Thursday, April 09, 2020

Little Man - All You Have Learned From This Emergency - Is That You Must Relax And Let It Happen....,

economicoutlook |  Today we consider the claim by the Financial Times editorial the other day that “Radical reforms are required to forge a society that will work for all”. It was an extraordinary statement from an institution like the FT to make for a start. But it reflects the desperation that is abroad right now – across all our nations – as the virus/lockdown story continues to worsen and the uncertainty grows. But I also think we should be careful not to adopt the view that everything is going to change as a result of this crisis. The elites are a plucky bunch, not the least because they have money and can buy military capacity. Changing the essential nature of neoliberalism, even if what has been displayed by all the state intervention in the last few months exposes all the myths that have been used to hide that essential nature, is harder than we might imagine. I think hard-edged class struggle is needed rather than middle-class talkfests that outline the latest gee-whiz reform proposals. The latter has been the story of the Europhile progressives for two decades or so as the Eurozone mess has unfolded. It hasn’t got them very far.

Financial Times goes all radical 
Fear has a way of changing peoples’ minds. Ask any torturer.

On April 4, 2020, the Financial Times editorial – Virus lays bare the frailty of the social contract – seems to have struck a nerve.

Here is an essentially conservative voice and a doyen of the financial press coming out and saying:
1. “Radical reforms are required to forge a society that will work for all”.
2. The virus is shining “a glaring light on existing inequalities”.
3. That just like during the Great Depression and World War 2, which moulded the social democratic era in the post-war period, maybe the “current feelings of common purpose will shape society after the crisis”.
4. How? To repair the “brittleness of many countries’ economies” – their unprepared health systems, the lack of collective spirit that neoliberalism has fostered as a way of redistributing income to the top and depriving millions of jobs and opportunities for careers and material security.
5. That the precarious labour markets are now making it more difficult for governments “to channel financial help to workers with such insecure employment”.
6. And while central bankers are hell-bent on saving the financial system with even greater QE interventions, the FT thinks that they will only help the “asset rich” while “underfunded public services are creaking under the burden” of past austerity.
7. We have culled support mechanisms where cost-sharing (the FT call it the sharing of “sacrifices”) can be accomplished with any sense of equity. “Sacrifices are inevitable, but every society must demonstrate how it will offer restitution to those who bear the heaviest burden of national efforts.”
8. And then we start talking about:
Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.