Changes to RBA Act will further entrench the depoliticisation of economic policy and reduce democratic accountability
Today, I consider the latest development in the entrenchment of neoliberalism in the Australian policy…
Just a short blog post today (short in research) as I devote Wednesday’s to other writing and I have to travel a lot today. More a collection of snippets that I come across over the course of a day’s work. Today, we think about Bolivia and the right-wing thugs that have overthrown a legitimate government advancing the well-being of its people. We also see senior progressive politicians falling into a myriad of lies and misconceptions about the monetary system and handing political initiative to the right wing as a consequence, even though they think they are being clever in their framing. And we think of Japan a little. And then some music offerings or two.
Last week, I was in Japan and I met a lot of people from across the political spectrum. After my presentation at the Diet (November 5, 2019), there was a relatively informal and private function attended by many members of the Diet including some senior politicians in the ruling party.
I spoke at length privately, with many senior members of the Japanese government and outlined my 10-point plan to them for Japan based on an MMT understanding.
We had a very free exchange (given it was private) and while I won’t disclose personal details here, several of those present indicated that they would be pressuring their Prime Minister Mr Abe in the following days to change economic policy in Japan.
On Friday, Mr Abe instructed officials in the Cabinet Office to devise a fiscal stimulus package, the first since 2016 as a means of offsetting the damage from the consumption tax hike on October 1, 2019, attenuating the risks from the global slowdown, dealing with the damage from the recent Typhoon Hagibis, and ensuring that the boost from the 2020 Tokyo Olympics is sustained.
The Cabinet Secretary told the media that:
To speed up our recovery … (from the Typhoon) … deal with risks from abroad and accelerate productivity growth, we are formulating an economic plan along the lines of a 15-month budget.
The details have to be determined which tells you that this decision was, probably, determined fairly quickly, especially given, that the politicians I spoke to had indicated to me (last Tuesday) that they were not aware of any plans for a stimulus.
Yet, on Friday, the stimulus was announced.
No causality claimed. But a great advance for Japan (depending on the specific areas and demographic cohorts that the stimulus will benefit).
The latest South American progressive government to be taken over by right-wing thugs sponsored by the US is Bolivia.
This comes just after the ousted President Evo Morales cancelled a 2018 contract with a German company to mine the nation’s lithium deposits.
He was reported to have said:
Bolivia’s lithium belongs to the Bolivian people … Not to multinational corporate cabals.
Bolivia, reportedly has 50 to 70 per cent of the world’s lithium reserves, which are essential to the development of batteries in electric cars, etc. Demand for that resources will sky-rocket in the coming decade.
Evo Morales wanted to increase the national benefits of the lithium production.
Multinational companies also harvest gas and oil resources in Bolivia.
Here is a report on that – Bolivian Coup Comes Less Than a Week After Morales Stopped Multinational Firm’s Lithium Deal (November 11, 2019).
I also saw this comparison for Bolivia:
2006 13.0 per cent
2018 2.4 per cent
2006 9.2 per cent
2018 4.1 per cent
2006 60.6 per cent
2018 34.6 per cent
2006 38.2 per cent
2018 15.2 per cent
I haven’t verified those figures but will.
Here is the tenor sax player Gato Barbieri off his great album from 1973 – Bolivia. Lonnie Liston Smith played on that album as did John Abercrombie (guitar) and Stanley Clarke (bass). I play it regularly.
We mourn the events in this nation in the last week.
And we realise that the progressive struggle goes beyond rhetoric and at times has to engage in other more aggressive ways.
Last week (November 8, 2019), the Opposition leader Anthony Albanese gave a speech at the National Press Club in Canberra (Transcript) outlining his vision for the Party after its disastrous election loss in May this year.
In the Q&A time, he was asked whether the Labor Party about the future tax and spending plans of the Party (Q&A Transcript).
Labor will always be better on health and education than the Coalition. That’s true. We actually believe that education is about creating opportunity, not just entrenching privilege. And we believe that health should be accessible to anyone regardless of their income. You should get proper health care. So, that’s a given. Specific policies, we’ll work on. We obviously will work on, in terms of the funding, that will be available. If we don’t have the same level of revenue, you can’t have the same level of expenditure. That’s just a fact.
Dear Anthony, that is not “just a fact”. It is a neoliberal lie that you choose to perpetuate while claiming to be a progressive party.
Your advisors are clearly part of the problem and you should sack them immediately.
The Australian government issues its own currency. The revenue it raises does not fund its spending in any intrinsic way.
And, if the Labor Party think they can win against the Conservatives, by lying like this, then their track record should tell them that it is a failing strategy.
Why not show some leadership and educate the public against these neoliberal myths.
And while we are talking about statements by Labour politicians that disqualify them from being suitable for office, I saw this Tweet this week from British Labour Party Shadow Chancellor John McDonnell (November 11, 2019).
So according to the framing of the British Labour Party, the super-rich in the UK are essential for funding improved public services via their income.
In other words, British people cannot do with them.
And if they eliminated them Britain would not have quality public services.
That is the sort of nonsense that Ayn Rand pushed onto us in her Right-wing bible – Atlas Shrugged – where the wealthy business men are the income generators and the rest of us a looters – living of their productivity and entrepreneurial flair.
I know this is not what John thinks. But in language and framing the two visions are comparable.
When are progressives going to realise that the ‘tax the rich’ narrative will fail.
The British government does not need to tax the rich to pay for first-class public services. It can do that any time it can muster the real resources to accomplish that aspiration. It issues its own currency.
It might want to tax the rich because they have too much power but that is quite separate from justifying such an action because the government needs their ‘money’.
I will be speaking at an event organised by the Modern Money Australia – NSW group on Saturday, 23 November 2019 from 14:00 to 16:30.
I will be speaking about the need for a Just Transition Framework for the Future, as a vehicle for dealing with the massive socio-economic transformations that will be needed if our societies are to effectively deal with the problem of anthropomorphically-induced climate change.
The Framework is motivated by the awareness that without consent from the people, particularly those who will be negatively impacted by these transformations in terms of their jobs and local opportunities, there is little chance of an effective policy response to the climate emergency.
The Just Transition Framework offers a radical alternative to the status-quo and stands in stark contrast with the lukewarm, neoliberal, market-based policy solutions that currently dominate the inertial climate change debate.
I will argue that action on climate change has to be radical and elevate government to the centre, rather than just seeing the government as a facilitator for better capitalism.
Such government-led solutions will exploit the currency-issuing capacity of the Australian federal government, which an MMT understanding shows us is not financially constrained in its spending.
Thus, the usual criticisms of government action that derail progressive initiatives, which can be summarised by the question “How will we pay for it?”, become irrelevant and the real questions of political legitimacy and real resource availability are elevated to the centre of the debate over a ‘Green New Deal’.
I will outline why I do not like the ‘Green New Deal’ terminology and why Australian progressives should organise under the Just Transition Framework banner.
I will also show why establishing political legitimacy requires the currency-issuing capacity of government be used to ensure, not only that essential green infrastructure is developed, but that the losers from the regulated closures of carbon-intensive sectors, are not disadvantaged in any fundamental way.
In this way, MMT crucially forms the foundation of the Just Transition Framework. A just transition is not only possible, it’s our only option. And, there’s no Just Transition without MMT.
Surry Hills Neighbourhood Centre
405 Crown Street
Surry Hills, NSW 2010
All are welcome and tickets are free. But, if you can manage it, a small donation would be much appreciated by the organisers to help them with their future activities.
Please register for a ticket, as seats are limited.
You’re welcome also to join us for drinks and a chat after the event, from about 4:30pm, at The Clock Hotel in Surry Hills.
Registration and further details – HERE
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Its legal structure allows people can make donations without their identity being revealed publicly.
The first project it will support is – MMTed (aka MMT University) – which will provide formal courses to students in all nations to advance their understanding of Modern Monetary Theory.
At present this is the priority and we need some solid financial commitments to make this project possible and sustainable.
Some sponsors have already offered their generous assistance.
We need significantly more funds to get the operations off the ground.
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It first appeared on William DeVaughn’s 1974 self-financed #1 Billboard hit record of the same name.
Backing musicians included the Philadelphia-based studio band – MFSB – comprising on this track, Norman Harris (guitar); Bobby Eli (guitar), John Davis (keyboards), Vince Montana (vibes), Vince Montana (percussion), and Earl Young (drums).
The backing players were key parts of the so-called Philly soul scene in the 1970s. Norman Harris died at the age of 39 from heart disease but as you can hear from this track was a master guitar player and one of my favourites of that era.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.