Friday, 19 November 2010

On the "so-called recession" and Lord Young's resignation

Lord Young, whom we last saw raging against Health and Safety, has quit the government after claiming that most Britons "had never had it so good" as during this "so-called recession." He has since retracted his comments as "inaccurate and insensitive." In reality, they were simply in line with the prevailing economic orthodoxy.

His remarks emerged from an interview with the Daily Telegraph;
For the vast majority of people in the country today they have never had it so good ever since this recession — this so-called recession — started, because anybody, most people with a mortgage who were paying a lot of money each month, suddenly started paying very little each month. That could make three, four, five, six hundred pounds a month difference, free of tax.
He also claimed that public sector job losses would be within "the margin of error" and that although "there will be people who complain," they "are people who think they have a right for the state to support them."

This last point, of course, is nothing more than an oft-repeated line of the right. Any and everybody who might rely on more than they can earn off their own backs is a "scrounger" and a "leech" who should be forced back into work or left to rot in the streets. Forget the heavy burden faced by disabled people, for example, if people can't support themselves that's just laziness.

As to job losses, sure - as Stumbling and Mumbling points out - "the ONS estimates that the sampling variability of its estimate of employment is 152,000 (p12 of this pdf)." So 100,000 is within that range.

Except that there is a significant difference between getting your employment figures wrong by that numeral and real people losing their means to support themselves. The former is a statistical matter, the latter a human one with significant effects in the real world - not least the knock-on effect of private sector job losses which adds up to a million unemployed.

With Young's claim about mortgages, again he's correct - on a superficial level. I was one of those who benefited from the dropping interest rates, my monthly payout dropping by about £230. But I, and many others, are not feeling it for the simple fact that the cost of living has skyrocketed across the board.

As PCS point out, in relation to civil service pay, "the cost of living has increased by 12.8%. Fuel and lighting rose by 35% last year, fares and travel went up by 10.2% and food costs rose by 10%." So, where mortgages may have gone down for some, other costs have increased to fill the gap.

But that is not all. Returning to Stumbling and Mumbling;
Only a minority of people have mortgages. Their gains, then, are offset by three groups of losers. First and most obviously, there are those who have lost their jobs; a net 876,000 full-time jobs have gone since the cyclical peak. Secondly, there are workers generally. Since December 2007, the average worker has suffered a cut in real wages: average earnings have risen 3.7% since then but the constant tax CPI has risen 7.6%. Within, this, though, millions would have done better. Thirdly, there are savers who have suffered lower interest income and higher prices.
Thus, what Young sees - as all Tories and even all capitalists tend to do - is the possibility of better fortunes for some (if they're lucky) equating to everybody having never had it so good. Hence, there's nothing wrong with going through with spending cuts and people are just whingeing for the sake of it.

His comments, in fact, are the myth of "the cuts that aren't cuts," recycled.

But there was no need for Young to resign his post over this. I, for one, am not "offended" by the sight of a Tory being a Tory, or a capitalist ideologue spouting capitalist ideology. I expect it.

The point should not be whether or not we are "insulted." The scalp of one old Lord speaking his mind means nothing - we need to challenge the lies and resist the institutions acting upon them in order to stop the administration he was part of from wreaking havoc upon our class.