Conservatives are clueless on poverty….
The school of thought that the Conservative Party, no matter how hard they try, simply will never ‘get’ poverty was today given a massive shot in the arm by the frankly illiterate words of Iain Duncan Smith. Remember people this comes on the same day that it has been revealed that Labour areas are getting hammered into the ground and paying the highest price for this governments austerity drive.
We will ignore the frankly just plain stupid argument that extra money makes the lives of poor people worse and look at another one. Apparently the solution to poverty is to push people into employment. Sounds plausible. Accept when you factor in this nugget from The Daily Telegraph:
the average worker is being hit by a 2.9 per cent cut in wages in real terms, the equivalent of a £651 being wiped off the purchasing power of their annual income.
This shows quite clearly that work isn’t the solution to your poverty problems. In fact, we have this governments barking economic policies to thank for that because they are sending prices through the roof while further depressing wages. Duncan Smith launches a broadside against the last government;
“By inflating incomes through benefits and tax credits, the previous Government hailed early watershed victories claiming significant numbers of people had been ‘lifted’ out of poverty, by virtue of moving them above the poverty line.
Duncan Smith is rendered blind to the real problems by his ignorant and destructive politics. Indeed, his argument is logically contradictory. By saying the solution is employment, he implies the problem is the ‘feckless and unemployed poor’. However, for example, Working Tax Credits, as Mr Duncan Smith should really know given his job, are an in-work benefit so how on earth could they have created the implied ‘benefit addiction’ amoung the allegedly ‘workshy’ and ‘feckless’ poor?
He simply can’t fathom that incomes for the many have not risen, let alone been ‘over inflated’, significantly at all, while debt levels have been steadily rising. Changes to the benefit system initiated by the last Labour government (aimed not primarily at alleviating poverty but actually aimed at compensating the middle classes for their falling wages vis a vie those at the top) only delayed the inevitable cave-in.
Take a look at this graph and you begin to see the roots of the problem. In 1997, it shows how average homebuyer mortgages were only three times average earnings. During the ‘boom years’ however this gap (already big) spiralled upwards to a peak in 2007/8 where average homebuyer mortgages were a mind-bending seven times average earnings. What plugged the gap? Well the graph tells us quite clearly it wasn’t earnings so it must have been cheap and readily available credit.
However, as the house of cards fell-in globally, the banks soon turned the tap firmly off and the rest as they say is history. If the middle-classes stopped receiving ‘trickle-down’ and became increasingly more dependant on credit then what does that mean happened to the poor? The answer is simple. During our tenure they remained where they were and even saw a swelling in their ranks; it is figures such as these that shame Labour:
official figures blew apart the Government’s credibility on helping those struggling the most. They painted a bleak picture of worsening poverty in Britain even before the recession took root. The number of people living in poverty had climbed to 11 million by March 2008, a rise of 300,000 since 2006. The poorest have seen their incomes drop, with 200,000 working adults falling below the poverty line last year.
Still, these figures are small beer to what is coming; the ranks of the poor will be massively swelled as the credit and tax credit starved middle classes join them. On the plus side, capitalism’s cannibalisation of the middle classes is laying the ground for an unprecedented democratic union of all the popular classes against it.
The real problem we have is the sheer undemocratic distribution of incomes engendered by an undemocratic social system has become so top-heavy it has simply fallen over. One way to solve this temporarily would be to drastically increase average earnings while curtailing those at the top. However, soon enough inflation would undermine this approach and we would be confronted with an inflationary crisis. The only real long-term solution is a programme of economic democracy, control and ownership. One thing is for sure though, that wont come from Mr Duncan Smith and his class-warrior colleagues because they simply haven’t got the first clue what they are doing even within the narrow confines of capitalist logic. Scary to think these people head the ship of state isn’t it?