Tag: Global banking crisis

The Coalition are creating poverty via their policies

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“David Cameron and George Osborne believe the only way to persuade millionaires to work harder is to give them more money.

But they also seem to believe that the only way to make ordinary people work harder is to take money away.”

Ed Miliband.

Source: Hansard, December 12, 2012.

The largest study into poverty in the UK has prompted fresh urges for the government to take measures to tackle growing levels of poverty. The Poverty and Social Exclusion in the United Kingdom (PSE) project is a collaboration between the University of Bristol, University of Glasgow, Heriot Watt University, Open University, Queen’s University (Belfast), University of York, the National Centre for Social Research and the Northern Ireland Statistics and Research Agency.

The project commenced in April 2010 and will run for three-and-a-half years. The research has revealed that inequality in the UK is growing.

The research paper presents an analysis of child poverty and social exclusion in the UK, drawing on data from the 2012 Poverty and Social Exclusion Survey and is the final report on this element of the PSE project. It advances the measurement of child poverty by using three different measures: a child deprivation measure, based on socially perceived necessities, the conventional income poverty measure (but with a more realistic equivalence scale) and a PSE measure which combines deprivation and low income.

The research finds the rates of child poverty for each measures are similar at 30%, 33% and 27% respectively. It also finds, from a new analysis of intra-household distribution, that child deprivation would be much higher if parents were not sacrificing their own living standards for the sake of their children. Analysing the characteristics of poverty, it confirms that a majority of poor children are now living in households with someone in employment.

Perhaps this is the most interesting revelation unearthed by the report: the fact that most of the people living in poverty are employed, dispelling the myth perpetuate by Tory ministers that poverty is a consequence of “worklessness”.

The research found that the majority of children living below the breadline live in small families with at least one employed parent.

Almost 18 million people are unable to afford adequate housing, while one in three do not have the money to heat their homes in winter.

Professor David Gordon said: “The Coalition government aimed to eradicate poverty by tackling the causes of poverty. Their strategy has clearly failed. The available high quality scientific evidence shows that poverty and deprivation have increased since 2010, the poor are suffering from deeper poverty and the gap between the rich and poor is widening.”

We know that benefit delays and the grossly punitive sanction regime are causing dire hardship for people who claim out-of-work benefits, including disabled people  who are deemed unfit for work by their doctor.

We are not simply talking about relative deprivation, here, which is more of a statement about degrees of social exclusion. We are talking about absolute poverty, which is a measure of how many can’t afford basic necessities to support life – food, fuel and shelter.

There are many current studies about poverty, all of which conclude pretty much the same: that poverty and inequality are rising, that people are struggling to meet their most basic needs, and that those who were already the poorest citizens have been hit the hardest by Coalition cuts

The problem isn’t that the government “aren’t doing enough” to tackle poverty: the real problem is that Tory policies are creating poverty.

Three things are immediately clear. Firstly, without the ramping up of VAT in 2010, to 20%, Osborne would be in even more dire financial straits right now. Secondly, income tax has, despite apparently rising employment, failed to increase. Thirdly, corporation tax, targeted for cuts, year after year, has slumped.

The tax system is increasingly veering toward very regressive – biased in favour of the wealthy – consumption taxes, and failing to deliver fairer taxes on income. This is a result of government policy, increasing VAT but cutting corporation tax, and the engineered kind of “recovery” we have ended up with.

We know that austerity is not an economic necessity, as claimed by the Coalition: it’s a Tory ideological preference, aimed at fulfilling a Tory obsession: “shrinking the State“.

We also know that Cameron, who rested all of his political credibility on “paying down the debt” hasn’t done so. In fact, he’s increased it, and the Coalition have borrowed more in just the first three years in Office than the Labour Party – faced with a global banking crisis – did in their entire thirteen years in Office.

If we scrutinise the Coalitions’s policies, which very clearly reflect their ideology, it becomes difficult to see how they could do anything but create inequality and poverty:

These cuts, aimed at the poorest, came into force in April 2013:

  • 1 April – Housing benefit cut, including the introduction of the bedroom tax
  • 1 April – Council tax benefit cut
  • 1 April – Legal Aid savagely cut
  • 6 April – Tax credit and child benefit cut
  • 7 April – Maternity and paternity pay cut
  • 8 April – 1% cap on the rise of in working-age benefits (for the next three years)
  • 8 April – Disability living allowance replaced by personal independence payment (PIP)
  • 15 April – Cap imposed on the total amount of benefit working-age people can receive.

At the same time, note the Tory “incentives” for the wealthy:

  • Rising wealth – 50 richest people from this region increased their wealth by £3.46 billion last year to a record £28.5 billion.
  • Falling taxes – top rate of tax cut from 50% to 45% for those earning over £150,000 a year. This is 1% of the population who earn 13% of the income.
  • No mansion tax and caps on council tax mean that the highest value properties are taxed proportionately less than average houses.
  • Benefited most from Quantitative Easing (QE) – the Bank of England say that as 50% of households have little or no financial assets, almost all the financial benefit of QE was for the wealthiest 50% of households, with the wealthiest 10% taking the lions share
  • Tax free living – extremely wealthy individuals can access tax avoidance schemes which contribute to the £25bn of tax which is avoided every year,as profits are shifted offshore to join the estimated £13 trillion of assets siphoned off from our economy.
  • Millionaires were awarded a “tax break” of £107,000 each per year.

This year, research from the Office of National Statistics showed that the quantity of food bought in food stores also decreased by 1.5 per cent year-on-year in July.

It doesn’t take a genius to work out that repressed, stagnant wages and RISING living costs are going to result in reduced sale volumes. Survation’s research in March this year indicates that only four out of every ten of UK workers believe that the country’s economy is recovering. But we know that the bulk of the Tory austerity cuts were aimed at those least able to afford any cut to their income.

Once again, what we need to ask is why none of the mainstream media articles, or the Office of National Statistics account, duly reporting the drop in food sales, have bothered to link this with the substantial increase in reported cases of malnutrition and related illnesses across the UK.

It’s not as if this correlation is a particularly large inferential leap, after all.

No-one should be hungry, without food in this country. That there are people living in a politically imposed state of absolute poverty is unacceptable in the UK, the world’s sixth largest economy (and the third largest in Europe). This was once a civilised first-world country that cared for and supported vulnerable citizens. After all, we have paid for our own welfare provision, and we did so in the recognition that absolutely anyone can lose their job, become ill or have an accident that results in disability. This is a Government that very clearly does not reflect the needs of the majority of citizens.

It is also unacceptable in a so-called liberal democracy that we have a Government that has persistently denied the terrible consequences of their own policies, despite  overwhelming evidence that the welfare “reforms” are causing people, harm, distress and sometimes, death. Furthermore, this is a Government that has systematically employed methods to effectively hide the evidence of the harm caused to others as a consequence of their devastating, draconian “reforms” from the public. This clearly demonstrates an intention to deceive, and an intention to continue causing people harm.

Cameron told us in 2012, in a rare moment of truth (albeit an unintentional one),  that he is raising more money for the rich. That money has been raised because as their policies indicate clearly, the Tories have taken it from the poorest.

How many policy-related deaths does it take to change a government?

What will it take for the wider public to recognise a despotic regime for what it is: a government that does not democratically reflect the needs of most citizens in the UK, one that is inflicting unforgivable punishment on those that our society once protected?

What kind of government causes harm to citizens?

With the hierarchical ranking in terms of “deserving” and “undeserving” poor, the artificial and imposed framework of Social Darwinism: a Tory rhetoric of division, where some people’s worth matters more than others, how do we, as conscientious campaigners, help the wider public see that there are no divisions based on some moral measurement, or character- type: there are simply people struggling and suffering in poverty, who are being dehumanised by a callous, vindictive Tory government that believes, and always has, that the only token of our human worth is wealth.

Tory policies ensure that the wealthy are rewarded with more wealth and they punish the poorest with grinding, unforgiving, unforgivable absolute poverty.

Conservatism in a nutshell, part 2: Laissez-faire isn’t.

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 “David Cameron and George Osborne believe the only way to persuade millionaires to work harder is to give them more money.

But they also seem to believe that the only way to make ordinary people work harder is to take money away.”

Ed Miliband.

Source: Hansard, December 12, 2012.

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Oh, the irony of Cameron trying to blame the “global economy” for the utter mess of the UK economy that his party has created. (Well, unless you are a millionaire, then it’s all a pretty good mess, actually.) Cameron’s mess is an entirely homegrown one, and is entirely down to his policies. Worse still, no matter how desperate things get, his message to the UK is that the only solution is to stick to his plan – more austerity – the plan that has created the problems in the first place.

Labour dealt with the global banking crisis without the need for austerity, and had steered the UK out of recession by 2009/10, Cameron, and his government caused a homegrown recession just like Thatcher and Major did, through redistributing public wealth to private pockets and offshore bank accounts.

The Conservative’s “long term economic plan” is to continue transferring public funds to private bank accounts. Not for the benefit of the economy, or the public, but for the sole benefit of hoarding millionaires and Tory donors who are sucking our public funds out of circulation and killing the economy.

“Trickle-down economics” is a term imported from the US, to refer to the idea that tax breaks and other economic benefits provided to businesses and upper income levels of society will benefit poorer citizens by improving the economy as a whole. It’s linked with Laissez-faire ideology.

Laissez-faire is basically the theory of Conservative/Liberal governments that uphold the apparent autonomous character of the economic order, believing that government should not intervene in the direction of economic affairs. “Free markets” and “free competition” are seen as a reflection of the natural system of liberty.

From a Laissez-faire perspective, the State has no responsibility to engage in positive intervention to promote equality through wealth distribution or to create a welfare state to protect people from poverty, instead relying on charity to provide poor people with relief. I rather suspect this is what Cameron means by “big society”.

The claim that people who have their taxes lowered, with greater wealth, will distribute their benefit to less wealthy individuals, so that a fraction will reach the general population and stimulate the economy, is of course completely unfounded and absurd. It’s worth noting that proponents of the policy generally do not use the term “trickle-down” themselves. But the underpinning assumptions of trickle-down theory are implicit in the rhetoric of Laissez-faire/supply-side economics, and clearly expressed in social policy.

The phrase “trickle-down” has been attributed to humorist Will Rogers, who originally said of the US New Deal (the response to the Great Depression of 1930s) that “money was all appropriated for the top in hopes that it would trickle down to the needy.”

It’s original use was entirely pejorative and it was drawn on as a lampoonery device .

The Depression of the 1930s profoundly influenced our theories of economics and resulted in many changes in how governments dealt with economic downturns, and the subsequent widespread poverty, such as the use of stimulus packages, Keynesian economics, and Social Security, manifested in our post-war settlement.

Cameron is dismantling those civilised foundations we built, using the malfeasance of his own administration – austerity – and of the finance sectors that caused the global crash, as an excuse to drive their prize ultra-conservative Ayn Rand ideology into manifest existence – the withdrawal of State support for anyone who may need it. For those that don’t, the State is there as your best buddy, and will continue to intervene on your behalf to feed you great gifts.

For a party claiming to reduce the State and reduce interventions, they sure intervene a lot. Talk about an Adam Smith sleight of hand…with one “invisible hand” they take money from the poor, by introducing policies that purposefully cut income and public services, and with the other, they hand out our money to the millionaires.(See: Follow the Money: Tory Ideology is all about handouts to the wealthy that are funded by the poor.)

The trickle-down theory is not a genuine feature of the economy, but an illusion maintained by Conservatives to fool the poor into believing that there is opportunity for social mobility, and to excuse their miserly, cruel cuts to the poor, and generosity to those that don’t actually need it. It’s political hocus-pocus.

What we need, as history has taught us, is broad fiscal policies that are directed across the entire economy, and not toward just one specific income  group: that merely condenses wealth into the private bank accounts of a few, reducing the entire economy and society to a few stagnant pools of hoarding greed. It also reflects the implicit Conservative advocacy of Social Darwinist philosophy, with the “market place” absurdly operating as “natural law”, generating a socioeconomic hierarchy.

A 2012 study by the Tax Justice Network indicates that wealth of the super-rich does not trickle down to improve the economy, but tends to be amassed and sheltered in tax havens with a negative effect on the tax bases of the home economy. (See: Wealth doesn’t trickle down – it just floods offshore, research reveals.)

The trickle down theory and Laissez-faire philosophy formed the basis of economic policy during the industrial revolution of the 1800s.  It didn’t work then either, in the wake of widespread absolute poverty resulting from deeply exploitatively low wages combined with very dangerous work environments, it became evident that exclusively Laissez-faire economic attitudes resulted in the political engineering and endorsement of exploitation and harsh mistreatment of citizens. It shortened people’s lives and reduced most citizens to a harsh, miserable existence. It was a time when economic theory was mistranslated into a social doctrine of”survival of the fittest.”

Conservatives: the more things change, the more they stay the same.

Bloody Feudalists.

As Hilary Mantel observed this week, the Tory-led Coalition are more brutal towards the poor and vulnerable than Thomas Cromwell was, she said that the Middle Ages appeared a positively enlightened era compared to the “retreat into insularity” which the UK had currently embraced. Mantel summed up criticism of this Government’s regressive justification narratives very well:

The government portrays poor and unfortunate people as being morally defective. This is a return to the thinking of the Victorians. Even in the 16th century, Thomas Cromwell was trying to tell people that a thriving economy has casualties and that something must be done by the state for people out of work.

“Even back then, you saw the tide turning against this idea that poverty was a moral weakness.”

Of course we know that poverty is caused entirely by Government policies. And if you didn’t know that, then ask yourself how the following policies could possibly cause anything but inequality and increasing poverty for the poorest:

These cuts, aimed at the poorest, came into force in April 2013:

  • 1 April – Housing benefit cut, including the introduction of the bedroom tax
  • 1 April – Council tax benefit cut
  • 1 April – Legal Aid savagely cut
  • 6 April – Tax credit and child benefit cut
  • 7 April – Maternity and paternity pay cut
  • 8 April – 1% cap on the rise of in working-age benefits (for the next three years)
  • 8 April – Disability living allowance replaced by personal independence payment (PIP)
  • 15 April – Cap imposed on the total amount of benefit working-age people can receive.

At the same time, note the Tory “incentives” for the wealthy:

  • Rising wealth – 50 richest people from this region increased their wealth by £3.46 billion last year to a record £28.5 billion.
  • Falling taxes – top rate of tax cut from 50% to 45% for those earning over £150,000 a year. This is 1% of the population who earn 13% of the income.
  • No mansion tax and caps on council tax mean that the highest value properties are taxed proportionately less than average houses.
  • Benefited most from Quantitative Easing (QE) – the Bank of England say that as 50% of households have little or no financial assets, almost all the financial benefit of QE was for the wealthiest 50% of households, with the wealthiest 10% taking the lions share
  • Tax free living – extremely wealthy individuals can access tax avoidance schemes which contribute to the £25bn of tax which is avoided every year, as profits are shifted offshore to join the estimated £13 trillion of assets siphoned off from our economy.
  • Millionaires were awarded a “tax break” of £107,000 each per year.
  • The richest 1,000 in UK double their wealth since crash while average incomes drop 6%

That most definitely does not indicate any “trickle-down” of wealth.

It was noted by the Keynsian economist John Kenneth Galbraith, adviser to President John F. Kennedy, that trickle down theory was originally less elegantly called the “horse and sparrow” theory in the 1800s.

The original theory was based on the idea that if you feed a horse enough oats, it will shit enough to feed a lot of sparrows.

And the Conservatives are certainly feeding us horse shit.

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Related

The Great Debt Lie and the Myth of the Structural Deficit

Conservatism in a nutshell

The World At One, Radio 4, 17th November, 2014“The economic situation explained in 3 minutes.Tory austerity has given us the slowest recovery since the South Sea Bubble.Professor David Blanchflower absolutely slaughters Cameron over his pre-excuse warning over the world economy, he blames Tory austerity for tanking Britain’s economy and preventing a recovery, and states that any recovery we do have is simply part of the cycle as long as you don’t wreck it with austerity, and confirms that our economy was on the RISE in 2009 / 2010.” Robert Livingstone.

Some highlights of the Conservative long term economic plan so far:

540525_186110078206715_79170441_nFitch and Moody triple A credit rating lost
1390648_548165358586330_1740107407_nThe return of absolute poverty and Victorian malnutrition-related illnesses, such as rickets and scurvy.
10001887913_f8b7888cbe_oAusterity was never about “paying down the debt”, that was a Tory lie: it is entirely about “raising more money for the rich“.
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This is conservatism in a nutshell

482882_456712161064984_1212213617_nConservative socio-economic ideology is incompatible with human rights.

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Many thanks to Robert Livingstone for his persistence in exposing the Tory lies and hypocrisy in his pictures.