Page 679 - "The Keynesian 'state is back in fashion'"

People often say we can learn lessons from history. It's not always that easy. Should we scrap our  democratic system because Anne Widdcombe is still in Stictly Come Dancing? Perhaps? It seems to me that one of the conclusive lessons from history, is do not cut public expenditure during a recession. Time and again, from FDR to Thatcher, politicians have seen economic conditions worsen cuts in spending.

Yet, today, 35 of Britiain's most powerful business leaders have given their support for the planned spending cuts by the government. In a letter to the Telegraph the bosses argue that reducing debt will improve confidence and that the private sector will be 'more than capable of generating additional jobs to replace those lost in the public sector.'

I am a little baffled how confidence will be improved by making a large section of the population unemployed? Surely these public servants buy their pants from M&S just like private sector workers? Where are all these new jobs going to come from? Where were they during the boom years? No doubt the private sector will fill some of the void left by the cuts. They must be rubbing their hands with glee.  People will end up doing the same work under much worse conditions. Is this the business confidence they allude to? There are certainly opportunities to exploit yet another sector of society, after all, 21% of the workforce are currently working in the public sector, that must represent huge possibilities for future dividend growth.

Although the headlines talk about top earners and huge pensions, the real story is that the public sector provides a powerful brake on the private sector's attempts to exploit its workforce. The majority of public servants are not rich but they do work under reasonable conditions. We are talking about a living wage and pension entitlements that are not generous by any means except when you compare them to the levels in the private sector. Have we fallen so low that we no longer aspire to improve worker's conditions? Instead, we allow our political parties, in league with business groups, to manipulate the public. "Ihaven'tgotitsowhyshouldthey" seems to be the watchword.

Blair argues that Brown lost the 2010 election by returning to the old Labour culture of tax and spend. He highlights the moment when 30 business leaders came out against Brown's rise in National Insurance as the point when the game was up. He concludes that,

"If thirty chief executives, employing thousands of people in companies worth billions of pounds, say it's Labour who will put the economy at risk, who does the voter believe?"


Clearly not the politicians! That would be ridiculous, wouldn't it? But doesn't it show such a sad, lack of ambition when we can't expose business leaders' statements for morally repugnant self-interest? We know who will profit from these cuts.