{"id":7668,"date":"2020-03-30T11:42:49","date_gmt":"2020-03-30T10:42:49","guid":{"rendered":"https:\/\/progressiveeconomyforum.com\/development\/?p=7668"},"modified":"2020-03-30T11:44:09","modified_gmt":"2020-03-30T10:44:09","slug":"the-end-of-austerity-speak","status":"publish","type":"post","link":"https:\/\/progressiveeconomyforum.com\/development\/blog\/the-end-of-austerity-speak\/","title":{"rendered":"The End of Austerity Speak"},"content":{"rendered":"\n

Fiscal Policy & the <\/strong>Ancien Id\u00e9ologie<\/strong><\/em><\/h3>\n\n\n\n

<\/p>\n\n\n\n

On 11 March the new chancellor presented his Spring budget. While the budget\nwas unambiguously expansionary after a decade of cuts and freezes, as the Shadow\nChancellor pointed out it did not restore expenditures to their 2010 levels especially\nfor local government<\/a>. But for all its shortcomings and faults it marked a first\nstep towards ending the rhetoric of fiscal austerity. <\/p>\n\n\n\n

In response to the shift on austerity by a Tory government, reactions to\nthe budget demonstrate more than anything else how engrained in the media was the\nideology of austerity, what we might call austerity speak. Typical was an FT<\/em> article that while praising the Chancellor\nbecause he “rose to the occasion” with “a careful orchestration of\nfiscal and monetary policy”, said his budget “flung money at a grateful\npopulation”. To reinforce the message, the author told us that “it’s easy\nto throw money around” but harder to “spend it well”.<\/p>\n\n\n\n

This rhetoric of being loose with money comes not only from the business-friendly FT<\/em> and media on the right. A Guardian<\/em> news article referred to the budget as “a spending spree”, designed to “win over [the] public.”<\/a> The Guardian’s economics editor, who is one of the UK’s most progressive mainstream commentators on economic issues, hinted at the budget’s problems in an article that assessed that the Chancellor “can count himself relatively lucky” that the Institute for Fiscal Studies did not attack him more vigorously. <\/p>\n\n\n\n

The source of this IFS criticism becomes clear in another article by Elliot<\/a> that carries the headline “Sunak’s spend, spend, spend budget”. The author comes close to praise because the Chancellor has acted “to break the economy out of its low-growth, low-investment, low-productivity trap”. The first sentence of the article refers to this break as a “giveaway budget”. A jointly authored article by Elliot and Stewart pursued the pejorative language, writing that the Chancellor “turns on the spending taps”, and reported that the sacked Chancellor Javid “warned against abandoning all spending rules”.<\/p>\n\n\n\n

Amid this language of spending sprees, turning on taps and warnings of violating rules, one searched in vain for a favourable judgement about increased spending as a budget strategy. The FT<\/em> editorial board provided a rare example<\/a> of an assessment almost void of value-laden language, referring to “the right budget for the moment” that seized the “opportunity provided by low interest rates to invest”.<\/p>\n\n\n\n

Ancien Id\u00e9ologie<\/strong><\/em> gets Shock Therapy<\/strong><\/h3>\n\n\n\n

<\/p>\n\n\n\n

In March 2020 the UK economy faced two major economic shocks, each on its\nown sufficient to provoke a recession, the corona virus and uncertainties associated\nwith leaving the European Union. With interest rates low and public borrowing under\n2% of GDP, the technical case for a fiscal expansion should be obvious to any open\nminded commentator. Why then the widespread anxieties about an expansionary budget\nand the negative language of sprees and giveaways?<\/p>\n\n\n\n

Two explanations present themselves, the persistence of the austerity ideology\nand a much older ingrained ideology in the UK media. For almost a decade the Tory\nausterity ideology preached a doctrine of balanced budgets, to the point that it\nwent unchallenged, accepted as valid without need of justification. This false imperative\nto balance the budget received independent verification from the Institute for Fiscal\nStudies, which repeatedly stressed the dangers of deficit spending. Despite\nits focus being microeconomic<\/a> and budgets requiring a macroeconomic analysis,\nthe media embraced the IFS as Britain’s definitive source on public finances.<\/p>\n\n\n\n

Judging deficit spending as a prima\nfacie<\/em> problem does not explain all pejorative language found in the media, especially\nuse of “giveaways” and “hand-outs”. Such polemics have a long\nhistory in the UK media, reinforced by repeated reminders that all spending eventually\nincreases the “burden on taxpayers”. <\/p>\n\n\n\n

These terms are regularly applied to all budget statements Conservative and\nLabour. For example, whether a Tory chancellor will have the space for tax cuts\nto attract voters appears as a common pre-budget speculation, as do queries that\na Labour government will find the tax revenue to deliver spending to its core constituency.\nThis approach to public sending betrays a deep distrust of both the public sector\nand the political process. It treat public spending as the instrument used by cynical\npoliticians to curry favour with voters rather than the legitimate or even preferable\nalternative to private provision. <\/p>\n\n\n\n

Thus, the proposal in the Labour manifestos of 2017 and 2018 for free (i.e., public payment of) university tuition fees could be described even by centre-left commentators as a bribe for young voters<\/a>. The NHS represents a striking exception to this cynical view of public spending, which in the second half of March became the vehicle for a profound paradigm change by the Tory government and in public perception.<\/p>\n\n\n\n

Difference a Week Makes<\/strong><\/h3>\n\n\n\n

<\/p>\n\n\n\n

Towards the end of March rhetoric of spending sprees and handouts disappeared,\nswept away by the threat of a national health disaster. Larry\nElliot who as in 11 March referred<\/a> to a “spending spree”\nand a “spend, spend, spend” budget, on\n20 March abandoned such rhetoric<\/a>. Two days later on\n22 March he completely embraced<\/a> and lauded the extraordinary increase in public\nspending by the Tory Chancellor in a deeply insightful article,<\/p>\n\n\n\n

…[A] model [of limited spending] that has failed not once but twice has\nbeen ditched. Governments recognise they have to support their citizens through\nthis. <\/p>\n\n\n\n

“Supporting citizens” and taking responsibility for stabilising\nthe national economy are central tasks for every responsible government. The execution\nof those tasks should require no justification, just as the public accepts the need\nfor a well-funded NHS protecting our health. The NHS has the responsibility for\nthe nation’s health. The Treasury has the responsibility for a stable economy that\nprovides decent incomes for all. <\/p>\n\n\n\n

Once we re-recognise that over-riding public responsibility, we should dismiss\nthe ideologically driven anxieties about excessive government spending, encouraged\nby mainstream economists of the centre-right and centre-left. In retrospect, we\ncan see that the threat to economic stability in the UK, US and Europe lay not in\nthe remote possibility of too much public spending but in the reality of not enough.\nIf spending rules are necessary, they need ones to insure adequate funding not frugality.<\/p>\n\n\n\n

The Progressive Economy Forum firmly states\non our web site that it opposes austerity and the current ideology and narrative\nof neoliberalism, campaigns to bring austerity to an end and ensure that austerity\nis never used again as an instrument of economic policy. Is it too early to say\nthat we are at last making progress in these aims?<\/p>\n\n\n\n

Furthermore will there be at some point a reckoning for those who increased our public debt and caused needless suffering by pursuing a reckless and damaging ideology to shrink the state only to abandon this when it became politically expedient and in the face of national emergency? <\/p>\n\n\n\n

Photo credit: Flickr\/HM Treasury<\/a><\/em>.<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

The United Kingdom has made its first step toward ending the rhetoric of fiscal austerity, yet reactions to the budget on 11th March demonstrate how engrained the austerity ideology is in the media.<\/p>\n","protected":false},"author":11,"featured_media":7673,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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