Thursday, 17 March 2016

Time for Osborne to Call it a Day

No one has said it, but there is a sense in which this is George (Gideon) Osborne's last budget. He is a failure. He has not achieved any of his financial objectives (at considerable pain to the many) and he is now resorting to creative accounting regarding years 2019-2020.

At the same time this posh boy Chancellor shows the despicable side of this government, paying for his failure by taking from the needy like the disabled in order to afford tax cuts. On top of other cuts in benefits, the Bedroom tax, Council Tax at 20%, sanctions and sheer uncertainty, he is removing chunks of money that keep people cabable and keep them mobile. This man borders on the evil with his ignorance about how tough some people find it to live.

Gideon talks codswallop about the 'Northern Powerhouse' - a phrase created for the media - while the need for revival at a time of cheap money is to spend and spend and invest.

There is no economic policy of use that lowers interest rates to near zero and then is forced to 'create money' that then sits in financial centres or leaks into a wealth economy of Central London property and finance, and once again boosts property elsewhere. No use to anyone - except the already well off.

Keynes would be spinning in his grave. You have to distribute money to the poorer, who are more likely to spend it. It is called the Multiplier effect. When money costs next to nothing, you make it to invest it in productive assets. You get firms to make things and generate jobs that are worthwhile jobs. It is a joke to cut benefits and then encourage people to save what they do not possess.

Osborne's cheap labour economy mitigates against capital investment. This so-called Living Wage is feeble, plus investment comes about through participatory industry - everyone involved. Firms that can employ cheap labour to do its tasks, the ever reliance on the service sector, do not improve productivity. This takes capital, capital investment that allows labour to be used elsewhere and in producing more. There is never a demand ceiling: if we are more efficient, innovation will increase what we can do. And, in any case, with greater efficiency comes greater value and surely more of the leisure the prophets of automation once promised. When you have cheap underemployed supposedly flexible labour markets to rule the roost, you descend to the floor of trying to scrape together basics and doing so longer rather than enjoying retirement.

The economy is made for us, not us for the economy. This is how it should be. Osborne has run out of road.

Well, let's hope the European Referendum either clears him out with an out result or forces Cameron out as his internal opposition become bitter about the remain result. However, Osborne in power as PM would be nastiness writ large, especially if they repeal the Parliament Act and go for an election. I know the alternative is another Eton boy. Nevertheless he has come to the end, there is nothing more he can offer: he has been oin the job too long and, like all politicians, he has finished this with failure.