Why Labour Cannot Refute The Austerity Argument.

There are few economists in the world who do not recognise that austerity as an economic principle is utter nonsense. Ever since the 1930's it has been known - known that is and not simply believed - that the only way out of recession is to stimulate the economy by deficit spending. The Tories understand this like everyone else but continue to wield the axe because they would rather the poor paid for the present recession, caused by criminal bankers, rather than themselves and their rich mates. And, it must be said, it has worked to a certain extent - the rich have grown richer while the poor have grown poorer and those in the middle have all but stood still. So why has Labour not pointed this out and advocated an end to austerity entirely? The problem is that in order to refute austerity some sophisticated arguments are needed and these immediately run into the simplistic argument that the Tories have deployed - that the British economy is just like a household budget. The British electorate, largely unintelligent, ill-educated and led around by the nose by a right-wing press, think they understand this argument and lack the attention span necessary to hear about the alternative. Labour, recognising this but unable to tell the electorate that they are thick, have no choice therefore but to pay lip-service to this Tory cliche in order to prove their economic credentials. Labour, in effect, have ducked the argument on the very sensible grounds that they cannot win. If they argue for an end to austerity they will appear dull and uninteresting and be open to the accusation that they are "out of touch". The Tories, meanwhile, will trot out the "just like a household budget" argument knowing full well that this is simply short-hand for "you're too thick to understand". Paul Krugman, the American economist, has described the Tory obsession with austerity as a "delusion" but the truth is that it is a confidence trick perpetrated by the greedy, selfish and dishonest and accepted by an electorate too dumb to walk and chew gum at the same time.

Does Paul Krugman Read "The News In Shorts?"

Paul Krugman made an appearance on "Newsnight" tonight and, much to Jeremy Paxman's amusement, made mincemeat of the right wing opposition to his ideas. In quick succession he routed Ken Ragoff, Paul Mason and Allegra Stratton, all of whom trotted out the tired and discredited mantra that austerity and deregulation will cure our economic woes. In one telling illustration he compared the present politicians, both here in Britain and in the rest of Europe, to Medieval doctors intent on bleeding their patients white - a comparison made by "The News In Shorts" in its report entitled "Tories Continue To Kill The Patient" on May 24th. So does Paul Krugman read "The News In Shorts?" We asked the nobel prize-winning economist; "The News In Shorts? Never heard of it. And stop pinching my metaphors before I use them." Oh well, chagrined as the editor was by this, this reporter is more a fan of Mr.Krugman than ever. After two years of complete failure, with economies shrinking across the world, unemployment rising through the roof and no sign whatsoever of the private sector magically expanding to save us all from an impending depression, all Ken Ragoff, Paul Mason and Allegra Stratton could say is that debts have to be paid off double-quick no matter what disasters befall us, that young people are straining at the leash to establish new vibrant businesses and are held back only by excessive employment regulation and that tax cuts for the rich are the key to prosperity. In other words more of the same. As Mr.Krugman pointed out this is merely ideology masquerading as economics as right-wingers scrabble to shrink the state while they have the opportunity. Everywhere the neoliberal-supporting establishment have tried to curb democracy, here in Britain by insisting on a full five year term for this woeful coalition government, in Greece and Italy where elected heads of state have been replaced by bankers and even in Canada where attempts have been made to outlaw student protests over rising university fees. Defending the indefensible, trying to save an economic system broken beyond repair, moronic national leaders have prevaricated, tried their best to have the poor pay for the mistakes of the rich and, after two years of utter idiocy, are now facing the prospect of a disorderly exit from the Euro by Greece -an event that any moron could see coming from a mile away.