Tag Archives: Tories

Austerity

Back in early July, I wrote a “Letter from London” based on a conversation I had had with a friend during a trip to the UK.  He told me of his fears about the implications of the new Tory government’s plans to slash government spending drastically.

Those plans are now being realized.  A recent article in the New York Times details the pain that is unfolding as the central government rolls out deep, wholesale, and apparently random cuts.  The Film Council, the Health Protection Agency, and dozens of other groups that regulate and distribute money in the arts, health sector, and other areas have simply been abolished at the stroke of a pen.  The ability of local authorities to plan and budget on anything beyond an immediate time-scale has been drastically interrupted.  The article quotes the chief executive of the country’s supreme court as saying that she doesn’t know whether the country will continue to function if the Tories’ promised cuts of 40% are implemented.

The U.S. needs to watch what’s unfolding in the U.K. very closely.  Already the recession and the failure of politicians of both parties to implement a genuine recovery program has led to brutal economic problems around the country.  As Paul Krugman discussed in a recent editorial, Colorado Springs recently made headlines by shutting off its streetlights in an attempt to save money.  The lights are going off across America, Krugman argues, as the dogmatic anti-statist doctrines of neo-liberalism are implemented remorselessly.

As the great urbanist Jane Jacobs argued in her final, dystopian book, there is a dark age ahead.

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Letter from London

The hammer has not yet dropped.  London is enjoying an Indian summer before the onset of cold, hard times.  During my brief trip to the UK, a government document estimating 1.3 million job losses as a result of the recently released budget was leaked to the press.  Right now in sites of culture like the Tate Modern and fleshpots like Shoreditch, this looming downturn is invisible and apparently weighs little on the minds of the average Briton.  But the downturn is coming nonetheless.  How did the UK get to this point of limbo?

In a recent conversation with Tim Lawrence, a British friend, in a very trendy pizzeria in London, much of this background came clear.  Going into the election, the PM, Gordon Brown, seemed exhausted both personally and ideologically.  After all, he was the architect of the policies of deregulation that led to the credit crisis and the recession.  Labour was in power for over a decade, and seemed to have few new ideas.  What’s more, Brown had played fall guy for Tony Blair’s love affair with the City and international finance.  True, Labour did spend huge sums on social programs like the National Health Service and Education.

This became the main theme of the election season: wasteful public spending.  But this attack, so skillfully wielded by the Tories that Gordon Brown actually seemed to accept the terms leveled against him, was based on totally false premises.  The UK is running a deficit of around a trillion pounds sterling.  But roughly 700 billion of this figure is the product of the credit crisis created by irresponsible and predatory lending practices and irresponsible speculation by banks.  So once again the left hand of the state was blamed for the practices of the financial sector which has come over the last thirty years to dominate the UK’s economy more and more.  The answer to Britain’s financial crisis thus becomes massive cuts to the public sector.

Of course it didn’t have to go this way.  In the last days of the election, Brown began speaking clearly about fairness and social justice.  The televised debates between him, the Tory candidate David Cameron, and Nick Clegg surprised everyone by being extremely contentious and exciting.  Many of my friends in the UK felt that the Liberal Democrats had some strong proposals, including changing the British constitution to allow proportional representation.   The result was a groundswell of support for the Liberal Democrats going into the election.  Liberal papers like The Guardian advised their readers to vote for the Lib Dems in order to secure social change.  But Clegg made it clear that he wanted virtually nothing to do with Brown, and so the possibility of some kind of rainbow coalition between the Lib Dems, Labour, and the Green Party was never in the cards.

The election resulted in a hung parliament.  The electorate, in other words, gave no clear mandate to any party.  Nevertheless, the Conservatives managed to convince the Lib Dems to side with them, and a kind of love fest ensued between Cameron and Clegg, who have similar very posh backgrounds.  Many progressives in the UK still felt hopeful since they saw the Lib Dems as exercising a moderating influence on the Tories and pushing forward their positive agenda for the UK by getting into power.

But now the Tory budget has been released.  They propose to completely eliminate the country’s debt in five years.  They will do this through massive cuts in areas like education and the NHS.  It’s clear, according to my friend Tim Lawrence, that these moves are purely ideological.  After all, Obama, by contrast, has been arguing a fairly standard Keynesian line – deal with the economic downturn by stimulating the economy through government spending.  The Tories have adopted a diametrically opposed line, one that seems to be emerging as the new global status quo.  It seems that every country is going to be Greece from now on.  Incidentally, Paul Krugman just wrote a very good editorial that totally debunks the idea that fiscal austerity is the solution to the current economic downturn.

Of course the silver lining may be that the electorate never voted for such draconian austerity policies.  The context is therefore very different from when Thatcher acceded to power after the turbulent years of the 1970s.  Public indignation at the coming drastic budget cuts may very well explode, making the protests and vibrant cultural resistance of the Thatcher years pale in comparison.

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