Wednesday, March 18, 2015

Rambling thoughts of a non-economist on budget day

I believe there is a little matter of a budget being announced today. Get ready for all the analysis and speculation about the relationship between the plans and the upcoming election. Get ready for all the arguments about who has the right numbers and who's spinning them to make them look better or worse than they really are. Prepare yourselves for the voices of big business and the city bemoaning or celebrating something.

In all the bluff and thunder of budget days in the past, recent years have become somewhat antiseptic. There are very few shocks and surprises. Perhaps there never really where. There will be lots of self-congratulations and probably a few stern warnings that the process isn't over yet. I dare say a lot of important things will even get lost in the smoke and mirrors of complex fiscal accounting. And then the counter arguments will start.

But even if the numbers point to a positive state of affairs, even if the chancellor can demonstrate a recovery with falling unemployment and a few other positives, there remains a single, important question to be be asked.

At what cost?

Who has paid the dearest price for getting us to a positive position and who will continue to pay that price? As the gap between rich and poor continues to expand, we must answer this question. I grow increasingly weary of calls to protect the city (the financial district) as if it is the engine room of the economy. It may be, but only at the cost of a manufacturing and engineering sector that has shrunk exponentially over the last 3 decades.

Executive pay continues to outstrip the wages of the ordinary employee to the point where a CEO is, in no uncertain terms, grossly overvalued, especially so in today's economy. The whole thing is unbalanced in a hugely detrimental way. We're not talking about seeking some idealised equality, but some sense of equity wouldn't go amiss.

If the figures I saw a few weeks ago are correct and our debt is rising at the alarming rate of £5,000 a second, then by the time this business day is over we will have added around £150M to that debt. That can't go on. But if we are truly all in this together, then the solution must be to share the burden not equally but equitably among the people. I just wonder if we're too scared to do it.

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