Monday, May 28, 2018

By Peter S. Goodman - Britain’s Big Squeeze: In Britain, Austerity Is Changing Everything



                        This beautiful park is up for sale to developers - once it's gone, it's gone!

“Everybody uses this park,” says Jackie Lewis, who raised two children in a red brick house a block away. “This is probably our last piece of community space. It’s been one after the other. You just end up despondent.”


So much for the Thatcher miracle, Britain is more broke than ever. But where did the money go, maybe the banks took it all in their bail out?  But aren't these the technocrats who say they know how to run an economy?

After eight years of budget cutting, Britain is looking less like the rest of Europe and more like the United States, with a shrinking welfare state and spreading poverty.r eight years of budget cutting, Britain is looking less like the rest of Europe and more like the United States, with a shrinking welfare state and spreading poverty.


PRESCOT, England — A walk through this modest town in the northwest of England amounts to a tour of the casualties of Britain’s age of austerity.
The old library building has been sold and refashioned into a glass-fronted luxury home. The leisure center has been razed, eliminating the public swimming pool. The local museum has receded into town history. The police station has been shuttered.
Now, as the local government desperately seeks to turn assets into cash, Browns Field, a lush park in the center of town, may be doomed, too. At a meeting in November, the council included it on a list of 17 parks to sell to developers.

For a nation with a storied history of public largess, the protracted campaign of budget cutting, started in 2010 by a government led by the Conservative Party, has delivered a monumental shift in British life. A wave of austerity has yielded a country that has grown accustomed to living with less, even as many measures of social well-being — crime rates, opioid addiction, infant mortality, childhood poverty and homelessness — point to a deteriorating quality of life.



24 comments:

peterc said...

"After eight years of budget cutting, Britain is looking less like the rest of Europe and more like the United States, with a shrinking welfare state and spreading poverty"

I think the negative influences of the US (and also the positive influences) are definitely strongest in the English-speaking world, including Britain of course but also Australia, NZ and I'd imagine Canada. To me at least, Australia these days appears to be a second-rate or third-rate US in most respects with education, health, public transport, utilities etc all getting trashed.

peterc said...

At least in the US with Sanders and UK with Corbyn there seem to be prospects of a re-energized left or at least center left. Australia and NZ appear to be lost causes, though never say never.

peterc said...

The quality of the journalism here in Australia is also diabolical and only getting worse, not helped by the deliberate running down of the public broadcaster (though it is as neoliberal as the rest).

An embarrassment of a country.

Konrad said...

“So much for the Thatcher miracle. Britain is more broke than ever.” ~ Kaivey

The Thatcher miracle has worked beautifully. Average Britons are more broke than ever, while rich Britons are richer than ever.

U.K. austerity is 100% gratuitous, since the U.K. government can create infinite pounds sterling out of thin air. Gratuitous austerity is a means to rapidly expand the gap between the rich and the reset, since gratuitous austerity impoverishes the middle and lower classes, while legitimizing mass privatization.

Gratuitous austerity began on Sunday 27 June 2010 in the Metro Toronto Convention Centre in Canada.

There, during the G20 summit, Prime Minister David Cameron explained to the assembled ministers and presidents how the wonderful scam of gratuitous austerity would widen the gap between the rich and the rest.

In this, Cameron delighted the representatives of Canada, Australia, and New Zealand, and their governments immediately started cutting. So did the governments of several other nations.

The U.S. government, however, was still reeling from the 2008 financial meltdown, and did not start indulging in gratuitous austerity until mid-2011. That was the year of Obama’s “grand bargain” (a.k.a. the Grand Betrayal). Meanwhile the Simpson-Bowles “Catfood Commission" demanded severe austerity in the USA. Alan K. Simpson, a former Republican Senator from Wisconsin, condemned average Americans as “the greediest generation is history," and Social Security as a “milk cow with 310 million teats.” (His own words.)

Today Simpson is 87 years old, and he is still screaming for more cuts in social programs. Always more. Perhaps Simpson imagines that being a total a**hole will make him too repulsive for even the Grim Reaper to go near.

Now the UK is being totally privatized. Every park, every green, every common, and every "chase" is being gifted to the rich.

QUESTION: Why does this happen?

ANSWER: It happens because the U.K. masses insist on believing the lie that the U.K. government is “broke” and has a “debt crisis.”

Konrad said...

PETERC WRITES: “To me at least, Australia these days appears to be a second-rate or third-rate US.”

Yes. Many Australians follow U.S. politics closely.

I we ask them “Doesn’t Australia have its own politics?” they answer, “Yes, but Australia’s government is a total slave of the U.S. government. Therefore we study the U.S. government in order to have an advance warning of how the Australian government in planning to screw us. And we study political correctness in U.S. society in order to get advance warning of how that filth is coming to infect us.”

PETERC WRITES: “At least in the US with Sanders, and UK with Corbyn, there seem to be prospects of a re-energized left or at least center left.”

Sanders and Corbyn are both sell-outs.

Both believe in deficit reduction (i.e. gratuitous austerity)

Both call for tax increases, thereby supporting the lie that the U.K. and U.S. governments depend on tax revenue.

Both support the Russia-gate hoax.

(To Corbyn’s credit, he has voted against every military action proposed by the UK government during his 35 years in Parliament.)

Regarding Bernie Sanders, the more atrocities Israel commits, the louder Sanders screams that “Israel has a right to defend itself.”

In 2016 the Democratic establishment saw that Sanders would easily win the U.S. presidency. Therefore the Democratic establishment rigged the primaries so that Hillary “won” over Sanders, only to see Hillary in turn lose to Trump. Sanders knew about all this, and yet he supported Hillary anyway. The Green party asked Sanders to be their candidate, knowing that Sanders could win the election, but Sanders refused, saying he was dedicated to Hillary and the (corrupt) Democrats.

The elites let Sanders and Corbyn put on their fake shows so the masses think they have a “choice,” and that Sanders and Corbyn are “fighting for them.”

Noah Way said...

There is no political solution to this. It can only end in revolution which will likely be incurred by civil unrest due to economic or other catastrophe such as war although environmental disaster is also a possibility. Highest probability is all three simultaneously, started by war.

Welcome to the cheery forecast of the day.

Tom Hickey said...

The West is going bonkers. Way beyond "Trump derangement syndrome" and gaslighting. The elites are holding onto power with all they've got and their grip is loosing. Meanwhile, the people in many countries are deeply divided and at each other's throats.

Will end badly. Maybe even catastrophically.

I am not posting too much on this anymore. It's spiraling out of control.

Matt Franko said...

“QUESTION: Why does this happen?

ANSWER: It happens because the U.K. masses insist on believing the lie that the U.K. government is “broke” and has a “debt crisis.”

Whoa whoa whoa!!!! I thought it was a big “neoliberal conspiracy!”... can’t have it both ways ...

Matt Franko said...

Which one is it?????

Kaivey said...

Last year when I thought Hilary was going to get elected and PCR was saying we had only days to live I ran into hiding. I stopped reading all politics, stopped posting here, and ended all email subscriptions to political sites, like CounterPunch, and within a week I started feeling a lot better.

We here know how evil the elite can be; we know it's all about making money; we know that many of them are psychopaths when the ordinary public think that only people like Hannible Lecter are psychopathic. Having too much knowledge can sometimes be a bad thing. Good guys like Corbyn don't stand a chance, but I still hope we can do something to stop this.

The problem is the corruption where politicians are easily bought. As the empire grows and becomes richer the more money it has to corrupt. Boris Johnson and Theresa May are prime examples of two politicians working against the public interest who are just trying to make as much money as possible for themselves and their class. They are also corrupted by Israel with it's enormous wealth and power.

And I despair at the electorate who keep putting the ruling elite back in power. They think Labour will put taxes up and let all the immigrants in when it's the right that does this. They hate people on benefits when the ruling class syphon off hundreds of billions more. The ruling elite destroyed manufacturing and millions of jobs, but the right wing electorate blame people for not finding work.

Konrad said...

MATT, I talk about neoliberals, and elitists, and politicians, and bankers, and blah, blah, blah.

Despite all that blather, the parties I really blame for this mess, more than anyone, is average people. Every bit of stupidity and selfishness adds up.

To use a metaphor, one candle of stupidity can only be seen from a short distance, but millions of candles can be seen from orbit.

You like Trump, but I suspect it is only because you are so fed up and disgusted with liberalism. I am too. God knows I loathed Hillary. I am always attacking political correctness and SJW filth. Unfortunately Trump has become as much a part of the Washington DC swamp as Hillary and everyone else.

Whatever.

I get the impression that you have read my comments, and for that, I am grateful. I thank you.

Andrew Anderson said...

Despite all that blather, the parties I really blame for this mess, more than anyone, is average people. Konrad

Not me. If even Yves Smith [Susan Webber], Bill Mitchell, and some other illustrious folks I could name can't see the need for ethics wrt fiat and credit creation what chance does the general population have as they struggle just to survive?

Myself, I blame the Christian denominations who long ago decided the Bible was naive wrt economics. Of course, they are the naive ones - except where they are outright corrupt, knowing better but choosing worse.

Matt Franko said...

The problem is a lack of competence in positions of economic administration...

Matt Franko said...

“At least in the US with Sanders and UK with Corbyn there seem to be prospects of a re-energized left ”

US and U.K. CBs did asset purchases while AUS never did .... so it never got that bad there economically to increase the appeal of the far left candidates...

Matt Franko said...

“who long ago decided the Bible was naive wrt economics.”

Yo hello we are operating today the same type of corrupt libertarian shit the Bible chronicles ...

It’s not a behavior modification program... it is a demonstrative failure...

Tom Hickey said...

Which one is it?????

False dilemma. Some of both, but the "neoliberal conspiracy" largely created public perception through "experts'" being pumped in the propaganda machine, I mean, "media."

The University of Chicago economics department was structured for this task, and it was buttress by "a vast right wing conspiracy" led by capital, finance and real. This is well-documented for anyone that takes the trouble to research it. Philip Mirowski is a good place to start.

AXEC / E.K-H said...

Austerity and the political games Progressives play
Comment on Peter S. Goodman’s ‘Britain’s Big Squeeze: In Britain, Austerity Is Changing Everything’

There is the political sphere and there is the scientific sphere. For well-known reasons, both spheres have to be kept apart but economists violate this elementary methodological principle since 200+ years. Economics started as Political Economy and never rose above the level of a cargo cult science.#1

As a result, economic policy guidance never had sound scientific foundations. Economists do not know how the price- and profit-mechanism of the monetary economy works. Because of this, economists do not deal in earnest with the economy but inevitably get lost in meta-communication = gossip: XY, conservative member of the upper chamber of Parliament, the House of Lords, said this; the large mob which includes quite a few journalists, believes this; but economists know that the “argument that denies the very possibility of debt finance in the face of a recession doesn’t make the cut” and so on and on.

The issue of austerity/government deficit spending/public debt is framed for the general public a.k.a. the little man as a moral tale. This applies to the New York Times article on “the effect of almost a decade of austerity on economic and social conditions in England”.

It is a sad story, indeed. Political economics always starts with a sad story. But fortunately, one has not to wait long and some smart economists are presented with their genial solution.#2 And then the political fraud begins.

This time, the fraud comes in the incarnation as MMTers who call themselves Progressives. Their message is, the bad state of the economy is a sadistic political choice of the current government and can easily be overcome with money creation/deficit spending. There is no such thing as a budget restriction and public debt does not matter for a sovereign country.#3

The lethal defect is NOT in the political program as such but lies in the fact that it has NO sound scientific foundations. Any crank is entitled to produce any policy proposal out of thin air, that is what freedom of speech means, but a scientist can not. The decisive argument against MMTers is that their policy proposals have NO sound scientific foundations.#4

To make the argument short, the axiomatically correct Profit Law for the economy as a whole is given as Qm=Yd+(I−Sm)+(G−T)+(X−M) which reduces to Qm=G−T for Yd, I, Sm, X, M = 0. The reduced Profit Law says that the monetary profit of the business sector Qm is equal to the deficit G−T of the public sector, in a nutshell: Public Deficit = Private Profit.#5

From the standpoint of simple self-interest, the one-percenters and their useful academic spokespersons should consistently argue FOR deficit spending and the ninety-nine-percenters and their academic spokespersons should consistently argue AGAINST it.

Accordingly, whoever calls himself a Progressive and argues for deficit spending and assures that debt does not matter is a political fraudster. Fact is that nobody has done more for the one-percenters than deficit-pushing economists.#6

Egmont Kakarot-Handtke

#1 Economics: a science without scientists
https://axecorg.blogspot.de/2016/10/economics-science-without-scientists.html

#2 How MMT enlightens Washington
https://axecorg.blogspot.de/2018/05/how-mmt-enlightens-washington.html

#3 Austerity and the utter scientific ignorance of economists
https://axecorg.blogspot.de/2015/12/austerity-and-utter-scientific.html

#4 MMT: No sound basis
https://axecorg.blogspot.de/2017/06/mmt-no-sound-basis.html

#5 Profit and the decline of labor’s nominal share
https://axecorg.blogspot.de/2017/08/profit-and-decline-of-labors-nominal.html

#6 Keynes, Lerner, MMT, Trump and exploding profit
https://axecorg.blogspot.de/2017/12/keynes-lerner-mmt-trump-and-exploding.html

Andrew Anderson said...

in a nutshell: Public Deficit = Private Profit.#5 AXEC / E.K-H

1) What if all deficit spending by the monetary sovereign were via equal fiat distributions to all citizens?

2) All debt of the monetary sovereign yielded or paid negative interest except for a, say, $250,000 negative interest-free-exemption for individual citizen checking/debit accounts at the Central Bank itself?

BTW, according to the Bible, profit IS GOOD, profit TAKING ISN'T GOOD.

Andrew Anderson said...

BTW, according to the Bible, profit IS GOOD, profit TAKING ISN'T GOOD. aa

Which should have clued John Calvin and his followers that common stock issuance, rather than usury from one's fellow countryman, was the proper way to finance progress.

Andrew Anderson said...

The problem is a lack of competence in positions of economic administration... Franko

Why should a competent person choose to dirty his/her hands administrating a corrupt system? Unless corrupt her or himself?

Matt Franko said...

Whether somebody goes all around believing “we’re out of money!” or one does not is not an “ethical!” issue it’s a technical issue... best left to those technically competent ...

ANC Driver said...

"in a nutshell: Public Deficit = Private Profit.#5 AXEC / E.K-H

1) What if all deficit spending by the monetary sovereign were via equal fiat distributions to all citizens?"

I think the point being made is that all spending (which obviously increases with deficits) has two components, where one component circulates back into the economy via wages and B2B, and the other component ends up as distributed profits to the owners of the businesses, and the more circulation there is the more siphons off into the second component. Income is only ever temporary and like metal filings, whereas the share and bond owners are the magnets.

AXEC / E.K-H said...

ANC Driver

You ask: “What if all deficit spending by the monetary sovereign were via equal fiat distributions to all citizens?”

In this case two, things happen:
(i) If all households spend this helicopter money, the price goes up a little (NO inflation) and the household sector gets the SAME total real output under the conditions of market clearing.#1,#2
(ii) The profit of the business sector increases because of Qm1=C1−Yw in comparison to Qm0=C0−Yw with C1 greater C0. The difference between C1 and C0 is the amount of helicopter money.

The real situation of the household sector remains unchanged because the price hike counteracts the nominal demand increase. The situation of the business sector as a whole improves, i.e. monetary profit Qm is higher.

All these political movements (MMT, Helicopter Money, Magical Money Tree, Functional Finance, and good old Keynesian Deficit Spending) amount ultimately to the self-financing of the one-percenters via the state.#3, #4, #5

Whether MMTers are aware of it or not does not matter. De facto, the political fallout of MMT’s economic policy guidance is a weakening of democracy and a strengthening of oligarchy.

Egmont Kakarot-Handtke

#1 MMT: academic snake oil for the people
https://axecorg.blogspot.com/2018/02/mmt-academic-snake-oil-for-people.html

#2 MMT, money printing, stealth taxation, and redistribution
https://axecorg.blogspot.com/2017/11/mmt-money-printing-stealth-taxation-and.html

#3 Clueless about money and profit
https://axecorg.blogspot.com/2016/09/clueless-about-money-profit.html

#4 Helicopter money — a free lunch for the one-percenters
https://axecorg.blogspot.com/2016/03/helicopter-money-free-lunch-for-one.html

#5 The Emergence of Profit and Interest in the Monetary Circuit
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1973952

ANC Driver said...

Sorry Egmont,
The question “What if all deficit spending by the monetary sovereign were via equal fiat distributions to all citizens?” was asked by Andrew Anderson. I was attempting to answer it. I should have pointed that out. But yes, your response makes sense.