Economic debate is completely idiotic, and that’s a serious problem

For the sake of argument, let’s say that you’re the leader of the Labour party, and you’re a bit of a leftie. Perish the thought. You’ve got an idea for a platform for the next general election that you think could be a vote winner and you want to put it into practise. You want to spend more money on the NHS (because it’s significantly under-resourced), you want to build social housing (because we don’t have enough of it and private rents are ridiculously expensive) and you want to renationalise the railways as their franchises finish. All fairly popular policies. Ignore them. They’re just examples. If you don’t like them, pretend they’re your pet policies that need spending. Whatever.

You say you want to do all this, and then a little voice pops up. It’s your policy adviser, and he has a bit of an issue for how this all might go over with the public. “How are we going to pay for it?”, they ask.

Oh. That.

This is the thorny issue with any policy now, because the debate is so completely slanted towards one big-C Conservative stance on public spending that absolutely no method of financing any spending is allowed, and you will be torn to shreds for suggesting any of them:

  • “OK, let’s raise taxes to put them up — taxes on the rich, inheritance taxes, things like that. Few people will object to that.” Bad move — now, in all the papers and in an email campaign the Conservative party sends round about six femtoseconds after the words leave your lips, you are now the wealth-stealing evil socialists returning to “tax and spend” policies. You are now “Red [whatever your name is]” and you are bad and wrong. The implication that raising taxes from the public to pay for things that the public want and need (i.e. the role of government according to anyone who isn’t an anarcho-capitalist loon) is somehow a bad thing to do is ignored. You can’t raise taxes.
  • “Well, we can borrow money, and then the spending will benefit the economy overall and we’ll see growth of many times the amount we borrowed. That’s what the economists say.” Even worse! You can try to make that argument if you want to, however increased public borrowing is now roughly on par in the public mind with sodomising a sheep to death in front of a nursery. (Never mind that the Tories have borrowed more than all Labour governments in history combined.) The papers and that lovely Tory mailshot are now going to refer to you as mortgaging the country to pay for profligate spending that will eventually lead to us becoming like Greece, which is of course a great comparison if you ignore all the ways in which one of the world’s biggest economies with its own sovereign currency and a reasonably efficient tax collection system differs from Greece. Feel free to try to make the economic argument , or even the argument that a business that refused on ideological grounds to borrow at low interest rates to grow itself would be a miserable failure in a world where nobody else has any such compunction — you would be entirely right, but nobody will broadcast it, much less print it, even less believe it, because profligate Greece borrowing mortgage running up the credit card. You can’t borrow money either.
  • “OK, no borrowing, no taxes. Right, sod it, la-la land idea — this bloke says something about ‘People’s QE’. It sounds completely crazy, and we’d have to do it very carefully to not ruin everything, but it might work; it doesn’t involve any borrowing or new taxes.” See the above scenario, only replacing “Greece” with “the Weimar Republic and Zimbabwe”, with the same end result. You can, again, argue that judicious use of the Peoples’ QE idea to fund public services is a bit different from a forcibly-deindustrialised power with a shattered economy arbitrarily and endlessly printing money to repay an externally-imposed inter-war debt it couldn’t possibly afford to repay otherwise, or a corrupt African basket case printing money to finance a war, but nobody will listen. Your name is now somehow integrated with that of Robert Mugabe in the public eye to form another delightful nickname (because nobody knows who the leader of the Weimar Republic was). You can’t use this idea either.*

You’ll notice that there is a fourth option which the Conservatives won’t whinge as much if you do it, or the media that supports them. That option is “don’t spend any more money on anything”. That happens to be the option which they intend to pursue themselves and which suits them ideologically. It is also the only answer that is now acceptable in mainstream public discourse. Ed Miliband ended up in this bind in 2015; he was completely beholden to the public perception of Labour as financially profligate, and acutely aware of the fact that every penny of spending Labour proposed would be scrutinised in great detail while the vagaries of half-baked Tory pledges like a £12bn saving on benefits (which no Tory deigned to explain or pinpoint at the time) or a massive splurge on the NHS (ditto) would be given the occasional going over in interviews with Andrew Neil that nobody watched. As a result, he ended up trying to push the idea that he would spend more and cut the deficit, but couldn’t say that he wanted to do so by cutting the deficit slower (i.e. borrowing more) because he’d be savaged, but his only reward was to be savaged for not saying how he was going to pay for his pledges.

Essentially, through an absolutely incredible PR machine and the willing participation of a media that is at best allied with the Tories for convenience and at worse actively supportive of them, Labour has been constrained into a single binary choice as regards the economy: they can either not spend any money on anything, or they can be a bunch of profligate tax and spend socialist Greece Weimar spendthrift irresponsible can’t be trusted Mugabes. At the same time, the Conservatives can make as many unfunded promises as they like, borrow as much as they like and miss as many of their idiotic, ideological deficit reduction targets as they like, and not suffer anywhere near the same level of scrutiny or public bollocking. They know full well that their programme is economically indefensible, in fact outright harmful, but know they will receive precisely zero scrutiny for it. The only people who will care are the people who already vote Labour sharing stories about it on Twitter and tutting.

Usually, I think blaming the Tory media for Labour’s unpopularity is, at best, an attempt to shirk blame; a means of Labour activists passing the buck for the party’s manifest failure at ginning up a coherent public relations strategy that doesn’t revolve around Facebook and Twitter echo chambers. However, most peoples’ exposure to news about the economy and economics is through that same Tory media, and its politically motivated monstering of any means of financing public spending has destroyed any meaningful public debate on the economy or the government’s role in it. It has turned what should be a rational and serious debate into a completely irrational one moderated by petulant children, where all but one option is taken off the table and anyone who disagrees is a dangerous and stupid lunatic, crippling the ability of Labour (or anyone else) to put forward any alternative economic arguments without being dismissed out of hand. I have absolutely no idea how this could be solved, or if there is any way around it; but then I am not the Director of Communications of the Labour party, and I would hope to Christ that whoever that person is incredibly competent at PR and has some really solid ideas for doing so, otherwise the 2020 uphill struggle is only about to get a bit steeper.

…Oh dear.

*For what it’s worth, I don’t think Peoples’ QE as espoused by John McDonnell and co is a terrible idea as such, but it would clearly need a lot more thought before it was used, if at all. It’s nowhere near an unequivocal good.

Originally posted on Medium.

No wonder the young are supporting unapologetic socialists— they’re fucked

There’s a rather similar back story to the rise of both Bernie Sanders in the US and Jeremy Corbyn in the UK. Both have been propelled to, in Corbyn’s case, the office of Leader of the Opposition, and in Sanders’ case the current front-runner for the Democratic presidential nomination (and, if the polling is correct, winner of the presidential race overall; Sanders handily cleans the clock of every single one of his potential Republican opponents, except Marco Rubio, who is now at best an irrelevance after taking great pains to tell us all that Barack Obama knows exactly what he’s doing). Both also have a significant base among young people — YouGov identifies Corbyn’s supporters as being predominantly aged between 18–24 (compared to David Cameron, who does better amongst those aged over 55), with similar results for Bernie Sanders (Hillary Clinton getting the same results as Cameron). In both cases these are unapologetic firebrand socialists with a reputation for sticking to their principles and envisioning a more Scandinavian, social democratic society for their respective countries. And young people are lapping this up.

It’s quite easy to reflexively dismiss this as just idealistic students being idealistic students. However, I think there is something far more important at play in the overwhelming enthusiasm now being shown amongst those who may have just voted in their first general election, and those who are going to in four years’ time. And that something is the fact that young people are fucked. Something I’m going to illustrate with a couple of worked examples.

Let’s say you’re 66, a state pensioner; a group that very heavily broke for David Cameron and the Conservatives in the 2015 election, winning 47% of the over 65s. Born in 1950 into a working class family, you were born close to the end of Clement Attlee’s term as Prime Minister, two years after the NHS had been founded and five after the end of World War 2. The country is in the midst of a massive rebuilding programme and, under Attlee’s direction, a significant expansion of social services and the role of government. New homes are being built, new towns are planned to provide a greater supply of new, modern housing — massive central government subsidies are provided to councils to achieve this aim, ultimately leading to over a million new homes being built by the time you’re one year old. Your education is free, you get free school meals as your family’s on a low income, and if you want to go to university this is paid for out of general taxation, along with you receiving a grant for your essentials. As you grow up and grow older, you can live in a subsidised council house, eventually perhaps buying a home of your own; your wages go up year on year and living standards in general go up with them. Jobs are plentiful in all sorts of trades and professions, housing is plentiful, all sorts of local amenities from libraries to swimming pools are available for you and if you fall on hard times there’s a social safety net to support you. No, not everything is perfect, and to be sure there’s a significant amount of “…however”s to all of the above, but you can live a happy life with an array of social services there to support you. All that the government asks is that if you are one of the few that is really, really successful, you pay more in tax to support the people who aren’t and to pay for the system that nurtured you into that success.

Just a reminder that the people who grew up and reached adulthood under that system are those who, overwhelmingly, voted for David Cameron in the last election. Now think about what things are like if you’re 23.

You were born in 1993 at the fag end of the Thatcher-Major years into an upper-working class family. Tax rates are the lowest they’ve ever been. Social services improve markedly from their low bar at the start of your life over the New Labour government, albeit floated up on a bed of horrid PFI contracts, however when you’re 15 the financial crash of 2008 hits, everything goes tits-up and the government has to bail out Lloyds, Northern Rock and RBS to stop the entire economy from going any more tits-up than it just did. You had absolutely no part to play in any of it (beyond your dad having to put stuff on tick for you, which is a bit tangential) but, ultimately, you’re going to have to pay for it over the rest of your working life. You turn 17 in 2010 when the Tory/Lib Dem coalition comes to power after promising to cut government borrowing.

You leave school and go to college — this, at least, costs nothing. You could have got some money to fund your studies at college in the form of EMA before — this meagre £30 a week handout is now gone, as the government needs to cut the deficit. But the state pension now goes up at the greater of inflation, wage increases or 2.5%. The government can afford this but can’t afford your £30 a week. It also cuts taxes on people earning over £150,000 a year specifically, while cutting everyone else’s taxes too to a somewhat lesser degree by raising the personal allowance. The government can afford to somehow reduce its income drastically, but can’t afford to support you through further education, because it needs to save money.

(You don’t really notice the bit about the pensions or the tax system at the time, because you’re 17 and probably more concerned with trying to fuck things. I don’t blame you. I was 17 once too, although my wayward youth was spent carrying a Lib Dem membership card and talking about it on the Internet rather more than it was spent having sex. It shows.)

You can, of course, go to university; tuition fees came in when you were 13, and these went up to £9,000 when you were 17. It used to be free; now you get charged, and you will now pay for it directly from your income as soon as you earn over £21,000. The people who voted for this change are all the same people who previously didn’t have to pay anything. You go through university, conscious that every penny you spend has to be paid for eventually, and come out with a degree. Well done.

After finishing your degree at age 22 and moving back home you notice that there’s a bit of a shortage of jobs. Manufacturing is in decline, high-tech jobs are stagnant, services are where it’s at. Services like working in Domino’s making pizza on a zero-hours contract. You do this while waiting to see if a job posting relevant to your degree pops up, which pays for your mobile bill and whatever your mum charges to live with her (you can’t afford to rent) but not much else. Virtually all of the social housing has been bought by the people who lived in it under right-to-buy, and are now looking to rent it out to you for profit — there’s none for you to rent and eventually buy though. They aren’t building any more, and for the sake of argument, you’re male, so you can’t even do the “getting pregnant to get a council flat” thing people keep talking about as an argument for why welfare is bollocks but you never see anyone actually doing because getting pregnant is a real pain in the arse (if you’re doing it wrong, that is) and it makes no sense.

You manage to somehow get a job which isn’t on a zero hours contract, even if it still has no real relation to your degree, and you now work full time — £7 an hour, 39 hours a week, you lucky ducky, now you earn £14k! Your mum doesn’t really want to keep you in the house since you have a job of your own, so you have to move out. You bring home about £1050 a month; your choices are to either rent a shoebox close to your work on your own for £550 a month plus bills (so really about £800 a month) or rent a room in someone’s former council house for £300 a month where you have very little legal protection, can be turfed out at a moment’s notice and your landlord can control your time not spent at work as much as they please because you’d rather be silent, bored and lonely than homeless. You choose the latter because it’s cheaper and take care not to fart too loudly during the night and upset your landlord — too bad the house is a fair distance from your workplace, so that means you spend more or less the difference in rental costs in transport to and from your job, either by a shit bus or a shit train or an expensive-to-run car. Meanwhile the government is talking about how it’ll give you a discount on buying your first home, just so long as you can pull thousands of pounds out for a deposit first. You can’t save any money because all your money goes to rent, food, bills, transport and the merest bit of leisure you can afford. You can’t afford a deposit. Even if you could, a house near you is £150,000 and rising. That’s a lot of money for someone earning £14,000 a year. People keep talking about salary multiples; you think about how many multiples of your salary £150,000 is and die a little inside.

Your work is more or less the same; you hate it, and your boss makes you work unpaid hours constantly and you’re frequently driven to distraction by stress, but you daren’t say anything because you’d rather be miserable than broke and homeless, and employment tribunals cost money now so you don’t even get help from them. Luckily, this becomes irrelevant as soon as the company ceases to tread water as it was doing previously and makes you redundant. People who have been working there longer than two years get redundancy pay — you get jack shit. You now have no income. You can go on Jobseeker’s Allowance, but you have to keep going back and forward between the Jobcentre (which is near where your work is/was) to sign on and prove that you’ve been looking for work exhaustively, and there’s a pervading sense that they are just looking for any excuse to trip you up and cut off your payments. You can’t afford the room in the house any more, let alone the room plus the transport to and from the Jobcentre; back to your mum’s house it is.

You apply for jobs. You apply for more jobs. You apply for more and more jobs. There are at least a hundred people applying for every job going, but you put applications in anyway. You have a degree so you’re overqualified so get knocked back. You keep applying. You show the list of applications as long as your arm to the Jobcentre person and they tell you you’re now on the Work Programme and must go and stack shelves in Poundland for free or they’re cutting off your JSA. The government trumpets the great recovery and all the jobs it has created. It says it wants to encourage entrepreneurship; you’d love to start a business, but you rather need money to do so, so you can’t. Oh well. You apply for more jobs in between stacking shelves in Poundland.

The upshot is this: You’re 24, in what should be the prime of your life. You have no money. There are no jobs. You live with your mum and probably will for a long time because rent is extortionate and you can’t afford to buy. You work for free in Poundland so you can get JSA, which even then they are trying to devise ways of prying you off. Your options diminish daily. You have little money for leisure. There’s no libraries and no swimming pools that you can afford as the council has had to slash its budget; there’s no real leisure activities available in your price range beyond getting shitfaced on whatever cheap shit booze you can get. Public services are being run down and you don’t feel safe out at night on the few chances you get to go out. You have a millstone of debt around your neck so even if you have the wherewithal to get out of your current rut, you’ll still be paying for the degree that makes you “overqualified” as soon as you earn even the national average wage, as well as paying through taxation for the inflated state pensions of the people who previously had it far better and have now voted for a government to pull the ladder up, who incidentally vote in far greater numbers than your generation so your interests will never win out. There are few unions and employment tribunals cost thousands of pounds, so any job you do get will, de facto, be at-will employment where you can be sacked for any reason or no reason at all unless you can spring money from somewhere; that is, if you can even get a job. Everything your parents and grandparents had has been taken from you and they’re telling you it’s for your own good. You are fucked.

The nature of the fuckery

Now, that’s a deliberately worst-case scenario. Not everyone who leaves university right now is going to immediately spiral into some sort of hell of joblessness and horror. I am a few years older than 25 and I am lucky to have been able to find a relatively secure, stable job before the financial crash hit and to have escaped the worst of the ensuing shitstorm as a result (I’m by no means well off either, incidentally; buying a house is a pipe dream). But it isan illustration of how thoroughly, and how nakedly, the young have been systematically ripped off. Their parents and their grandparents got to grow up in an era of full employment and economic growth; of the government intervening to ensure that they were safe, secure, well fed and healthy, and investing in the economy to ensure that it grew and provided jobs for all. Those parents and grandparents, or at least the governments they elected, have now deigned to pull the last rungs of the ladder up from their children, to abandon them to the mercies of what passes for a free market after all the assets the government used to have have been sold off and are now rented back to the population with a profit margin attached, and to strip them of the social services that helped nurture them and the social safety net that kept them secure; all on the basis that a debt the young had absolutely no part in creating (indeed, could not have had any part in creating) must be repaid by them.

The question is, why in the name of Christ would anyone catapulted headlong into the above environment of pure fuckery want to support it or prolong it?Why would someone faced with chronic insecurity and inequality not want to see a massive, diametric change in their lives? To be sure, one does not have to be a raving, little-red-book-toting Marxist to think that the above is neither a good state of affairs or a fair or just inheritance for the people just now coming to adulthood. Despite the protestations of his opponents, Jeremy Corbyn is not a raving, little-red-book-toting Marxist. Neither is Bernie Sanders. (John McDonnell might be at least the first bit, though.) Neither are their supporters. Neither, incidentally, is Ed Miliband, who also intuitively recognises the issues surrounding inequality and its effects on the young but never particularly put it across well during his time as Labour leader (a fact he himself acknowledges).

The young people who voted for Jeremy Corbyn, or who are voting for Bernie Sanders, and who are supporting socialist candidates the world over, do so because they can see exactly how fucked they are, and because these candidates have both articulated not only an understanding of that fucked-ness but have articulated a way out of it — a way back to an era of security, greater equality and greater opportunity that is within living memory. That articulated solution is democratic socialism; an unapologetic and sincere desire to use the state’s power and resources to improve the lives of its citizens. While this might be terrifying to some, it’s worth pointing out that“socialism” to someone who’s 18 or so is not a bogeyman or an instinctive threat compared to what it may have been to their parents. Someone turning 18 today was born seven years after the Cold War ended; to them, socialism is not the Soviet Union and its associated repression and threat of nuclear armageddon, the Winter of Discontent or the Militant Tendency. To them, socialism is the NHS, Clement Attlee and, yes, Jeremy Corbyn and Bernie Sanders and their prescriptions for more, more affordable and better housing, government investment in jobs and better wages and working conditions.

To understand this is absolutely crucial for both politicians in general and specifically for those who wish to unseat or derail Corbyn and Sanders respectively. Young, not very well off people have flocked to these leaders and the unapologetically socialist ideas they espouse because they have promised an improvement in their lives, and because the status quo is so drastically against them that they (correctly) perceive the problems with it to be systemic and indicative of a system rigged to reward and insulate their seniors and those above them in the social pecking order at the expense of their own comfort, wellbeing and happiness. Any potential challenger to this new surge in socialist thinking needs to have a concrete and workable proposal to address the things Corbyn and Sanders have made so much goodwill out of eloquently addressing; inequality, insecurity and the distinct feeling of intergenerational sabotage of their lives. An 18 year old with a shit life ahead of them doesn’t want or need a dose of centrist reality from a Liz Kendall or of slow, pragmatically-obtained progress from an Yvette Cooper or a Hillary Clinton; they want and need to be able to afford somewhere decent to live in a community worth living in and to have a job to go to after they finish their education. That’s not much to ask for, but simultaneously the only people promising any concrete action towards it are the people who were previously on the fringes. Anyone looking to swing those people back towards the notional “centre” needs to have something to offer the victims of the current system, or else they are doomed.

Note: This article got a fair amount of shares and views when I first posted it on Medium, having got about 143,000 page views – it is easily, by a long shot, the most read thing I have ever written. On reflection, one thing I could have made clearer is that I wasn’t trying to make an argument specifically in favour of Sanders/Corbyn the individuals; more that there is an understandable reason for the surge in popularity amongst the young, that being because they are (or were) the only people of any prominence with any shot at power who spoke to young peoples’ concerns. Even if you have a distaste for either man or their politics, there are good reasons why they are so popular that can’t just be boiled down to “young’uns want free shit and cuddles” as many friendly commenters deigned to tell me.