Austerity myths

We already know that real households do not live within their means; if they did, the economy would grind to a halt. Modern prosperity is built upon debt, and the main aim of economic recovery is to get the banks lending again to both households and businesses.

It is a myth, and it is propping up austerity politics. Another myth is that there is a shortage of money. This implies that there is a fixed pool of money, or some other external factor limiting supply. …

The austerity myth that damaged the public sector most significantly was the claim that states could not create money, they could only borrow from the banking sector.  …
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Weapons manufacturer takes over 400 council jobs in education

NEARLY 400 council jobs across Worcestershire are going to be privatised in a £38 million deal.

Worcestershire County Council’s Conservative leadership has today agreed that an array of school support jobs can be handed to Babcock International from October.

The jobs, known at County Hall as ‘Learning and Achievement’, offer a vast array of advice and help to schools including everything from school admissions, post-16 education, teacher training and educational psychology.
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Age of Dissent: more protests in 2015 than any time since the late 70s

The year 2011 is widely viewed as the peak of protest and dissent in the wake of the 2008 financial crisis and the austerity agenda that followed it. It was the year of the Arab Spring, Occupy, UK Uncut, indignados, urban riots and anti-austerity and tuition fee protests – and in which Time magazine famously named “The Protester” as its person of the year.

Yet in the UK, protests continue to occur at a rate rarely seen prior to the global economic crisis in 2008. Indeed, 2015 seems to have confirmed the suggestion, made at the beginning of the year, that 2011 was “really only just the beginning”. …
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IMF: ‘Trickle-Down’ economics does not work

If there’s one person most often associated with the origins of of trickle-down economics, it’s President Ronald Reagan. Few people know, however, that the phrase was actually coined by American humorist Will Rogers, whomocked President Herbert Hoover’s Depression-era recovery efforts, saying that “money was all appropriated for the top in the hopes it would trickle down to the needy.” …

Now, nearly 80 years later, Rogers’ quip is getting the punchline it deserves: A devastating new report from the International Monetary Fund has declared the idea of “trickle-down” economics to be as much a joke as he’d imagined.

Increasing the income share to the bottom 20 percent of citizens by a mere one percent results in a 0.38 percentage point jump in GDP growth.

The IMF report, authored by five economists, presents a scathing rejection of the trickle-down approach, arguing that the monetary philosophy has been used as a justification for growing income inequality over the past several decades. “Income distribution matters for growth,” they write. “Specifically, if the income share of the top 20 percent increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down.”

The IMF Confirms That ‘Trickle-Down’ Economics Is, Indeed, a Joke
http://www.psmag.com/business-economics/trickle-down-economics-is-indeed-a-joke

October Reading List

  1. A Trillion Ways To Build a New Military Industrial Complex
  2. The Military Takes on Climate Change Deniers
  3. Amazon Must Be Stopped
  4. Japan’s Decision on Collective Self-Defense in Context
  5. Far-Right Birther’s Secret Funders
  6. Pinkwashing: Fracking Company Teams Up With Susan G. Komen to ‘End Breast Cancer Forever’
  7. Cut benefits? Yes, let’s start with our £85bn corporate welfare handout
  8. US firms could make billions from UK via secret tribunals
  9. Germany Can’t Manage Its Weapons
  10. Warmongering Hebrew University tries to muzzle Palestinian students
  11. Richest 1% of people own nearly half of global wealth, says report
  12. UK to allow fracking companies to use ‘any substance’ under homes 
  13. This One $486 Million Blunder In Afghanistan Sums Up The Disaster Of Military Spending
  14. The US and a Crumbling Levant
  15. Only 12% of drone victims in Pakistan identified as militants: report
  16. Does Rising Inequality Make a Democracy More Warlike?
  17. European banks and the global banking glut
  18. With US-led air strikes on Isis intensifying, it’s a good time to be an arms giant like Lockheed Martin
  19. Organised Hypocrisy on a Monumental Scale
  20. NASA Confirms A 2,500-Square-Mile Cloud Of Methane Floating Over US Southwest
  21. Netanyahu’s Not Chickenshit, the White House Is

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Short of cash, rent and food – Britons in dire financial straits

Karen Rowlingson, “Short of cash, rent and food – Britons in dire financial straits,” The Conversation, 25 July 2013

Britain is currently experiencing its longest and deepest economic slump in a century. But through new research we’re only just beginning to realise quite how dramatic the impact of this recession has been on UK residents. …

Around 2.5 million people have been out of work since 2008 and, among those in work, earnings have been falling or stagnating for some years. In 2012, the real value of workers’ wages fell back to 2003 levels, following several years of pay freezes and economic restructuring.
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Ha-Joon Chang: Osborne’s description of the UK economy is near-Orwellian

Ha-Joon Chang, “George Osborne’s description of the economy is near-Orwellian,” The Guardian, 26 July 2013

If all else fails, they say, you can always lower your standards. This is what we have become used to doing in relation to the UK economy. The UK’s economic performance since the start of the coalition government in May 2010 has been so poor that Thursday’s announcement of 0.6% growth in the second quarter of 2013 was greeted with a collective sigh of relief.

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Military spending and the EU crisis

Frank Slijper, “Guns, Debt and Corruption“, Transnational Institute, 14 April 2013

High levels of military spending played a key role in the unfolding economic crisis in Europe and continues to undermine efforts to resolve it.

Download Guns, Debt and Corruption: Full report (pdf, 525KB)
Download Guns, Debt and Corruption: Executive Summary (pdf, 77KB)
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