from 2009 to 2013, the last year of major spending cuts. The horizontal axis shows a widely used measure of austerity – the average annual change in the cyclically adjusted primary surplus, an estimate of what the difference between taxes and non-interest spending would be if the economy were at full employment. As you move further right on the graph, in other words, austerity becomes more severe. You can quibble with the details of this measure, but the basic result – harsh austerity in Ireland, Spain, and Portugal, incredibly harsh austerity in Greece – is surely right.

Meanwhile, the vertical axis shows the annual rate of economic growth over the same period. The negative correlation is, of course, strong and obvious – and not at all what the austerians had asserted would happen.

Again, some economists argued from the beginning that all the talk of expansionary austerity was foolish – back in 2010 I dubbed it belief in the “confidence fairy”, a term that seems to have stuck. But why did the alleged statistical evidence – from Alesina, among others – that spending cuts were often good for growth prove so misleading?

The answer, it turned out, was that it wasn’t very good statistical work. A review by the IMF found that the methods Alesina used in an attempt to identify examples of sharp austerity produced many misidentifications. For example, in 2000 Finland’s budget deficit dropped sharply thanks to a stock market boom, which caused a surge in government revenue – but Alesina mistakenly identified this as a major austerity programme. When the IMF laboriously put together a new database of austerity measures derived from actual changes in spending and tax rates, it found that austerity has a consistently negative effect on growth.

Yet even the IMF’s analysis fell short – as the institution itself eventually acknowledged. I’ve already explained why: most historical episodes of austerity took place under conditions very different from those confronting western economies in 2010. For example, when Canada began a major fiscal retrenchment in the mid-1990s, interest rates were high, so the Bank of Canada could offset fiscal austerity with sharp rate cuts – not a useful model of the likely results of austerity in economies where interest rates were already very low. In 2010 and 2011, IMF projections of the effects of austerity programmes assumed that those effects would be similar to the historical average. But a 2013 paper co-authored by the organisation’s chief economist concluded that under post-crisis conditions the true effect had turned out to be nearly three times as large as expected.

So much, then, for invisible bond vigilantes and faith in the confidence fairy. What about the backup bogeyman, the Reinhart-Rogoff claim that there was a red line for debt at 90% of GDP?

Well, in early 2013 researchers at the University of Massachusetts examined the data behind the Reinhart-Rogoff work. They found that the results were partly driven by a spreadsheet error. More important, the results weren’t at all robust: using standard statistical procedures rather than the rather odd approach Reinhart and Rogoff used, or adding a few more years of data, caused the 90% cliff to vanish. What was left was a modest negative correlation between debt and growth, and there was good reason to believe that in general slow growth causes high debt, not the other way around.

By about two years ago, then, the entire edifice of austerian economics had crumbled. Events had utterly failed to play out as the austerians predicted, while the academic research that allegedly supported the doctrine had withered under scrutiny. Hardly anyone has admitted being wrong – hardly anyone ever does, on any subject – but quite a few prominent austerians now deny having said what they did, in fact, say. The doctrine that ruled the world in 2010 has more or less vanished from the scene.

Except in Britain.

Chapter four
A distinctly British delusion
in the US, you no longer hear much from the deficit scolds who loomed so large in the national debate circa 2011. Some commentators and media organisations still try to make budget red ink an issue, but there’s a pleading, even whining, tone to their exhortations. The day of the austerians has come and gone.

Yet Britain zigged just as the rest of us were zagging. By 2013, austerian doctrine was in ignominious retreat in most of the world – yet at that very moment much of the UK press was declaring that doctrine vindicated. “Osborne wins the battle on austerity,” the Financial Times announced in September 2013, and the sentiment was widely echoed. What was going on? You might think that British debate took a different turn because the British experience was out of line with developments elsewhere – in particular, that Britain’s return to economic growth in 2013 was somehow at odds with the predictions of standard economics. But you would be wrong.

Austerity in the UK
Cyclically adjusted primary balance, percent of GDP


Chart 3 Source: IMF, OECD, and OBR

The key point to understand about fiscal policy under Cameron and Osborne is that British austerity, while very real and quite severe, was mostly imposed during the coalition’s first two years in power. Chart 3 shows estimates of our old friend the cyclically adjusted primary balance since 2009. I’ve included three sources – the IMF, the OECD, and Britain’s own Office of Budget Responsibility – just in case someone wants to argue that any one of these sources is biased. In fact, every one tells the same story: big spending cuts and a large tax rise between 2009 and 2011, not much change thereafter.

Given the fact that the coalition essentially stopped imposing new austerity measures after its first two years, there’s nothing at all surprising about seeing a revival of economic growth in 2013.

Look back at Chart 2, and specifically at what happened to countries that did little if any fiscal tightening. For the most part, their economies grew at between 2 and 4%. Well, Britain did almost no fiscal tightening in 2014, and grew 2.9%. In other words, it performed pretty much exactly as you should have expected. And the growth of recent years does nothing to change the fact that Britain paid a high price for the austerity of 2010-2012.

British economists have no doubt about the economic damage wrought by austerity. The Centre for Macroeconomics in London regularly surveys a panel of leading UK economists on a variety of questions. When it asked whether the coalition’s policies had promoted growth and employment, those disagreeing outnumbered those agreeing four to one. This isn’t quite the level of unanimity on fiscal policy one finds in the US, where a similar survey of economists found only 2% disagreed with the proposition that the Obama stimulus led to higher output and employment than would have prevailed otherwise, but it’s still an overwhelming consensus.

By this point, some readers will nonetheless be shaking their heads and declaring, “But the economy is booming, and you said that couldn’t happen under austerity.” But Keynesian logic says that a one-time tightening of fiscal policy will produce a one-time hit to the economy, not a permanent reduction in the growth rate. A return to growth after austerity has been put on hold is not at all surprising. As I pointed out recently: “If this counts as a policy success, why not try repeatedly hitting yourself in the face for a few minutes? After all, it will feel great when you stop.”

In that case, however, what’s with sophisticated media outlets such as the FT seeming to endorse this crude fallacy? Well, if you actually read that 2013 leader and many similar pieces, you discover that they are very carefully worded. The FT never said outright that the economic case for austerity had been vindicated. It only declared that Osborne had won the political battle, because the general public doesn’t understand all this business about front-loaded policies, or for that matter the difference between levels and growth rates. One might have expected the press to seek to remedy such confusions, rather than amplify them. But apparently not.

Which brings me, finally, to the role of interests in distorting economic debate.

As Oxford’s Simon Wren-Lewis noted, on the very same day that the Centre for Macroeconomics revealed that the great majority of British economists disagree with the proposition that austerity is good for growth, the Telegraph published on its front page a letter from 100 business leaders declaring the opposite. Why does big business love austerity and hate Keynesian economics? After all, you might expect corporate leaders to want policies that produce strong sales and hence strong profits.

I’ve already suggested one answer: scare talk about debt and deficits is often used as a cover for a very different agenda, namely an attempt to reduce the overall size of government and especially spending on social insurance. This has been transparently obvious in the United States, where many supposed deficit-reduction plans just happen to include sharp cuts in tax rates on corporations and the wealthy even as they take away healthcare and nutritional aid for the poor. But it’s also a fairly obvious motivation in the UK, if not so crudely expressed. The “primary purpose” of austerity, the Telegraph admitted in 2013, “is to shrink the size of government spending” – or, as Cameron put it in a speech later that year, to make the state “leaner ... not just now, but permanently”.

Beyond that lies a point made most strongly in the US by Mike Konczal of the Roosevelt Institute: business interests dislike Keynesian economics because it threatens their political bargaining power. Business leaders love the idea that the health of the economy depends on confidence, which in turn – or so they argue – requires making them happy. In the US there were, until the recent takeoff in job growth, many speeches and opinion pieces arguing that President Obama’s anti-business rhetoric – which only existed in the right’s imagination, but never mind – was holding back recovery. The message was clear: don’t criticise big business, or the economy will suffer.

If the political opposition won’t challenge the coalition’s bad economics, who will?
But this kind of argument loses its force if one acknowledges that job creation can be achieved through deliberate policy, that deficit spending, not buttering up business leaders, is the way to revive a depressed economy. So business interests are strongly inclined to reject standard macroeconomics and insist that boosting confidence – which is to say, keeping them happy – is the only way to go.

Still, all these motivations are the same in the United States as they are in Britain. Why are the US’s austerians on the run, while Britain’s still rule the debate?

It has been astonishing, from a US perspective, to witness the limpness of Labour’s response to the austerity push. Britain’s opposition has been amazingly willing to accept claims that budget deficits are the biggest economic issue facing the nation, and has made hardly any effort to challenge the extremely dubious proposition that fiscal policy under Blair and Brown was deeply irresponsible – or even the nonsensical proposition that this supposed fiscal irresponsibility caused the crisis of 2008-2009.

Why this weakness? In part it may reflect the fact that the crisis occurred on Labour’s watch; American liberals should count themselves fortunate that Lehman Brothers didn’t fall a year later, with Democrats holding the White House. More broadly, the whole European centre-left seems stuck in a kind of reflexive cringe, unable to stand up for its own ideas. In this respect Britain seems much closer to Europe than it is to America.

The closest parallel I can give from my side of the Atlantic is the erstwhile weakness of Democrats on foreign policy – their apparent inability back in 2003 or so to take a stand against obviously terrible ideas like the invasion of Iraq. If the political opposition won’t challenge the coalition’s bad economics, who will?

You might be tempted to say that this is all water under the bridge, given that the coalition, whatever it may claim, effectively called a halt to fiscal tightening midway through its term. But this story isn’t over. Cameron is campaigning largely on a spurious claim to have “rescued” the British economy – and promising, if he stays in power, to continue making substantial cuts in the years ahead. Labour, sad to say, are echoing that position. So both major parties are in effect promising a new round of austerity that might well hold back a recovery that has, so far, come nowhere near to making up the ground lost during the recession and the initial phase of austerity.

For whatever the politics, the economics of austerity are no different in Britain from what they are in the rest of the advanced world. Harsh austerity in depressed economies isn’t necessary, and does major damage when it is imposed. That was true of Britain five years ago – and it’s still true today.

Saturday, 16 December 2017

uk media see blue Peter badge as more important than major international peace prize very questionable values of uk mainstream media

The BBC tried to defend a media “blackout” on Jeremy Corbyn winning an international peace prize. It didn’t go well.
On 8 December, the Labour leader received the Séan MacBride Peace Prize from the International Peace Bureau (IPB). Founded in 1891, the IPB is one of the world’s oldest peace organisations. But not a single mainstream media outlet seemed to report on Corbyn winning the award, sparking allegations of institutional bias.

Enter the BBC

On BBC Daily Politics, host Jo Coburn was grilling [0.05] Corbyn ally Chris Williamson MP:
Why do you think there is a conspiracy amongst UK mainstream media to suppress positive stories about Jeremy Corbyn?
The Shadow Minister for Fire and Emergency Services responded [0.11]:
Well, you tell me. But it’s pretty clear that there was a media blackout… Let’s remember, when… there was a photograph of Jeremy wearing a tracksuit, it made front-page news. When Theresa May put a star on the top of a Christmas tree, there was wall-to-wall coverage, as there was of William and Kate being awarded a Blue Peter badge. And here we have the leader of the opposition being… awarded a prestigious peace award being completely ignored.
There was indeed wall-to-wall media coverage when royals William and Kate recently won a Blue Peter badge. And as Williamson says, there was apparently nothing on the leader of the UK opposition winning an international peace award.
While Corbyn received the award on 8 December, the IPB announced it in September. With this in mind, Coburn later suggested [2.12] that the media didn’t cover the award because Labour didn’t speak up enough:
None of the official Labour media accounts or even Jeremy Corbyn himself actually publicised it. Do you think that is the problem?
The MP for Derby North pointed out [2.20] that the story went viral on social media:
No. I think the problem is very clearly with the mainstream media who simply ignored it, even when it went viral on social media.
Williamson also noted that even foreign news outlets reported on Corbyn receiving the award.

Enter Channel 4

Meanwhile, Channel 4 FactCheck argues that there was no coverage of Corbyn winning because the media doesn’t generally report on the award. But Dave Webb, vice-chair of the IPB board, points out that the peoplewho win it are rarely mainstream figures. They do tend to be distinguished anti-war and anti-nuclear activists, who the media has a history of marginalising. They do not tend to be among the most high-profile people in Britain.
Still, no mainstream media outlet covered it. So Williamson called out the “blackout” on the BBC. Apparently, we have a media that values a royal couple winning a Blue Peter badge far more than the elected leader of the opposition winning an international peace prize. The topsy turvy coverage would be funny if it didn’t have such far-reaching implications.
Watch the exchange here:
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Thursday, 12 October 2017

may is starting to look more thn a little foolish

Imagine the scene. It’s spring 2016. The Vote Leave campaign is feverishly telling the electorate that a sovereign parliament is a mere distraction. The object of prime importance is that we leave the EU – and that also means leaving the single market, leaving the European Economic Area (EEA) and leaving European-wide customs arrangements. This has to happen by fair means or foul. Power must leave Brussels, bypass parliament, and reside with a Whitehall elite. Ministers may or may not reinstate the rights and protections conveyed either by membership of the EU or the EEA, but we can all agree in any event that our jobs, rights and prosperity are of lesser importance than the British dream of rule by ministerial decree.
This counterfactual account – the true face of an honest Leave campaign – would have been dismissed as reckless by voters and would have lost a referendum. This recklessness though is no longer counterfactual, but actual, and is being debated in parliament as a result of the EU Withdrawal Bill.
Much attention has rightly focussed on the extent to which the bill represents a “power grab” by ministers. Top of my list of concerns, is the power it confers on the likes of David Davis to sit behind their departmental desks and at the stroke of a pen withdraw us from the European Economic Area and the single market.
The EEA contains the countries of the EU plus Norway, Iceland and Liechtenstein. It provides a way to stay in the single market while being outside the EU and a means of maintaining ease of trade whilst being beyond the jurisdiction of the European Court of Justice. Put simply, membership of the EEA satisfies the instruction provided by the referendum result without needlessly sacrificing our economy.
Now many of us might prefer to stay in the single market by remaining in the EU, but the odds don’t look good on that front and as a realist, I feel I have a responsibility to look at other options to limit the damage. I recognise the result of the referendum, but I will not allow ministers a completely free hand in deciding how we leave.
And so for the sake of the democracy leavers used to be in favour of, I have tabled an amendment to the Withdrawal Bill. My new clause would prevent a ministerial power-grab on single market membership and would require a further act of parliament before the government seeks to pull us out of the EEA. It would require MPs to determine whether Britain triggers article 127 of the EEA Agreement and would stop this being decided by ministerial whim.
This is no more than was provided by the government when parliament voted to trigger article 50 of the Lisbon Treaty to pull us out of the EU and it was an issue that was pronounced by David Davis in March this year as “quite likely to come to Parliament”. But as currently drafted the bill contains no provision for MPs to vote on whether we notify other contracting parties to the EEA agreement of our intention to withdraw from that treaty. Worse still, hidden in the bill’s 19 clauses and eight schedules, its sneaks in a number of changes which could be prayed in aid by ministers as some sort of back door authorisation for taking us out of the single market.
What might this back door route look like? The repeal of the EEA Act 1993 (the British act of parliament which put the EEA Agreement onto our statute book) is part of the EU Withdrawal Bill, squirreled away in Schedule 8 Part 2. Ministers could very well claim that having repealed the agreement in domestic law, they can use the powers conferred on them under clause eight of the bill to “tidy up” the irritating issue that Britain is still officially a signatory to the EEA Treaty.  They would have the power to decide that and it needn’t come back to parliament.
That isn’t the reclaimed British sovereignty people voted for and it’s not good enough. Irrespective of whether we believe the country should be out of the single market, in it for a transitional period or in it indefinitely, how can this not be a decision for parliament?
That’s what my new clause would change. It’s called democracy.
The most important issue for our country is our continued membership of the single market, along with our ability to stay in a European customs union. It is about jobs and living standards, but it is also about the money a future Labour government will need to tackle austerity. The idea that we cede all decision making on our membership of the European Economic Area to a prime minister so palpably held hostage by a cell of Brexit fanatics is one that should concern us all.
The bill has to change. The economy must come first. Parliament must make the decisions and it should be the Labour Party that leads the way

Wednesday, 13 September 2017

the Conservatives and general apathy are killing our deocracy such as it is

Normal partners in government, the hard-right DUP , are also well-represented on high-profile committees despite only having 10 MPs.

Its members will sit on the transport, international trade, Northern Ireland and defence committees among others.

What are Henry VIII powers?

Since Theresa May launched her Brexit Repeal Bill, there's been furious debate about 'Henry VIII powers'.

So what are they?

It's all to do with the difference between what us geeks call primary and secondary legislation.

Primary laws are Acts of Parliament and go through a long, line-by-line process of approval by MPs and the House of Lords.

But with secondary laws it's 'take it or leave it'. There's no chance to edit them, and in some cases (when they go through 'the negative procedure') they actually become law before MPs get to challenge them. The last time one of these was blocked was 1979.

These big differences mean primary laws are much more powerful. Quite rightly, some secondary laws can be crushed by the courts - primary laws can't.

Yet a Henry VIII power lets the PM make a secondary law that edits a primary law.

The process gets its name from the six-wived Tudor King who 'ruled by proclamation' thanks to the 1539 Statute of Proclamations.

The government claims it needs the power, which ends on 29 March 2021, to correct 'deficiencies' in EU-inspired law after Brexit.

It can't be used to change taxes or criminal offences, make laws retrospectively or change the Human Rights Act.

But even Tory MPs and a House of Lords committee have voiced fears about the powers. Labour's Keir Starmer said: "So much for taking back control."

Monday, 28 August 2017

The DUP—racist, homophobic, anti-abortion bigots with a history of violence
by Simon Basketter
Former DUP leader Peter Robinson with a gun
Former DUP leader Peter Robinson with a gun

The Tories may hang onto office with the support of the bigots of the Democratic Unionist Party (DUP) in Northern Ireland.

But who are the DUP?

Arch reactionary Ian Paisley set up the DUP in 1971 because the Official Ulster Unionist Party didn’t hate Catholics enough for him. It now has ten of Northern Ireland’s 18 MPs.

The Tories made a great deal of noise about Jeremy Corbyn’s supposed links to terrorists during the election campaign. Now they want to go into coalition with people with a rotten history of backing terrorism.

The terrorist group Ulster Resistance was founded by a collection of people who went on to be prominent DUP politicians.

Former First Minister Peter Robinson, who was DUP leader and Northern Ireland’s first minister until last year, was an active member of Ulster Resistance.

Paisley long toyed with Loyalist death squads to protect the “Union” with Britain.

In 1981 Paisley launched “Third Force”. He led a group of 500 men up a hillside in County Antrim at night, where they were photographed holding firearms certificates above their heads. They were showing that they could easily have been holding weapons.

Racist

When Enoch Powell was expelled from the Tory party for being too racist even for them, he moved to Northern Ireland.

There, his campaign manager was Jeffrey Donaldson. Donaldson said, “I worked alongside two of the greatest names in Unionism in the 20th century.

“Between 1982 and 1984 I worked as Enoch Powell’s constituency agent, successfully spearheading Mr. Powell’s election campaigns of 1983 and 1986.”

Donaldson is the longest serving of the DUP’s MPs.

The Northern Ireland Assembly collapsed in January after DUP leader and first minister Arlene Foster became embroiled in a scandal over a green energy initiative.

The scam cost hundreds of millions of pounds. Businesses could earn more money the more fuel they burned.

But the DUP isn’t just corrupt – it is nasty. The party has described climate change as a con.

It is against gay marriage and LGBT+ rights in general. It is the only political party in parliament that is determinedly anti-choice and pro-forced pregnancy.

Any support from the DUP will further slow attempts to get the 1967 Abortion Act to apply in Northern Ireland.

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