Depression

And quite possibly a long one. Paul Krugman thinks so:

Why the wrong turn in policy? The hardliners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it's true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hardliners' medicine.

It's almost as if the financial markets understand what policymakers seemingly don't: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

So I don't think this is really about Greece, or indeed about any realistic appreciation of the trade-offs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

Imposing suffering on other people as a sign of leadership? Isn't that a bit harsh? Oh... Here's Frank Field, David Cameron's policy advisor on poverty, and yes he is a Labour MP.

He (Field) suggests that men who refuse to take up a government offer of work should have their benefit removed altogether, a far tougher sanction than they face under the current benefits regime.

To do what is the question that springs to mind. Starve? Beg? Rob? Or take that marvellous career opening in a contracting economy that opens up all the time to people Field describes as "the unmarried father who is often young, unemployed and often unemployable and who is unskilled"? Supply side dogma again. And the sort of community education that can make a big difference to individuals is now facing the looming inevitability of cuts.

Never mind, we can be reassured that this is a centrist government for a non-ideological age. Who better to say so than Tony Blair, who now regrets the time wasted in the first two years of the Labour Government ideologically overturning the work of the Tories (can't quite remember that bit myself).

So sorry Krugman, this isn't the triumph of the ideological preferences of Herbert Hoover, it is just good sense.

Well, at least the neo-liberal weather, brutally imposed on this normally sun-kissed nation by the IMF, has relented and it is now a beautiful day. So I am going to stop wasting my life reading the Guardian on-line and simply enjoy sitting in the shade on my patio. Bollocks to the lot of it, here's a YouTube.

Surprises

Not one here:

The impact of George Osborne's emergency budget on the poor has been revealed in a study that finds the country's least well-off families face cuts equivalent to 21.7% of their household income. That means they will be hit six times harder than the very richest by the coalition's deficit-cutting measures.

A bit of one here from William Keegan if you bought into the Government's 'record deficit' guff:

The Treasury view seems to have been brought back into circulation by Osborne. Most people accept that it was misguided in the early 1930s, when, at the time Neville Chamberlain introduced his deflationary budget of 1932, the national debt amounted to 177% of gross domestic product and debt interest was absorbing as much as 40% of public expenditure. By comparison, the latest Red Book puts debt at 61.9% of GDP in 2010-11 and debt interest at 6.3% of total public expenditure. Yet the way that Osborne goes on about it, you would think things were more like the 1930s.

A bloody great one here, especially if you expected to be annoyingly smug about being in Greece (and it is about to start raining again):

As Britain enjoys a sporting and cultural weekend that will linger in the memory, temperatures are set to eclipse those in Greece today as the country basks in a heatwave.

As for this, totally predictable, even the false hope and the goal that wasn't.

England, for all the exertion, had been a markedly inferior team.

World Cup latest

'Psychic' octopus predicts Germany victory over England

It's the prawn playing the vuvuzela I want to see next.

Green Greece

There was more rain this afternoon. It has left the garden incredibly green for late June in Greece. Now the birds are singing and the cat that comes here demanding food was found asleep on the sofa before being unceremoniously booted out. He is trying to move in. He still got his bowl of food tonight though. There are no great thoughts in my head, not this evening, not after the rain.

A coalition of cuts

There is only one real issue in the UK today and it is ideology. This may seem strange as Britain, with its deeply embedded political self-image of pragmatism and moderation, can often appear to be an ideological wilderness. Today's papers trail the forthcoming emergency budget, no doubt informed by countless confidential briefings. It is being made obvious that it will launch a massive programme of cuts and, whilst they still talk about us all being in it together, clearly some are more in it than others.

Keynesian liberals are appalled. Here's Will Hutton:

No country has ever volunteered such austerity. It is as tough a package of retrenchment as the IMF imposed on Greece, a country on the brink of bankruptcy. It is twice as tough as the famously harsh measures Canada took between 1994 and 1997. It is three times tougher than Sweden's measures between 1993 and 1995. In British terms, it is immeasurably tougher than what we did after the IMF crisis in 1976 or after the ERM crisis in 1992...

We are not in the position of Greece. Britain has a diversified economy. Our cumulative national debt is not large by international standards. Uniquely, the term structure of our debt is very long – around 14 years. Most of this year's debt will be sold to British domiciled individuals and companies, so the international sovereign debt crisis has much less impact on us. The level of interest on the national debt in five years' time as a share of national output is more than manageable. These are the truths about the situation; to claim otherwise creates distrust.

So why do it? Surely, what we are about to see is the dogmatic implementation of the underpinning political economy of contemporary conservatism, borrowing some of the small state hysteria of the American right, though without the paranoia, lumped together with the perceived self-interest of the business elite, but mainly settling into comfortable, thought free, treasury orthodoxy; the final resting place of the complacent.

Those of us who remember the 80's will realise that these moments do not occur in a vacuum, there has to be an international consensus. Thatcher had her Regan, neo-liberalism was in the ascendancy, attempts at Keynesian stimulus failed in France as Mitterand did a comprehensive u-turn. Today much reference is being made to Canada, Sweden and the like who made major structural adjustments, apparently successfully. Except...

One of the most trenchant critics of the current orthodoxy, Paul Krugman, points out in his blog that these cases are not analogous. Instead, he argues in this New York Times op ed "that economic policy around the world has taken a major wrong turn, and that the odds of a prolonged slump are rising by the day".

The other similarity with the Thatcher years is the existence of a crisis in the centre-left. In the early 80's it was the split in the Labour Party and the formation of the Social Democratic Party. Both opposed Thatcherism, but now, following the SDP/Liberal merger to form the Liberal Democrats, part of the former opposition is actually in the coalition government, whilst the Labour Party has lost power after a long period of accommodation with, rather than opposition to, neo-liberal political economy. The ideological sterility of Labour's leadership debate shows little sign of a political movement that can speak for any popular discontent arising from this elite economic consensus.

Whilst looking around for a coherent and informed political opposition and merely finding oneself in an intellectual desert, it is hard to escape pessimism. Krugman again writes that, "The triumph of prejudices over the evidence is a wondrous thing to behold. Unfortunately, millions of workers will pay the price for that triumph." And the last word goes to Will Hutton:

Number 10 and the Treasury believe the worst can be offset by aggressively low interest rates and more quantitative easing. They will work to a degree. But what is proposed still risks everything. Politicians pay the price with lost office. Millions of British will pay a higher price – the needless squandering of their lives.

Bravo Barack

Great choice Obama - but ditch Crete, this is the place to be.

Let them learn salsa

This will sound churlish. A statement from any government minister that sees adult education as anything other than an expensive luxury should be a welcome relief. I know that John Hayes, the Skills Minister, had extensive contacts with adult education organisations when in opposition and, I was assured by others, despite my cynicism, that he actually got it about its significance.

He certainly seems to given this reported statement:

Taking evening classes improved adults' physical and mental health, encouraged them back into work and helped build tight communities, the minister said. "[The classes] aren't just about utility in its narrowest sense," he said. "There are a lot of studies that show the beneficial effect adult education has on health and social interactions."

He also gets it about the utility of non-vocational learning. But, and there is always a but, he is a Tory and ultimately this is translated into a curious amalgam of a lack of substance in terms of policy and a sense of the absurd.

Hayes said courses such as dance or flower arranging were "arguably more important" in times of financial constraint because they made people happy.

So, after New Labour's commitment to make lifelong learning central to the new 'knowledge economy' (and then trashing it), we now see adult education advocated as a new opiate of the masses. Flower arranging as a compensation for losing your job. It isn't convincing, reflects a stereotype of the enormous variety of activities that fell under the lifelong learning banner, whilst the creation of a happy subservience doesn't encompass the vision that made so many of us give our working lives to adult education, before departing with some bitterness and a severance payment.

How to be a nuisance

Go here whenever anyone is enjoying a bit of peace and quiet and turn those speakers up. They work like this you know.

UPDATE

This is even worse.

(Ta Will)

The only way ...

...to watch the World Cup.

Especially posted for mikeovswinton, yes only two Euros for one and a half litres. Mmm ... taste that pine resin.

Sanity ...

...from Larry Elliott:

The determination to cut budget deficits in these circumstances does not show that policymakers of probity and integrity have replaced the irresponsible spendthrifts of 2008 and 2009. It shows that the lunatics are back in charge of the asylum.

Insanity

"So remember this: the imposition of futile misery is not an act of wise policy, but rather a sign of folly."

From an open letter to George Osborne from Martin Wolf on the economic policy of the new UK government and, implicitly, on the austerity programmes currently being imposed across Europe (quoted here).

Back to Greece

It is a long journey going overnight via Athens, made more so by the bus from Volos taking a detour to drop some elderly people off in the village of Xinovrisi, blocking the narrow road for an eternity whilst the old man gathered his shopping as it had spilt all over the baggage compartment. Now, I can look out on an impossibly green garden for this time of year after a wet spring. Bird song is everywhere, the nightingale was blasting out all night long, and now it is hot enough for the cicadas to start up their constant summer row. And this is when my early retirement pays off. I shall be here all summer so who knows what you will get on this blog and how often.

Now, with a few chores done in the cool of the early morning it is time for some serious sitting in the shade of the vine.

Big is not always beautiful

A friend has emailed me some notes from one of those grim conferences that work decide that people must go to. One presentation was given by a consultant styling himself as a "Public Cost Reduction Specialist". I am quoting from the notes, rather than from any published documentation, with permission from my friend. They provide a glimpse of the workings of Conservative thinking on the Big Society, the idea of a limited state but with an active citizenry.

I suppose the one thing that the seminar showed was just how seriously this was being taken and I doubt whether the new coalition would put much of a brake on any real policies that emerged. There is an ideological preference within both the Tories and the Orange Book Liberals for this approach to the public sector, though it is hard to see where the demand lies outside the political class. A general distrust of politicians has not produced a populist upsurge in this country to match the Tea Party movement, "antipolitical Jacobins" as Mark Lilla describes them in this essay from the New York Review of Books.

The new Jacobins have two classic American traits that have grown much more pronounced in recent decades: blanket distrust of institutions and an astonishing—and unwarranted—confidence in the self. They are apocalyptic pessimists about public life and childlike optimists swaddled in self-esteem when it comes to their own powers.

I see no sign of this in the UK (other than from religious fundamentalists and alternative health quacks!). Popular protest is more likely to arise in defence of public services, rather than to ask for them to be dismantled.

So, unsurprisingly, much of the urgency behind the approach seems to come from a desire to cut costs and to reduce deficits, rather than from popular demand for change. Empowerment, individual autonomy and the breaking of dependency are the rhetorical justifications for a policy of reduced central government expenditure. It is a way of making cuts sound nice.

So what does this mean in practice? Firstly, it means marketisation and competition in the public sector to "empower" the consumer through consumer choice, thereby raising productivity and putting downward pressure on "wage inflation" in the public sector. This is all depressingly familiar and not new at all. They are the same assumptions that underpinned New Labour's public service reform agenda. The objections are the same too - public services are not the same as consumer goods, quality often rests on lower productivity (teachers with smaller class sizes, social workers with lower case loads, etc.) and consumer choice is not ownership and control.

You can see the difference between the parties though in health care. Instead of setting targets and performance indicators, marketisation will mean that prices will be set for hospitals to do given procedures, thus incentivising hospital managers to improve productivity and carry out more (just like the US insurance system - and in the same way it can lead to rampant over-medication).

The consultant also seemed taken with behavioural economic notions like the fashionable "nudge", as well as other fads, thinking that economic policy can be used to shape human behaviour - in the direction he wants it to go of course. Apparently, this process of subliminal social control is known as "libertarian paternalism" (an oxymoron if ever I have seen one).

What got to me most was the discussion of public libraries where he suggested a neat and cheap way to meet the demands of those who protest at library closures.

"Well,... if you look at the demographics of people volunteering to work at Oxfam shops, its nearly always the same as the demographic of people who campaign to keep libraries open...

Why not let the volunteers run the libraries! And you could have Libraries open 24 hours with this arrangement! And you could do deals with WH Smith to sell remaindered books!"

Hmm... Leaving aside the fact that going to a library at 3.00 am, staffed by an unpaid, well-meaning insomniac, to access a stock of remaindered books is not the most attractive vision, this is horribly simplistic. People campaign to keep a professional service going, not to make an opportunity for themselves for unpaid work. There is so much more besides ...

As well as cuts, there is a second agenda lurking around. The consultant continued,

"Of course although eventually government will give freedom, in the initial stages government will have to be quite hard, and tough with local authorities in ensuring they become sufficiently liberated and fully utilise their new found freedoms ... we know that ... even if you throw open the doors of an asylum, some people will always just creep off and cower in a corner rather than running away."

I see. The power being given away is not central government's - it is local government's. And to do this, central government will have to increase its power and control. This is a rather old-fashioned political struggle against municipal local authorities who are often the power base of other parties and work, in part, in variance to central government policies.

What this reminded me of was Jacob Levi's demolition of another associated piece of fashionable nonsense, Philip Blond’s Red Toryism. Remember these are Conservative Party ideas and Levi describes the social base of much conservatism in this way:

... conservatism is the party of the traditional elite, drawing on the votes or social support of those they have traditionally dominated. It is the alliance the aristocrat offers the peasant against the tacky, educated, often-Jewish new money city slicker; and the aristocrat sets the terms of the alliance.

This could not be a more fitting description of these proposals. The independent sector is being offered a deal and the terms of that deal, as well as the control of funding, is set by central government.

Thus the big society vision stands in opposition to democratic decentralisation and representative local democracy. It enhances central government control through purse strings rather than targets, though I see that central control of the school curriculum is also being embraced with enthusiasm. It also opens the way for the politics of communalism, funding independent power bases that can be used for advancing of narrow ideological and sectarian aims.

I must make it clear that I have no hostility to the voluntary and community sector. I worked closely with it in running adult education programmes, but it does not match the stereotypical view embraced by this consultant. It works in partnership with local authorities and other public bodies, not against them, and it is professional, most staff are paid for their work. It is a key player in regeneration and community development. However brilliantly it does some things, it is only too aware of the tensions between central funding and autonomy, a factor absent from the consultant's vision.

There is something to be learnt here from adult education too. There has been a hidden privatisation. As classes have closed, students and tutors have set up their own programmes on their own terms. Free from appalling bureaucracy, people can learn together as they want. And most importantly, they have direct ownership, no one can close their courses or take their classes away from them, as has happened in the past. There are problems with comprehensive coverage, access and qualifications for those that want them, but it could be the basis for a renaissance of dedicated adult learning.

This would seem to support the assumptions about the Big Society, as would some of the anarchist ideas of the late Colin Ward, but this is not the case. Autonomy is not something that is granted, and funded, by a central government or an elite. Nor is it about behaving in a socially acceptable way. It is is about self-organisation and self determination; it is taken, not given.

It is early days for the new government so who knows whether any of this will eventually see the light of day. Parties in opposition are very fond of flirting with ideas that they then abandon when faced with the realities of government and the attraction of exercising power. All I know is that if I had responsibility for cutting expenditure, Public Sector Cost Reduction Specialists would be the first for the chop.