Boy George and the Pound in your pocket

Why won't this spin?

Warmest congratulations then to Gideon “Bullingdon” Osborne on losing Britain’s AAA rating as the deficit reduction is stalled, debt is soaring, sterling is falling, bond yields are rising and growth is stagnating. This is a unique achievement from one who is so economically illiterate. Indeed while right wing commentators have attacked Moody’s credibility they have argued that economic growth is likely to remain "sluggish" for years to come and the deficit (and debt) will consequently keep rising as a proportion of GDP. 

So what had Boy George said about the AAA credit rating which Britain has enjoyed since 1978? The Tory led Coalition inherited an economy from Alistair Darling that was growing nicely. Since then, the economy has grown 0.5% in just over two years and not at all over the last year. There is a chance we are in triple-dip recession. Even that little bit of growth is down to sales of tickets and TV coverage for the Olympics. The coalition increasingly looks out of its depth. George Osborne set out benchmarks for economic policy “against which I expect to be judged” and “against which we can be held accountable.”

The first of these was maintaining Britain’s credit rating. He said: “To bring some accountability to economic policy, I have set out eight benchmarks for the next Parliament against which you will be able to judge whether a Conservative Government is delivering on this new economic model.

"So we will maintain Britain’s AAA credit rating.”

In his first party conference speech as chancellor in October 2010, he mocked Labour for having put the UK's credit rating at risk for the first time in our history and boasted that, under the coalition, there was "no paralysing fear that our credit rating could be lost".

But now let us consider the pressing issue of how far will the pound fall this week? 88p to Euro? 90p to the Euro? Par with the Euro?

I'm amused at the total silence from the Righties on sterling's dramatic devaluation which will cripple what's left of Britain's exports and import inflation. While this seems somewhat counter intuitive it is a bit trickier than the classic economic analysis as the UK exports very few commodity products these days. Therefore most exports need imported components, energy, finance costs and labour costs all of which will be adversely affected by the decline of Sterling. That is why exports have stayed flat despite the aggregate 25% decline in Sterling since 2008.

Imagine the vitriol which would have been directed @ Gordon Brown if he was presiding over this devaluation of Sterling - but from the Tory cheerleaders zero, zilch, nowth, diddly squat – total radio silence?

In various ways (Bailouts, QE and liquidity support) since 2008 we have given the Banking sector One Trillion pounds of public funds whilst we impoverish those earning an honest living and needing our support. All this while the economy has contracted and the debt and deficit have increased and the country's AAA rating has evaporated. Obviously we should share the joy of The Nation that this area of the hugely efficient private sector engaged in largely socially and economically useless activity has kept its profits whilst offloading its risk and failures to the rest of us.

A London School of Economics study released last week revealed the growing gap between the fat cats who sparked the financial crisis and the workers now having to pay for their mistakes. Bankers' pay has rocketed 14% during the recession compared to 3.7% for the rest of us, a damning report showed today. Why do I not feel empowered at seemingly owning several banks?

Osborne is booed at the Paralympics

There is a growing democratic deficit in Britain which will be sharpened this April when many cuts and ill-founded policies including the appalling “bedroom tax” take effect. In 2010 the British Electorate did not vote for a deep recession, increased deficit and borrowing, £1 Trillion in support to the Banking Industry, dismantling the services you value, destruction of the NHS, disemboweling of our Armed Services, lack of opportunity for young people and attacks on pensioners, disabled, the vulnerable and the needy. Increasingly both Blue (Conservative) and Yellow (LibDem) Tory MP’s take us for granted and look both ways on issues whilst their parties in Coalition implement failed and destructive policies which were never put to the electorate.

So we are all OK with Boy George and his record of failure on errr.... everything? No doubt many Tories will deal with the real issue highlighted by Sterling's devaluation - the price of these xenophobes Villa party in Tuscany this summer!