Journalists are supposed to stay well away from Politics (and the capital ‘P’ is no typo). The fourth estate’s putative duty is to ask awkward questions, to speak truth to power, to avoid political biases, etc. etc….
But what happens when a cynical hack wakes up one morning and realises that the government he lives under is passing off myths and rumours as truth? That the country he lives in is about to be torn asunder not in the best interests of the people but for the sake of ideology?
Spending cuts are not inevitable, and what’s more they will destroy the livelihoods and futures of millions. This is a journalist making a statement of fact that can be supported by evidence (some of it below) but it is also a concerned citizen waking up and smelling the coffee.
The time has come for me, and you, to cross the Rubicon, to openly question the economic orthodoxy that threatens to decimate the UK. We need to make a political stand, many of us for the first time in our lives, before Britain cuts itself back into the 1930s.
On October 20 Chancellor George Osborne set out proposals to cut government spending by some £81 billion in the next four years. Osborne said that only such drastic spending cuts would bring Britain back ‘from the brink’. But is this really true?
Well, almost every non-aligned economist (those not in the pay of think tanks, government or pressure groups) disagrees.
David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee, describes the cuts as ‘unnecessary, misguided, doctrinaire’. Paul Krugman, winner of the 2008 Nobel Prize for Economics, has warned that, ‘the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump’. Leading UK economist George Irvin calls the Chancellor’s argument ‘a mixture of fact and myth’.
The economic case against cuts is manifold, but arguably the most important point is that for vast swathes of the population the economic crisis that began on Wall Street in late 2007 is nowhere near over.
Unemployment is already increasing across most of the UK (only the Conservative heartland of south-east England bucks the trend). With joblessness on the rise, what has our government decided to? Why, cut two million public sector jobs – directly and indirectly – of course.
Osborne’s argument that the private sector will simply ‘grow’ to fill the gap left by government is totally unproven and goes against the advice of everyone from the OECD and the IMF to the think-tank Compass, who have said that, ‘the government’s hope is that this will come about by simply creating ‘space’ for private initiative. It has an agenda for cuts but not for growth’.
Meanwhile, house prices are still far below pre-crash levels, economic growth hovers below the developed world average and is expected to fall in the next quarter.
So why are the coalition carrying out these savage cuts? Their answer is that without cutting the country’s budget deficit bond markets will lose faith in the UK’s ability to pay back its loans and interest rates on government borrowing will rocket to uncontrollable levels.
All available evidence suggests the exact opposite. Those countries that have radically cut public spending – Ireland, Greece – have seen their interest rates go through the roof, while those who have resisted the urge to self-flagellate have been rewarded with interest rates around 3 per cent. (Last week the yield on Irish government debt hit a record high of 7.19% after the government announced a further €15 billion cut in spending.)
Bond markets do not reward reckless deficit cutting: it radically erodes a country’s tax base (as Ireland is finding out) and leaves a massive black hole in tax receipts, both now and in the future.
Paul Krugman called it right when he recently described economic policy makers as ‘like the priesthood of some barbaric cult, demanding sacrifices in the names of invisible gods’. These ‘invisible gods’ are global financial markets, the ‘sacrifices’ gargantuan spending cuts.
If we no longer believe in pagan ritual, why are prostrating ourselves before an altar constructed out of smoke and mirrors?
Of course, economics does not easily set the blood racing. The dismal science is too often presented in opaque, jargon-filled prose that most are unwilling – or unable – to engage with. However, instead of accepting the cuts as ‘inevitable’ and the ‘only option’, the economic arguments against the cuts need to be presented as clearly as possible. When they are the holes and fallacies are all-too-clear.
Many economists agree the only way out of the black hole that we are in is sustained, massive increases in government spending. Not quantitative easing but government spending on capital and non-capital projects. This will produce employment, tax revenue and growth. Only then can we talk about deficit reduction.
But economics is not the only reason to oppose the proposed spending cuts.
Walk through any Scottish town today and you will see boarded up units on the high street, pass streams of jobless young men and women. Scotland, and many other parts of the UK, needs investment: imagine what these towns and communities will be like after five years of continuous disinvestment? What it will be like for a generation to grow up into unemployment? As many vital services are either pared back to the bone or cut altogether, the social glue that keeps the nation together will be pulled apart, inducing a downward spiral of poverty, crime and drugs.
Opposing spending cuts is not a matter of left or right. Wanting to stop our leaders’ grotesque experiment in political economy is not about socialism or capitalism: It is about our own, and everyone else’s, right to a reasonable future.
There are plenty of oppositional politics out there – as the endless reams of flyers and inky, black and red posters attests – but this cause is different. It is precisely this difference that means we must make the case against cuts and in favour of stimulus spending as cogently, as forcefully, and as creatively as possible.
Instead of shouting ‘down with this sort of thing’ we will explain to people the economic argument against deficit reduction in a language everyone can understand. But we also need to organise, to be bright, to be new, and to appeal across classes and affiliations.
I am still not exactly sure what I am proposing but it might go something like this: a broad-based campaign, involving everyone from pensioners and community groups to students and parents. This campaign will take the argument in favour of increased government spending right into the public domain, publishing economic data in pamphlets and online, and arguing our case in the media and elsewhere.
Of course mobilisation is vital, too. Old-school street protests and demos have their place but for this campaign to work we need to move beyond the tried and the tired. We need to be creative, to get our message across in a clever, innovative, and unpredictable fashion, from inventive PR stunts one day to reasoned public debates the next.
The time has come for all of us to take what belongs to us all – our future. If you want to call this a Tea Party go ahead, but this is not about getting ridding of government per se – government is the only way out of this mess – but changing government policy.
We already have the support of several leading UK economists, why don’t you come onboard, too?
This is probably the first considered, overtly political act in my life: I am calling on anyone reading this to help start something new, to imagine a better way. If it all sounds incredibly idealistic for a hack on a Monday afternoon, well it is, but if this is something you think you want to get involved in (and why wouldn’t you?) drop me an email, get in touch or follow me on Twitter (@PeterKGeoghegan).
Spread the word, the cuts may be coming but we are too.