Monday, 31 May 2010

Emergency....paging Doctor Beat!

As May draws to a close the new Con-Dem coalition has really been only engaging so far in shadow boxing with regards to the massacre of public services that they will carry out to pay for the bail-out of the banks. Indeed to salve their consciences the Liberals and Clegg have stressed the progressive nature of the reforms of civil liberties .Indeed Clegg has said this "will be a government unlike any other".

6 billion pounds of cuts were announced last Monday by the now resigned but "dignified" copyright British Media Right wing Liberal Democrat Laws. But the ominous date is the upcoming June 22nd "Emergency Budget".

The formation of an unlikely coalition behind closed doors and an emergency economic programme reminded me of a passage in the Shock Doctrine on Bolivia. In 1985 Bolivia became a laboratory for neo-liberal economics. Not unique but unlike Chile where a bloody dictatorship brought in the Chicago Boys to carry this out on the crushed bones of the Allende regime. This time however it was done after an election.

The Presidential election of 1985 had been inconclusive but both candidates were locked away to discuss the economy. The "left" candidate Paz a sort of Peronist figure emerged as Presidente. He was then in his 80s and had been a long standing figure in Bolivian politics But the important point was that along with his emergence there was announced a cross party economic programme called Decree 21060 (passed in a one-r) - drawn up by Jeffrey Sachs an unelected American academic advisor - later a critical figure in the reintroduction of capitalism in Russia .

This programme (which noone had voted for) included mass privatisation, huge price hikes of basics and an opening up of the economy to global capitalist forces. 20,000 miners lost their jobs, Oil and bread prices went sky high. It was the ultimate shock therapy. Although there was much resistance it took another generation for the political impact to hit of President Evo Morales and his Movement for Socialism administration (elected first in 2005).

Back to GB and all the rhetoric post election is that things are much worse than anyone imagined. Managers across the public sector are using it as an excuse to justify excessive cuts amongst staff.
So a cobbled together coalition in the national interest may use its majority to get through an economic programme that was not endorsed in any election. Austerity and Emergency Budgets have been passed in the last couple of years.
Ireland: Public Sector pay cuts and big taxes on the lowest in 2009 - provoking public protests and a swing to the left in some elections. Spain passed its austerity budget by 1 vote on May 26th icluding a 5% pay cut and a freeze in pensions. The trade unions have called a public sector strike for June 8th.
So the real fight against the coalition will become clearer after June 22nd - though the way they will sell it may be rhetorically different because of the Liberals. For example if there is a sizeable rise in Capital Gains Tax this will be promoted as a tax on the rich - it is already provoking opposition from the Tories bristling at the coalition - the Daily Telegraph have launched their own campaign. But I would guess in Bonapartist style this will be coupled with some outrageous attack on the public sector.
How the opposition will manifest itself is hard to see as the left are so weak at the moment but the battle lines will be clearer post Emergency or rather shock.

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