Graham Turner

Merkel's machinations

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"There's a danger of having any government of any composition led by a party which doesn't have a proper mandate across the country try to push through really difficult decisions. I think a lot of people will react badly to that."

So said Nick Clegg on Sky News, back in April 2010, as he warned people of the consequences of not voting Lib Dem.

He also argued that there was "a really serious risk" of rioting in the streets should the Tories "slash and burn public services with a thin mandate".

At last - Nick Clegg keeps a pre-election pledge.


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Same old ideology

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Economist Graham Turner gives his assessment of the austerity plans and their wider significance.

George Osborne's spending review does not pull any punches. Page 13 of the document outlines the "scale of the fiscal challenge". He argues that "the spending plans in the 2007 comprehensive spending review were based on unsustainable assumptions about the public finances". It goes on to say that government attempts to tackle the "structural deficit did not begin to take effect until 2010, by which time the impact of the financial crisis had made an unaffordable situation unsustainable".

Axe finally falls in Tory budget

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"The Tories can reduce the deficit without a rise in VAT," boasted George Osborne to the Daily Telegraph on 6 April. "The plans we set out involved around 80 percent of the work coming from spending restraint... The tax increases are already in place and the plans do not include an increase in VAT."

Honesty was clearly not a prerequisite to securing the keys to 11 Downing Street. But then history is merely repeating itself. In 1979 the then Tory chancellor Geoffrey Howe declared, "We have absolutely no intention of doubling VAT." Strictly speaking, Howe did not lie. VAT did not quite double, as it went up from 8 percent to 15 percent.

Chris Harman: A masterful book

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Zombie Capitalism is a masterful book, a culmination of Chris Harman's work spanning four decades as one of the world's leading Marxist economists. The timing of his passing is both tragic and deeply ironic.

For years Chris argued passionately that capitalism was a system uniquely prone to crisis. Many of his warnings were borne out by the credit crunch. He consistently warned that there would be no easy solutions to the current economic debacle. Events are likely to prove him right.

Structural problems of capitalism

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Economist and author Graham Turner talked to Socialist Review about his new book No Way to Run the Economy, why he believes Keynes is misunderstood and what he has learned from Marxist economics.

You studied mainstream economics, which is often made out to be "ideology-free" and treated like a branch of mathematics. Yet your new book, No Way to Run an Economy, discusses figures such as John Maynard Keynes and Karl Marx. How did you end up there?

I did a degree at City University in London which was heavily steeped in monetarism. Then I went on to do a postgraduate degree that was far more pragmatic and non-ideological at the University of Toronto. I came back from Canada to get my first job in the City and worked in London for Japanese banks throughout the 1990s.

The global economy - solid as a rock?

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The recent ructions in financial markets and the collapse of Northern Rock have a familiar ring.

Whether it is the crash of 1987, the housing slumps of 1989-90, Asia in 1997, the hedge fund LTCM in 1998 or dotcom meltdown in 2001, the world economy has been grappling with a succession of financial crises.

And yet, each time the global financial apparatus has withstood the onslaught and, it appears, come back stronger and more robust than before. Encouraged, the major actors in this evolution of unfettered markets - financial institutions and their shareholders - have taken on bigger, bolder and more aggressive bets.

Brown and Inflation

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Chris Harman is right to say that Gordon Brown is very lucky (In Perspective, May Socialist Review).

His luck is partly that down to growth in the financial services sectors boosting investment and jobs which have fallen or stagnated elsewhere.

However there are also signs that his luck may be running out. The significant rise in inflation means that the Bank of England is under ever-increasing pressure to get on top of it by raising interest rates. But rising interest rates threaten to slow down or even deflate the housing market. For while inflation in the retail sector has been low, house price inflation has been rampant.

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