Down is up

A ‘recovery’ based on zero-hours contracts, self-employment, the importation of cheap labour and part-time work and ‘revealed’ through false junk statistics that nobody in the real world is actually feeling cannot really be said to be happening at all, can it? The economy is now in tatters thanks to Osborne and for the first time since records began *real* incomes will be lower at the end of a parliament than at the start. Osborne has borrowed more in three years than Labour did in thirteen. Roll on the European elections, and better still 2015 when the electorate will let the coalition know what they think of their ‘recovery.’ Aditya Chakrabortty writes: “Down is up. Sick is healthy. The RMS Titanic is seaworthy. Topsy-turvy logic is a speciality of the austerity brigade, and here they come dishing up a third helping. First, in 2010-11, they pledged that making historic cuts amid a global slump would definitely, absolutely secure a strong recovery. Then things went predictably belly-up, forcing Cameron and Osborne to dump their deficit-reduction plans and the eurocrats to make more bailouts. Yet these reversals were, naturally, “sticking to the course”. Now things don’t look quite as awful as they did a couple of years ago – and this somehow gets chalked up as a miraculous rebound.

Only a prude would expect their politicians not to exaggerate. But getting to such upside-down conclusions requires more than that: it requires fictionalising and even lying. Let’s have a look at two examples from the past few days, one in Britain the other in Greece.

Athens was declared last week to have passed a big milestone. Officials in Brussels certified that Antonis Samaras and his government had racked up a primary budget surplus in 2013. Cue much celebration by Greek ministers: not only had they climbed a couple of rungs on the ladder of fiscal probity, they now also qualified for easier terms on their outstanding debt. The prime minister must have known well in advance that the European seal of approval was coming his way, because he was peacocking for days beforehand. Take last week’s boast: “We don’t need more money. We have no fiscal gap.” Of course, saying this even while petitioning for easier repayment on Greece’s mountain of debt is just another example of austerity’s topsy-turvyism.

In any case, it’s rubbish. For a country to have a primary surplus means that its income covers its spending – once you set aside previous borrowing. Imagine ignoring a person’s credit-card debt and just looking at whether his or her wages exceed their outgoings: if so, that’s a primary surplus.

And that’s what Greece doesn’t have. The only way Athens gets to a primary surplus is by the European Commission ignoring all sorts of things the country does have to pay for, the biggest of all being the bailout of its banks. Take those €19.7 billions (over £16bn) off the balance sheet along with a few trifles and – phew! –you get to a primary surplus, which happens to be completely fictional.

There is a debate to be had about exactly how you factor in a big payment like rescuing a broken banking system; I imagine it would mesmerise accountants everywhere. But what you can’t pretend is that if Greece walked away from its debtors tomorrow it wouldn’t have to pay for its banks.

Europe is accounting for a member economy as if it were a dotcom circa 1997: by covering up all the bad stuff on the books, and then pointing to the rest as evidence of a money-making enterprise. And the reason the eurocrats are doing this is to prove that Greece’s destructive austerity is a success.

So it is that Angela Merkel jets into Athens at the start of this month to congratulate the administration on “honouring its commitments”. So it is that when the IMF suggests that Greek banks need a transfusion of €20bn to cover over their cracks, the pesky Washingtonians are hushed up by Brussels. Tiny, broken Greece must be pushed under the carpet so as to stabilise the European financial system.

Meanwhile, unemployment in Greece is around 27%; the public debt now is higher than it was when Athens collapsed, and the banking system is so crocked that small and mid-sized businesses in Greece are starved of credit (compare that with the generous terms and conditions a tech start-up in Berlin can now get). But no matter: the programme is a success.

Britain also has its own statistical snowjob. On Tuesday morning, GDP figures will be released. They’ll show another strong rise and provoke more crowing from the coalition. Yet while our national income is almost back to where it was before the crisis (rejoice!), our GDP per head remains almost 7% below where it was at the start of 2008. The Britons of 2014 are as poor as they were in 2005.

Whether in Westminster or the media, Cameron or Paxman, you don’t hear much about that measure of GDP per head, yet earlier this month the Office for National Statistics said this: “If GDP increases, but the population producing it rises by the same percentage, there would be no reason to suppose the well-being of individuals would have increased.”

One big reason why the country is getting richer is simply that we’re importing a lot more people – including from the crisis-hit regions of southern Europe. And whether they’re recent arrivals or freshly-minted graduates, they’re being shunted off into low-paying jobs or into precarious underpaid self-employment. This is what Osborne will claim as his triumph next May, the result of sticking to his plans (except when he didn’t, you understand).

If Miliband’s team had their wits about them, they wouldn’t just be talking about living standards but talking about all the ways this isn’t a recovery at all: not in GDP per head, not in business investment or trade. Instead, they talk about the need for a decent capitalism without any yardsticks to measure what that would look like.

So how does the logic of austerity sound in Britain? The country is richer, but its people are poorer. This now counts as a recovery.” ( See also – (

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