Saturday, August 18, 2012

flawed politics?

Yes, I know, the Guardian newspaper (and Jon Snow on Channel4 News) does much to set my political perspective/social conscience…
There were two articles in today’s Guardian (well, actually, one of them was in the Guardian Weekend magazine) that caught my eye.
The first was an article by Peter Wilby in which he talks about how the army's Olympic performance had challenged the defence minister's (Philip Hammond) private 'ethos'. It makes fascinating reading.
The second related to George Osborne (our beloved chancellor) in which seven leading economists told Mr O exactly what they thought of his policies and what he needed to do next. I particularly liked the following comments:
Paul Krugman (Professor of Economics at Princeton University):Do the opposite of what you've been doing for the last two years. The credit ratings don't matter at all, so this argument about austerity keeping Britain's triple A rating doesn't make sense. This is a time for the UK government to be borrowing and spending”.
Robert Skidelsky (Professor of Political Economy at the University of Warwick):Cutting public spending when there is no other source of growth in the economy is a sure-fire strategy for recession. As if the lack of recovery wasn't bad enough, the lack of growth also scuppers your deficit-reduction goals – the very reason for austerity in the first place. Like throwing away the engine to trim a car, you have offset the lack of revenue recovery by slashing capital spending. The results are already being seen in the forecasts: there will be no spurt of growth to regain the losses of the recession. The best we can hope for is a slow crawl along the bottom. Is there a way out? Initiatives such as the National Infrastructure Plan and the Green Investment Bank aim to mobilise private money behind growth-boosting capital projects, but they lack the financial backing to have a real impact. The government has promised less than £10bn, a fraction of the size of the cuts to public investment. Why not more? Since well-chosen infrastructure and energy-saving projects will be revenue-generating, increasing capital spending does not even have to come at the expense of a higher deficit”.
Jayati Ghosh (Professor of Economics, Jawaharlal Nehru University, New Delhi, India): Even the International Monetary Fund thinks the government should loosen its belt! The focus has to be on restoring economic activity through increasing public spending. In the medium term, the focus has to shift from obsessing about GDP growth to improving the quality of life of all citizens, which may create quite different economic goals: generating good-quality employment; ensuring universal access to freely available and good-quality social services; reducing economic disparities and material vulnerabilities to get greater social cohesion; and providing ways of living that are less destructive of nature. The good news is that this can be done – but it requires a different economic approach and possibly therefore different politics as well”.
Obviously, George will immediately sit up and take notice… because that’s just the kind of sensible, enlightened bloke he is!

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