It’s so not the economy, stupid!

THE received wisdom is that it’s always ‘the economy, stupid’. I’m just not at all convinced.



Exhibit A is the euro-omni-shambles that is being presented as a victory for the Greek people (it just isn’t), as an example of a generous magnanimity on the part of the Eurogroup (the more audacious the lie, the less likely people are to have the temerity to question it), and as a prime example of how economic considerations always come first (they have clearly been subordinated to political imperatives).


When the Greek people boldly (foolishly?) voted in the left-wing Syriza government, the powers-that-be at the heart of Europe shook their collective head and sucked in their collective cheeks. An observer could see a further hardening of the steely glint in ‘Europe’s’ eyes. This would not do. The Greek people must be punished for stepping out of line.


When the Syriza government, by then pretty desperate, went to the electorate again in a referendum – and when the Greek voters (will they never learn?) voted overwhelmingly ‘Oxi’, ‘No’ to further austerity – the masters of Europe began drumming their fingers on their desks, and shut off the liquidity tap. The Greek people must be taught a lesson for voting the ‘wrong’ way.



Finally, when Greece’s Syriza negotiating team (having dumped its brilliant, outspoken ‘Game Theorist’ Finance Minister Varoufakis) returned, to the ‘last-chance saloon’, they were subjected to a whole night of negotiations, and forced to their knees.


Let’s start at the beginning – the beginning of the end. Massively indebted, clearly sinking under the weight of an unsustainable debt burden, Greece called on its neighbours – in the spirit of European solidarity – for help.


The only help that was forthcoming was more debt, under even less realistic conditions.


When Syriza (with a clear democratic mandate from the electorate) sought another way, calling on the inflexible finance ministers of the Eurogroup – led by the hawkish Wolfgang Shauble – for practical expression of the principles on which Europe is founded, the negotiating team was subjected to what ‘an EU official’ has described as ‘extensive mental waterboarding‘.


The ‘aGreekment’ – announced as if this was, indeed, a compassionate move on the part of the Eurogroup, the saving of Greece, the avoidance of a #Grexit – binds the Greek government and her people into further years of unsustainable indebtedness, structural adjustments which will further damage Greek society, and a humiliation designed to put the upstart Syriza firmly in its place (handily sending a signal to any other European anti-austerity movements which might be watching) – it’s little to do with economics and Everything to do with politics.


Exhibit B comes (surprise!) from the Conservatives’ ‘Summer Budget’.


The government talks up fiscal discipline, and its ‘Long Term Economic Plan’ promoting the notion that it’s the economy that drives all its actions.


Is it really, though?


The decision to protect pensions, and load the ‘pain’ onto those of working age. Is this an economic decision? Does this choice really have nothing to do with how older people tend to vote (Tory)?


What about the Welfare Cap? Nobody in work should be worse off than people reliant on social security, we’re told – is this driven by economic considerations? Does it really have nothing to do with Work & Pensions Secretary Iain Duncan Smith’s ‘belief’ that reducing welfare benefits to a level nobody could live on will force people to find work, any work?


There is excellent evidence that many of the government’s welfare reforms will impact disproportionately on women and on children. Not only is this patently discriminatory (on grounds of gender), but the courts have also determined that the changes breach the UN Convention on the Rights of the Child. Economic grounds again?


A more general point about impoverishing children – the ‘whole-life costs’ far, far outweigh any short-term savings. But, of course, too many politicians simply refuse to think more than five years into the future.


The costs in homelessness terms of the welfare cap have been thoroughly mapped and are well understood, but ‘it’s not my budget’ (so, I don’t care?) – break it down, and ‘there’s no such thing as Not My Problem‘.


All of these considerations (there are many, many more) provide clear evidence that George Osborne’s Summer Budget is driven not so much by the economy, but by politics.


Typically, younger people and poorer people are the least likely in our society to vote for the Conservatives. Which groups in society do you think are most likely to be hurt by changes (particularly benefit changes) announced in the Summer Budget?


You can have one guess.



Taken together, Exhibit A and Exhibit B are but two exemplars of the big changes we face – nationally and internationally.


And both lead me clearly to the view that our ‘leaders’ take decisions which are cloaked in Economics, but are profoundly Political at heart.


It’s So not the Economy, stupid!


Do take a look:


on Greece and Europe:

Greece wins euro debt deal – but democracy is the loser – Paul Mason, Channel 4 News


Alexis Tsipras’s U-turn – The Economist explains


Greece bailout agreement – the key points – The Guardian


Killing the European Project – Paul Krugman in the New York Times


Twitter denounces new bailout agreement using #ThisIsACoup hashtag – The Independent


Germany won’t spare Greek pain – it has an interest in breaking us – Yanis Varoufakis in The Guardian


Varoufakis explains his ‘five month battle to save Greece’ in the New Statesman


on the Summer Budget and the Politics of Austerity:


Will wages fill the tax credit gap? Don’t Budget for it – Gavin Kelly of The Resolution Foundation


What hope has the Court of Appeal left for human rights? – Child Poverty Action Group


Libertarians mourn as Tory Chancellor George Osborne buries Thatcherism – The International Business Times


Savings from welfare accrue to central government, costs from homelessness fall on local government – Guerilla Wire


The Institute for Fiscal Studies publishes regular budget analyses


… and a ‘must-read’ with awful relevance both to Greece’s third bailout and Gideon’s Summer Budget:


Why food riots work in the 21st century – Naomi Hossain in OpenDemocracy




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