Purely personal reflections on the state of politics.

A trail of misinformation and manipulation

Last week, the national broadcaster ABC’s Media Watch program – Up in Smoke – took aim at the Murdoch press (in particular, the Australian newspaper) for misleading reporting. The News Limited rag (it is barely that) has been running a campaign via headline claiming that Australia’s world leading laws on plain packaging of tobacco products have failed. Of-course, News Limited is just the conduit. Lying behind the headlines are rather secretive right-wing think tanks who pump out propaganda every day which aims to undermine government intervention and activity in favour of the industrial and other interests that just happen to fund the propaganda. These organisations hold themselves out as being non-partisan and independent – only offering an evidence-based viewpoint. The only problem is they clearly do jobs for bobs and manipulate ‘evidence’ to the point of absurdity.

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Serial liars who stand for nothing that is worth supporting

Tonight is the Federal Budget night. Tomorrow’s blog analysis could be as long as “its appalling”. We already know that. So I might take a day off and leave it at that. Some of the policy changes announced already are certainly appalling. Regular readers will know I have been keeping tabs on the way the Federal unemployment benefit in Australia has failed to keep pace with the poverty line and the Government has refused to do anything about it. At present, the single unemployment benefit stands at $35.50 a day which is well the single unemployed poverty line of $A64.10 per day. For married couples the unemployment benefit is currently at $56.47 per day, while the corresponding poverty line is set at $79.99 per day. While the Government has been under intense pressure from a number of different sources (including the typical welfare lobby groups, the OECD (not typical) and even right-wing columnists (definitely not typical) to address this disgrace. It has resisted any rise in the benefit and continually claims it is about jobs not welfare and is in the process of creating work. Not much action seems to happen on that front. Tonight’s budget will announce their latest offering in this regard. They are going to allow the unemployed to earn an extra $A19 per week before their benefits is cut. It claims it cannot afford any more because it has run out of money and needs to get back to surplus as soon as possible. The reality is that it can never run out of money, it needs to triple the current budget deficit to address the growing output gap, and is once again failing the most disadvantaged Australians that it professes it care about. The Government is also comprised of serial liars who will be decimated in the upcoming Federal election because their political support base has shrunk so much because they stand for nothing that is worth supporting.

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Map of British local unemployment and the August 2011 riots

We have been working on a map to relate the local area unemployment in Britain with the incidence of riots in August 2011. I discussed why the incidence of unemployment might be a key driving factor for the riots in this blog – I blame the British government for the riots. The map we have now produced provides a stark representation of the geographic coincidence of labour market failure and the rioting.

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China is to blame – freedom and current accounts

“The freer the market the freer the people”. This is one of the questions that you are asked to assess in the the questionnaire designed by the Political Compass to determine where you stand on the economic continuum (left/right) and the social values (authoritarian/libertarian) continuum. I was reminded of this proposition when I read the latest Bloomberg opinion piece (December 7, 2010) – China Needs a U.S. Lesson – written by Alberto Alesina (Harvard) and Luigi Zingales (Chicago). They claim that the lack of freedom in China is to blame for the world crisis. They ignore the failure of the capitalist bosses and the bankers to behave honestly and competently. They ignore the wilful neglect of “free” governments who became captive of the self-regulation is good mantra proposed by the “free market” supporters. No, China is to blame because it is communist. The evidence would suggest otherwise. That is what this blog is about.

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Who is going to pay?

I am working on a book at present on the way recessions entrench growing disadvantage beyond the costs that the actual crisis period imposes on the unemployed and others. The idea is that the neo-liberal era has systematically been associated with a trend towards erosion of working conditions and a rising inequality in outcomes far beyond anything that could remotely be justified by disparate individual or sectoral productivity trends. It is clear that the rise of the financial sector has been generated a massive redistribution of national income in most countries away from workers and productive sectors. As part of this research I am delving beyond the usual “economic” analysis that I might take of recessions. I am also trying to document how recessions occur and how the recessions of the last 40 years have reflected a growing disregard by our governments for their legitimate responsibilities to advance public purpose. In turn, this disregard has seen them turn a blind eye to corruption and incompetence in the private sector while we were being told that by privatisation and deregulation they had solved the macroeconomic problem and we would enjoy unparalleled prosperity. It was a con job of major proportions and now the question should be who is going to pay for all the damage they caused?

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The public sector and free information are essential for collective well-being

I have been in Sydney today for Day 1 of the Australian Society of Heterodox Economists’ (SHE) Conference. I always go down as a solidaristic gesture but I admit to not being fully engaged in some of the topics given there is an underlying hostility among many heterodox economist to getting the macroeconomics right before you delve into various microeconomics topics. I do not find it appealing to analysing demographic cohorts distinguished by sexuality, gender, race as if they are “independent” and can be understood without recourse to acknowledging their relationship to capital and without understanding the macroeconomic constraints that bear upon their decision-making environment. But during the day I was thinking about why societies voluntarily go along with state imposed restrictions on their freedoms which clearly entrench the disadvantage of individual members within these societies. I was thinking of this within the context of the choice nations have to exit the euro and the pressure being put on such nations to remain within the zone even though the status quo is devastating private well-being. I was also thinking about the forces that are working within the US to misrepresent the true nature of the financial crisis and allow government support for the elites who have committed gross fraud to override basic job creation support for the unemployed. I was also thinking about this in the context of the debate about the morality of WikiLeaks and the growing government attacks on that organisation.

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Education – a vehicle for class division

Yesterday I wrote, in part, about the way in which the term long-run is mis-used by the mainstream economists to assert “natural rate” theories, which essentially deny a role for government macroeconomic policy in stabilising the business cycle and reducing mass unemployment. I also get asked by readers (several times now) to provide some discussion of what were known as the Cambridge capital controversies in the 1960s and 1970s. They are related in fact to the notion of the long-run. These were rather esoteric debates which are now largely ignored by the mainstream despite the fact that the results of the debate showed, beyond any shadow of doubt, that the whole body of neo-classical distribution theory (that is, marginal productivity theory) is plain wrong. MPT was developed to justify the claim that capitalism delivers “fair” income distributions because everybody gets back what they put in. The Cambridge debates killed the legitimacy of those claims. But my profession continued oblivious because the results would have meant that a major part of the mainstream apology to capitalism would have to be jettisoned. Who understood the debates anyway? It was easy to just sweep the results under the carpet. I still plan to provide some commentary in this regard as I used to teach a course in capital theory covering these debates. But in thinking about them I started thinking of prior questions which also feed into a policy debate in Australia at present. It relates to educational outcomes and class.

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Sad day for America

I followed the US mid-term election campaign as best I could – being an outsider. Sometimes the level of debate appeared to be below that which I imagine the primates engaged in back then. I don’t intend to become a psephologist (not qualified) but I am interested in exploring why these witless conservatives have made ground. In Australia’s recent national election where the so-called progressive Labor Party (not!) lost office in their own right the swing was to the Greens rather than the conservatives. This does not appear to be the case in the US. So there are two questions I am interested in. First, what role did the neglect of the unemployed play in the election results? Second, do the result really amount to an endorsement of the neo-liberal economic approach? But the reality is that the US political debate has become so divorced from reality – which in my parlance means that it has totally failed to provide a vibrant debate about the options that the monetary system offers government to improve the lives of the citizens. Instead, candidates who have no understanding at all have been elected on the basis of a pack of lies and only demonstrate total ignorance when it comes to informed debate. In that sense, the mid-term elections have foisted a number of very dangerous individuals into office. Sad day for America!

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The revolving door – how social policy is co-opted

I mentioned yesterday that I would reflect on the ACTU Jobs Summit, which was held in Sydney on Monday. I was one of the invited speakers. You can download notes of my talk HERE. The revolving door idea has been on my mind a lot over the last decade or even earlier. The revolving door idea – that open door between key institutions such as unions, welfare agencies and the like and government – relates to how political struggle manifests. The revolving door is a process which increasingly sees organisations and institutions that started out to defend the rights of the poor and the workers become co-opted into the discourse of the day to the detriment of their own charters. That is what this blog is about.

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