Why does Cameron want permanent austerity?

In the United Kingdom, there could well be austerity without end. In a recent bullish speech at the Lord Mayor’s Banquet, UK Prime Minister David Cameron offered up a glimpse of what the future might hold if the Conservatives are re-elected in 2015: a government of “austerity in perpetuity”.

Martin Kettle suggests in The Guardian that this speech may have been the moment of hubris that loses the Conservatives the next election.

For many people across the English-speaking world, “austerity” does not mean quite what it once meant — simplicity, restraint, beauty. In much the same way, “rationalism” in the Australian context no longer holds the same positive connotations when paired with the word “economic”.

It is not just in the English-speaking world that this has changed: if you happen to be a young Madrileño struggling to find work, one of the almost 26 per cent of the Spanish population still unemployed, austeridad is a curse.

In Greece, the Greek term for “austerity” can hardly now be separated from the growth-strangling measures imposed since 2010 at the behest of the IMF and European Union, measures that have at times seemed to threaten the very existence of the modern Greek state. As of October 2013, Greece’s annual GDP is still in decline (after five prior straight years of decline) and its debt as a percentage of annual GDP remains in the vicinity of a colossal 170 per cent.

The “austerity medicine” has been forced down Greek and Spanish throats since 2007 and plenty more besides. In Cyprus, the Ukraine, Portugal, Hungary, Iceland, Ireland and perhaps soon Slovenia, fiscal austerity programs have been administered under the instruction of the European Union and the IMF, in exchange for bailout funds to service national debt and/or shore up their domestic banks.

That growth in the European Union has subsequently flatlined since 2011 can hardly be viewed as mere coincidence, and the advisory role of the IMF has accordingly fallen under increased scrutiny in the last couple of years.

The response has been a truly spectacular feat of intellectual acrobatics. As reported by Alan Kohler in October last year, the IMF has since admitted to mathematical error in calculating the effect of austerity on growth estimates and in effect, executed “a full intellectual U-turn” on austerity.

IMF Managing Director Christine Lagarde has led the political damage limitation exercise. Further mea culpas have emerged this year, seemingly burying “fiscal austerity” permanently, at least in the brutish form it has taken in the aftermath of the GFC as a salve to national debt crises.

The truth is more complicated: as Australian economist John Quiggin observes in his book Zombie Economics, even when proven to be wrong and dangerous, ideas are very hard to kill and “expansionary austerity” now has its own chapter in the latest editions.

In France, President Francois Hollande finds himself and his Socialist Party in the ironic position of being criticised by the IMF for pushing austerity too far. The United Kingdom, once the IMF’s austerity poster child, provides a case in point: under the Chancellorship of George Osborne, fiscal austerity staggers relentlessly on even as it bleeds to death.

Since the Conservative-Liberal Democrat coalition was elected in 2010, the government has junked its touchy-feely “Big Society” moniker in favour of a program of cuts so deep they could well be labelled “Cruel Society”. They have resulted in the widespread closure of libraries, reductions to and closures of local government services supporting children, the disabled and the elderly, and a reduction in patient access to NHS specialist services across the country.

The Cameron government has also introduced the “spare room subsidy” or bedroom tax targeting public housing residents with more rooms than they need, and also instigated an intrusive and demeaning program of outsourced work capability assessments designed to force anyone who is plausibly capable of some kind of work (in the imagination of a bureaucrat) off welfare.

The UK economy has stagnated over the last few years, with annual GDP growth not touching 2 per cent since 2007, missing growth and debt reduction targets on consecutive occasions. Unemployment has remained high, over 7.5 per cent since 2009, and ratings agency Moody’s made the historic decision in February this year to downgrade the UK’s credit rating from AAA to Aa1.

Government debt as a proportion of GDP has also continued to increase steadily since 2010. Despite all this, Chancellor George Osborne remains determined as ever to stay the course — surely now for political reasons as much as empirical reasons — though boosted recently by recent economic figures for 2013 Q3 (growth up to 0.8 per cent, unemployment down to 7.6 per cent).

Despite the evidence, the immediate future of austerity as a response to debt is hard to predict. On the one hand, the IMF’s intellectual backflip seems likely to discourage governments from embracing austerity measures in the years ahead. On the other, for governments that are wedded politically to the doctrine, it seems that no amount of expert advice or economic analysis will convince them to alter their course.

Despite Australia having one of the lowest government debt to GDP ratios in the developed world, the effects of Tony Abbott’s appointment of Maurice Newman to his Prime Minister’s Business Advisory Council will be watched with interest in the months ahead, particularly given the lilt of some of Newman’s recent comments about the minimum wage.

At least – thanks to Cameron – it seems as though voters in the United Kingdom are going to have a clear decision to make at the 2015 election: you can vote for Keynes, or you can vote for “the Cruel Society”.

This piece was first published in this form at New Matilda.

David Cameron’s socialism by some other name

Whither Keynes? For the past six to twelve months, the big philosophical imponderable doing the rounds in British political life has been the extent to which the government should intervene in the market in order to stimulate the national economy. The Conservative/Lib Dem government’s “Plan A” to cut, cut and cut some more is flatlining; growth is stagnant. Unemployment has risen to 8.4% – the highest it has been since 1995 – as the jobs that the government’s austerity programme has ripped from the public sector and wrung from the strangled charity/NGO sector are not being replaced in the for-profit sector as hoped.

This is by every empirical measure imaginable a failing fiscal plan, but Plan B remains firmly off the agenda. And why? Keynesian economics is not policy anathema, but it has become political anathema. Central to the fable being spruiked by Prime Minister David Cameron and the Conservatives is that Labour’s clunky and interventionist approach to economic matters is to blame for the mess that Britain now finds itself in. If the Tories were to take a backward step from their “Plan A”, the economic dogma they’ve peddled since May 2010, they would be letting the Opposition off the hook. They would also be pricking the bubble of fallacious confidence that George Osborne et. al have, in effect, hitched a ride with throughout their war on public spending. It’s easy to forget given all the sanguine polling doing the rounds, but this is a government sustaining itself not through success in matters of policy, actual popularity, or anything resembling hard work, but merely ego: a reserve of confident bloody-mindedness that the market will eventually prove them right and that those on welfare should be punished.

The rigid stance adopted by the government on economic stimulus is particularly galling when one considers some of the moral peccadillos that the Tories apparently feel do warrant some intervention. This is a government that has no qualms about pulling levers and interfering with the market like a bunch of cardboard cut-out social-engineering lefties when doing so will slap and tickle their upper middle-class conservative base. A crusade to cap welfare benefits, directly impacting the lives of some of the nation’s most needy children has in recent days seen support for David Cameron soaring to a 22 month high. Jobs may be disappearing into the ether by the thousand across the country, but as Allegra Stratton alluded to in The Guardian recently, Cameron’s willingness to engage in blinkered market intervention has been plainly evident for some time now:

In a WH Smith not far from Westminster, there are no Terry’s Chocolate Oranges on sale at the till but there’s every other calorie and additive on offer. This stroll to the newsagent counts for political research because if you listened to David Cameron six years ago, flogging cheap chocolate to captive targets was an exemplar of immoral capitalism run amok.

“As Britain faces an obesity crisis, why does WH Smith promote half-price Chocolate Oranges at its checkouts instead of real oranges?” Cameron protested. Through the bully’s pulpit of office and opprobrium, he sought to change it.

In America, they would call out such a protest as socialism. In Britain, it would just be an all too typically fluffy intervention into the market on behalf of the morally conservative, rich or powerful, while the brutalisation of the truly needy by the market continues, wholly aided and abetted, in the background.

David Cameron hearts archaic voting systems

Over here in the United Kingdom, the creaking FPTP (First-Past-The-Post) system of voting still operates; voters in general elections are forced to nominate only their most-preferred candidate, a solitary smudge in a box. It’s easy to see how such a system can result in fairly undemocratic results in tussles between more than two serious candidates: as the number of serious candidates in a ballot increases, FPTP forces a serious division of the vote, ultimately delivering victory to candidates with potentially only a minority proportion of overall electoral support. It is a system that decisively favours larger, more-established parties at the expense of smaller ones, and it is not surprising in this context that the Liberal Democrats made electoral reform one of the cornerstones of their campaign in the May 2010 UK general election.

The begrudging promise of a referendum on the alternative vote or “AV” system of preferential voting reportedly sealed the Coalition deal for David Cameron’s Conservatives with Nick Clegg’s Liberal Democrats in the election aftermath. The referendum, which is to be held on Thursday 5th May 2011 as a kind of royal wedding after-party for psephologists, will cast the two Coalition partners decisively against each other in what looks set to be an intriguing political tussle. From an Australian perspective it is particularly intriguing, because as the anointed international standard-bearers for preferential voting, Westminster-style, it looks like we will be stuck in the crossfire for the duration of the debate!

The first serious volleys were fired late last week, when Nick Clegg and David Cameron set out their opening arguments for voting for and against AV, respectively. David Cameron made special mention of the Australian example several times in his speech launching the “No” campaign. His approach? Never let a good argument get in the way of a good slur:

When it comes to our democracy, Britain shouldn’t have to settle for anyone’s second choice.

And this argument that no one really wants it, it’s as true abroad as it is at home.

Only three countries use AV for national elections: Fiji, Australia and Papua New Guinea.

In Australia, six in ten voters want to return to the system we have – first past the post.

This is both sleight of hand and an egregious slight; playing on the relative size and remoteness of all three countries mentioned, and slimily “hiding” Australia in passing between Fiji and PNG. What really are you saying about Fiji and Papua New Guinea, Prime Minister, by being so careful to mention them first, and last? They are the countries you want people to remember and associate with AV, aren’t they? I’d also be interested in hearing the basis for the “six in ten” figure mentioned. Does anybody seriously believe that there is any realistic popular support whatsoever for a regression back to FPTP in Australia?

The British Prime Minister also takes the time to explain why preferential voting is the reason for the relatively high number of safe seats in Australia (?) and furthermore, why it is to blame for “obliterating minor parties” down under. Evidently nobody told him about the rise and rise of the Greens, or the notable success of independents and minor parties in recent years, in both the House of Representatives and the Senate.

He goes on to trash Australia’s electoral system, calling out the fact that it took seventeen days for a government to be formed at the last federal poll, and noting that on voting day ”voters are lectured at polling stations by party apparatchiks with ‘How to Vote’ cards.”. I’m not necessarily a fan of “how-to-vote” shenanigans outside polling booths, but it is a nonsense to describe the process as “lecturing”; in practice, it is little more than froth and colour. It is also disingenuous of Cameron to spin the speed of confirming the last federal election result as indicative of what happens in preferential voting systems generally. September 2010 was hardly exemplary of recent federal election results in Australia – practically all of which were decided with brutal speed and on the night (indeed, called by Antony Green a few hours after the close of polls, quite frequently).

I’d like to think that the Prime Minister isn’t going to take this rubbishing of Australia’s electoral system lying down. She might start by making gentle mention of that most thoroughly democratic of British institutions, the House of Lords.

Cross-posted at Larvatus Prodeo.

Will hatred for Labour or hatred for the Tories triumph?

Modern representative democracy really does tend to have a strong “lesser of two evils” theme to it in countries where a small number of major parties dominate. One wonders to what extent the average person casts their vote with the tactical aim of keeping a particular party out of office, as opposed to voting in a strategic sense for a party that they have some belief in. With the UK election now looming, Gary Younge has what might prove to be a telling piece in the Guardian, describing why he’s not that fond of Labour but could never vote for the Tories:

I hate them for a reason. For lots of reasons, actually. For the miners, apartheid, Bobby Sands, Greenham Common, selling council houses, Section 28, lining the pockets of the rich and hammering the poor – to name but a few. I hate them because they hate people I care about. As a young man Cameron looked out on the social carnage of pit closures and mass unemployment, looked at Margaret Thatcher’s government and thought, these are my people. When all the debating is done, that is really all I need to know.

I get the impression that this election may turn out to be rather closer than one would think because of the relative prevalence of this sort of thinking, the unevenness of support for the Liberal Democrats, and the inability of the Conservatives to swing voters their way in all the seats that matter. We’ll know either way in a couple of days.

Of course, with Tony Abbott proving to be a fairly divisive figure locally, there are clear parallels with the Australian situation, and our forthcoming federal election. How many voters, a little disgruntled with Rudd Labor but very unimpressed by some of Abbott’s more extreme and controversial views, will cast their votes for the least objectionable party?

Mating sloths, bovver boys and toffs

It’s a curious fact that the United Kingdom has, only in the last twenty-four hours, fielded its first ever televised election debate. Both locally and in the United States, debates between the key party leaders have been conducted during election campaigns for many years now. Historically, British Prime Ministers seem to have been rather reluctant to cede any of their billing as media “top dog” to their political opponents. The difference this time around is the devastating nature of the challenge facing Prime Minister Gordon Brown, who most people have written off in favour of David Cameron over the last few years. Of course, the other reason (antipodean chortle), is that perhaps the Brits are sometimes just a wee bit degenerate when it comes to political innovation. We have, after all, been directly electing our Senate for over a century now… whereas the House of Lords… anyway, let’s just not mention our shared head of state.

The debate outcome has been both interesting and unexpected – indeed it may serve to re-energise the election campaign for a lot of Britons. The leader of the Liberal Democrats, Nick Clegg, was also invited to participate in the debate, and most commentators seem to believe he stole the show. Clegg’s performance has reignited debate around the possibility of a hung parliament, should the Liberal Democrats perform well enough to capture a decisive number of seats in the May 6 election. Polling results following on from the debate and indeed the subsequent planned debates should be very interesting indeed. One presumes that Conservative and Labour Party boffins (particularly the former) will be just a little bit nervous about what could happen if Clegg manages to ride a wave of debate-driven popularity into the final days of the election campaign.

Even if it achieves nothing else, at least this whole TV debate lark has proven quite the novelty for UK political columnists, with a few notable exceptions. I think Jackie Ashley from the Guardian is being just a tad harsh, but Australian readers might find something a little familiar in this observation:

A tame, silent audience was confronted by three leaders, who rarely made eye contact and never let fly. No real humour, no surprises, nothing spontaneous at all. No doubt some interesting things were said towards the end. Nobody was still awake to hear them.

If this was a natural history programme, it was less carnivores tearing across the plain than hanging around for far too long, waiting for sloths to mate. The television negotiators must have been grinding their teeth with disappointment.

A disturbing use of imagery, yes, but somehow, so very apt.

Manifesto chic

With the UK election campaign now in full swing, Gordon Brown’s Labour is doing its darnedest to remain competitive, despite the troubled legacy of the Blair years. Both Labour and the Conservatives have just released their election manifestos; and as Jonathan Glancey from the Guardian points out, a picture is worth a thousand words.


While Labour’s clearly shooting for Soviet-era revolutionary imagery, the David Cameron’s Tories are clearly very, very serious about the situation. In a sense both parties are trying to “cover off” (ahem) their perceived weaknesses. Labour is fighting the dreary, grey image they have cultivated for themselves with Gordon Brown with an explosion of colour here, and the Conservatives are doing their best to appear businesslike, competent and ready to govern. Looking at the covers, which one do you think is likely to be more interesting?

And the content? It would seem that with the exception of the democratisation of the House of Lords (a long overdue reform – why hasn’t Labour tackled this already?), the government probably hasn’t offered up quite enough to stay in the game.

Cutting him loose

There’s quite a lot ado about parliamentary expenses at the moment, a little bit locally, but to paraphrase the Prime Minister, there’s a whole shitstorm going on in the United Kingdom right now. Even as Kevin Rudd clings gingerly to repeat-offender Joel Fitzgibbon like one does with a somewhat disliked cousin, it is beginning to look as though the ever-escalating UK expenses scandal might be the straw that finally breaks the back of the Brown Labour Government.

Home Secretary Jacqui Smith is reportedly set to resign from Cabinet, and Communities Secretary Hazel Blears resigned in a shock announcement today. Now backbenchers are threatening to push a petition letter throughout the partyroom calling for Gordon Brown to abdicate, and the Guardian has taken the extraordinary step of calling for the Prime Minister’s resignation in an editorial:

All must agree that the die is cast and a hard judgment made. Otherwise progressive politics will be dragged down at a general election in May 2010 that could lead to a much bigger defeat than Labour suffered in 1979. That might bring a chance for other parties to take it forward, as the Liberal Democrats are trying to do in this election. But they are not placed to enter government. Labour has a year left before an election; its current leader would waste it. It is time to cut him loose.

It’s a little unfair that Gordon Brown should be made to pay a price for the current expenses drama, a drama in which every sitting member of parliament has a stake. The Guardian editorial is nevertheless spot on. Gordon Brown has been given a good run, but he and his government remain on an express train to electoral irrelevance at the polls next year unless something drastically, and changes very soon indeed.

Roll on David Miliband as a fresh alternative to Gordon Brown, and a man of more substance than David Cameron.

Mister fast money schmicko no longer quite so schmicko

In a political sense, it is increasingly looking like the global financial crisis has been just what the doctor ordered for British Labour and in particular Prime Minister Gordon Brown. As The Guardian reports today, a Mori poll has Labour trailing the Tories by only three points now, an amazing seventeen point improvement on what polls were suggesting a few months back before the worst of the crisis hit. For someone like myself, who lived through an extended period whereby it seemed that David Cameron and the Tories were interminably ahead of the Prime Minister by ten points or more, it’s really all quite astonishing.

So why the shift? There is surely a multitude of reasons, but I am going to offer some observations about the comparative public images of Gordon Brown and David Cameron. Brown comes across in the media as a dour, boring, wonkish man. I dare say that a majority of Britons descend into a microsleep the very moment that he appears in front of them on the television, the very second that his voice starts droning across the airwaves in earshot. While the going was good economically, twelve months or so ago, it is probably fair to say that Brown was not really in tune with the entrepreneurial energy of the times. The British people wanted boldness; they wanted action. They were not adverse to a little risk taking by their government. This is of course where the poll success of David Cameron comes in; a young business type actually willing to embrace new age concerns like global warming. He represented a fresh change and a clean break from the past. Sure, he was probably a little wet behind the ears compared to his rival, but he promised to deliver the energy that the Prime Minister seemed to lack.

Now, the tables have turned. We have entered troubling economic times, when suddenly ordinary people are interested in what dour, boring wonks have to say. They are concerned for their future. They are worried about their employment prospects. They are no longer in the mood to take financial risks, or to take a punt on an unknown quantity like David Cameron. They want surety and certainty, and someone who has a lot of experience behind them and the intellectualism required to fortify the nation against the chaos of the global financial situation.

It would be an interesting exercise to plot the poll ratings of Gordon Brown against the FTSE over the last twelve months. And it will be interesting to see if Gordon Brown manages to surge to a lead in the polls over the next six months, on the back of his superior credentials with respect to the financial crisis that seems to currently have observers the world over in a bit of a tizz.

Bring us your fat and your poor and we’ll kick them

I am really not sure what to make of this article in Uncle Rupert’s Times today. When I first saw the headline plastered over the free morning shitsheets on the tube this morning, I thought that just maybe, Tory Leader David Cameron had taken a step too far in his belligerent, wealthy-folks-oriented conservatism and would get a well-deserved whack for it. The title of the article is “David Cameron tells the fat and the poor: take responsibility”, and remarkably enough, the title is in fact a fairly accurate synopsis of what Cameron is reported as saying:

In a conscious shift of strategy, the Tory leader said he would not shirk from discussing public morality and claimed that social problems were often the consequence of individuals’ choices. “We talk about people being ‘at risk of obesity’ instead of talking about people who eat too much and take too little exercise,” he said. “We talk about people being at risk of poverty, or social exclusion: it’s as if these things — obesity, alcohol abuse, drug addiction — are purely external events like a plague or bad weather.

Of course, this being the Times, these comments are described matter-of-factly in the article, with nary a hint that just perhaps Cameron’s comments are controversial, or for some, offensive. Certainly what we have an example of here is the rhetoric of individualism taken to yet another fanciful extreme, the prejudices of an arrogant upper-class twat fashioned crudely into a faux-bold pronouncement. I don’t believe it to be true that modern society makes individuals feel blameless for their various predicaments, as Cameron seems to be suggesting. If anything, both Britain and Australia have over the last couple of decades moved away from being societies where one’s rights towered over one’s responsibilities, to societies where the balance between one’s rights and responsibilities are more evenly (and perhaps, more effectively) poised.

It is interesting that Cameron is all for heaping responsibilities onto individuals who may or may not have the capacity to solve their problems on their own, but does not seem to be very interested in the responsibilities of society. Moreover, is it not true that society has a responsibility to lend individuals a helping hand when they fall foul (whether partly or wholly through their own hand) of afflictions like poverty, alcoholism, drug abuse, or obesity? Isn’t it not just the individual that has failed when this scenario unfolds, but society itself? What is clear from these sorts of questions is that conservatives like Cameron seem to lack the very basic human ability of taking a walk around the block in someone else’s shoes. Not everyone grows up in a wealthy family, with excellent parents and a good understanding of how to play the 21st century economic game to perfection. Not everyone emerges, blinking, into the light of the global economy at 18, ready to plug in with a metaphorical USB cable dangling from the back of their skull. I don’t see why we should be surprised that people who come from difficult backgrounds might struggle to make the right decisions in their lives, perhaps leading to some of these afflictions taking hold.

The people of Great Britain would do well to remember at the next election that a vote for David Cameron is a vote against the sorts of people right across the kingdom who need a helping hand. If you are thin, white, rich, and don’t give a shit about other people, the Tories are making it damned well clear with comments like this that they are your party.