Thursday 19 September 2013

Economic Recovery: You are having a laugh!!

Listening to George Osborne, Nick Clegg and other Government ministers gush over the supposed ‘economic recovery’ over the last few days makes me sick. They may convince the gullible but to the average person on the street; there has been NO recovery.
An Eejit

The Government will point to ONS figures to prove that their economic plan is working, growth is up and unemployment is down. But this is not the truth, far from it.

Cost of Living rising faster than wages

From the 12 months up to April this year, the average wage rose by 0.4% while the cost of living (CPI) was 3.2%.  And if we compare household income, we will find that it is 5.5% lower than when the coalition came into power.
The cost of living rising faster that wages is having a disastrous effect on households up and down the county.  Hard working people are working the maximum hours available but are still struggling financially.

A prime example is the energy sector.  Due to lax regulation, the big energy companies now have a monopoly over the market, charging over-inflated prices, making extreme profits while people sit cold in their homes.

The rise in the cost of living while wages are being cut or frozen has left a huge section of our work force being now classed as the ‘working poor’.

The rise of the working poor can be shown by Housing Benefit data which shows that 90% of new housing benefits claims in the last two years came from those in work.  Around 1,000,000 housing benefit claimants are in work.


Employment
Another Eejit
Under-employment has been used as a strategy to hide the true nature of the UK’s labour market.

To show how the Government uses under-employment to hide the true state of the employment market, let’s say for simplicity reasons that the UK jobs market has 2 workers looking for full time work and 40 hrs a week employment available.

Normal Logic
1 person employed 40hrs per week
1 person would be unemployed.
Unemployment rate: 50%

Tory Logic
1 person employed at 20hrs per week.
1 person employed at 20hrs per week.
Unemployment rate: 0%

This sleight of hand by the Government has hard-hitting effects on people’s home life. Workers who need to have full time employment to look after their family are thrown into poverty by the Government’s spinning of data.

The TUC found that 10% of the UK’s workforce is under-employed in 2012 and latest data shows that there are 1.43 million workers in part time employment but are looking for full time employment.


If things are so bad, why do we have economic growth?

Rightfully or wrongfully, economic growth is the barometer that expert judge our economy.  According to the ONS the UK’s growth was revised up to 0.7%

So where is this growth coming from?  Quite simply, this is artificial growth is partly due to the £375 BILLION Quantitive easing that has been pumped though the banking system that was agreed by the BoE in July. 

Yes, that is right. While the poor, vulnerable and low paid are suffering, this Government is allowing BILLIONS of pound to be given to banks so that the Government can cover up the failing of Austerity.

Added to this it the beginnings of a housing bubble.  House prices going up increases the paper value of the UK.  

The Solution

We need serious root and branch reform.  We need to examine every aspect of our economic and democratic system and if they are found wanting, reform them.

We need to democratise out money supply.  We need to return that fiscal lever from the banks to its rightful owner, us, the people of the UK.

We need to learn from the success of the past.  We need a ‘New Deal’ which will:

1 Reform broken democratic and economic systems, to ensure that the mistakes in the run up to the credit crunch cannot happen again.

2. Retrain and invest in the country’s workforce so that they have the appropriate skills for a dynamic and modern economy.

3.  Build. We need the money that is being diverted into privately owned banks and invest it in capital projects that would transform our nation’s creaking infrastructure and regenerate it into a modern and green infrastructure that is fit for purpose for the 21st Century,

Example.

A Ratbag
An example of a ‘New Deal’ policy would be implementing a social home building program on a scale that has not been seen since the Atlee Government.  At the same time there would be reform of the housing system. For example, rent controls in the private sector which would lower the housing benefit bill while impacting on the over-inflated house prices.

Implementing this program would revitalise the construction and manufacturing sector. You would need workers to build the homes and manufacturing the goods that are required for building a home. Workers would need to be trained in their specialised field so that our workforce can cope with the increased demand for workers in the manufacturing and construction sector.


This would have beneficial effects for our economy on a local, regional and national level with solving our housing crisis. We could literally build our way out of this economic depression.

Sadly, no political party seems to have the appetite for these type of reforms.  They seem to not understand the difference between ‘spending’ and ‘investing’ and until they do, it will be us that will have to pay for the establishment’s narrow minded view on our economy.