Michael Granados: It’s the economy stupid, it’s broken and so easy to fix – so why aren’t we?


The lie of austerity must be resisted and there big lessons to learn from across the Atlantic, writes Michael Granados

EVERYTHING you’ve ever been told about the minimum wage is a lie.

The received collective wisdom of neoliberal Westminster and it’s compliant press is all about how taxing the rich or increasing workers’ wages kills jobs and makes businesses leave or go out of business. That to do so would be madness. This is demonstrably, simply not true.

In fact, it is so false that the exact opposite is true and explains in a nutshell why the United Kingdom is in the economic mess that it is in. UK and European economies are essentially flat lining whereas the United States is booming.

We are told that austerity is the only way out of our mess when the reality of our mess is that it is created by austerity.

There are many cases where state governments in the US are doing exactly as the UK is: cutting taxes on the wealthy ‘job creators’ so that the wealth will trickle down to the rest of us. An example of this is the state of Wisconsin whose conservative government has ruthlessly attacked workers’ rights and cut taxes strangling the state’s finances and degrading people’s lives deliberately.

Right next door is the state of Minnesota which is the come-back kid. One that is bucking the trend and prospering instead of faltering. The previous conservative administration managed to rack up a $6.2bn deficit, seven per cent unemployment and to add 6,200 jobs in the state over eight years in office. A deplorable record.

The current administration, led by Democrat Mark Dayton, is the one which has turned things around in Minnesota since taking office in 2011. Gov. Dayton raised the state income tax from 7.85 to 9.85 per cent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly – a tax increase of $2.1bn. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women.

These kind of actions, we are told, will cause the job creators; companies both big and small to go out of business or flee the state and jobs to be lost. We are told wrong.

Between 2011 and 2015 Minnesota has added 172,000 new jobs, unemployment has dropped to 3.5 per cent – fifth lowest in the US, The median income has risen to be $8,000 higher than the US average and most importantly has turned a $6.2bn deficit into a $1bn surplus which they are investing in education.

Two simple things – raising taxes on the wealthiest by just a little bit and raising the minimum wage for the lowest workers – have served to radically alter the economic prospects for the citizens of the state of Minnesota. It has already made a dramatic difference in peoples lives.

We’re told we can’t afford anything but austerity when the reality is we must stop austerity and start putting people first.

The lie of austerity is being exposed. We are told that austerity is the only way out of our mess when the reality of our mess is that it is created by austerity.

Capitalism works in Minnesota because funds that had been stagnating in the hands of the few have been released to flow through the system, in the pockets of individuals who can then spend in the economy and the coffers of the state to invest in education and infrastructure.

For a capitalist system to work the money must flow. Austerity is a monstrous lie perpetuated by the enemies of the people. The enemy is what Tariq Ali refers to as the ‘extreme centre’. It is the establishment; the elite. Those who hold all the cards and don’t even want to share the merest crumb with we, the people.

The enemy is ideologically opposed to the welfare state because it begrudges every penny that comes to us rather than itself. The enemy is anti democratic. It does not want the people to have any say in what it does to us and the United Kingdom is the perfect set up for its wicked scheme.

It is neither liberal nor is it small ‘c’ conservative. It is outside the normal political spectrum. Labour and Conservative have both signed on to do the enemy’s bidding, which is why the Westminster parties look the same, why no one in England is much interested in the general election, why there is no alternative except in Scotland and why they are collectively shitting themselves over the potential SNP surge.

We do not and must not conform to this ideology any longer. We’re told we can’t afford anything but austerity when the reality is we must stop austerity and start putting people first. It is ridiculously easy to do, as the state of Minnesota has shown us.

Westminster holds the economic levers to do the same but not the will to act contrary to the wishes of its perceived masters. So long as the mechanism of democracy is in place we can say that we the people are the masters of our own destiny.

Picture courtesy of 401(K) 2012