Wednesday, 3 July 2013

The truth lost in austerity; it wasn't public spending that got us into this mess.

How convenient it is for the government that the real cause of our economic woe seems to have become a distant media memory. Better it is for the government to blame the poorest for the crisis, rather than question how it was that the capitalist edifice crumbled.

The inconvenient truth is that far from it being 'social welfare' that brought us to our knees, it was middle class greed.  It wasn't the deficit; it wasn't the 'welfare dependent' poor.  It was middle class greed and a banking sector gone sour;  a banking sector willing to sell us their 'toxic' financial products pushing personal debt higher and higher, and in the UK to the highest levels in the world.

No it wasn't and isn't public debt that was or is our problem; it was personal debt. Whilst the government have been on an ever failing austerity drive of cuts that are stripping services to the bone, hitting the poorest the hardest, slashing funding to the NHS with £20 billion of cuts, and attacking those on benefits, the Bank of England have created some £275bn of new money through quantitative easing making it possible for us to live with our debts. 

Harold Wilson once said that a week is a long time in politics. Three years must be an age. But are we doing anything to prevent a repetition of capitalist failure? The answer is surely very little. The greatest hope for the coalition is that we have another boom, that house prices rise, that banks lend more money, that we stoke another furnace of unsustainable debt. 

Perhaps the logic is that it only went wrong because of the actions of 'rogues' in the banking system. This would be the triumph of hope over reality. It was the banking system that went sour. Greedy bankers, greedy shareholders, that did away with mutual building societies and turned them into banks. Banks that expanded carving out ever green territory, buying each others toxic lending: promissory notes that had little chance of being redeemed. 

Yet the government, if opinion polls are to be believed, have  persuaded the public that it is all to do with government spending and 'welfare dependency'. They have succeeded in blaming the poor. And the reason is obvious. Any other narrative is uncomfortable. We would like it all to go back to how it was; toxic and unsustainable, in the hope it will work next time. God forbid that government ever did the wisest thing and raise taxes. Yet if we were truly all in this together then surely we should all pay. 

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