Sunday, November 14, 2010

Never waste a good crisis pt 2

Tories do it better. The collapse of free-wheeling financialized capitalism gave the left the opportunity and the means to reshape our political economy: the most powerful business elites - the hyper-rich investment bankers - were insolvent and begging for government help, which could have been extended by the simple expedient of taking ownership (which in extreme cases, such as RBS, is what the UK government did).

But TARP and quantitative easing, the main tools of government intervention used so far in western countries, essentially consist of printing money (or taking it from taxpayers) and giving it to bankrupt financial institutions so that they can rebuild their balance sheets. Unsurprisingly, the banks are making use of this facility to make money, most of which they redistribute back to themselves. Governments feebly exhort them to lend money to businesses and consumers. They sit on their hands, knowing there is no ultimate sanction.

Along comes the resurgent right, with the following message: free-wheeling financialized capitalism has failed, because it was held back by the welfare state. So, to solve the problem we dismantle the welfare state, not only by cutting subsidies to the poor, but by undermining the very core of western welfare capitalism: public provision of education, health and pensions to all but the hyper-rich.

Even though the Conservatives failed to win the election, winning the support of only 23% of the total electorate,  thanks to the Lib Dems they are being allowed to take on the welfare state in a way Margaret Thatcher could have only dreamt about. Cuts to unemployment benefit, housing benefit, education at all levels, reorganization of the NHS, removal of elected local councils from the management of local schools, the list goes on. No mandate for any of this: none of the more radical measures were presented to the electorate before the vote, and much of it directly contradicts what the Liberal Democrats actively campaigned on. A government of 18 millionaires removing benefits from the workless in the middle of a recession. Can this really be allowed to stand?

If this country has any life left in it, the coalition should last no longer than a couple of years. If it lasts a parliament, I'm outta here.