Things I thought

Wednesday 30 June 2010

More Economics/Less Filth

Look, I didn’t want to have to do this. I really didn’t. It’s just, they’ve left me no choice. Along with the usual grab-bag of sweariness, tortured analogies and obtuse sesquipedalianism, this blog will, by necessity, contain several, many or more Very Boring Numbers.

Now, I don’t know about you, but I hate numbers. Four, for example, is a complete twat. But today I need their help in showing you the way that the Prime-Minister and his allies in the blogosphere have been lying about the budget.

A lot of you may already have seen the Guardian’s excellent expose on the real impact of coalition cuts on employment. Based on a leaked Treasury report that David Cameron is now refusing to release in full, it makes for stark reading. For those of you who haven’t seen it, here come a few numbers that are too scary to be boring:

• A loss of 500-600 thousand jobs from the public sector
• A loss of 600-700 thousand jobs from the private sector
• A total loss of 1.1-1.3 million jobs

Right wing bloggers have been apoplectic in their response. Their defence of the indefensible largely centres around the separate Office of Budget Responsibility pre-budget report, and another OBS report (conveniently published today, though seemingly not online) - which separately cite private sector job creation of 2-2.5 million over the next five years.

Highly successful, semi-literate professional cockbadger Guido Fawkes helpfully published the bullshit graphic below on his blog, which you may remember as the organ which helped popularise the bollocks claim that Gordon Brown was on anti-depressants in 2009.

Despite making several schoolboy errors (for example, marking down all 1.3 million disappearing jobs as ‘public sector’, despite the fact more than half will go from the private sector) the graph neatly summarises the arguments of both the right wing blogosphere and the prime-minister – namely, that the damage done by cuts will be more than offset by increases in private sector employment. There are a few problems with this argument, which I’ve summarised below.

A.)The increase in private sector employment will occur in spite of, not because of, the budget and is mainly down to two factors, specifically net migration pushing up the size of the Labour pool (See OBR report P.82 - an assumption based on the premise that the Conservatives will ditch their pre-election pledge to cap immigration at 100k per annum) and hilariously optimistic forecasts for economic growth. Speaking of which…

B.) The growth forecasts are complete wank, predicting UK GDP to rise at over a percentage point above the Euro Area trend every year of then next five, as well as assuming that every available economic indicator will turn from shit dust into flying gold over the next twelve months due to some kind of as-yet-to-be-identified magic. Finally…

C.) Even if the highly positive growth forecasts were somehow correct, it would have nothing to do with this budget, which has prescribed economic retrenchment over investment. Any economic growth will, by definition, be the product of external demand and the banks beginning to lend again due to the global economic bailout instituted by whatsisface – you know, the last bloke we had in charge.

In short, what Cameron et al are doing is committing murder and then pleading innocence because babies are being born all the time (see, there’s one of those tortured analogies I promised you). Here’s a quick chart summarising the reality of the situation.

In related news, I hate Excel.

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