12 August 2015

Jeremy Corbyn's Analysis and two Nobel Prize Laureates

Looking back to the aftermath of Labour’s defeat in the 2010 General Election , it has been argued that Labour was distracted from the need to explain its spending policies in government because its priority then was to find a new Leader of the Party to succeed Gordon Brown.

Into that vacuum and ever since the Tories have wasted no opportunity to occupy that space with a false record of the Labour Government on public spending with deceitful claims about it being “profligate” and “runaway” , and that this caused the recession in 2008-9

As Larry Elliott of the Guardian has observed : “ It has been a catastrophic political blunder not the challenge the myth that Brown’s Government caused the crisis and the austerity that followed.”

And as Oxford economist Simon Wren-Lewis has commented :

“The profligacy charge is nonsense.

"But you would not know that from seeing political commentators routinely allowing charges of profligacy to go unchallenged and asking for apologies from Labour politicians.

"Partly as a result, many members of the ordinary public just know that Labour was profligate, and accuse either Labour politicians or academic bloggers of lying when they suggest otherwise.”

Now, in the aftermath of the Labour’s defeat in the 2015 General Election, and in the campaign to elect the new Leader of the Labour Party, the party has one uncompromising champion of public spending in Jeremy Corbyn who asks :

“Did nurses pay crash the economy? Did refuse collectors pensions bankrupt Northern Rock? Did too many teaching assistants bring down the derivatives markets? No”

He and very many other Labour Party members and supporters blame the banks and their light-touch financial regulation.

While his stance may have earned him the wrath or displeasure of other politicians, Jeremy Corbyn’s emergence as a potential leader has been understood by Nobel Prize winners in economics.

Nobel laureate Joseph Stiglitz was, according to the Independent,  “not surprised at all that there is a demand for a strong anti-austerity movement around increased concern about inequality.”

And fellow Nobel laureate Paul Krugman remarks :

“All the contenders for Labour leadership other than Mr. Corbyn have chosen to accept the austerian ideology in full, including accepting false claims that Labour was fiscally irresponsible and that this irresponsibility caused the crisis.

“As Simon Wren-Lewis says, when Labour supporters reject this move, they aren’t ‘'moving left', they’re refusing to follow a party elite that has decided to move sharply to the right."

Here is Jeremy Corbyn describing the effects of austerity on take-home pay and standard of living in the UK :

“Some workers in our public services are taking home 20% less in real terms now than they were before the recession - due to years of pay freeze, pay caps, and increases in pension contributions. "

And here is Joseph Stiglitz on the same theme of falling living standards in the US :

“While the rich have been growing richer, most Americans (and not just those at the bottom) have been unable to maintain their standard of living, let alone to keep pace. A typical full-time male worker receives the same income today he did a third of a century ago….

“Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable.”

So Jeremy Corbyn’s analysis of the country’s condition demonstrates that he is not an isolated figure.

A vote for him and his campaign is far removed from the politics of the protest vote for minor parties at by-elections.

His campaign challenges the status quo.

It is about bringing together the disconnected and the elected.

It is about restoring the Labour Party to its traditional distinctive Left-of-Centre politics.

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