The Predictable Double Dip

So today brings the news that the UK economy is back in recession.

This has been predicted by people like myself on the left of the political spectrum right since the moment that the Tories were elected in May 2010, and for good reason, because this was simply an inevitability given their choice of economic plan. Austerity is failing Europe and it is now demonstrably failing Britain.

The Tories are now, predictably, explaining how this is all the previous governments fault and that they inherited a terrible financial mess which they are taking tough decisions to fix. But I'd like to explain exactly how this point of view is completely wrong and inconsistent with their own policies and the facts as they are.

Lets get this out of the way first, the situation we are currently in is NOT the fault of the previous Labour government. Now, some might say "well you're a Labour Party member, so you would say that wouldn't you?" well I'd obviously sooner stick up for Labour than the Tories, but I am to the left of the party and and therefore have a lot of criticisms of the parties policies that I am not shy about. But on the issue of whether they spent too much, I am totally with the party because of what I see are the facts on the ground.

Throughout the 13 years of Labour government, they fluctuated between producing budget surpluses and deficits. In 2007 the year before the crash, the deficit was 3.1% of GDP. The fact is, public spending deficits are not necessarily a bad thing believe it or not! So long as they are not out of control and are managed properly. The analogy that is often made about the government is with a business and that no business would survive if it spent more then it had. But this is just illogical because most businesses start with debt, how else could people afford to set up businesses? But that debt isn't bad, in fact its good, because it eventually leads to profit, job creation and growth. The same principle applies to the government. If the government spends more money than it has on investment projects and creating growth, it is actually a good thing, because it eventually leads to more people having jobs, higher tax receipts and lower welfare payments. So, so long as this temporary debt is small, sensibly managed and spent correctly, there isn't a problem with the government being in debt.

In fact, so obviously was this the case that even the Tories were then making promises to "match Labours spending pound for pound", which shows that their change of position now is totally disingenuous and opportunistic.

The problem was - the 2008 financial crash. All of a sudden with the banks about to fail and the economy contracting, the government had to bail the banks out to secure everyone's savings and investments (because it would have been a disaster for us all if that had happened) and increase public spending to keep people in their jobs, rather than on the dole. The public spending deficit thus massively increased to a level that is now very unhealthy. But this was completely necessary otherwise the economy would have entered a downward spiral of people losing their jobs, increasing the welfare bill (and therefore public debt) and decreased economic activity. Labour increasing the deficit meant that the country avoided a depression and the economy quickly began growing again and unemployment was falling.

It's worth noting now that the Conservative Party were pretty much the only organisation in Europe that actually opposed public spending stimuli to get out of recession and in favour of immediate public spending cuts.

Now, Labour are accused of spending too much before the crash, and thereby making it worse when it hit. But this isn't the case and demonstrably has no bearing on the countries condition post-crash. Before the crash, Ireland had a budget surplus of around 3% and Iceland's was even larger and look how that turned out for them. There was clearly no correlation. The problem was the countries dependence on the financial sector and the under-regulation (and Tories can't really be ideologically consistent if they want to argue for more regulation...).

So when the Labour Party left office, the economy was on the road to recovery. The economy was growing and unemployment was falling. But when the Tories/ Lib Dems took over and started implementing their policies, the economy started going backwards because they had not learnt the economic lessons of the past.

This austerity drive was always going to lead to this double dip recession. If you cut public spending at a time when the economy is not yet stable, you will simply make things worse. Raising VAT will make people spend less, so businesses will make less money and be less likely to employ people, may make redundancies and add to unemployment. The higher unemployment we have, the more dole money the government has to hand out and less tax revenue it gets (thus increasing the deficit).

Cutting peoples benefits mean they have less money to spend in the economy. Whereas a tax cut for the richest simply makes the deficit bigger so that rich people can spend that extra money in places like Monaco or (dare I say) Jersey.

The modern Conservative Party is one of the remaining vestiges from an age where our economic understanding was not as great as it is now, and the modern Left hasn't been able to permanently change the economic consensus, since Thatcher and Reagan tore up the rule book and replaced it with an older edition in the 80s. It was John Meynard Keynes that taught us that in a recession, you just simply cannot rely on the Adam Smith "invisible hand" idea, you must have state intervention to prevent a recession turning into a depression. But because this idea is inconsistent with conservative values, they are doing their best to forget it and return to Adam Smith Laissez Faire economics.

After the Second World War, the country was in a far worse economic state than we are in today, and there was no austerity drive, but instead mass nationalisations, a huge housing program and the creation of the NHS. This kept the country at 0% unemployment for years and economic growth that meant Britain could pay back it's debts slowly and steadily without the worst off in our society suffering, in fact they prospered. This is what we need a return to.

I can only hope that these arguments start being won by the left. As it stands Francois Hollande is set to win the second round of the French Presidential Election which will hopefully smash this ridiculous austerity consensus in Europe to prove in a country similar to Britain that there is better way to sort out our problems.


Vive la France, Vive la Gauche!

Sam


P.S. Apologies to Jersey readers if something on UK politics bored you!

The Road to Reform - Meeting

Apologies for the lack of updates recently, I have been having a hectic time with exams, which is not over yet, but I intend to write a few blogs (including one on London politics) soon.

In the mean time, on Thursday (26th) at 8.15pm at the Peirson pub is going to be a meeting entitled "The Road to Reform".

It has been organised by Deputy Tadier and all are welcome to go and find out how people can get involved and plan the campaign for a fair electoral system in Jersey.

Electoral reform is an incredibly important issue for Jersey and the Establishment have been winning the fight so far in usurping the Commission. What we need to do is organise ourselves to initiate a full campaign on what the public want from reform so that the Commission is completely unable to offer us anything other that what we are demanding. This meeting will be the place to be if you are someone that cares.

The youth are getting involved!

I mentioned in my last post how a friend was inspired to write to the JEP after our meeting and after reading the front page of the JEP that day on Senator Bailhaches assertion that we must "stand up for ourselves".

He has asked me to reproduce the letter here in case it isn't printed. I hope most of my readers will agree with me that it is a really impressive letter that should give us hope in the youth of today for being so switched on to the facts and not blinded by the propaganda they see in the paper.

He has also started a blog site which I'm sure is something worth paying attention to! -  http://liamrenouf.blogspot.com/


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My name is Liam Renouf and I am a 16 year old student studying the International Baccalaureate at Hautlieu School. On Thursday the 12th of April I read the article in the JEP titled ‘Let’s stand up for ourselves!’ In this article it stated Senator Bailhache’s idea that ‘Jersey needs either to develop a stronger more independent personality or face up to the idea of being a ‘satellite’ of the UK unable to challenge assaults on our own industries and our abilities to make our own decisions.’

As a young person and a student in particular, I feel to weaken an already tense relationship between the United Kingdom and Jersey would be detrimental to Jersey’s well being as a crown dependency. Jersey has always to me had this aura of being a very traditional and conservative island with the famous saying ‘there’s a boat in the morning.’ It really is time for change in Jersey and for us to stop getting on our high horse about being from Jersey for the sake of being from Jersey and to really scrutinise the decisions made here by our states’ members.

As a Renouf I am from strong Jersey decent. I studied Jerriais for a number of years and take an interest in Jersey’s history. However the idea of supporting every single decision Jersey makes because you come from Jersey has to stop.

We cannot isolate ourselves any further from the United Kingdom and the rest of Europe then we already are. In my passport it states that ‘The holder is not entitled to benefit from EU provisions relating to employment or establishment.’ Jersey is already isolated enough, we need to look at how we can strengthen our relationship with the UK. Senator Bailhache needs to address the weaknesses in the relationship rather than finding excuses to cover up the island’s patriotism. This is not an attack on Senator Bailhache himself I just believe that Jersey needs to shake off old views and start living in a progressive 2012!

A Pint and Politics - A Review

Firstly, can I say thank you to everyone that came to the meeting on Thursday. There was a great turnout and we had some great discussions. It was particularly nice to see some former politicians and former candidates come along to take part too.

A special thanks has to go out to Deputy Tadier, Deputy Macon and Rico Sorda for their input and making some great points.

It was clear from the views we heard from the young people that there is dissatisfaction with the islands government among all age groups and that same criticisms of the media are not only recognised by the older generations.

One of the attendees has been inspired by the meeting to write his first letter to the JEP on the subject of Senator Bailhache's calls for independence. Well worth keeping an eye out for that (if the JEP print it, that is...)

It's not important to consider where to go with this and not to lose any momentum. So expect more word as things are organised!

Several things were mentioned in the meeting that would make for good reading/ watching, so I've attempted to compile a list of them all here -



Interview with former Deputy Wimberly on the Electoral Commission and Senator Bailhache usurping it -

This blog post by Team Voice also includes a link to the original proposition by Deputy Wimberly on the Electoral Commission -

http://voiceforchildren.blogspot.com/2012/03/democracy-terrorists.html

Deputy Macon mentioned this survey on tasers for the police in Jersey -
https://www.surveymonkey.com/s.aspx?sm=u5bfeiVHbep%2BzOckeO57i60JbA1%2BM338QD4UTlHEH84%3D

I mentioned this documentary on democracy by Tony Benn -

And for those that didn't get the hand out, here is a list of local blogs that are well worth paying attention to -

Team Voice -
voiceforchildren.blogspot.com
voiceforprotest.blogspot.com
voiceforjersey.blogspot.com

Rico Sorda -
ricosorda.blogspot.com

A View from the West -
st-ouennais.livejournal.com

Cover-Up Jersey -
coverupjersey.blogspot.com

Crapaudverload -
crapaudverload.blogspot.com

Tom Gruchy -
tomgruchy.blogspot.com

Nick Le Cornu -
district1sthelier.blogspot.com

Deputy Trevor Pitman -
thebaldtruthjersey.blogspot.com

Bob Hill -
deputybobhill.blogspot.com

One Day -
onedaysooninjersey.blogspot.com

Ozzy's Place -
ozzysplace.blogspot.com

Ted Vibert -
tedvibert.blogspot.com

Planet Jersey -
planetjersey.co.uk

Simon Crowcroft -
sthelier.blogspot.com

Stuart Syvret -
stuartsyvret.blogspot.com

Deputy Montford Tadier -
mtadier.blogspot.com

The Jersey Way -
thejerseyway.blogspot.com

Tony's Musings -
tonymusings.blogspot.com

Ugh it's him! -
ushitshim.blogspot.com

Nick Palmer -
nickpalmer.blogspot.com

A Pint and Politics

Evening everyone,

I've organised a bit of a get together on Thursday that I am calling "A Pint and Politics" and I just want to spread the world to all who may be interested.

The idea is to get some young and progressive people to have a drink and talk about local politics together with some interesting guests who are involved in local politics.

So I've booked the upstairs room at the Peirson Pub (at Royal Square) at 7pm this Thursday and asked Deputy Tadier, Deputy Macon and Rico Sorda to come take part in the discussion.

It's going to be really interesting and hopefully some great discussions will be had. The whole thing is meant to be informal and open, so I suppose even if you aren't young or progressive you would still be welcome! Please spread the word to anyone you think might be interested!

Cheers,

Sam


7pm

Thursday 12th April

The Peirson

Facebook event page - http://www.facebook.com/events/214795761954605/

My Letter to the JEP

After a reader directed my attention to Senator Farnham's letter to the JEP I felt compelled to write my own, which I have published here. It'll be interesting to see if it gets printed and what reaction it stirs.


EDIT - The JEP printed my letter on the 5th April and can be found on page 11. I'll just point out that they did remove the very last line about Senator Bailhache, but perhaps we can assume that was for space reasons rather than a conspiracy...

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As someone on the left of the political spectrum who thus abhors discrimination in any form, I have become dismayed over the past few weeks of what I have seen as a serious "anti-UK" sentiment that is growing in the island, and being fuelled by the certain politicians in conjunction with the JEP. I mainly talk about the reactions we have seen in relation to the LVCR debacle and the news that our passports will now be printed in the UK.

But after reading Senator Farnhams letter in the JEP, I just feel as if I cannot let his points go unanswered.

What we are seeing is the mother of all smoke screens. A classic example of something we regularly see in history of a government in trouble trying to create a scapegoat to distract us all from their own incompetence and it is utterly contemptible.

This deal with our passports is a total non-issue. I urge you to go to the opening pages of your passport and check section 6 of the notes which says "This passport remains the property of Her Majesty's government in the United Kingdom". Jersey has no right to issue our passports, further than the rights that the UK voluntarily bestows upon us. We don't possess Jersey citizenship, we have British citizenship and it is the British governments right to decide how that arrangement works. We may have an argument if the UK was taking away our right to decide to who gets the Jersey variant passport, but as Senator Farnhams letter said, that is not the case. It also isn't a big deal if our passports will take a few days longer to arrive, because Jersey can still print emergency travel documents. A total non-issue.

Yet we are seeing words like "fight" and "defend" used as if it was some sort of noble quest to heroically defend our moral principles against an evil invader. This is just a nonsense. He also describes Jersey as "a small island nation", but Jersey is not a nation, Jersey is British. This idea of Jersey as a nation is just to try and further create a "them and us" feeling to blindly rally us round the flag.

And with LVCR, we have seen a UK government act entirely within it's rights to close a harmful tax loophole. Yet, Senator Farnham describes it as "prejudice". No, it isn't prejudice because the Channel Islands were the only jurisdictions that were materially causing a problem, and therefore it was proportionate and it is worrying to see a politician not understand that important distinction.

The recent challenge of the UK Chancellors decision was doomed to failure from the start and was nothing more than an expensive PR exercise to try and save their necks and make people forget about the incompetence that led to this in the first place and portray our government as our defenders when they are really no such thing.

Jersey is in trouble. Our economy has been shrinking, public services are being cut and we face rising unemployment. But this has been happening for years and is not the fault of the UK government. It is the Jersey governments fault and it is therefore them that we should be directing our anger towards. They are simply trying to whip up tension and create an enemy figure in the UK so that out of a defensive instinct we will rally behind them out of fear for being accused of being a traitor and unpatriotic should we dissent. But as Dr Johnson said "patriotism is the final refuge of a scoundrel" and we should not be standing up for Jersey but standing up for what is good and right.

I wonder how long it will take before Senator Bailhache starts banging the drum for independence?

Sam Mézec
4 Le Jardin a Pommier
La Rue de Patier
St Saviour

sammezec.blogspot.com