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Austerity and Theresa May’s last dance!

Dickson Igwe

By Dickson Igwe, Contributor

Theresa May gambled and lost on June 8, 2017. This, despite her Conservative party winning the most seats in Westminster.

May lost the expectations game. She called the general Election to strengthen her parliamentary majority.

She said that she needed to gain a stronger majority to strengthen her position in upcoming Brexit negotiations. Instead, May lost seats.

Theresa May’s Conservative Party will have to form a coalition government. Her move has backfired terribly.

The Prime Minister, based on past history will not last long in office. The British Conservatives are the most skillful political back stabbers in modern democratic history. They will not hesitate to thrust the dagger into May’s back as they see their fortunes dissipate in the coming months.

The result of May’s disastrous decision to call a snap general election will lead to a decline in Conservative Party’s fortunes. That is the nature of politics. Losses like wins become a self fulfilling prophecy.

On the other side of the political divide, The British Labour Party and its Leader Jeremy Corbyn, have suddenly acquired that greatest of political assets: MOMENTUM!

Jeremy Corbyn has a spring in his step. He is a very decent man. His decency and honesty will endear him to the British public.

Theresa May will have to align with the Democratic Unionist Party (DUP) of Northern Ireland if the Conservatives are to remain in power.

The Democratic Unionists are more to the right than the most right wing conservatives.

The DUP are strongly opposed to same sex marriage and abortion. This is not good for the Conservatives in a liberal Britain.

Now, Mrs. May will have to address the economic and social gaps in the UK if she is to survive the next 3 months.

Great Britain is far from a happy and contented country. The British voter is concerned about bread and butter issues.

Brexit is a simple backdrop to working and lower middle class anxiety. In any event Brexit may well have to be placed on hold with the present election result.

The British working and middle classes have had a miserable decade. Post the Great recession of 2007-2009, people in the 90% demographic are more insecure, and uncertain about the future.

They have seen their livelihoods threatened by a ruthless financialization of their nation. The British economy is controlled by accountants and bankers: not innovators and entrepreneurs.

The under 30s feel set upon by the older generation. They have been locked out of the housing and job markets. They have to borrow heavily to go to college and university. This is a far cry from what their parents fared.

The economy of Britain is increasingly driven by the City of London, and its investment banking culture.

Then, computer technology promises to replace human labor with computer algorithms in a short space of time. Robots with human type intelligence can perform the tasks done by humans, even tasks in more complex services, such as legal and accounting.

Economic recovery has been slow in Britain. There has not been significant economic growth in Britain in 7 years.

Austerity has slowed investment in 21st Century manufacturing, which is the last bastion of well paid work for the skilled working classes. Today’s working class jobs are service oriented and low paid.

Austere culture has opened up an innovations gap. This is a commercial deficit that will not be narrowed any time soon. Innovation and creativity are critical to economic growth. This is especially so for the western economic model.

At the core of Britain’s economic troubles is a simple economic matter. Since 2007, Britain has not invested sufficiently in the innovation and technology that drives modern trade and industry. This has stifled productivity.

Firms, from the single proprietor, through to medium and large organizations, will not invest where there is no healthy demand for their products and services.

Or better put, firms will only invest where there is confidence that what is produced will be sold at a competitive price.

However, austerity has wrecked consumer and business confidence in the UK.

Then, Brexit has simply made matters worse. Most Fortune 500 companies – the world’s top ranking businesses in terms of revenue – deem Brexit a bad idea. The Pound has gone south together with inflation.

There is a sinking feeling in Britain. Brits believe the country is on the wrong track. A new machine age is dawning. In a service driven economy, over 3 million retail jobs will be replaced by computers shortly. Britain is simply not prepared for that inevitability.

There is another matter. Business investment in Britain has been on the decline for 25 years. Britain has become a speculative economy.

More money in Britain is put into housing speculation than real wealth creating assets such as the factories that produce efficient and globally competitive products.

This is a culture of speculation that has led to lower productivity, greater unemployment, less private housing production, and a higher cost of living. Britain’s households are being squeezed.

Instead of investing in plant, machinery, and innovation, the culture of speculation, driven by the love for austerity, has resulted in businesses hoarding cash. This cash has benefited top executives and shareholders, contributing to social inequality.

Long term thinking would have placed this ocean of liquidity into building a better corporate and commercial environment and future: in other words, vast cash holdings would have been better invested in business growth and jobs.

The talk of recovery in Britain has been a hoax to the average consumer. In no region of Britain, outside of a London driven by the City and finance, has output per person matched levels before the start of the Great Recession in 2007.

Consequently, for all the talk of a business driven, enterprising Britain, the country has actually shifted left towards a socialist type culture.

Politicians understand the British voter is hurting. There can be no further move towards a private enterprise economy under present social conditions.

This is one reason Prime Minister Theresa May has presided over the most working class friendly Conservative Party Manifesto in a generation. The British public is calling the shots in the power metrics.

The British economy is simply not working for most Britons. Consequently the public has shifted to an anti austerity, pro growth position. Stimulus is what is demanded by Jack and Jill Working Class.

The British working man and woman has seen a pay packet that has not kept up with inflation, cuts in their benefits, and deteriorating public services.

The British economy is so weak that years of historically low interest rates and quantitative easing- flooding the market with cash- has failed to produce significant economic growth.

And the Conservative Party has not listened. It has pursued a culture of austerity to the nation’s detriment. The answer has to be a return to the economics of John Maynard Keynes: boosting demand in the economy through government spending.

This type of Keynesian economic thinking has always been anathema to a Conservative Party in love with austere social and economic policy.

Politics has forced the Conservatives to step on a left wing election platform. The party has promised caps on energy prices to help the poor, the compulsory purchase of land for social housing, increasing the minimum wage, greater labor protections, and checking executive pay.

Even the Conservatives admit Austerity has not worked.

And now with a coalition government composed of the reactionary DUP, and very angry colleagues, Theresa May is in deep, deep, trouble.

She may not last the summer.

Connect with Dickson Igwe on Twitter and Facebook.

This article was posted in its entirety as received by bvinews.com. This media house does not correct any spelling or grammatical error within press releases and commentaries. The views expressed therein are not necessarily those of bvinews.com, its sponsors or advertisers.

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