Sunday, September 19, 2010

Tony Blair's Deferred War on the Working Class

Labour knew they were spending, borrowing too much

As Labour leadership candidates Andy Burnham and Ed Balls battle over whether or not the Labour party would have embarked on a program of cuts similar to that of the current Tory/Liberal Democrat government, Lord Andrew Turnbull, former head of the British Civil Service, has dropped a bombshell on the debate:

The Labour party was spending too much, and knew it was spending too much. And it knew in 2005.

Lord Turnbull suggests that it was political pressure that convinced Tony Blair and his government to continue spending at a manifestly undisciplined rate, even after it became evident that there was a problem.

"It kind of crept up on us in 2005, 2006, 2007, and we were still expanding public spending at 4.5 per cent a year," he explained. "You might have thought that we should have been giving priority to getting borrowing under better control, putting money aside in the good years - and it didn't happen."

Lord Turnbull's comments reveal Keynesian economics for precisely what they became under Tony Blair: an excuse to spend, even at the expense of the government's ability to battle a recession by expending savings accumulated during strong economic periods.

Lord Turnbull explained it very simply: "Public spending got too big relative to the productive resources of the economy."

"The politics was that we had put an end to boom and bust," he said. But it didn't work that way. The government overspent even during the time of boom, and now succeeding governments have to fix the problem.

All of this complicates matters intensely for the current crop of Labour leadership candidates, looking to replace Blair's successor, Gordon Brown.

Andy Burnham has been tremendously candid about the necessity of cuts under a Labour government.

"Let's get some honesty in this debate," Burnham said. "There would have been significant spending cuts under Labour and there would have been job losses under Labour."

For his own part, Ed Balls seems to think that things would have been magically different under a Labour government.

"I think Labour would have been creating jobs this year," Balls insisted. "At a time when the economy is slowing down, we should be building houses, not cutting them, building schools, not cutting them."

This of course begs the question of where the money would have come from. But Balls seems to think that he has the answer... or at least something he can easily pass off as the answer.

"The banks should be paying the price of the crisis, not people up and down this country," Balls insisted.

Of course, it shouldn't be the banks that pay the price for the excessively poor fiscal policy of the Blair and Brown governments. One way or the other, under one government or another, the British government will have to pay the price for that.

Unfortunately, it's inevitable that when the government pays, the citizens will pay as well.

Many among Britain's left have gleefully seized upon the looming cuts by the David Cameron government of waging class warfare against the middle and working classes.

But even as Tony Blair spent the government of Great Britain deeper and deeper into debt, he had to have known that a fiscal day of recknoning was coming. Tony Blair had to have known that the middle and working classes would be hit hardest by that reckoning than anyone else -- including himself.

If class warfare is being waged against the working and middle classes at all, it's Tony Blair's defferred class warfare.

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