So blind
are the blinkered pupils of Milton Friedman, so stupidly obedient are the
Thatcherites and the pith-brained followers of the market-economy approach that
they are unable to see the idiocy of their policies in handling the global
financial and economic crisis.
It is clear
that taking money out of the economy is not an option. Europe and its mentor
across the seas could learn a lesson from Latin America.
As
Britain's Chancellor (Finance Minister) delivers his Autumn speech today, no
doubt replete with self-justification and blaming everything on everyone else
but himself as Britain is set to ask for a further 100 billion pounds in
borrowing over and above what it had planned (what was that they were saying
about Labour?), we take a look at the sheer idiocy of the policies adopted to
handle the crisis not only in the UK but across Europe.
The bottom
line is "we are all in this together and we all have to pay". Now
just a minute there, who put us in "this, together"? Was it the
working (wo)man who studied hard, got a job, saved to buy a house, worked hard
and paid taxes and did everything that was asked? Or was it some po-faced
simpleton with University degrees as long as your arm, apparently pulled from
packets of soap, implementing laboratory policies from some office, protecting
banks and bankers while leaving the person in the street to pick up the tab?
What have
Governments done to protect the people they are supposed to be protecting? It
is not the people's fault that economies have been mismanaged, for nobody ever
asks the people to make a decision through a referendum and nobody ever bothers
to explain the issues and choices open to them. It is not the fault of the
private sector that the public sector has been irresponsible, become top-heavy
and in many cases filled with people who appear to earn a lot for doing very
little.
And now,
precisely when the mismanagement bubble of previous years bursts before our
very eyes, what happens? The price of utilities is sky-rocketing, the ratings
agencies are allowed to directly interfere in our daily lives by dictating the
price (interest rate coupon) at which a country sells bonds and borrows funds,
public spending is being cut, salaries are being reduced, pensions are being
lowered and benefits are being withdrawn. Precisely the social policies which
could and should be implemented as a safety net are being taken away.
It is as if
the trapeze artist is told to perform, with the tightrope raised to 300 feet,
without a safety net while all the time he is being pelted with broken bottles
and stones by a jeering crowd of suited officials standing on a raised
platform. It is as if the man lying in the street dying of hunger is being
treated by kicking the plate of bread crusts away from him, denying him access
to water and thrashing him with chains.
It comes as
no surprise at all that these types of policies are adopted by those faceless
cliques who serve the lobbies who in turn have seized positions of power in
most countries, on either side of the political divide, offering cynical
choices for "change" which as we saw in Obama's case was a raspberry
in the face of Humankind. Is there any difference between Democrat and
Republican, between Labour and Tory, between Socialists and Social Democrats?
How can
countries be expected to overcome the crisis when money is being taken out of
the economy in increased taxation, when more money is being taken out of the
economy by cutting public spending and when yet more money is being taken out
of the economy by reducing salaries and benefits? And on top of that, how are
countries to reach the heady growth rates needed to service their debt
repayments when these are linked to staggeringly high interest repayments? Add
to this the poisoned chalice that countries taking IMF medicine receive and
that kills any hope of progress or growth for decades to come. Taking the IMF
pill is like being force-fed an overdose of strychnine.
Are these
people stupid, or what?
It does not
take a rocket scientist to understand that the man dying of hunger in the
street must be treated by providing him with food and water, it goes without
saying that the trapeze artist has to work in safe conditions, in a work-easy
environment which will allow him/her to perform to the best of his/her ability.
Forcing the
economy to the limits pushes people over the edge, more days are taken off
work, the number of people requesting psychological leave or treatment
skyrockets, companies are forced to close, States have to make more payments in
sickness pay and unemployment benefit; conversely, by curtailing these, the
already elevated social cost rises, translated into cycles of crime and
violence which also have a cost.
What is the
alternative?
Contrary to
what western governments are claiming all the time, that there is no
alternative and there is no money, then suppose we treat the world economy as
if it were a bank and the national economies as if they were bankers, and lo
and behold, trillions will suddenly become available. When it is to save a
bank, there is money and a lot of it, but when it comes to building a hospital
or saving jobs, it vanishes.
The
alternative was ably demonstrated by forward-seeing and socially progressive
policies adopted in Latin America, which is no oasis on the world stage and
which is as intrinsically tied into the global economy as anyone else. Yet in
2010, exactly through the adoption of social policies which put money into the
economy, creating jobs, getting people back to work so as to contribute towards
and not take from the economy, Latin America and the Caribbean region reached
GDP growth rates of some six per cent (1) (2).
Unemployment
fell in the region by 0.2% in 2010 and is set to register a higher decrease in
2011 (between 0.2 and 0.4%). Macroeconomic policies stimulating growth created
jobs, and a lot of these jobs are related to the green economy. By
strengthening and investing in factors which fostered greater social equality,
Latin America created a growing middle class which in turn has made an
increasing contribution to the economy. In the west, the divide between haves
and have-nots is widening, and those without are increasing in number.
So if Latin
America can create sustainable green economies which respect its population,
which respect the environment and the planet, why can't the west? Do we
conclude that the Governments in Latin America and the Caribbean knock streaks
off the idiots running western governments? Probably. And if we accept the
adage "where there is a will, there is a way" we can see that those
who govern western countries could not care less about the people they are
responsible for, being instead far more tied to pandering to the whims of the
lobbies they represent.
And that,
ladies and gentlemen, is what they call democracy.
(1) Economic Commission for Latin America and
the Caribbean (ECLAC)
(2) International Labour Organisation (ILO)
Timothy
Bancroft-Hinchey
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