Friday, 8 May 2015

Cameron Sweeps to Victory at the Expense of the United Kingdom

Cameron's victory most resembles Major's victory in 1992. Somewhat against the polls and leaving him with an emboldened backbench to undermine him on Europe. As parliament fills up with a new generation of 'bastards' the Scottish army have camped across the aisle. It's difficult to imagine a parliament lasting 5 years where the SNP don't get everything they want whether they play the short or the long game. They now probably  have the representation in parliament they've always deserved. Cameron's election tactic was as cynical as it was dishonest. A house price bubble which was instigated to chime with the election cycle has been passed off as an economic recovery. Of Course as any economist worth their keep will tell you its wages that matter. Unfortunately the last round of quantitative easing (ie. printing money only it's not just printing money and the difference is what causes all the problems) was channelled into the housing market. If it had been channelled into the productive sector of the economy i.e.making wind turbines we may have seen Real growth not nominal growth in the economy. However since 97% of money creation is done through the five biggest commercial banks (RBS,Lloyds,Barclays,Santander,HBOS) they would much rather lend and charge interest on asset backed loans rather than risky business loans. So when Liam Byrne left the Tories a note that proved to be a perfect prop saying 'there is no money' that is in fact not true. There is plenty of money to give to the banks to lend to you for mortgages thus increasing the money supply further but no money to scrape a few billion for the NHS. So our only hope is that the promise of austerity has been a lie by the Tory government and to actually save the economy they will return to Keynesian sanity and spend on the productive sectors of the economy. Alternatively you can continue under-investing in education and hope you have an electorate that grows up to vote for a PM and Chancellor that essentially work for the banks. If QE is continued to be done in such a fashion we are all heading for a very bleak economic future.Please pay attention to economists such as Ann Pettifor (her latest offering Just Money is a damn good read) or follow the activities of Positive Money who campaign on this issue.