The end of austerity?

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Big news from the OECD.

At last, the OECD has converted to the teachings of John Maynard Keynes. The austerian non-believers, for so long the dominant force in the Paris-based thinktank, are banished to a distant land. Common sense has prevailed.

As revolutions go, it has taken a while. Five years ago ago, the priority was public spending cuts. George Osborne was lauded. Then there was muted criticism. Now the austerity delusion, as the economist Paul Krugman called it, is no longer a central tenet of thinking at the Organisation for Economic Co-operation & Development, the club formed to provide advice to 34 wealthy countries.

Replacing calls for changes to the labour market (wages cuts) and reconfigurations of state provision (welfare cuts) is the belief that global economy lacks demand and only a coordinated effort by the G20group of countries, taking the opportunity to borrow money at ultra-low interest rates, can bring it back.

The long and the short of it is:-

that we don’t have enough demand
it has clearly been a political choice
Next week could be the start of a sea change in economic approach

http://www.theguardian.com/business/economics-blog/2016/feb/18/oecd-calls-less-austerity-common-sense-prevailed

[Polski_Filip]

There is one almighty fundamental flaw in the concept of Capitalism.

What happens when you don’t NEED anything? (Not WANT, but in a Maslow way)

eg I have furniture, car gadgets clothes, so I don’t NEED anything. I WANT stuff but the problem with Austerity is that “Things will get worse” becomes a mentality, so instead of buying the new Router that I WANT in order to get better WiFi I don’t bother. I go out twice a month instead of twcie a week.

The OECD may well have come up with this U-Turn, but the PROBLEM is changing the mindset. I have been programmed the last 7 years or so to think “We are Doomed” so I am in Survival Mode (as tbh many of my pals are in the UK) - they have discovered that their cars run perfectly well for 4 years or more not for 3. They found that Primark gear actually can last, and of course Car Boot Sales & Ebay are now the big thing.

Japan has spent the last decade or more showing that once you instill a “fear” in the population, no amount of Abenomics can snap people out of it. You lot will buy your new TV’s & stuff on Black Friday not when you WANT to.

Growth cannot be sustained, it cannot be infinite when we live on a planet with finite resources. The only way growth comes is through improved efficiencies - which means expensive labour in factories in China moving to Nepal or Myanmar, which is NOT you lot and which will further depress demand for Commodities and Financial Instruments which then affects the Service INdustry that is UK PLC.

Austerity in the 1930’s took almost 30 years to get out of the system until the Never Had it so Good moment.

It’s all very well investing in infrastructure to stimulate Demand, but we all know that UK Gov will NEVER build the things the Nation needs, they will build what their (whichever colour) Benefactors need.

No Motorways or Housing, not new commuter rail infrasturcture & lines just High Speed Rail, More Bombs & Guns.

What Think Tanks MISS every time is a Vision. They do not NEED one as they are only interested in their jobs, not what the Nation/World should look like in 20 or 30 years time.

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Think tanks are all about visions. The problem is that they’re usually so myopic that they fail to see the big picture ramifications.

Before all this business started, I used to consider the people of the 1920s and 1930s complete idiots for ever putting up with the depression. At best, they were simply products of their time, unable to vocalise any serious resistance to the changes being foisted upon them, at worst, pathetic little chickens that do whatever the wolves tell them.

How stupid do I feel now? We’ve just been through the same kind of thing, and let’s describe that thing accurately, a mass redistribution of wealth. Not everyone got poor during the Great Depression. Some people did very well out of it, particularly those that had something to lend. We see the same things now. One of the most deprived areas in the country has a fucking loan shark on the shirt of its Premier League team.

Anyone with a decent wedge of money or property probably did alright in the last six years. For those of us not able to exploit what others lack in basic needs, it hasn’t been as easy. Some have been able to turn to help within their families (although that too, has knock-on effects) but most have gone to the lenders.

Long-term, I think austerity has been genuinely counterproductive for those that have benefited from it. One of the consequences of implementation is that people have become a lot more switched on about where their money comes from, and how it is made. I know that there are still idiots on Facebook that believe that our foreign aid comes from a big finite pile of money that should be going somewhere English, but anyone that actually understands how money is created knows that’s bollocks, and by the time McDonnell has spent four years highlighting people’s QE, a lot of other people will too.

The pain that austerity has caused has subjected it, and many other “common sense” ideas to intense scrutiny, and the OECD aren’t the only ones questioning the legitimacy of those ideas.