Will Western Liberal Values Hold Up During Difficult Times?

Millions of Asians - including Chinese, Indians, Filipinos, Sri Lankans, Pakistanis - and others from different corners of the world have made the West their home. What are the likely social and psychological consequences for us "others" in these hard times?

One of the defining features of Western democracies is said to be its liberal values. What it essentially means for people like us is that our presence is for the most part not considered a big deal. If the economist Benjamin Friedman is right, however, liberal values thrive and indeed depend on continued economic growth and prosperity of citizens.

"Economic growth - meaning a rising standard of living for a clear majority of citizens - more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy." In contrast, when there is economic decline, the "moral character" of citizens takes a hit.

They become less tolerant, less open and less generous towards the have-nots. Friedman contends that "merely being rich is no bar to a society’s retreat into rigidity and intolerance once enough of its citizens lose the sense that they are getting ahead".

In other words, a society's values are fickle. The future prospect of citizens largely determines the values they hold at any point of time. Economic growth matters more for a society's ‘moral character' than the country's overall wealth.

Clearly, the truth is more complex than what the stylized version of Friedman's thesis suggests. Any values that we hold do not change quickly. We let go of our old values and acquire new ones only over time.

But what if some kinds of values - in this case liberal values - are prone to easy abandonment because they never developed deep roots in ways we thought they did?

With no end to bad economic news, how many Europeans and Americans will retain or abandon liberal values? If more of the latter, which members of society are likely to become victims of growing intolerance and injustice?

The so-called "undeserving poor" certainly. Additionally, the victims are also likely to be from among what Canadians label as "visible minorities".

From this perspective, for the millions of visible minorities who live in the West, the hard times of today may be the beginning of worse to come. They face the prospect of greater discrimination in the economic and social spheres or more.

Are we then headed for an era of growing illiberalism in the liberal democracies of the West so far as "others" - whether the poor or visible minorities - are concerned? Are the foundations of liberal democracies really so shallow?

Some of us may recall Fareed Zakaria's seminal article in Foreign Affairs (1997) in which he drew attention to growing illiberalism in new democracies - countries which held reasonably free and fair elections without subscribing to constitutional liberalism. For Zakaria, "liberal constitutionalism" - that "tradition, deep in Western history that seeks to protect an individual's autonomy and dignity against coercion, whatever the source - state, church or society" - separates Western democracies from the rest.

The larger issue may well be whether the celebrated liberal values of Western societies - which together with constitutional and other legal provisions, provide the bedrock of liberal democracy - are really dependent on the continued prosperity of a majority of its citizens or whether they have replaced or compete with older traditions.

Perhaps Zakaria is right about the part where the "tradition" to protect individual autonomy and dignity - by which one should understand the referent to be all individuals irrespective of class or race - against coercion has developed deep roots among a large majority. If that is true, then liberal values may well hold their own in hard times.

What if, however, we overestimated the nature and extent to which liberal values have penetrated these societies without sufficient consideration to ethnic or other differences so that we became blind to its fragile bases?

If Friedman is right, then Western democracies face a challenge from within where "tradition" may not be of much help. Economic stagnation and decline will likely have immoral consequences because the same countries have other traditions too. The laundry list of these other traditions is long and well-known - racism, colonialism, slavery et cetera - and their existence shows up in the public spaces of "civilized" countries in the form of anti-immigrant rallies and demonstrations.

Under current conditions, the social fabric of many Western societies is strained to an extent not experienced at least since the times of the Great Depression. In Europe, as high rates of unemployment become endemic, a shrinking base of taxpayers is expected to support welfare handouts to not only the fair sons and daughters of the soil but dark-skinned others as well. Both in the US and Europe, there has been broad resentment against welfare for the undeserving poor (read African-Americans and Latinos) at least since the Ronald Reagan/Margaret Thatcher years.

The news about "others" from Europe - whether in Germany, the Netherlands or the United Kingdom - is not pretty. It remains to be seen how many American states will follow Alabama's lead in pushing for harsh anti-immigrant laws, invoking uncertainty, fear and worse.

I don't know about other liberal folks but I do wonder about my "moral character" holding up in hard times.

Pushkar is a Montreal-based researcher affiliated with the Institute for the Study of International Development (ISID), McGill University.

In the Premier League the endgame of rampant capitalism is being played out

An unsustainable system where the rich win and the poor go to the wall. We see it in English football – and beyond

• 
• • Jonathan Freedland
  • guardian.co.uk, Tuesday 18 October 2011 21.30 BST
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Illustration by Belle Mellor
It's a newspaper convention that the front and back pages are a world apart, as if news and sport inhabit two different spheres with little to say to each other. Indeed, it used to be an article of faith that "sport and politics don't mix", with the former no more than a form of escapism from the latter. And yet the Occupy Wall Street and London Stock Exchange protests that led the weekend news bulletins might not be entirely unrelated to the Premier League results that closed them. For the current state of our football sheds a rather revealing light on the current state of both our politics and our economy. Or, as one sage of the sport puts it: "As ever, the national game reflects the nation's times."
What that reflection says is that Britain, or England, has become the home of a turbo-capitalism that leaves even the land of the let-it-rip free market – the United States – for dust. If capitalism is often described metaphorically as a race in which the richest always win, football has turned that metaphor into an all too literal reality.
Let's take as our text a series of reports written by the sage just quoted, namely the Guardian's David Conn, who has carved a unique niche investigating the politics and commercialisation of football. Conn elicited a candid admission from the new American owners of Liverpool Football Club, who confessed that part of the lure of buying a stake in what they called the "EPL" – the English Premier League – was that they get to keep all the money they make, rather than having to share it as they would have to under the – their phrase – "very socialistic" rules that operate in US sport. In other words, England has become a magnet for those drawn to behave in a way they couldn't get away with at home.
Start with first principles. Of course, inequality is built into sport: some people are simply stronger or faster than others. What makes sport compelling is watching closely matched individuals or teams compete to come out on top.
But a different kind of inequality matters too: money. A rich club can buy up all the best players and win every time. That's the story of today's Premier League, as super-flush Manchester United sweep all before them, challenged only by local rivals Manchester City – now endowed by an oil billionaire – and Chelsea, funded to the hilt by a Russian oligarch. This, then, becomes a different kind of competition, a battle not of skill, pace and temperament but of pounds, shillings and pence. The clearest manifestation of that came at the close of the transfer window, when the biggest teams splashed out millions to buy the top talent. It means the half-dozen top sides, already at a different level from the rest, soared even higher towards the stratosphere and out of reach – in just the same way that the super-rich float ever further away from everyone else, the 1% in a different league from the 99%, as the Occupy protesters would put it.
Nothing you can do about that, says dogmatic capitalism. You can no more stop the richest teams dominating football than you can prevent the fastest sprinter winning gold. That's the force of the market, all but a law of nature.
Except along comes American sport to show us another way. First, there are those rules on revenue-sharing that so frustrated Liverpool's new owners. All the money that, say, a baseball team makes – from tickets, TV rights and merchandise – is taxed by the major league that runs the sport and spread around the other clubs, so that the richest cannot dwarf the rest. That isn't because the titans of Major League Baseball have read too much Marx. It's because they understand that their sport is worth nothing if it stops being a real competition, if only a handful of the wealthiest teams ever have a chance of winning. Redistributing the wealth around the league ensures their sport doesn't become boring. It does not level the playing field, but it comes very close.
The proof is in the stats so beloved of sporting obsessives. Over the past 19 seasons, 12 different teams have won baseball's biggest prize. In the 19 seasons since the Premier League was created, only four teams have won; Manchester United alone have won the title 12 of those 19 times.
It's not just revenue-sharing that ensures true competition. In American football and basketball a salary cap applies, limiting how much each club can pay in wages and thereby preventing the richest teams making their domination permanent by snapping up all the best players. (A "luxury tax" performs a similar function in baseball.) In the same spirit, teams in all major US sports submit to a "draft", in which they take turns picking from a pool of newly eligible players, so that the equivalent of Chelsea or Manchester City can't gobble up all the fresh talent, but instead have to let the Blackburns or Wigans have a go.
Put like that, it seems fantastical. Who can imagine Old Trafford voluntarily snaffling less of the pie, so that clubs in smaller cities with smaller grounds, and therefore weaker gate receipts, get a look in? And yet English football used to work just like that. When the founders of the Football League gathered in a Manchester hotel in 1888, they fretted over how they might ensure that a fixture between, say, Derby County and Everton remained a real contest. They agreed the home side should give a proportion of its takings to the visitors, a system that held firm till 1983.
Clubs shared the TV money when it came too, spreading it around all 92 league clubs. But the big teams always resented subsidising the minnows; indeed, the Premier League was formed out of the biggest 20 clubs' express desire to keep Rupert Murdoch's millions for themselves. That TV money is at least partly spread throughout the Premier League, but now there are noises about ending even that small nod towards wealth-sharing, so that the biggest half-dozen teams can keep every penny for themselves.
Not for the first time, it's fallen to Europe to act. Upcoming Uefa "financial fair play" rules will require teams to live within their earnings, which should put an end to the sugar daddy handouts of Man City and Chelsea. But that 2014 change will push clubs to maximise their revenue, which is bound, in turn, to mean even less sharing. Football will still be a game determined by who has most money.
There are three consequences of this strange gulf between our rules and those across the Atlantic. First, football's most storied clubs have become attractive to foreign tycoons who sniff a licence to print money, unrestricted. Second, we've established a model that is inherently unsustainable, involving colossal debts that cripple all those without a billionaire to bail them out. Since 1992, league clubs and one Premier League team – Portsmouth – have fallen insolvent 55 times. Third, we risk killing the golden goose, turning an activity that should be thrilling into a non-contest whose outcome is all but preordained.
Hmm, a system that sees our biggest names falling to leveraged takeovers – think Kraft's buy-up of Cadbury – thereby selling off the crown jewels of our collective culture in the name of a rampant capitalism that is both unsustainable and ultimately joyless. That doesn't just sound like the state of the national game, that sounds like the state of the nation.

How Quantitative Easing will not solve the problem - An alternative viewpoint

Professor Steve Keen was one of the few economists to predict the financial crisis. According to him, the “debt-deflationary forces” unleashed today “are far larger than those that caused the Great Depression.”

George Monbiot

I stumbled out into the autumn sunshine, figures ricocheting around in my head, still trying to absorb what I had heard. I felt as if I had just attended a funeral: a funeral at which all of us got buried. I cannot claim to have understood everything in the lecture: Sonnenschein-Mantel-Debreu Theory and the 41-line differential equation were approximately 15.8 metres over my head(1). But the points I grasped were clear enough. We’re stuffed: stuffed to a degree that scarcely anyone yet appreciates.

Professor Steve Keen was one of the few economists to predict the financial crisis. While the OECD and the US Federal Reserve foresaw a “great moderation”, unprecedented stability and steadily rising wealth(2,3), he warned that a crash was bound to happen. Now he warns that the same factors which caused the crash show that what we’ve heard so far is merely the first rumble of the storm. Without a radical change of policy, another Great Depression is all but inevitable.

The problem is spelt out at greater length in the new edition of his book Debunking Economics (4). Like his lecture, it is marred by some unattractive boasting and jostling. But the graphs and figures it contains provide a more persuasive account of the causes of the crash and of its likely evolution than anything which has yet emerged from Constitution Avenue or Threadneedle Street. This is complicated, but it’s in your interests to understand it. So please bear with me while I do my best to explain.

The official view, as articulated by Ben Bernanke, chairman of the Federal Reserve, is that both the first Great Depression and the current crisis were caused by a lack of base money. Base money, or M0, is money that the central bank creates. It forms the reserves held by private banks, on the strength of which they issue loans to their clients. This practice is called fractional reserve banking: by issuing amounts of debt several times greater than their reserves, the private banks create money that didn’t exist before. Conventional economic theory predicts that when the central bank raises M0, this triggers a “money multiplier”: private banks generate more credit money (M1, M2 and M3), boosting economic growth and employment.

Bernanke, echoing claims by Milton Friedman, believed that the first Great Depression in the US was propelled by a fall in the supply of M0, which, he said, “reinforced … declines in the money multiplier.”(5) But, Keen shows, there is a weak association between M0 money supply and depression. There were six occasions after World War Two when M0 money supply fell faster than it did in 1928 and 1929. On five of these occasions there was a recession, but nothing resembling the scale of what happened at the end of the 1920s(6). In some cases unemployment rose when the rate of M0 growth was high and fell when it was low: results which defy Bernanke’s explanation. Steve Keen argues that it’s not changes in M0 which drive unemployment, but unemployment which triggers changes in M0: governments issue more cash when the economy runs into trouble.

He proposes an entirely different explanation for the Great Depression and the current crisis. Both events, he says, were triggered by a collapse in debt-financed demand(7). Aggregate demand in an economy like ours is composed of GDP plus the change in the level of debt. It is the sudden and extreme change in debt levels that makes demand so volatile and triggers recessions. The higher the level of private debt, relative to GDP, the more unstable the system becomes. And the more of this debt that takes the form of Ponzi finance – borrowing money to fund financial speculation – the worse the impact will be.

Keen shows how, from the late 1960s onwards, private sector debt in the US began to exceed GDP. It built up to wildly unstable levels from the late 1990s, peaking in 2008. The inevitable collapse in this rate of lending pulled down aggregate demand by 14%, triggering recession(8).

This should be easy enough to see with the benefit of hindsight, but what lends weight to Keen’s analysis is that he saw it with the benefit of foresight. In December 2005, while drafting an expert witness report for a court case, he looked up the ratio of private debt to GDP in his native Australia, to see how it had changed since the 1960s. He was astonished to discover that it had risen exponentially. He then did the same for the United States, with similar results(9). He immediately raised the alarm: here, he warned, were the conditions for an economic crisis far greater than those of the mid-1970s and early 1990s. A massive speculative bubble was close to bursting point. Needless to say, he was ignored by policy-makers.

Now, he tells us, a failure to address these problems will ensure that this crisis will run and run. The “debt-deflationary forces” unleashed today “are far larger than those that caused the Great Depression.”(10) In the 1920s, private debt rose by 50%. Between 1999 and 2009, it rose by 140%. The debt-to-GDP ratio in the US is still much higher than it was when the Great Depression began(11).

If Keen is right, the crippling sums spent on both sides of the Atlantic on refinancing the banks are a complete waste of money. They have not and they will not kickstart the economy, because M0 money supply is not the determining factor.

President Obama justified the bailout of the banks on the grounds that “a dollar of capital in a bank can actually result in $8 or $10 of loans to families and businesses. So that’s a multiplier effect”(12). But the money multiplier didn’t happen. The $1.3tn that Bernanke injected scarcely raised the amount of money in circulation: the 110% increase in M0 money led not to the 800 or 1000% increase in M1 money that Obama predicted, but a rise of just 20%(13). The bail-outs failed because M0 was not the cause of the crisis. The money would have achieved far more had it simply been given to the public. But, as Angela Merkel and Nicholas Sarkozy demonstrated over the weekend(14), governments have learnt nothing from this failure, and seek only to repeat it.

Instead, Keen says, the key to averting or curtailing a second Great Depression is to reduce the levels of private debt, through a unilateral write-off, or jubilee. The irresponsible loans the banks made should not be honoured. This will mean taking many banks into receivership(15). Otherwise private debt will sort itself out by traditional means: mass bankruptcy, which will generate an even greater crisis.

These are short-term measures. I would like to see them leading to a radical reappraisal of our economic aims and moves to develop a steady-state economy, of the kind proposed by Herman Daly and Tim Jackson(16). Governments and central bankers now have an unprecedented opportunity to learn from the catastrophic mistakes they’ve made. It is an opportunity they seem determined not to take.

---

www.monbiot.com

References:
1. Professor Steve Keen, 6th October 2011. Alternative theories of macroeconomic behaviour: a critique of neoclassical macroeconomics and an outline of the alternative Monetary Circuit Theory approach. Nuffield College, Oxford.
2. Ben Bernanke, 20th February 2004. The Great Moderation. http://www.360doc.com/content/11/0402/23/67028_106822017.shtml
3. Jean-Philippe Cotis, May 2007. Achieving further rebalancing. OECD Economic Outlook. http://findarticles.com/p/articles/mi_m4456/is_81/ai_n27271380/
4. Steve Keen, 2011. Debunking Economics: revised and expanded edition. Zed Books, London.
5. Ben Bernanke, 2000. Essays on the Great Depression, page 153. Princeton University Press. Quoted by Steve Keen, as above.
6. Steve Keen, page 302.
7. Page 300.
8. Page 341.
9. Page 336-337.
10. Page 349.
11. Page 348.
12. Barack Obama, 14th April 2009. Remarks on the economy. http://www.whitehouse.gov/the-press-office/remarks-president-economy-georgetown-university
13. Page 306.
14. http://www.guardian.co.uk/business/2011/oct/09/france-germany-agree-plan-banks
15. Page 355.
16. http://www.monbiot.com/2011/08/22/out-of-the-ashes/

Bank of England hits the panic button

By Jeremy Warner in The Telegraph on 7/10/11

Who was it who said that QE – printing money by another name – is the last resort of desperate governments, when all other options have failed?

As Labour's Ed Balls gleefully points out, it was indeed George Osborne, the current Chancellor. It is the sort of thing politicians say in opposition and then bitterly regret when they get into government and have to take the decisions.

Yet in a sense, his words are even truer today than they were then. You wouldn't choose further to expand the Bank of England's purchases of government debt unless you were desperate, and all other options had been exhausted. The Chancellor condemned it then; now he welcomes it.

Since nominal interest rates are already as low as they can realistically go and the Government has, rightly, ruled out easing back on deficit reduction - more QE is about the only thing left in the locker as the world slides, inexorably, towards depression.

As regular readers will know, until quite recently I've argued steadfastly against QE2, but on the never say never principle, I was always careful to add some riders. When faced by an extreme deflationary threat, almost anything can be justified, and that's precisely what we are seeing now. As the Governor of the Bank of England, Sir Mervyn King, put it on Thursday, "when the world changes, we must change our response".

Long-standing supporters of more QE will say that it has been obvious for some while that the economy was stalling anew, requiring some form of fresh stimulus.

I can't agree. No growth for nine months is not the same thing as a sudden lurch back into the abyss, a threat which thanks policy paralysis in Europe and the related upsurge of stresses in the banking system, is now only too evident. These dangers have risen markedly over the past two weeks, which explains why the Bank of England has acted both earlier than had been expected and, with £75bn of further asset purchases now sanctioned, more boldly. Sir Mervyn went further than he has ever done before on Thursday by saying that this is "the most serious financial crisis since the 1930s, if not ever". For the sake of appearances if nothing else, something had to be done.

Not that this seems to have been obvious to the European Central Bank (ECB), whose failure to cut interest rates on Thursday was almost as surprising as the Bank of England's decision to act so precipitously and pre-emptively.

At his valedictory press conference, the outgoing ECB president, Jean-Claude Trichet, announced some further "non-standard" initiatives to ease the European banking system's funding crisis, but it was small scale stuff, and frankly isn't going to make a great deal of difference.

Bizarrely, the ECB still seems to be looking in the wrong direction – ever vigilantly searching the horizon for the ghost of inflation – even as the noisy locomotive of economic catastrophe bears down on it from behind. Even for such a compromised institution, with 17 masters to answer to, the incompetence of the policy stance is quite breathtaking.

Glowing though the tributes have been to the departing Mr Trichet, I doubt the judgment of history will be kind.

There are big risks in what the Bank of England is doing, which despite its protests to the contrary, is as close to monetisation of the national debt as you can ever get without doing it outright.

By the time the new bout of asset purchases is over, the Bank of England will own nearly half of the market in three to 25-year gilts, or 32pc of the total stock of UK government bonds. Even when steeped in the economics of quantitative easing, this looks mad, and when things look mad, they generally are.

Let's get this straight. By switching on the printing presses, the Bank of England, which is 100pc owned by Her Majesty's Government, is buying up a third of the debt owed by Her Majesty's Government. The Treasury is becoming ever more in debt to itself. It's as strange as that.

To be doing this even as inflation is about to breach the 5pc mark makes the Bank of England's position more uncomfortable still. Let's not have any of this nonsense about how QE is not inflationary. By keeping the pound low, the inflationary impact is all too obvious.

Even the Bank of England's own analysis puts the inflationary effect of QE to date at between 0.75 and 1.5 percentage points. The same study finds that the addition to real GDP is just 2pc. That doesn't look a particularly good trade off to me.

Evidence from the US, moreover, is that the second bout of QE is both less powerful and shorter-lived than the first. It's like a drug; the more you take, the less potent it is. Yet most galling of all is the damage it does to savers, who are being further plundered to bail out the debtors.

If you are coming up to retirement, forget it. The price of an annuity just got a whole lot more expensive. What remains of our sadly depleted final salary pensions industry is toast. Companies will have to pay even more for the pension promises they have made, and so will the taxpayer, on the hook as he is for the unfunded pension pledges of the public sector.

The Governor says he shares the saver's pain. There is nothing he would like more than to return interest rates to "normal", and begin the process of making over-indebted Britain a nation of savers once more.
But right now you might as well do what he wants, which is spend your nest egg or blow it on higher risk assets, because with rising inflation, it will be worth less tomorrow than it is today.

I'm not saying the Bank of England is wrong to be doing this. There are no good choices left to policymakers. Europe's failure to resolve its debt crisis is creating a vicious downward spiral of contracting credit and economic activity. The Bank does indeed have little option but to react in the way it has. The almost suicidal, depression economics of the eurozone leaves it no choice.

When half the country is up to its neck in debt, and therefore cannot provide the demand necessary to get the economy growing again, the least worst option is to force-march those with the balance sheet strength to withstand it into the shops and the unknown returns of business investment.

If the Bank can drive yields on "riskless" gilts even lower, then those with the money might be more inclined to spend it or invest it, rather than lending to the Government. Even just leaving the cash on deposit with the bank ought to help ease credit conditions a little. That's the idea, anyway.

Whether QE2 works out that way is another matter. All too likely, it will merely end up feeding another investment banking bonus bonanza. Hey ho.

Osborne, cut these items to reduce deficit

Bins, roads, unwinnable wars: this is a chancellor with money to burn

While the poor struggle to survive the crisis, George Osborne is happy to run a welfare state for corporations and billionaires

• 
• • George Monbiot
  • guardian.co.uk, Monday 3 October 2011 20.30 BST
  • larger | smaller

Illustration by Daniel Pudles

Crisis, what crisis? There must be one: George Osborne, chancellor of the exchequer, said so 12 times in Monday's speech. But if it really is as bad as he says, why is he squandering what remains of our money like an aristocratic gambler in a Russian novel?

This column is about the cuts the government has failed to make. It's about the profligate, pointless spending that has not been slashed, and the money Osborne could have raised but has instead decided to fritter away. For the sake of argument it accepts his estimate of the amount that will need to be saved. But it will show that over half of it could be found with much less pain.
Let us begin with the easiest cut of all: one that would hurt no one except a few grasping corporations.
By cancelling its planned re-organisation of the National Health Service, the government would save £2bn. That would allow it to drop three-quarters of the cuts to the NHS's capital spending budget planned for the next four years.

To show how reasonable I mean to be, I won't adopt Simon Jenkins's arresting proposal that we cut the entire armed forces' budget. I'll suggest we drop only the military projects of such withering pointlessness that even the government can't decide what they are for.

The strategic purpose of the war in Afghanistan changes by the week. Its prospects of achieving any of its fluctuating aims recede by the day. Pulling out would save us £4.5bn a year. That's equivalent to the entire cut in the government grant to local authorities, plus the entire cut to the housing budget, which will raise social rents to impossible levels. So here's the choice: Sure Start centres, libraries, Citizens Advice bureaux, affordable housing, all the other services that give the poor a chance of a decent life; or an unwinnable war likely to sow further conflict.

Whatever else the Ministry of Defence gets wrong, however, you can't fault it for innovation. It's spending £6.2bn on a pair of aircraft carriers with a unique feature: they won't carry any aircraft. The jets they were to have supported won't be ready in time, or perhaps at all. They will drift around the oceans like the Flying Dutchman, the embodied ghosts of our imperial pretensions. Because of the commitments already made, cancelling them now would save only £1.2bn. But that's enough to avert all but £200m of the government's cuts to early intervention programmes for families that might otherwise run into trouble.

While we're on the subject of pointless foreign intervention, could someone in government please explain the survival of the export credit guarantee department? Its purpose is to subsidise multinational companies by underwriting their business in other countries: such as drilling for oil in fragile environments or selling weapons to dodgy regimes. It costs the government £20m a year. This money could have saved the Sustainable Development Commission and the Royal Commission on Environmental Pollution four times over.

The road schemes the government wants to fund would have been pointless and destructive in the boom years. In a time of crisis and contraction, they are a refined form of madness. A report by the Campaign for Better Transport analyses the local authority transport schemes listed as the "best and final bids" for new money by the government, which will decide in December. You have until 14 October to respond.

Though it generates the least employment, does the greatest damage to the environment and creates the fewest social benefits, road building is in line for the greatest share of the new transport spending: £897m. Some of the schemes being proposed, such as the £86m Bexhill to Hastings link road (all of 6km) or the £108m Kingskerswell bypass (also 6km) have been fought by local people for years. Like the useless new roads the last Tory government built, they will simply bump the traffic problem along to the next bottleneck. The same money would have kept the education maintenance allowance afloat for 18 months – or, as we're talking about transport, provided mobility for disabled people in residential care (one of the cruellest of the proposed cuts) for 300 years.

The Beast of Brentwood, known to his mother as Eric Pickles, has insisted – on the expert advice of the leader writers of the Daily Mail – that councils reinstate weekly bin collections, at a cost of £250m. This spending, unlike some of the examples I'm listing, will do no harm. But a government that believes it's a higher priority than, say, legal aid for people with no representation (now cut by £300m a year) is a government that's lost all sense of proportion.

Such sums are trifling by comparison with the money the government has selflessly foregone. Wherever it has spotted a relatively painless means of plugging the spending gap, it has hurried away to find an excruciating alternative. It continues to hold out against a Robin Hood tax on financial transactions. Levied at just 0.05%, this would raise around £20bn a year from the people who brought us the crisis. That's equivalent to one quarter of all the cuts the government is making.
When he slapped new charges on the North Sea companies making tanker-loads of money from a mineral resource that belongs to the nation, Osborne could have banked the £2bn he raised. He could have used the oil revenues to cancel almost all the cuts to disability living allowance. Instead he gave it, as a tax rebate, to a group some way from the top of the priority list: motorists. When he struck a deal with Switzerland, and British tax evaders stashing their ill-gotten gains in its banks, Osborne could have held out for £25bn. Instead he settled for £5bn, all malfeasance forgotten. He threw away the equivalent of another quarter of this year's cuts.

Then there are the straight giveaways: acts of profligacy at any time, of Bullingdonian debauchery today. The government's cuts to corporation tax will cost us £1bn a year by 2014. Changes to controlled foreign company rules, capital gains tax, capital allowances, inheritance tax and similar levies (all of which reward only corporations or the ultra-rich) will deprive the exchequer of a further £1.5bn a year by 2015 – almost enough to reverse the fiscally destructive cuts to the tax collection service: a net £2.3bn. The freezing of air passenger duty, excise duty for lorries and the aggregates levy – which in all cases, like the spending on new roads, damages the environment as much as they damage the economy – will cost us another £175m.

Far from running out of funds, this looks like a government with money to burn. While the poor and middle struggle to survive the crisis that George Osborne bewails, he's giving away our money to those who need it least. So let's support him when he calls for cuts, but demand that he directs them at the welfare state he's running for corporations and billionaires, which is turning this crisis into a calamity.

Everybody Hurts - aka Weltschmertz

By Pritish Nandy in the Times of India

We all live with weltschmerz in these difficult times. There's no exact translation of this charming word coined by Jean Paul Richter in 1810. What it suggests is a kind of world weariness that has entered our lives. What you can call a universal pain. Everyone lives with it and yet everyone is in denial of it. That's why we have this great love affair with the entertainment business. Movies. Broadway. Vegas. The IPL. Formula One. We are living in the greatest era of escapism simply because we live in the greatest era of pain.

This pain is not always personal. It's not just about you and me and those who we love. You see it in the eyes of the urchin who comes begging to you at a street corner. She has lost her childhood, her innocence. You see it in the eyes of those who work for you at home, cooking, cleaning, washing your clothes, or taking your well groomed dogs out for a walk. Each one of them, however well you may take care of them, dreams that one day they will walk away to be their own master. You see it in the eyes of your colleagues at work, however enthusiastic they may be about what they do. The long travel to work, the pitiable condition of public transportation, the missing footpaths, the growing pollution, the problems with putting kids through school and college, the frequent confrontations over rent, power, water, tax: everything contributes to this weltschmerz. It's everywhere.

I see it in parties and film premieres too. There's something very tragic in watching middle aged men and women dressed in absurd designer togs, their hair dyed and faces botoxed, prancing around like teenagers and pretending to have a great time. There are more sad-eyed drunks and dope heads there than in the dance bars of suburban Mumbai or the glitzy discotheques of five star hotels. While the real youngsters of this generation, equally sad-eyed, shot and lonely, are racing down empty Mumbai roads late at night on rented souped up bikes trying to prove their machismo. They challenge danger because they find it tougher to challenge life. They hide their pain by escaping it. So do their parents who helplessly watch them suffer, knowing that sermons don't help.

The day we all realise this, that the rich is in as much pain as the poor, that the employer is having as tough a time as the employee, that the cop who asks you for a bribe lives as sad a life as you, the pickpocket you catch has risked being lynched because he has no other alternative means of livelihood, that the movie star you idolise is as lonely as you are, that the one who brutalises you is perhaps as brutalised by life as you are, the less we will seek to blame others for our fate. You will feel less anger against that guy in the tax office who asks you for a bribe when you realise he is still paying back, after ten years on his job, his father's debt for getting him the job. We are lucky. The Americans are consuming today what their next 13 generations will have to pay for. The Greeks will be lucky if their next generation can survive their current crisis.

We have, all of us, mortgaged our futures to pay for being around. No, I am not saying this. Ask anyone who understands economics or the environment and they will tell you this. Yet man bravely strides ahead. As we flirt with more pain, more danger, we discover more and more ways to seek gratification, more technology to flaunt, more entertainment to excite us and, most important, more dreams to chase. So we pursue new ways to earn more money, grow more food, hunt down more pleasures, seek to extend our life spans. British scientists recently declared that by 2050 we will find a way to overcome mortality.
This is the miracle of our times. Even as most things go wrong, man's ingenuity to seek hope and happiness keeps improving. But where we fail most is in sustaining relationships. The best companies collapse, as do the best marriages, the best rock groups, the most intense relationships because our weltschmerz makes us lonely islands of pain. That's why last week, when R.E.M broke up after 31 years, I remembered their most popular song, which became the anthem of our times. Everybody hurts. Yes, everybody hurts. And that is why we hurt each other so much.

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