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July 21, 2015

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John

"No Labour MP, who has the foggiest idea of what the party is for, could in good conscience, possibly do anything other than oppose the Bill."

Not at all. They voted their conscience. Their respective consciences are stuffed full of deranged Blairite ideology: war, PFI, tax avoidance, Ponzi-style asset booms, less social mobility, etc.

The idea that Labour is a social democratic party is nonsense. Everything falls into place once you accept that it is a reactionary party that will lie the country into war, and engineer an economic system that enriches a tiny minority and is prone to collapse.

We can debate how different "real" Labour is to New Labour, but it is nevertheless clear that New Labour is dominant within the current Labour Party and is as far away from social democracy as is George Osborne.

On BBC Question Time recently, Chuka Umunna, a Blairite through and through, showed his neoliberal colours when he blamed Greece for overspending, not the structure of the Eurozone. This is not just economic illiteracy (Labour is full of that) but blind ideology. Ed Balls, who probably knows better but couldn't care less, wanted to run Osborne-like surpluses, a sure fire way of throwing the economy into a severe recession.

Rob

I'm baffled by this, I really am. See, I'm 33 now, and I've spent most of my politically-aware life (which, as a fairly nerdy child, began roughly with Thatcher's resignation) being someone who "gets it". I could see the appeal of Blair even as Old Labour denied it; the Lib Dems made sense to me; Cameron's conservatism was obviously on to something, the SNP were always going to do well out of devolution. But I'll admit that the coalition years were a bit puzzling at times, like the wrong notes were sounding every now and then.

(I'm talking here purely about politics as a game, where the objective is to win, irrespective of the moral rights and wrongs of the policies of the parties in question).

But now, for the first time, I really don't have a damn clue what's going on. "Hah", I thought when I heard that tax credits were being cut, "It's finally all gone to Osborne's head". Perhaps with nobody around to challenge him, he's lost his bearing and has finally done something that Labour can really attack him for. I was clearly wrong, but I'm damned if I can understand why. I suddenly know what all of those clueless people I used to read in the newspapers, persistently not getting it about the issue of the day, must have felt.

Surely, but surely, this is an open goal for Cooper or Burnham? The Chancellor is making work less attractive for millions of people, taking pounds out of the pockets of people who will spend it, not gamble it all on the property market or squirrel it away, harming the mainstream ordinary person just trying to get by. I always used to laugh at how often "hard-working families" were invoked as the core constituency of every government minister, but Osborne is shafting them royally in front of millions of people in an annual live televised presentation to the entire country and nobody can lay a finger on him for it!

I suppose I shouldn't take it personally (and really, I shouldn't; the only down-side for me is the changes in dividend rules), but I feel that for the first time I don't understand why anyone is doing any of the things they are doing. I suppose this means that I'm outside the bubble. Which is fine, and probably better than being inside, but it is very strange to realise, so suddenly, how little sense the behaviour of the people inside the bubble actually makes.

All of which makes me wonder: in, say, 2002, one could see the advantage of being inside the bubble. The people who weren't inside it were clearly jealous of those who were - the Tories were annoyed that the bubble didn't belong to them. But now, the bubble looks absurd. Wouldn't it be clearly advantageous for Labour to be led by people who can see this?

Luke

John,
Blair, Brown, Balls had their faults. But they also saw poor people, and decided that a good way to make them less poor was to give them some money. Give them some credit.

John

"But they also saw poor people, and decided that a good way to make them less poor was to give them some money."

A decent paying job does infinitely more than the miserly benefits which in any case went predominantly to landlords. For thirteen years, Labour had to choose between creating decent jobs and cheap social housing, or subsidise rich landlords and poorly paying businesses. It chose the latter because it was so much easier using money coming in from an illusory "wealth effect" based on asset inflation than confronting the real problems confronting the country, benefitted their kind of people ("entrepreneurs" with "aspiration"), and it didn't interfere with the omniscient market, which happens to need approximately £1 trillion in taxpayer bailouts and guarantees and has thrown the country back many years.

Most one nation Tories would have probably done something similar.

Sure, poor people are going to find it tough to get by now that the Tories are going to engineer the welfare system in such a way that poor people can't live in prosperous areas. Without the economic madness of asset inflation during the Labour years, Labour would have done the same. And poor people are going to find it tougher now that Tory and Labour alike have decided that the benefits system needs to be directed even further towards rich people (financial bailouts) than to poor working people.

Donald

Luke - "give them some credit", intended pun?

Donald

John - "A decent paying job does infinitely more than the miserly benefits "

The point of working tax credits is to make jobs decent(er) paying, no?

(Agree with you generally though)

John

"The point of working tax credits is to make jobs decent(er) paying, no?"

Well, you can certainly argue that, and Labour people do. But all it turns out to be is a subsidy to business who won't pay their workers a decent wage. Why tax income and then return the income which was taxed? Where is the sense in that? Why not just not tax them in the first place? Why all this bureaucracy? Indeed, it seems that all the added bureaucracy was a way of dissuading people from applying.

The solution to all this madness is straightforward (much of which would have nationwide support) and it goes something like this: a minimum wage that increases until it reaches a point where it is commensurate with the productivity gains over the past thirty years, no income tax on the first £20,000 and completely elimination of the regressive VAT and national insurance taxation. Then you could get rid of pretty much the whole welfare budget aimed at the working poor.

At the same time build a million houses a year until demand is satisfied, and bring in a land value tax. That'll deflate the economically damaging house bubble that is inflated every decade or so and causes so much damage when it crashes, not least the redistribution of wealth upwards.

Lastly, bring in a job guarantee. Anyone who's unemployed will be offered a job by the state. Anyone who refuses a guaranteed job will not be entitled to benefits. Unemployment will cease to exist, as will unemployment benefits. The social ills caused by unemployment will disappear. Big business won't like any of this, but you'd be guaranteed massive majorities at each election.

If Labour want to steal these policies, that's fine by me. They don't seem to have had any intelligent ones since 1945. Actually, there's no reason why the Tories shouldn't implement it. Much of the above has been advocated by rightwing economists like Milton Friedman for decades. All in all, aggregate demand goes through the roof, wealth is redistributed, poverty almost eliminated, crime and substance abuse slashed, family breakdown and violence slashed, and the welfare budget is slashed to almost nothing. What's not to like?

BCFG

None of this is rocket science. We live in a system of exploitation, where to get power and wealth a person must employ other people and get back from them more than they are paid.

In that situation those who represent the rich and powerful must:

1. Ensure the exploited are disciplined
2. Ensure that the costs of employing the exploited are not too much of a burden.
3. Ensure the exploited are in competition with each other as much as possible.
4. Ensure the exploited have little choice but to be exploited.
5. Ensure that the exploited know the alternative is worse.
6. Ensure that the exploited are not so exploited as to be next to useless.
7. Ensure all unnecessary expenditure on the exploited is kept to a minimum.
8. Ensure the exploited have a work ethic, where free time is a crime and hard work is a virtue.
9. Ensure the exploited are smart enough to carry out the tasks required of the job but are dumb enough to not to question the authority of the exploiters.
10. Ensure a balance is maintained between the immediate needs of the exploiter and the the mid term needs of the exploitative system.

This is why nothing the Tories are doing is a mystery of in any way something that should confuse us.

Those who are confused simply don't understand the nature of this system.

Luis Enrique

like Rob, I'm baffled. I think of myself as centre-left and Corbyn is too nutty for me, but I'd have voted against that welfare bill because being centre left (or competent on economics) does not entail needless shitting on the poor. Why the fuck do these people imagine they need to go along with the Tories on this in order to signal they are not loony lefties?

An Alien Visitor

"being centre left"

30 years ago centre left would have been hard right! I prefer to just call you hard right and have done with it.

And people like you, on the hard right, have been shitting on the poor for an eternity. You are just squabbling over how much shit to splatter the poor with!

Luis Enrique

see a therapist

Igor Belanov

If you think Jeremy Corbyn is 'nutty' then you are clearly not 'centre-left'.

Donald

John

"But all it turns out to be is a subsidy to business who won't pay their workers a decent wage."

Is it though? That's only the case if they would pay more without tax credits. It's not clear that they would without a higher minimum wage/more bargaining power, and it's not clear that these things will ever be ENOUGH to alleviate all poverty.

"Why tax income and then return the income which was taxed? Where is the sense in that? Why not just not tax them in the first place? Why all this bureaucracy?"

Don't buy into Cameron's "money go round' nonsense.

tax credits are simply a way of doing means tested benefits. Tax everyone the same based on income and consumption then give some of that back.

You can argue for or against means tested benefits, and for or against different ways of doing means tested, but means tested always means more bureaucracy and tax credits seems a reasonable way of doing means tested.

Personally I'm persuaded by Chris's arguments for a basic income but that doesn't seem politically feasible.

Also, I'm for more bargaining power and a higher minimum wage which are more feasible. And lower taxes for the poor (NI, income,consumption). And for measures to get rents down.

But even if you have all these things they might not be enough. If they're not it makes sense to have something like tax credits.

And if they do become enough you can then get rid of tax credits. Actually they should fall away themselves if they only go to people that aren't earning enough. This highlights another Tory nonsense that they'll take away tax credits and replace it with better paid jobs. If they do manage to increase wages then tax credits go down on their own.

John

Donald,

All the tax credits in the world will be as nothing compared to eliminating income tax on the first £20,000 (possibly higher), VAT and national insurance. Ask a working family which they'd prefer, and I should think that every single one would opt for paying less tax rather than getting tax credits, which I must say are demeaning.

He may be right for the wrong reasons or have other motivations, but David Cameron's "merry go round" argument is essentially right.

In any case, I personally wouldn't advocate abolishing tax credits until it was proven that the tax reduction, high minimum wage, job guarantee, land value tax policies I advocate bring greater benefits.

A basic income is essentially no different to a high minimum wage, and at least a high minimum wage is achievable.

Almost all people want to work, and that work should be at a rate such that at a minimum benefits cease to exist.

Talking to many of my nutty Tory friends the other day, it was heartening to see that they were essentially on the same page on almost all of Corbyn's policies. Once the real arguments are laid out people are more leftwing than they generally imagine, at least that is my experience.

Laban

Sorry to harp on, but the UK Left has got what it wanted - increased diversity - but then moans that social solidarity (of which the welfare state is a fine expression) is getting weaker. You can't have it both ways.

It's a lot easier to justify a welfare state when the recipients are "people like us" and therefore easier to identify with and to think "there but for the grace of God". Social solidarity among working people, whether it be support for a welfare state or a trades union, will always be stronger in the absence of cultural, religious or racial divisions. Social scientists like Robert Putnam have noted how diversity weakens a sense of community.

In Bryan Caplan's words:

"Diversity undermines solidarity. People don't mind paying high taxes to support people "like them." But free money for "the other" leads to resentment and political pushback."

http://econlog.econlib.org/archives/2011/09/the_political_e_6.html

http://econlog.econlib.org/archives/2011/09/ethnic_diversit.html

"Despite the tough economic climate, the study by independent social research agency NatCen reveals attitudes towards welfare and welfare claimants have toughened. Only 28% of those asked wanted to see more spending on welfare - down from 35% at the beginning of the recession in 2008, and from 58% in 1991."

http://www.bbc.co.uk/news/uk-19621020

What could possibly have changed so much between 1991 and 2012 ?

Laban

@BCFG - "Ensure the exploited are in competition with each other as much as possible."

Karl Marx, 1947 - "The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it"

Laban

oops - think that should be 1847 ...

Igor Belanov

I know a bit about Marxism, and I'm pretty sure it didn't say 'Workers of this country, and not including blacks, Muslims, Poles or other foreigners, unite' in the Communist Manifesto.

Donald

John

"In any case, I personally wouldn't advocate abolishing tax credits until it was proven that the tax reduction, high minimum wage, job guarantee, land value tax policies I advocate bring greater benefits."

We are, I think, mostly agreed then :-)

Mick Fealty

Chris,

Reality *has* to matter.

But how: one, do you figure what that is for people whom you have likely only heard distant tell of; and two, how do you configure stories which both engage our fragmenting public attention and suggest resonant forms of collective action outside the market structure?

I've just been listening to the latest Labour hustings in Stevenage. Interesting, but essentially dull. Even Corbyn comes over like one of those demure free Christian bible-thumping preachers who like short verses and easy refrains in their hymns.

By contrast, coming here is like taking in a long draft of cool wet water from the spring.

I would rather see a series of event where they go out and listen to a load of their members and question them about what they think about the current mess the party is in, what besets them and what might be done about it.

Not as a token, but to help them begin to break through that bubble. The bubble in many ways, is the real problem. Not Blair, not neo Cons, not austerity or even (Lord forgive me for saying it) Welfare cuts.

Most of anti austerity talk I hear is (mostly) ballocks, because it doesn't really propose (or even tangentially infer) a different set of realisable actions. That said, voting against the benefit cuts would have at least have sufficed as well as a placeholder position as abstaining.

I'm constantly reminded of Charles J Haughey's famous instruction to his party, when he temporarily lost power in Ireland: "wreck everything". Great for defenestrating your opponents but, on its own and particularly at a time of such constant flux, it's not a great way to construct an agenda for the future.

It's not good enough to have great (and not so great) policy ideas, you need to be able to sell them as an answer to a pressing personal question.

aragon

Liz Kendal on the Welfare bill.

"We are party of work–we want people to work+be better off in work than on benefits."

https://twitter.com/politicshome/status/623916975115399168

It is not a misinterpretation to say she is happy to achieve this through lower benefits? Not that they are adequate at the moment.

The same sentiment (about party of work) has been expressed by John McTernan, a Liz Kendal supporter/advocate.

The Labour Party no longer represent the poor, or the working class according to John McTernan. (FT is behind a paywall).

"But he [John McTernan] then concludes that this is because the “white working class” don’t matter to Labour any more and is no longer part of our base."

[...]

"Unlike John I wouldn’t snobbishly dismiss the importance of voters who are “older, unskilled workers who left formal education at 15″"

[...]

"John claims that “It is the professional middle classes, together with the young, and black and minority ethnic voters, who are Labour’s base now”."

"John talks about “an electoral coalition of liberal-leaning city-dwellers at ease with the modern world”."

http://labourlist.org/2014/06/giving-up-on-the-white-working-class-is-a-20-strategy/

At least some of the Labour Party in Parliament have left the public, perhaps a majority, as demonstrated by the Welfare Bill.

http://blogs.spectator.co.uk/coffeehouse/2015/07/labour-has-lost-its-senses-if-it-thinks-liz-kendall-is-a-tory/

Bob

From the view of Modern Monetary Theory, you are all caught in the bubble!

John

"From the view of Modern Monetary Theory, you are all caught in the bubble!"

Not at all, well at least I'm not. Taxes drive money, fine. Taxes regulate demand, fine. Taxes do have a different use in a fiat money system but don't pay for anything, fine. Deficits are ex-post: deficits arise as a consequence of the spending desires of the non-government sector: if the non-government sector spends, the deficit is low; it the non-government sector does not spend, the deficit is high. Not that deficits and the national debt are a "debt" or anything to ponder for more than a fraction of a second, let alone worry about. Surpluses are a bad idea (unless in an economy overheating), fine. All of this is initially mind-bending stuff, but once you think about it, it can't be any other way. The mainstream economics explanation doesn't make any sense, and modern monetary theory is essentially correct.

Nevertheless, unless it is a figment of my imagination, taxes are levied on the public, usually the ones least able to live a decent life by paying them, and the richest avoid them and are in the best position to take advantage of inflated asset prices, thus increasing inequality. So let's stop taxing working people and shift the taxes to the richest and start taxing land, thereby redistributing income and wealth, a modern money desire, not least because it diminishes the likelihood of financial and economic instability and recessions.

I think a job guarantee is an excellent idea: why pay people to do nothing, when you can pay people to be productive and learn the skills that will increase their chances of a better paid job in the future? Many of the social problems of unemployment are eliminated, productive capacity is created and inflation is mitigated.

With a different tax structure and a job guarantee, the three major pillars of macroeconomics are positively dealt with: employment, inflation and growth.

The curious thing about most of the above is that none of this is particularly leftwing or rightwing. Nearly all of the above has been advocated by rightwing free marketeers and leftwing (and rightwing) modern money theorists.

As much as a land value tax is a free market idea, it may be difficult to bring in due to the vested interests of land owners and house builders. But this is as nothing as what is really needed: a total overhaul of the UK banking system. What is needed here is a banking system dominated by non-profit credit unions and local banks. This was originally a British idea but discarded for big, unstable and inefficient banking. It can be currently found operating extremely well in Germany, where housing booms and banking crises are almost unheard of.

The opportunity of overhauling banking was lost in 2008. We can only hope that the next crisis, which can't be long off now, won't be handled in the same way, but as an opportunity to force out of business the entire banking system and replace it with one that isn't parasitical, doesn't require permanent subsidies and bailouts, doesn't work in the interests of the rich and can work to redistribute income and wealth downwards to the working and middle classes not upwards to the rentiers and financial asset and land holders.

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