In this week's New Statesman: The death spiral

Is it too late to avert a British Depression? | Mehdi Hasan on Al Jazeera | Mark Mazower: Greeks vs


David Blanchflower: Is it too late to avert a British Depression?

In this week's New Statesman, former Bank of England MPC member and the NS's economics editor David Blanchflower considers whether it is possible for Chancellor George Osborne to change his course of austerity before it is too late for the British economy, or whether we are already in the "death spiral" of another recession:

The Office of Budget Responsibility members Robert Chote, Stephen Nickell and Graham Parker foolishly accepted Osborne's claim that the economy would benefit from 'expansionary fiscal contraction' - in other words, that public spending cuts and austerity would lead to a resurgence in the private sector. It hasn't happened.

He states there is "zero chance of a default", yet, fearing whether the Chancellor has the courage or ability to change course, Blanchflower argues that the government policy "should move from deficit reduction to one of attempting to avoid the death spiral of decline - of falling growth, deflation, increased unemployment, falling living standards and ever-rising business failures."

Mark Mazower: Germany v Greece

In the NS Essay "Grappling with Ghosts", leading historian Mark Mazower, professor at Columbia University and author of the award winning Inside Hitler's Greece, describes the anti-German feelings running high in Greece, where "it is not only protesters who reach back to the era of the Nazi occupation for analogues with the present".

The austerity measures decided on by Angela Merkel "may indeed be reducing Greece to penury," writes Mazower, though the outrage felt by Germans at the invocations of the war is, in fact, "because they feel they are trying to act exactly as the Nazis did not". Yet - Mazower recognises - these are different times:

The absence of armies in the entirely unfolding euro-saga is so obvious to us that we ignore its historical meaning . . . Our troubles [today] are caused by an addiction to cheap credit . . . enabled by the greed of bankers and the deliberate liberalisation of financial flows.

Mehdi Hasan vists Al Jazeera

In "Voice of the Arab spring", Mehdi Hasan travels to Doha, Qatar, to visit the headquarters of Al Jazeera, the TV and internet news network owned by an absolute monarch yet hailed as an independent voice in the Middle East. Hasan asks the managing director of Al Jazeera English and former ITN journalist Al Anstey how often he is rung up by members of the ruling family: "Never."

Anstey doesn't budge:

We are not a mouthpiece [for Qatar]; we are not a tool of public diplomacy. We have come here as journalists to carry out the profession of journalism.

Elsewhere in the New Statesman

In the NS Interview, Brian Cox and Jeff Forshaw, physicists and co-authors of the new book The Quantum Universe, tell Helen Lewis-Hasteley why Britain is the most efficient scientific nation in the world, how the scientific method is unarguable (". . . because we're not in fucking caves!") and why the best way to teach quantum physics is to think like children.

All this plus Mark Serwotka, leader of the Public and Commercial Services Union, defends the largest strike in a generation; Helen Lewis-Hasteley is disturbed and astonished by the testimonies delivered to the Leveson inquiry; Rafael Behr argues that, following George Osborne's gray-washed Black Tuesday, Ed Miliband must step up to prove the coalition wrong; nature writer Richard Mabey offers the first in an occasional series of "seasonal diaries", and Owen Sheers shares a new poem, "The Carriage Horses: Manhattan".

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Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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