Monday, October 18, 2010

Bosses back their own Government shock

A gaggle of plutocrats and parasites have had someone put pen to paper for them and written to the Torygraph to express support for the ConDem's planned spending cuts (http://www.telegraph.co.uk/news/newstopics/spending-review/8069947/Spending-Review-2010-cut-now-or-pay-later-say-business-leaders.html).

Yes these are the leading lights of the same private sector which got us in to this mess in the first place - and one of the few groups of letter writers imaginable who may actually have a higher average net worth than the Cabinet of millionaires itself. They and their children won't be suffering when Osborne follows Cable's advice to make "savage cuts".

To the extent that the "business leaders" have an economic argument in their letter (http://www.telegraph.co.uk/comment/letters/8069609/Osbornes-cuts-will-strengthen-Britains-economy-by-allowing-the-private-sector-to-generate-more-jobs.html) it is this;

"The private sector should be more than capable of generating additional jobs to replace those lost in the public sector, and the redeployment of people to more productive activities will improve economic performance, so generating more employment opportunities."

This argument fails on many levels. Ask Connaught workers if public spending cuts increase private sector employment opportunities!

This is no more than a rehash of the 1970s "crowding out" thesis, which was tested to destruction in the 1980s (and destroyed many jobs and communities in the process).

Having only recently returned to the sixth form where I first studied economics thirty years ago I can recollect this argument when it was still new and could go on about it at greter length.

However Aditya Chakrabortty gave a good summary in the Grauniad a fortnight ago (http://m.guardian.co.uk/?id=102202&story=http://www.guardian.co.uk/commentisfree/2010/oct/05/george-osborne-margaret-thatcher) so you can just read that.

The only question I would ask is this. Do these "business leaders" believe their own arguments because they are ignorant of economic history or is this reheated Thatcherism no more than a populist cover story for an attempt to shrink the public sector in an attempt to increase profitability at the expense of the living standards of working people?

Sent using BlackBerry® from Orange

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