Updated: Feb 18, 2018
So many lies ... So many lemons. In my 'admittedly amateurish' book I put forward the idea that "lemons", a politically correct form of "lies" were all around us. I put forward the idea that we all had the ability, possibly even the obligation to use our own judgement to identify and uncover these lies. I suggested that in such an 'honest' world each and every one of us would benefit and furthermore it was the only sustainable way for humanity to thrive in the long term.
Frankly, I am not so sure any more. There are so many vested interests, so many short-term thinkers, so many simple minded people who will buy anything if is labelled 'gold', that perhaps we are not ready as a species for that move. This was epitomized by Damien Green's speech on 'Question Time' last week. He verbalized the phrases that all Tories seem to be taught from birth,
We have a huge infrastructure fund and therefore we need lower taxes to help reduce the deficit which in turn will lead to lower taxes for every body
Presumable this is his version of the Tory mantras of:
Lower corporate tax means greater investment and greater wealth for everyone
We can't live beyond our means forever and so we must lower the deficit - we pay more in interest than ...
The Labour policies will bankrupt the country
We have created more new jobs since we have been in power than ...
There is no magic money tree.
So many lies I don't even know where to begin. However, let's start at number one. Britain has the lowest corporate tax in Westernized Europe and yet investment is lower than anyone else in Europe (I am referring to the more advance economic nations). It has the lowest productivity because the machinery simply isn't there, which in turn leads to less profits to share out to the workers. The self-imposed austerity measures have done nothing for the people and even less for the deficit. The Tory claims that they had lowered it to unprecedented levels is already beginning to unravel as they themselves admit that it is again rising. To this you can add their new attempts to bribe the voters with stolen 'Marxist' policies which will help make this deficit even worse. Their claims of lowering unemployment to record levels is also a huge lie. The so called 'gig' economy has distorted the facts. Firstly, in a world of zero hours, it is theoretically easy to do this. I, for example could simply say, "hey everybody, come work for me but you are on a needs basis. When I need you I will phone". You then sit by your phone waiting for the call, and in the mean time at least we have no unemployment (and more to the point, I don't have to pay either unemployment benefits or even social security, because you are self-employed).
This doesn't even begin to describe the misery created because the jobs themselves have changed. For example, why hire full-time staff when a half dozen students looking for extra pocket money can be found anytime. The net result is a whole army of people who wanted and need full-time employment being pushed out of their jobs. Just talk to the people of Redcar after the closure of the steel mills.
If companies are not investing it is because the entrepreneurs have no incentive to invest. We've tried the carrot, so now let's try the stick! Let's shake that money tree a little. It's not that difficult. Start taxing the reserves and all profits set aside for the future. Let's see how long companies will continue to squirrel away potential investment funds when you start taxing them, or how long developers will sit on land waiting for it to gain value before building, if you start charging them for the activity.
Next, let's take number two. In theory you can live beyond your means forever. At least that's what America is proving. The latest Congressional budget approval has opened the road to a potential increase in the deficit by well over a trillion dollars over the next 5 years, and yet the markets haven't batted an eyelid. Instead higher inflation has fueled speculation of an increase in the interest rate, sparking a wave of portfolio sell-offs. A casino gone mad. I have long claimed that the stock market has been turned from a benevolent institution intended to finance business, into a casino. Controlling this is in fact very easy, if they had the political will. Just put a delay of three days or even a week, on any stock or options purchases. Now let's see people gamble with this kind of uncertainty. Let's see if we control this new fad to get computers to buy and sell in microseconds before anyone else has any value in such a world.
The US debts and deficit are beyond belief and yet their borrowing ratings (and their ratings) are still where they were before. A man that denies climate change, is risking potential nuclear war with Korea and has done nothing for business except give them a tax break, is sitting on top of a resurgence in the economy. At least that's what we are told, but look closer and you will see that's only partly true. There is a dark cloud overshadowing this growth. As I said, what is happening is that the world's biggest casino is seeing booming business. The players are not only local but come from abroad as well.
But ballooning stock market prices is not a real measure. It had been proven more and more often recently. From the crash of the '20's, we had one in the '90's and now in the first decade of this millennium. Like Hurricanes they seem to be linked to global warming. Investment is nothing more than the faith people have and show in profits. It is the reason why people will often buy stocks even when they are overvalued because they believe it will go even higher. In this respect the media and papers are also to blame because of their scare stories. The other side of the coin is also true. A few rags to riches exaggerations will achieve the opposite effect.
Next on my list come the Labour policies. government ownership of utilities. Take a look at Europe guys. There are many countries that still have government owned or state controlled utilities. The Tory lie that laissez-faire, or free trade is the best policy does not always apply. Two important exceptions are mentioned here. The first has to do with big business. Large stores, buyers sellers and and producers will always have a price advantage. This eventually will force out the smaller, less efficient competitors. Any country that wants to help protect these small to medium industries is going to have to treat them differently and balance the playing field. After all, they do account for almost 60% of all employment.
More important are the utilities and public transport. These tend to have monopolistic positions and as such, in the hands of private business there will always be a need to control the profit motive and regulate prices, or else the consumer will get skinned alive. Some industries have proven to be more adaptable to private ownership, There has been growth in the number of suppliers. Industries such as air travel and telecommunications for example, but others like power and even rail in the UK have not. Not even the privatization of NHS facilities , the so-called private initiative schemes has worked. Neither law no regulation has helped. As for the cost of buying back these de-nationalized industries, I would either negotiate buy-back prices that reflect the damage they have done through poor or greedy management or else adopt a 'confiscate now - pay later' policy
I won't dwell on the 0 hours contracts. Since some people in society (students and family with dependents) prefer this then fine, keep them, but force employers to maintain proper employee conditions also. Maybe then we can find some better trained employees who aren't just in it for the money. Finally there is the infamous money tree. Money was there when MP's voted are rise for them themselves in expenses or when they need to pay £1 billion bribe money to the D.U.P of Ireland, There is even a surplus for Teresa May to adopt a few Labour tactics to bribe voters, with little or no thought to how this will be funded. But money for nurses and police just seems to be unavailable.
In conclusion, unemployment that puts students to work for peanuts and forces 0 hour contracts on people is unsustainable. All these will eventually collapse under their own weight and take everybody with them. Stop the off-shore tax havens, oblige Banks to monitor large amounts of cash going on an electronic journey through computer-worlds, and you will see where the money needed to fund the future is hidden. Oblige business enterprises to invest with taxation of excessive unused funds, stop overseas transfers of profits and even off-shore registration of companies and we will see where the money to fund the future lies.