Saturday, 24 August 2013

Saturday, August 24, 2013 Posted by Jake No comments Labels: , , , , ,
Posted by Jake on Saturday, August 24, 2013 with No comments | Labels: , , , , ,

In August 2013 the Office for National Statistics (ONS) revised the second quarter growth figure from a spongy 0.6% to a strident 0.7%. This allowed George Osborne and the Tories to trumpet that the economy was "moving from rescue to recovery". Recovery will happen eventually, maybe sooner, maybe later. 

But just as it is hard to say whether the man running in front of a raging bull is leading it or being chased by it, it will be hard to say what role the Chancellor's policies have in our economic recovery.

The banker induced economic crisis, like all busts and all booms, is transitory. Governments are using a transitory crisis to inflict permanent pain including cuts to pensions, pay and benefits, the proliferation of 'zero hour contracts', and changes to employment law eroding workers' rights. What we sacrifice in the bad times will not be returned to us in the good.

It is not because our economy can't afford the costs of health, education, pensions, workers rights etc. While the banker induced crisis knocked us back for awhile, the medium term GDP forecast shows a very healthy growth trend (see graph of government forecasts below). 

The economy is strong enough to support us. The Credit Crisis is being used as cover to increase inequality.

The underlying reason we ordinary Ripped-off Britons are becoming too expensive is that our share of our nation's wealth is being reduced. The national pie is getting bigger but our share is being cut down faster:

The TUC report, from which this graph is taken, explains:
  1. 1961 to 1981: during this period the wage share was relatively high (always above 58 per cent) and income inequality was relatively low (Gini always below 0.28).
  2. 1982 to 1987: over this six-year period, the wage share fell below 58 per cent and income inequality grew rapidly (with the Gini rising from 0.26 to 0.31).
  3. 1988 to 2010: during this period the wage share was relatively low (between 51 and 56 per cent) and inequality relatively high (always above 0.32)."
The Nation has the money to maintain pensions and services. However, those who hold the ladle, those in government and in the company boardrooms, choose to serve themselves more by giving the rest of us less. If the head of a household decides to cut the milk-money from 5% to 3% of household income, then milk becomes unaffordable not because people drink more milk but because the share going to milk has been cut.

We are bamboozled into letting go of our rights as an act of "we are all in it together" solidarity to help the nation recover from the banking crisis. But we will not easily recover those rights when the recovery comes. Even then we will be left with less salary, less pension rights, less workers' protections, less health and less education. All so that those with the most can take more. To be fair to the Tories this is not new - it's been happening for years.


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