Governments avoid the obvious at their peril

Hello Humans


Well, it seems as though the doomsday clock might have regained a few seconds, following the news that France voted in favour of an investment banker over a Nazi.

A brief reprieve.

A pragmatic victory.

No matter where you sit on the political spectrum, I think we can concur that not having another Nazi holding the Presidency hostage is ultimately a good thing.

Macron is one to watch. This 39-year-old investment banker will be instrumental in holding Europe together with what seems like an elastic band, some glue & flimsy pieces of string.

It is slightly maddening watching and reporting on the cognitive dissonance gripping the developed and developing world. It is difficult not to feel as though I am taking crazy pills listening to politicians and pundits grasping for excuses for the economic malaise gripping countries from Australia to the UK, America to France, let alone the rest of Europe.

Immigration. Taxes. Muslims. Terrorists. Women. We’re so busy reaching around for someone to blame when the answer is right in front of us: Governments colluded with the private sector and bankrupted half the world and there has been no true economic recovery.

Pundits and politicians are  walking around pointing at millennials and poor people claiming they’re lazy good-for-nothing dole-bludgers, at immigrants claiming they’re taking our jobs while simultaneously taking up space in a welfare line: we’ve been over this: They can’t be in two places at once.

So too at the feet of women is the blame laid, claiming their need for maternity leave is a burden on the system and shows a lack of commitment even though without them you’d have no future workers to employ. Also at gay, trans, intrasex and queer people, claiming their need for equal rights under the law is political correctness gone mad, even though equal rights for the LGBTQI community would mean more money in the economy. Forget the morality of it all. You’d have double the amount of weddings: That’s wedding planners employed, dress-makers, caterers, musicians, DJs, celebrants, make-up artists, chauffeurs, photographers, videographers, florists, even graphic designers for the invitations. Equal rights creates more work and more money for more people.

You have taken so much money out of the economy that it has financially disenfranchised such a broad swathe of the population that productivity has plummeted, because as it turns out: When people have less money to spend, their participation in the economy drops.

It’s a failure of classic, neo-liberal economics.

As Nobel Laureate Joseph Stiglitz recently pointed out:  it was the incorrect belief that unemployment was a requirement of economic growth that led us here in the first place.

Voters, politicians and business alike has convinced itself that it can close borders and industry, it can govern over ideology and it can help the private sector stay in business.

But when it comes to employment or the wellbeing of the citizens you are elected to govern: that’s beyond the scope of our abilities. Before he uttered those stupid, stupid, stupid words claiming there was no connection between death and a lack of health insurance, the Freedom Caucaus’, Representative, Raúl R. Labrador said as much just a few days ago.

Likewise in Australia, the NLP has abdicated its responsibility over wage-growth or productivity, climate-change, unemployment, or inequality, instead devoting its energy to ideological causes like retaining their right to discriminate against Muslims, immigrants, the Indigenous, women and gay people at the boardroom, and the pub.

And in America the Republican Congress – endowed with their own private and guaranteed lifetime healthcare and pension –  just stripped more than half the country of its health insurance.

You do not need to tax the rich to get universal health care. You don’t need to tax anyone to get universal health care.

The only reason to tax anyone is to control inflation, which, incidentally, is lower than it has been in 17 years in Australia sitting at 1.1%. Inflation in the US has been low and predictable since the 1980s, and sits at around 1.5%. The UK experienced a bigger than expected increase in inflation up to 2.3% in February from 1.8% in January, with food and fuel prices the main drivers.

[Side-note: No, this doesn’t mean I am against taxation. Nor does it mean that low inflation is reason for taxation to cease. I do think there is an argument to be made for significant personal tax cuts, across-the-board].

Taxes do not need to be collected before they are spent.

You do not need to tax the rich to fund defence, or education, or roads or infrastructure, or the any number of other things that keep the lights on in Australia, America, Britain, the UK, France and pretty much every other country with electricity.

In fact tomorrow you could give every sector in this country a tax cut and the world would keep turning.

It makes me bonkers.

In America the private sector received $80 billion in government subsidies in 2012. In Europe it was $300 billion, and in the UK up to $110 billion (around 85 billion pounds). The Australian coal, oil and gas companies received $5.6 billion a year in subsidies. The banks receive almost $4 billion in subsidies a year.

These champions of the free market, binging off the government purse.

Yet uber-capitalists like Peter Thiel would have us believe that the entry of women and immigrants into the workforce has thrown the globe off its axis and has permanently prevented commerce from operating at capacity.

He’s a multi-billionaire. How much money does one need before one stops feeling threatened by the presence of other people in the economy?

If the private sector is so confident in the powers of the free market then it should put its money where its mouth is and pay back every last dime of every billion-dollar subsidy it has ever received and then promise that from now on it will only accept dollars generated by their customers, or other business partners in the private sector in the form of payment.

To quote economist Ellis Winningham: “Business is not the centrepiece of the economy. It is nothing more than a reactionary supplier. In good times, it begs for more help from workers to increase its production and in bad times, it begs for more help from consumers to buy from it. At all times, it begs for help from politicians in the Federal Government to protect it from both consumers and workers.”

But from the US to Australia, to Britain, when we turn to the parties we would ordinarily rely upon to validate these self-evident truths, they are nowhere to be found.

In Australia Bill Shorten is busy trying to steal the NLP’s racist immigration policies, which it stole off One Nation.

In the US: A jubilant crowd of white, male, millionaire Congressmen just gave half the country the finger.

And in the UK Jeremy Corbyn struggles to maintain legitimacy, plagued by inconsistency and factionalism within his own parties, and, in his defence, an acrimonious relationship with the press which with few exceptions, have been largely critical of his policies: halting public sector cuts, renationalising banks and energy firms, and a “maximum wage” for private-sector executives. It doesn’t help that Theresa May is enjoying a wave of centrist populism having largely been depicted as the ‘Remain’ Prime Minister who having saved the country from Boris Johnson and Nigel Farage is steering the previously sinking ship back to dry land.

Macron’s policies leave some things to be desired, but on many points, I remain cautiously optimistic. For example, he aims for “an economy of recovery, not an economy of innovation”, an interesting point which Australia’s Prime Minister, Malcolm Turnbull would see fit to pay attention to.

“In fact we are the single largest European country today not to have solved the problem of mass unemployment,” Macron told Monocle in a recent interview. (A good read I highly recommend you spend some time on).

“We need a system similar to those of Germany and Scandinavian countries. In France we haven’t been able to reach the kind of social compromise needed to create the English-speaking world’s model, which tolerates much more inequality. We also have to reconsider the system of unemployment and professional training.”

Here’s the sentence which worries me: “It is about rights and obligations; people should not be allowed to refuse a decent job offer if it corresponds to their qualifications.”

No person should be obliged to take a job. The right to turn down a job is the price you pay for an economy of equal opportunity. There are plenty of good reasons to turn down a job: It doesn’t pay enough, it has inflexible hours, it has no pension or superannuation plan. Macron has it backwards, putting the onus of responsibility on the job taker to lower their expectations, instead of creating a system where employers are required to offer incentives that would make a job opportunity too good to turn down.

Macron has been critical of Donald Trump’s economic policies as they relate to both trade and migration: “Ignoring history has never improved anyone’s status,” he said.

“We should not leave criticism of Europe to the anti-Europeans. The pro-Europeans must criticise Europe in order to improve it. We have to explain what Europe is protecting itself from. Confronted with migration, terrorism, digitalisation, the challenge of climate change and energy transition, Europe offers the right level of sovereignty. We must persuade the people of Europe of this evidence.”  Also a hopeful phrase.

His rhetoric has been critical of ‘interventionism’ and he speaks of a France which will need to open itself to the world if it is to be successful, globalised policies tend to follow phrases like this.  Macron speaks of economic recovery and he has been critical of the EU which unfairly compromises the needs of the French people so that Britain, led by David Cameron could ride roughshod over other member nations.

If only governments would face up to what is staring them plain in the face: Neglecting the economic well-being of the people you are elected to govern has seen the developed world descend hastily into fascism.

It seems many of us long for a return to a simpler time, not realising the reason it felt simpler was because almost everyone had a job. And the reason everyone had a job is because after the war governments in the UK, Australia and the US had a mandated job guarantee without which, none of today’s billionaires would have a penny.

At a time where the middle class and the working class are aligned in their economic insecurity, it will take a true centrist to bring together populations divided against one another.

It would help if they focused on the problem at hand instead of inventing new ones when they’re casting around for blame.

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Claire Connelly is working on her first book, How The World Really Works, a guide to recognising rhetorical red flags and immunising yourself against bullshit. You should definitely buy it when it comes out. A podcast of the same name will also be launching in the coming months.