A blog for the socially and politically conscious, written by a young, gay activist who strongly believes in equality and justice.

Wednesday, 28 April 2010

Burning issues fall on deaf ears?

The more important the issue, the less likely it is to come up in the general election. Trivia and bribes are the order of the day. This goes especially for economics. Labour, the Lib Dems and the Tories are competing to introduce ever larger public spending cuts and it is accepted that taxes are likely to increase. Yet the reason we have a deficit is the banking bailout. The British economy is far too reliant on banking and finance in the City of London. The City is far too reliant on increasingly esoteric financial instruments, which are essentially highly sophisticated forms of gambling. Let's not forget that the British economy came close to a total crash because British banks like Northern Rock held toxic assets. Buying up financial instruments that contained dodgy subprime mortgages from Florida caused chaos. The Tories bleat about Labour increasing debt - but forget that Thatcher ripped up the rule book and allowed banks to lend in irresponsible ways and march into speculation. The Tory push to demutualise building societies made it worse. The most significant part of our present economy strongly rewards irresponsible risk via a bonus-fuelled culture of excess. When the banks mess up, we all pay through tax increases and spending cuts. Yet a critique of speculative finance remains off of the agenda.

Let's be frank. The Tories under Thatcher created a financial timebomb that exploded and is primed to go off again. Most politicians don't understand the madness that is modern banking so they are leaving well alone. The banks could crash again and we could pick up the tab again. The Tories decimated manufacturing and with globalisation running riot British industry has continued to decline. Unless we reverse this, the long-term stability of the economy is under threat. Britain has been living off of oil revenues. The discovery of North Sea reserves funded Thatcher's economic experiment and cushioned Major, Blair and Brown. During the 1980s and 1990s, when production peaked, oil prices were just £6.50 a barrel. Now oil is at £55 and could head to £130. But North Sea oil is largely exhausted. This is a huge scandal - and guess what, politicians will be ignoring it during the election and blaming hard-working migrants for the unfolding British economic disaster. Ultimately an economy based on gambling and fuelled by dirt-cheap fossil fuels is not going to pay our pensions or provide security for our children.

We need economic democracy, with people in control of economic activity. The drive to privatisation and private finance schemes takes economic control out of our hands and places it in the hands of an increasingly small global elite who are concerned with immediate profit - not real long-term prosperity. Politics is increasingly meaningless because politicians elected by voters have less and less influence. How can we develop solutions to climate change if buses and rail services are no longer controlled by elected representatives? Mutual or co-operative control of banks would reverse the tendency to focus on the short-term. Economics needs to be a tool used to make us better off. Above all, the economy needs to work ecologically. The idea of an economy that ruthlessly focuses on profit means we mortgage the future for immediate gratification. Cleggmania is a product of voters who want to see a change, but the far-from-left Liberal Democrats have leant further and further to the right under his leadership. Social liberalism has made way for market liberalism, so the fundamentals of leaving economic activity to corporations and continuing to privatise - which are creating an unsustainable and increasingly unequal Britain - will continue. Unless we change our economy, it will become increasingly unstable. Green economics need to be on the agenda and that won't be brought about by electing a fresh crop of new Labour, Conservative or Liberal Democrat neoliberals.

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