General Election Predictions

Quoted from jock dock tower

However frustrated some folk feel we do have to accept that the public have backed a Tory majority government. Simple, end of. However they came to that position still has me baffled, bit if folk really are happy with the thumping austerity that is to come so be it. £12 billion of cuts to follow very shortly, something the Tories didn't dare talk about suring the election and for good reason, we will lose what we recognise as the Welfare State, and I'm absolutely convinced that the NHS will be completely unrecognisable come 2020 when it's primary purpose is profit not care.

Trade Unions will be completely neutered because the ability to take industrial action will be virtually impossible due to new guidelines on how many must vote for any such action to be legal. With this neutering, collective bargaining will crumble as workers find they can not back up threats of action to try and force the employer back around the negotiating table. As the Unions' weaknesses gather apace, zero hour contracts will probably become the norm. There will be an assault on final salary pension schemes in the public sector, in short working folk are going to get shafted. New rules will be brought in, probably, to make going to an Employment Tribunal even more harder, it will be come an employer's paradise harking back to the pre WW2 years of hire and fire and folk having to doff their caps and eat sh1t to get a days work.

The people have spoken.

Quoted from Maringer

Well, there are always some who do well, even during and in the immediate aftermath of a recession. However, the majority of people haven't seen any recovery in living standards before the last year or so and this recent improvement is down to the drop in oil prices and inflation which is nothing to do with Osborne's handling of the economy. That's sheer chance which has worked out for him well, but the myth that the economy has been 'fixed' by the government's actions just isn't true.

The recovery from the last recession has been hit badly by Osborne's austerity plan which was just economically incompetent. Making cuts in spending during a recovery goes against all economic theory and as I note in post 204, this cost a lot of growth. This lost growth would have been worth thousands (and possibly tens of thousands) of pounds per person in the economy. This is compounded by the fact that the Eurozone has also been engaging in similar austerity so our main trading partners are struggling as well.

My worry is not just that Osborne's planned but uncosted cuts will cause hardship for the poorest in society (which they will), it is that his cuts will lead us back towards stagnation or even recession. Despite all evidence to the contrary, and there is a lot, Osborne still believes in the 'trickle down' crap that tax cuts for the wealthy and businesses lead to a general improvement in the economy and everyone's lot. That is why he wants to cut £12 billion of benefits which go to the poorest in our society whilst at the same time giving the wealthy £8 billion in tax cuts. This will inevitably lead to greater poverty and social ills whilst the wealthiest get even richer. Economic inequality is bad in a society and the rich are only going to get richer as the poorest get poorer.

It doesn't seem to have occurred to Osborne that the poorest spend absolutely all of their income. Cutting the money to these people not only takes money out of their pockets and makes life much harder for them, it takes it out of the economy as a whole. On the other hand, much of the money given to the wealthy through tax cuts will end up as savings or even being spent overseas which doesn't help our economy whatsoever.

My spending is your earnings.

Savings are a good thing when the economy is doing well as you want people to have money to fall back on in hard times so they are less reliant on the state. However, when you're in a weak recovery following a deep recession, savings are absolutely the last thing you want - this is why interest rates have been almost at zero for years, to try and stop people saving money and instead spend to put their money back into the economy.

Anyway, I've spent a lot of time writing about bad economics in the lead up to and the aftermath of the election and I need to do something better with my time so I'll give it a rest soon.

People have voted and many are obviously happy to have elected a Conservative government. I've just tried to show that, if you thought the Conservative government had done well with the economy over the past 5 years, you are misinformed. The economy has done OK - just - despite many of their policies, not because of them. Note that pretty much all of the parties have bought into the austerity nonsense so all deserved criticism for their planned policies, though the Conservatives were worse than Labour and the LibDems. If you think the previous Labour government was especially profligate and this led to the recession or meant we struggled to deal with its effects, you are also misinformed as I have pointed out in earlier posts.

Ultimately, a lot of people will have voted for the Conservatives based on bad information which is very frustrating.

Hope I'm wrong about the way the economy will now head under Osborne, but I'm afraid I don't think I am. In a year or two (or three), if we find ourselves back in recession, just remember what I've said when you hear Osborne blaming external conditions for the tough times we are facing.