{"id":4260,"date":"2015-05-22T14:24:12","date_gmt":"2015-05-22T13:24:12","guid":{"rendered":"http:\/\/unitelive.org\/?p=4260"},"modified":"2015-05-22T14:24:12","modified_gmt":"2015-05-22T13:24:12","slug":"austerity-doesnt-work","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=4260","title":{"rendered":"Austerity doesn\u00e2\u20ac\u2122t work"},"content":{"rendered":"
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Earlier this week, the internationally renowned political scientist and author on world debt Susan George, addressed, the General Federation of Trade Unions (GFTU) conference.<\/p>\n

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Ahead of the conference, UNITElive spoke to Ms George for her views on the banking crisis, austerity and what trade unions can do to step-up the fight against austerity.<\/p>\n

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When we asked whether European governments have done enough to avoid a repeat of the financial banking crisis of 2008, Susan George responded with an emphatic \u00e2\u20ac\u015bAbsolutely not.\u00e2\u20ac\u0165<\/p>\n

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Seven years on from the global financial meltdown of 2008 \u00e2\u20ac\u201c which forced western government to inject billions of pounds of taxpayers\u00e2\u20ac\u2122 money into their banks to prevent them collapsing \u00e2\u20ac\u201c and it\u00e2\u20ac\u2122s back to business as usual with banks once again calling the shots with government.<\/p>\n

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George added, \u00e2\u20ac\u015bThere are studies that show us that the system is so interconnected and so fragile, that if something happens to one of the largest central companies, banks or financial instruments it could trigger the collapse of all.<\/p>\n

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\u00e2\u20ac\u015bMathematicians call it the knife edge property \u00e2\u20ac\u201c if one goes down they will all fall together like a set of dominos \u00e2\u20ac\u201c it\u00e2\u20ac\u2122s a cascade effect.\u00e2\u20ac\u0165<\/p>\n

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Obvious post crisis reforms to the financial system designed to solve \u00e2\u20ac\u0098too big to fail\u00e2\u20ac\u2122 have been systematically dismissed. \u00e2\u20ac\u015bWe\u00e2\u20ac\u2122ve not even done the basic things like separating commercial (retail) banking from investment banking,\u00e2\u20ac\u0165 George added.<\/p>\n

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She continued, \u00e2\u20ac\u015bWe still don\u00e2\u20ac\u2122t have a financial transactions tax that could be a huge source of income and get rid of austerity. So the banks have been left to write their own programmes with no serious attempts to regulate them, the banks have won.\u00e2\u20ac\u0165<\/p>\n

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Austerity never works<\/strong><\/em><\/p>\n

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In 2010, the newly elected coalition government responded to the post-crash recession \u00e2\u20ac\u201c not with robust banking reforms – but with austerity. Across the western world a similar rush of brutal fiscal consolidation was playing out.<\/p>\n

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On austerity George is clear that it can never work, she said, \u00e2\u20ac\u015beven the IMF is now saying, firmly but gently that austerity is not a good idea\u00e2\u20ac\u0165.<\/p>\n

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And she\u00e2\u20ac\u2122s right, all of the economic research that allegedly supported the austerity mania has now been discredited. Two-third of the UK\u00e2\u20ac\u2122s leading economists say austerity has been bad for the UK economy.<\/p>\n

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As the Nobel-prize winning economist Paul Krugman writes in \u00e2\u20ac\u0098The Austerity Delusion<\/a>\u00e2\u20ac\u2122, \u00e2\u20ac\u015bharsh austerity in depressed economies isn\u00e2\u20ac\u2122t necessary \u00e2\u20ac\u201c and does major damage when it\u00e2\u20ac\u2122s imposed.\u00e2\u20ac\u0165<\/p>\n

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Susan George, explained it like this. \u00e2\u20ac\u015bIt was proven in the 1930s by the new deal economist Irving Fisher. He showed why austerity couldn\u00e2\u20ac\u2122t work, and the problem is, as anyone will tell you \u00e2\u20ac\u201c demand.<\/p>\n

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\u00e2\u20ac\u015bThe reason the economy isn\u00e2\u20ac\u2122t working is because people don\u00e2\u20ac\u2122t have a quid in their pockets. Unless demand is fixed, there will be soaring inequality and what growth there is goes to the top. It goes to the 1 per cent of 1 per cent mostly and working people get very little.\u00e2\u20ac\u0165<\/p>\n

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She continued, \u00e2\u20ac\u015bIf you take a trillion pounds out of one groups\u00e2\u20ac\u2122 pockets and put it in another \u00e2\u20ac\u201c put it in the pockets of those who already have most of what they need -they\u00e2\u20ac\u2122re not going to go out and buy 200 pairs of jeans. Therefore we\u00e2\u20ac\u2122re going to lessen demand.\u00e2\u20ac\u0165<\/p>\n

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Britain\u00e2\u20ac\u2122s austerity U-turn<\/strong><\/em><\/p>\n

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Even Britain was forced to abandon austerity \u00e2\u20ac\u201c it\u00e2\u20ac\u2122s not something you will hear Osborne crowing about now, but after two years of over-zealous belt tightening no new austerity measures were imposed.<\/p>\n

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All talk of \u00e2\u20ac\u0098balancing the books\u00e2\u20ac\u2122 and \u00e2\u20ac\u0098deficit reduction\u00e2\u20ac\u2122 silenced.<\/p>\n

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Once the U-turn was made Britain saw a revival in economic growth in 2013. Paul Krugan writes, \u00e2\u20ac\u015bBritain did almost no fiscal tightening in 2014, and grew by 2.9 per cent.\u00e2\u20ac\u0165<\/p>\n

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What makes this all the more surprising is that the Tories were able to sweep into power on the back of a lie.<\/p>\n

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The British electorate were sold a pup, conned into believing that Cameron and Osborne had \u00e2\u20ac\u0098rescued\u00e2\u20ac\u2122 the British economy, when in fact their austerity had taken us to the brink of a triple dip recession in 2013 and only recovered when the brake was removed.<\/p>\n

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National debt doubled under the coalition and far from a fixed economy we have stagnant wages, a productivity slump, slow growth and rising household debt.<\/p>\n

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With Cameron promising to re-impose harsh austerity in the coming years and Osborne preparing \u00c2\u014112bn of welfare and in-work benefits cuts, we can expect the crisis of growing poverty in Britain to worsen.<\/p>\n

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Susan George describes austerity as an illness. She said, \u00e2\u20ac\u015bIt\u00e2\u20ac\u2122s a completely ideological policy. The point of it is to transfer infinite amounts of money upwards. The effect of it is to claw back everything working people have gained since the war, from healthcare to workers\u00e2\u20ac\u2122 rights.<\/p>\n

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\u00e2\u20ac\u015bThe system used to be GDP every year was divided between capital and Labour, with capital getting 30 per cent and salaried people got 70 per cent \u00e2\u20ac\u201c it\u00e2\u20ac\u2122s now down to 40\/ 60 per cent and in France it\u00e2\u20ac\u2122s 42\/ 58 per cent.\u00e2\u20ac\u0165 she said.<\/p>\n

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Hope on the horizon<\/strong><\/em><\/p>\n

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Susan George concedes that \u00e2\u20ac\u015bwe haven\u00e2\u20ac\u2122t won the battle of ideas,\u00e2\u20ac\u0165 but sees hope on the horizon.<\/p>\n

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George wants to see a collective effort on austerity \u00e2\u20ac\u201c a European-wide campaign \u00e2\u20ac\u201c with trade unions at the centre, similar to the pan-European campaign on TTIP (Transatlantic Trade and Investment Partnership).<\/p>\n

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She said, \u00e2\u20ac\u015bThis is a good model and the one that has worked best. I think we should at least start talking about it.\u00e2\u20ac\u0165<\/p>\n

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Many trade unions have joined the self-organised European Citizens Initiative against TTIP which has attracted 1.9m signatures so far. The aim is to reach 2m signatures before the European Parliament gives its opinion on June 10.<\/p>\n

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You can sign the petition against TTIP here<\/a>.<\/p>\n

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Interested in taking a stand against austerity? Then join the Peoples\u00e2\u20ac\u2122 Assembly march against austerity in London on 20 June. Sign up here<\/a><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

Earlier this week, the internationally renowned political scientist and author on world debt Susan George, addressed, the General Federation of Trade Unions (GFTU) conference.   Ahead of the conference, UNITElive spoke to Ms George for her views on the banking crisis, austerity and what trade unions can do to step-up the fight against austerity.   […]<\/p>\n","protected":false},"author":1,"featured_media":821,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[265,76],"wps_subtitle":"World debt expert Susan George says why ","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4260"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4260"}],"version-history":[{"count":1,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4260\/revisions"}],"predecessor-version":[{"id":4261,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4260\/revisions\/4261"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/821"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}