Ed Balls MP was absolutely right

I spent day watching all the political channels from the Andrew Marr Show right up to Shy News. What stood out for me was Ed Balls MP when he said that the coalition urgently need a plan B in regards to their budget as they are cutting the middle income and cuts that are affecting public services too deep and fast.

Hey good comments from Ed Balls mmm yes, Ed Balls does speak his mind and worked with Gordon Lyew opps I mean Gordon Brown MP Ed Balls does have a sense of direction.

However there is one problem faced by opponents of Labour’s economic policy was that, despite the huge gap between the rich and poor, it seemed for a long time to be delivering.

Finance houses, derivatives traders, private equity firms and asset-strippers of various stripes all announced huge profits and spectacular bonuses for the privileged few, funding conspicuous consumer spending.

Concerns about social injustice were pooh-poohed amid triumphalist monologues by Tony Blair or Gordon Brown detailing the highest ever this, lowest ever that and longest ever something else.

All criticism of economic policy was drowned under a tidal wave of endorsements by the City, the IMF and the European Central Bank.

Backed by such stalwarts of economic orthodoxy, Labour shrugged off demands to develop a manufacturing strategy, end private finance initiative schemes or introduce more progressive taxation.

It ignored them, but the critics were right, while Blair, Brown and the titans of international capitalism were wrong.

Periodic crises are embedded in capitalism’s DNA and government-approved adventurist schemes, especially the parcelling up and trading of property-market junk credit bonds, speeded the day of reckoning.

The Con-Dem coalition government is in a much more favourable position in that, after just over a year in office, the dangers inherent in its economic policies are apparent to friend and foe alike.

It has not had the dubious benefit of having presided over years of bumper profits and bonuses, encouraging misplaced consumer confidence in its judgements.

Well-heeled Bullingdon Club old boys David Cameron and George Osborne were feted by the institutions of imperialist globalisation when they signalled their intention to trash the public sector as comprehensively as they had Oxford restaurants when they were students.

But the savage cuts in jobs, salaries and services welcomed less than a year ago are already seen as opening the way to a double-dip recession.

That is not just the view of the Tory-led government’s opponents but of its friends such as National Institute of Economic and Social Research director Jonathan Portes, who was chief economist at the Cabinet Office until February.

Portes emphasises that there is no credibility in “sticking to a strategy that isn’t working.”

Yet, incredibly, the government’s complacent rejoinder is that “we haven’t seen anything that makes us question what we are doing.”

Ministers may have been comforted by support for their ongoing deflationary agenda from unlamented former Tory chancellor Norman Lamont, who suggested this week that current non-growth could not be blamed on the cuts because they have been implemented quite recently.

But this ignores the reality that government spending cuts predated last year’s general election. New Labour retrenchment of capital construction projects from April 2010 has had a marked impact on the building industry.

Many of the economists taking issue with government policy have cited the need for a plan B.

Plan A is disastrous for most people, benefiting only the bankers whose conduct precipitated the current crisis, so plan B must be qualitatively different.

Ed Balls’s addiction to the new Labour formula that there is “no argument there have to be tax rises and some spending cuts” holds back the development of a real alternative to the bankers’ agenda.

Arguments contained in the People’s Charter for social justice, progressive taxation, tackling tax avoidance, a manufacturing strategy and a council housebuilding programme provide such a real alternative.


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