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The myth of the 'inherited mess', and the myth of the 'clean up'

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The myth of the 'inherited mess', and the myth of the 'clean up'

Post by skwalker1964 on Thu May 24, 2012 4:37 pm

(This post is taken from my blog, skwalker1964.wordpress.com)

It happened again, in Prime Minister's Questions, yesterday. It was bound to, really. Rebuked by the excellent Speaker of the House, John Bercow, for using insulting, unparliamentary language toward Shadow Chancellor Ed Balls, David Cameron fell back, like an involuntary reflex, on a mantra I can guarantee you will hear in at least 99% of Tory (and most LibDem) interviews on TV or radio, in the press or online.

Withdrawing his comment as instructed, Cameron said:

"I will replace it with 'the man who left us this enormous deficit and this financial crisis'."

And, of course, cue much Tory guffawing and catcalling of the type that only a £25k a year private education can teach.

This (mostly) Tory tactic has been in place since before they were elected, and has continued, unbroken and to the point of nausea, to the present. Listen to any interview, any 'debate' on Newsnight or Question Time (though the Tories like to avoid debate if they can!), and you'll hear some variation of:

'the mess we inherited'

'we're having to clean up Labour's mess'

and so on. Clearly, in order to try to get off the hook of the never-ending run of screw-ups, the Tory PR gurus have drummed this into their politicians until they eat, sleep and breathe 'inherited mess, inherited mess, inherited mess...'

The only tiny problem with all this is this: it's absolutely untrue.

I'm going to try to show you why. It's not really that difficult to see, but a lot of people don't look beyond the mantras and the headlines. Anyone who knows me very well will know that I talk a lot about the 'Big Lie' concept. In a nutshell, this says that the bigger a lie is, and the more emphatically it's spouted, the more people are likely to think, 'Well, they wouldn't dare say it, and especially not like that, if it weren't true!' But of course, it isn't true - that's the whole point. As someone said to me the other day, a plausible lie, shouted loud enough and often enough, usually gets to be taken for the truth.'

Since a picture paints a thousand words and all that, I'm going to use a couple of graphs to illustrate just how untrue this Tory Big Lie is, along with a little commentary. There may be 'lies, damn lies and statistics', but when it comes to nailing a Big Lie, a few objective numbers work wonders.

The 'inherited mess' lie has 2 main parts. The first says that the economic crisis was caused by Labour's overspending. The second says that the resulting 'mountain' of government debt led to such an economic disaster that Dave, George and co had to come galloping in on their big chargers to rescue us with their Magic Sword of Austerity and Competence to clean up the mess and fix our economy.

Let's nail each part of the lie in turn. First, was Labour overspending, and was government debt drastically increasing under Labour? Well, the IMF (see www.scoop.it/t/deficit-myth) say not, and even George Osborne himself, under pressure from Treasury Select Committee members, has to admit it ain't so (see www.youtube.com/watch?v=BK-h4aiuGIs). Now, on to those pictures:

Graph 1 (first time trying this so hope it works!)



This handy graph shows the changes in UK national debt since 1999 (2 years after Labour came to power). It shows something very interesting. In the years from 1999-2002, the UK's national debt SHRANK to the lowest point it has been since well before Labour took over, right through to the present day. In fact, although not shown on this graph, the debt when Labour took power - the 'inherited mess' from the previous Tory government! - was higher than at any time during Labour's tenure until the 2008 global crash.

From 2002, the graph shows a gradual, managed increase, over a period of 6 years, from about 25% to about 35%. This is the period when Labour - as they had promised to do - started to increase investment in great, beloved British institutions like the NHS, as well as in other public services. This gradual increase was no problem - it was controlled, deliberate, affordable. And it was still lower than it had been under the preceding Tory government.

Of course, in 2008, something drastic happened. There was a global financial crisis that hit virtually every country in the world - hard. National debt increased - but, as the IMF report linked above confirms, this increase was NOT due to excessive public spending! National income fell, and this inevitably pushed up the amount of borrowing. But here's another thing - without being in the same kind of sudden meltdown, the misguided austerity policies of the coalition government have kept the debt growth-line steep! That's because those policies are shrinking the national income far further and faster than spending could or should ever be cut. The way out of the current problems is to stimulate growth - and that's not compatible with austerity budget-slashing.

Here's another graph that shows very clearly how Labour did not leave a mess behind for the coalition to clear up:

Graph 2:



Now this one's ever so slightly trickier to read, but bear with me. I want you to focus on the thickness of the very light blue block of the graph at the top. Don't look at how high up it goes, as that's caused by the thickness of the blocks underneath it.

This light-blue block represents UK government debt from 1987-mid 2011, as a percentage of GDP (basically, the amount the whole country earns). The striking thing about this light-blue block is that it hardly changes in thickness at all from 1987 all the way through to the big global financial crash in 2008 (in fact it gets a little thinner during most of Labour's last period in government) - debt stays constant as a factor of GDP, which is perfectly responsible. The first 10 years of that period were under a Tory government. The next 11 were under Labour. If Labour were being profligate in their spending, so were the preceding Tory governments of Thatcher (Queen of Austerity!) and Major, and somewhat more so.

Of course, as already mentioned debt went up during and just after the 2008 crash, because national income went down. You can see the light-blue block thicken at this point. But Tory spending cuts, even without a global 'meltdown', are pushing debt up and making the debt-block fatter. Countries like the USA, who under Barack Obama took a positive approach to stimulate their economy, have experienced growth during the same period that we've increased debt and suffered recession. Unlike Labour, the Tories have no excuse for the increasing national debt under their (mis)management - so they invent one: 'the mess we inherited', and repeat it for all they're worth in the hope of fooling people into believing their Big Lie.

There are other things I could draw out of the 2nd graph, such as the fact that household debt and non-financial companies' debt during the same period grew, but that far and away the big debt-increase problem, as the graph clearly shows, was irresponsible borrowing by financial companies (in other words, NOT the Labour government!), and that in spite of such companies clearly being the cause of our crisis, this Tory government is not curtailing the obscene bonuses the banks etc continue to pay themselves (I guess they need bonuses to console themselves for the destruction they caused!).

And there are other graphs worth looking at. But I think I've made my point and given you enough to chew on for now. So I'll round off, for clarity's sake, by reiterating the key point that all the graphs and words above are there to prove. Which is:

WHEN THIS GOVERNMENT AND ITS REPRESENTATIVES SAY 'THE MESS WE INHERITED' - AS THEY OH SO SURELY WILL - THEY ARE LYING: IT IS A 'BIG (FAT!) LIE'!

They want to fool you, so they can continue wrecking our great country and siphoning our money into the pockets of the so-called elite who pay into Tory party coffers (and Tory ministers' bank accounts, it appears).

Don't let them.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Thu May 24, 2012 5:16 pm

Similarly, in any discussion of the relative merits or otherwise of political parties, a Tory supporter will raise the fact that in 1976, Britain was forced to turn to the International Monetary Fund (IMF) for a £2.3 billion bailout. In return for the funds, the IMF insisted on reforms to the British economy including public spending cuts. The period was regarded as one of the most humiliating in the history of the British economy.

"The more things change, the more they are the same"

http://www.telegraph.co.uk/finance/financialcrisis/7198359/Britains-economy-now-as-bad-as-1970s-JP-Morgan-warns.html
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Ivan on Thu May 24, 2012 5:50 pm

Much of the 1976 loan wasn't taken up. It's strange how nobody (except me and the late Fred Pitt) has ever mentioned that the Tories went to the IMF for a loan in 1956.

And can anyone point out an occasion, in this country in the past or other countries in the present or more recent past, where austerity has achieved anything tangible? Is blood-letting really a cure for anaemia? Does it help when the fat people tell the thin ones to tighten their belts? I somehow doubt it.

My sincere thanks to skwalker1964 for responding to my request to re-post his excellent blog here.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Thu May 24, 2012 6:54 pm

Very well put together skwalker1964. This is most important because as you say the Tories continue especially when cornered to blame NL for the "inherited mess"
Today I have been active in bringing to the attention of The Daily Mirror, The Guardian and Ed miliband's Office the following extract from my post on another thread.

The IMF Ms Lagarde said on Tuesday that when she thought about where the UK would have been in 2010 without deficit reduction, it made her "shiver".
The fact is----------
IMF data (IMF World Economic Outlook Database, April 2010) shows the UK had the lowest government debt as a proportion of GDP among the G7 countries (the US, Canada, Germany, Britain, Japan, Italy and France).

Even she is at it on behalf of Osborne. I am incensed that the media nor anyone from the Labour party has not picked this blatant lie or doubtful error on Lagarde's part. I await some sort of response from those I have contacted.

Thank you for all the work you have put in to produce that excellent post.


Last edited by Mel on Fri May 25, 2012 12:51 pm; edited 1 time in total
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Phil Hornby on Thu May 24, 2012 9:42 pm

The temptation must surely now be to prepare a similarly huge whopper with which to berate the Tories once they are in opposition once more.

The only effective response to a lying bully is to serve them a hearty helping of their own medicine - just to make the point that this will be the outcome each and every time they try the same dirty trick...
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Thu May 24, 2012 10:37 pm

Donald Rumsfeld commented in different circumstances:


The message is that there are no "knowns." There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know. So when we do the best we can and we pull all this information together, and we then say well that's basically what we see as the situation, that is really only the known knowns and the known unknowns. And each year, we discover a few more of those unknown unknowns.

The Public will receive only edited versions of our Government's deliberations with the IMF.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by skwalker1964 on Thu May 24, 2012 11:23 pm

Phil,

On the blog, someone countered that Labour still blame Thatcher for all kinds of ills. My answer was that the difference is, that's not a lie! Same here - the things that will get flung at the Tories when they're in opposition, about their economic mess, will be entirely justified...
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Phil Hornby on Fri May 25, 2012 12:30 pm

We have to accept that - to a Tory - the truth about their little 'activities' is about as welcome as an ill-tempered ferret up their trouser leg..
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Fri May 25, 2012 12:59 pm

skwalker1964

I do sincerely apologise. I referrd to you as Ivan in my above post and have now rectified the error.

May I take this opportunity to thank you for all the hard work you and Bob are putting into the petition for No Vote Of Confidence.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by skwalker1964 on Fri May 25, 2012 1:02 pm

Mel - no problem, don't worry about it. I don't care who gets the credit as long as the info gets out there.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Fri May 25, 2012 1:16 pm

Good man. Thanks much appreciated.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by witchfinder on Fri May 25, 2012 2:03 pm

There is an article in todays Daily Telegraph by someone called Jeremy Warner ( who is Jeremy Warner ? ), he informs us that the greatest living economist of our time is visiting Britain in a few days time, I refer to professor Paul Krugman, the Nobel prize winning economist from over the pond.

Of course the Telegraph been The Telegraph, the columnist makes it clear that he totaly disagrees with professor Krugman, and that the worlds number 1 economist has got it all wrong, and that George Osborne has got everything right, well what would you expect from the Daily Telegraph. ?

Professor Krugman has said over and over again that the present UK government is making a huge mistake, that they are creating misery when there is absolutely no need to at all.

It was Paul Krugman who praised Gordon Brown and Alistair Darling for the way in which they handled the financial crisis when it hit, and he is on record as saying how David Cameron had no answers, no alternatives except simply to criticise the actions of the then government.

Its a fact that Gordon Brown is held in high esteem by financial experts throughout the world, he was considered for the post now held by Christine Lagarde ( head of the IMF ), it is widely acknowledged that Britain led the way in dealing with the international financial crisis in 2007 / 2008.

This is the problem - the Tories can see they are wrong, they know that their policies have led us directly back to recession and misery, it was all predicted.
But when the Tories claim they know best, then nothing will shift that position, they will not admit either defeat or error.

When some tupence hapeny columnist from a Tory rag tells its readers that he knows better than a Nobel prize winning professor of economics, and when a chancellor of the exchequer with a degree in history claims to know more about economics than someone considered for the post of IMF chief - then I know we are in trouble.

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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Fri May 25, 2012 3:04 pm

Hello Wichfinder.

You are correct in what you say. They (the con men Camercon and Gideon) know best in their eyes but the question is best for who? And we all know the answer to that.
They care not how stupid they appear against those who are experts, because they are doing what they want regardless of public opinion or even some of their own back benches who really do want to get back into office in three yrs time. Camercon and his front bench are different animals who are just hell bent on doing everything possible to assist wealthy employers and the rich in general.
Under this shower they are already something like £40 odd thousand better off as a concequence of the bastards measures.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Ivan on Fri May 25, 2012 4:56 pm

Mel. Lagarde used to be a member of Sarkozy's right-wing government, so it's no surprise if she subscribes to Camerkozy economics.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Fri May 25, 2012 8:37 pm

Q: How did the word "Socialist" turn into an insult?

The Tories are honest inasmuch as they do not hide their determination to grab as much as they can of whatever is going. "Socialism" in comparison looks a bit wishy-washy in advocating fair shares for all.

Some answers are provided in The Independent: Twitter.@OwenJones84
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Sat May 26, 2012 8:37 am

Ivan wrote:Mel. Lagarde used to be a member of Sarkozy's right-wing government, so it's no surprise if she subscribes to Camerkozy economics.

Ah!!! that explains it Ivan.. Bitch.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Sat May 26, 2012 5:50 pm

Tories prosper because of their carefully contrived manner of Natural Leadership.

In tough times, confused people will seek leadership, and times do indeed seem to be tough. The Labour Party and its supporters need to convince the Nation that there is an alternative.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by tlttf on Sun May 27, 2012 11:03 am

Speaking of prospering OW.

Tony Blair's moral decline and fall is now complete

Tony Blair's willingness to prop up the brutal Kazakhstan regime shames the one-time champion of democracy.

Yes the champion of democracy has shown the way forward for a true socialist and taken his mates with him. Don't you just love enterprise.

It seems that when you’re not posting lies or insulting the staff, you’re determined to ignore our rules. Not only is your message off topic, it’s a repetition of one you’ve posted on another thread, and that isn’t allowed:-
http://cuttingedge2.forumotion.co.uk/t18-posting-rules#95

If you want to discuss British PMs and brutal regimes, I suggest you open a thread on The History Channel and start by discussing Thatcher’s personal friendship with Pinochet, one of the most vicious dictators of the last century. Ivan.

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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Sun May 27, 2012 5:48 pm

(aside, in stage whisper) Maggie Thatcher owed General Pinochet a considerable personal debt for his agreement to stay OUT of the Falklands conflict in 1982.

War makes for strange bedfellows. Churchill had to suffer the insufferable Charles DeGaulle for most of WW2.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by skwalker1964 on Sun May 27, 2012 10:32 pm

Just about to post the latest blog topic, in case anyone's interested...
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Sun May 27, 2012 11:14 pm

Gee, thanks, Luke.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by tlttf on Mon May 28, 2012 1:41 pm

tlttf wrote:Speaking of prospering OW.

Tony Blair's moral decline and fall is now complete

Tony Blair's willingness to prop up the brutal Kazakhstan regime shames the one-time champion of democracy.

Yes the champion of democracy has shown the way forward for a true socialist and taken his mates with him. Don't you just love enterprise.

It seems that when you’re not posting lies or insulting the staff, you’re determined to ignore our rules. Not only is your message off topic, it’s a repetition of one you’ve posted on another thread, and that isn’t allowed:-
http://cuttingedge2.forumotion.co.uk/t18-posting-rules#95

If you want to discuss British PMs and brutal regimes, I suggest you open a thread on The History Channel and start by discussing Thatcher’s personal friendship with Pinochet, one of the most vicious dictators of the last century. Ivan.

Nah I'll stick to reality, anybody got anything interesting to say about the war criminal Tony Blair and Iraq? Never mind it probably never happened or so his mate Murdock would probably claim. After all didn't he give Tony and Gordon the okay to go?

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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Ivan on Mon May 28, 2012 1:51 pm

Nah I'll stick to reality, anybody got anything interesting to say about the war criminal Tony Blair and Iraq?
tlttf. Last chance. If you keep ignoring our few rules, you'll leave me no alternative but to refer your behaviour to the moderation team. Just to remind you of what this thread is about:-
'The Myth of the Inherited Mess.'
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by blueturando on Mon May 28, 2012 1:57 pm

'The Myth of the Inherited Mess.'.

What's all the fuss about? Everyone knows the coalition inherited a thriving economy and a healthy bank balance from Labour....Tut...silly people Rolling Eyes

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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by tlttf on Mon May 28, 2012 1:58 pm

Well Ivan aren't we paying for wars Blair involved us with. Now if that isn't an inherited mess I don't know what is?

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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Mon May 28, 2012 2:17 pm

blueturando wrote:
'The Myth of the Inherited Mess.'.

What's all the fuss about? Everyone knows the coalition inherited a thriving economy and a healthy bank balance from Labour....Tut...silly people Rolling Eyes

You do not know how right you are blue.

IMF World shows the UK Economics Outlook Database, April 2010
shows the UK had the lowest government debt as a proportion of GDP
among the G7 countries (USA, Canada,Gemany, Japan, Italy and France)

So glad you got it right, well done. Embarassed
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by skwalker1964 on Mon May 28, 2012 5:47 pm

Mel wrote:IMF World shows the UK Economics Outlook Database, April 2010
shows the UK had the lowest government debt as a proportion of GDP
among the G7 countries (USA, Canada,Gemany, Japan, Italy and France)

And an economy back in growth! Oh, those were the days...
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Tue May 29, 2012 8:32 am

Hello SKW. Perhaps and I mean perhaps our friend blue will return for some further education on the subject at some stage. Smile
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Red Cat Woman on Wed May 30, 2012 8:12 pm

blueturando wrote:
'The Myth of the Inherited Mess.'.

What's all the fuss about? Everyone knows the coalition inherited a thriving economy and a healthy bank balance from Labour....Tut...silly people Rolling Eyes

No that is a very silly reply Blue. what's more everyone with only half a brain box knows full well that it was the world banking crisis. if fact is, is this not the very same world banking crisis that Gideon is now hiding behind? funny how the song has started to change or have you missed the news of late?
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Red Cat Woman on Wed May 30, 2012 8:19 pm

tlttf wrote:Well Ivan aren't we paying for wars Blair involved us with. Now if that isn't an inherited mess I don't know what is?

tittf you need to take up reading a bit more. instead of hanging on to a lie that your man Gideon is now hiding behind. as only the other day there he was on SKY news saying about the effects of the 2008 world banking crisis. maybe you get a different SKY news to the rest of the UK.
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'Inherited mess' part 2: the myth of the 'clean-up' - who would actually benefit from a Tory 'recovery'?

Post by skwalker1964 on Wed Jun 06, 2012 12:48 pm

(My latest blog post from skwalker1964.wordpress.com)

I spent most of last weekend out of reach of a decent internet connection, and reading Naomi Klein's very, very excellent 'The Shock Doctrine'. In it, she shows emphatically how the disciples of Milton Friedman, the architect of the neo-liberal 'small-state' economic vogue that has dominated world economics over the past few decades, deliberately use crises as an opportunity to push through 'reforms' that people would never tolerate under other circumstances. These 'reforms' strip away cherished public provisions and replace them with private enterprise that costs more and does little but funnel public wealth into a small number of private and corporate bank accounts.

Adherents of Friedman's doctrines are shameless, openly referring to natural disasters such as tsunamis and Hurricane Katrina as 'opportunities', and using these to implement massive privatisations while the victims of the disasters are reeling from shock. Similarly, the events of 9/11 were an 'opportunity' to strip away civic rights and make fortunes from 'security', foreign wars and the subsequent reconstruction, exploitation of natural resources etc.

It's a compelling read, and if you have a few quid to spare I'd highly recommend this book for an eye-opening education about the tactics and world-view of the so-called 'elite'. The 'shock doctrine' of the title is a means of de-constructing people's deeply-held views in order to make its unpalatable replacement seem acceptable.

As you'll know if you've read my blog post 'The Myth of the Inherited Mess', I believe this government is using the same kind of tactic to push through its Friedmanite ideological agenda - to strip away the welfare state, the NHS, public and private-sector benefits of ordinary people for the enrichment of a small 'elite' - all by blaming Labour for 'leaving a deficit mess' that the coalition has to 'clean up', and frightening the populace into thinking it's the only option. The coalition, especially its Tory component, claims that its program of spending cuts is the only way to create an economic recovery, that the pain now will benefit everyone in the long run - and of course, that 'we're all in it together'.

Well, my weekend reading inspired me to do a little research of my own, once I was within reach of a decent WiFi signal, to see what the facts say about the coalition's claims. If you like, you can think of this as 'The Myth of the Inherited Mess, part 2' - but what I found out stands in its own right as a judgment on both the ideology of the Tory neoliberals and as a debunking of the myth of their claim that what they're doing may hurt now, but it's for everyone's good in the long run.

As you know if you've visited this blog before, I like graphs. The right graph can show things - things that might otherwise look obscure - with a clarity little else can match. There are a few below that will be very revealing. But first, a very brief preamble concerning Milton Friedman and his followers.

Friedman has been dead for some years now, but as far as slash & burn, 'riches for the elite' businessmen and politicians are concerned, he was the economic 'Messiah'. Friedman advocated a 'bare minimum' state provision and a 'blitzkrieg' program of forced privatisation to get public resources into private hands before the rest of the populace could react. He believed that 'free' markets are the best and only way to run things properly, and that government should not interfere.

His early 'clients' included brutal dictators like Augusto Pinochet of Chile, but the first leaders from the political 'mainstream' to put his ideas into practice were Margaret Thatcher (a bosom-buddy of Pinochet) and Ronald Reagan, whose policies of deregulation, tax-cutting and public-spending cuts were right out of Friedman's playbook. Conservatives ever since, in both the UK and the US, have admired Thatcher and Reagan as models of how such policies supposedly free 'wealth-creators' to make money and in doing so to create economic growth that benefits all of us.

So much for the history lesson. If the theme of tax cuts, spending cuts, the slashing of state welfare provisions to make space for private profit etc sounds familiar, you're absolutely right. David Cameron, George Osborne, Andrew Lansley and co are very much the ideological descendants of Thatcher and Reagan. They'd probably even happily admit it. So, let's look at the policies of their 'illustrious' predecessors and ask the key question: did they work? First, some graphs:



This graph shows the income of the top 1% of US earners compared to the incomes of the middle 60% of earners and the bottom 20%, since 1979 but adjusted for inflation (so a 'dollar' in 1979 stays equivalent to a dollar in 2007). Three things are striking, at least to me. Firstly, the dramatic upturn in the fortunes of the top 1% begins in 1981, the year that Reagan became US president. Second, it has continued steeply since, with only occasional blips due to stock-market slides (the rich tend to invest in shares a lot). Third, the incomes of middle and low earners have remained almost exactly unchanged - in other words, wage increases for the vast majority of people in the US have merely kept pace with inflation over a period of almost 30 years, while the incomes of the richest have increased massively. This graph doesn't show the whole picture. The incomes of the richest 0.1% increased even faster than those of the 1%:



Now for the UK:



This graph shows similar data, but over a slightly longer period - the 40 years leading up to 2008, again adjusted for inflation. The change is less steep than in the US (though that will change if the Tories are able to implement their wish-list!), but it tells a similar story. For a 10-year period, incomes of the lower-paid more or less kept pace with those of the highest earners. And then - from the year in which Margaret Thatcher came to power - the incomes of the richest suddenly accelerate far faster than those of everyone else. So, the first two mainstream implementers of Friedman's principles both triggered a massive and continuing increase in the income of the wealthiest at the expense of the majority of the populace. (For all its faults, New Labour put the brakes on the acceleration after a couple of years in power, but never reversed the trend.)

I've been unable to find equivalent graphs for the period since David Cameron became Prime Minister, but without question the incomes of the richest have once again accelerated away from those of the rest of us. The recent Sunday Times Rich List for 2012 showed that, over the past 3 years - a period when the UK economy stagnated and then declined, when the wages of ordinary people have been eroded in real terms by inflation and by vast increases in the cost of fuel, household utilities, education costs, increased VAT and other factors - the wealth of the richest 1000 people in the UK increased by £155 billion, while executive salaries have gone up far in excess of inflation, as the graph below shows:



How is this growth funded? It comes at massive cost to the rest of us. One more graph:



Again, this is a graph for the US, as I couldn't find comparable information specific to the UK, but the principle is clear - and it shows what will become even more applicable in the UK than it already is, if this government gets its way. This graph shows the increase in the ratio of household debt to household income, alongside the increase in the wealth of the richest. With the exception of a couple of upward surges in the wealth of the richest, caused by stock-market 'bubbles', the rate of increase in their wealth matches the increase in the indebtedness of the rest of us. The rich get richer as the ordinary population gets loaded with debt. It's a parasitic relationship more than a symbiotic one.

The pattern is clear. The slash & burn, Friedmanite policies that Cameron & co want to impose on the UK will not bring growth that benefits everyone. All they will do is suck money out of the UK economy and pour it into the coffers of a small 'elite' that is already rich and will get massively richer, at the expense of the rest of us.

Don't fall for the spin, don't fall for the rhetoric, the false promises, the false assurances that they have our best interests at heart. And especially, don't fall for the lie that 'we're all in it together'. The Tory component of the coalition, along with its rich and corporate backers not only want to maintain an already-unequal status quo - they want to extend it further and faster, to get even richer while the rest of us pay and lose the public services we treasure. These policies won't bring growth, but in growth or recession the Friedmanites get richer. Unless we say 'enough' - and refuse to let them fool us any longer.

(Petition to call for a motion of no-confidence in the coalition government: http://www.gopetition.com/petitions/petition-for-a-motion-of-no-confidence-in-the-uk-coalit.html - please sign and get as many people as possible to do the same.)
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Wed Jun 06, 2012 7:22 pm

My poor tired old memory suggests that Chancellor Nigel Lawson actually resigned from Thatcher's government because of her adherence to the Milton Friedman doctrine. But perhaps it was just hubris.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Ivan on Mon Jul 30, 2012 12:13 pm

The Tories love to peddle the lie that every Labour government leaves behind a financial mess. It wasn’t true in 1951, not true in 1970, not true in 1979, and only true in 2010 because Brown had no alternative but to bail out the bankers when global capitalism proved itself to be a failure. What the Tories don’t tell you is that they needed an IMF loan in 1956, they left behind a balance of payments deficit in 1964, they gave us double-digit inflation in 1974 and then left a debt equivalent to 43.76% of GDP in 1997. They don’t tell you that Thatcher left office in 1990 with inflation higher than when she came in, or that the Tories left office in 1997 with unemployment higher than when they came to power on the strength of those ‘Labour isn’t working’ posters in 1979. (They also don’t remind you that crime doubled in those 18 years.)

The longest uninterrupted period of growth in the UK economy in the last 200 years occurred when Gordon Brown was Chancellor of the Exchequer. The Tories supported Labour’s spending plans until the global credit crunch occurred, and the Tories supported the bailout of their banking cronies.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Mon Jul 30, 2012 3:04 pm

There can be no Tory counter to the points mentioned Ivan. The problem is that the media/press do not highlight all those points which do not favour the Tories and yet when Brown was PM they certainly highlighted anything that was unfavourable to him and NL

The general public who mainly have little interest in politics will not be aware of the history of the rotten tyrants.
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Mon Jul 30, 2012 4:55 pm

The standard Tory mantra at all Socialist Budget proposals is always, "Tax and Spend!"

Which has somewhat painted Gideon into a corner with his austerity budget. He can't possibly deviate from it without attracting that precise criticism. Incidentally his personal popularity within the Conservative Party is reported in today's Independent to be 2%.

That much?
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Mel on Mon Jul 30, 2012 5:52 pm

Makes one wonder why he is still there, still wearing those short trousers.

Perhaps he is closer to Cameron than their wives think. Shocked
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Stox 16 on Wed Aug 01, 2012 2:14 am

Mel wrote:Makes one wonder why he is still there, still wearing those short trousers.

Perhaps he is closer to Cameron than their wives think. Shocked


its crossed my mind more than once Mel
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Red Cat Woman on Sun Aug 12, 2012 2:27 pm

Ivan wrote:The Tories love to peddle the lie that every Labour government leaves behind a financial mess. It wasn’t true in 1951, not true in 1970, not true in 1979, and only true in 2010 because Brown had no alternative but to bail out the bankers when global capitalism proved itself to be a failure. What the Tories don’t tell you is that they needed an IMF loan in 1956, they left behind a balance of payments deficit in 1964, they gave us double-digit inflation in 1974 and then left a debt equivalent to 43.76% of GDP in 1997. They don’t tell you that Thatcher left office in 1990 with inflation higher than when she came in, or that the Tories left office in 1997 with unemployment higher than when they came to power on the strength of those ‘Labour isn’t working’ posters in 1979. (They also don’t remind you that crime doubled in those 18 years.)

The longest uninterrupted period of growth in the UK economy in the last 200 years occurred when Gordon Brown was Chancellor of the Exchequer. The Tories supported Labour’s spending plans until the global credit crunch occurred, and the Tories supported the bailout of their banking cronies.

Great post Ivan xx
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by Ivan on Wed Oct 10, 2012 9:31 pm

In the last five years of the Tory government which was booted out of office in 1997, the debt-to-GDP ratio rose from 31.4% in 1992 to 42.5% in 1997. Gordon Brown reduced this to 35.9% by 2007, just before the financial system went into meltdown. The ensuing rise in the deficit was fuelled, not by reckless public spending, but by the sums needed to bail out the banks and the collapse of tax revenues caused by the recession. Treasury data shows that before the recession, public sector current spending was 38% of GDP – which was lower than in eight of Thatcher's eleven years in office.

For purely political purposes, Osborne talked down the economy when he was Shadow Chancellor, with ludicrous stories of impending bankruptcy and far-fetched comparisons with Greece. In fact our level of debt - less than 60% of GDP net of bank assets - is within Maastricht treaty limits and lower than almost all OECD countries. It is low by historical standards, and in the immediate aftermath of the 2010 election was falling, because the policies initiated in the last year of the Labour government were causing the economy to grow.

It’s economic growth, not cuts in public spending, which reduces a deficit. As a result of the Tory-dominated coalition's economic policies, growth has been strangled and the deficit is rising. These are facts, verifiable by reference to Treasury figures, not perceptions dreamed up for political ends.


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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

Post by oftenwrong on Wed Oct 10, 2012 10:16 pm

Did Cameron's speech at the Party Conference suggest to anyone else that he was proposing to push Gideon around in a wheelchair?
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Re: The myth of the 'inherited mess', and the myth of the 'clean up'

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