4 June 2015

Class war

Class war ... got your attention? The Conservative press consistently claims it and specifically attacked Wayne Swan for it. But theirs is a flimsy argument (as are most of these emotionally ridden arguments, doctors' wives, latte-sipping, Howard's battlers and the rest - little evidence and maximum absence of thought). But fellow billionaire, Warren Buffett, laid it on the line “There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning” (interview with Lou Deed on CNN, 25 May 2005) and it's only intensified since, especially here in Australia with the Abbott Government. Now this is emotive stuff, so we need at least some evidence, like the increasing share of wealth held by the wealthy, the rates of taxation paid by the wealthy and the corporates, the loss of power by workers, the debased level of support for the disadvantaged, the denial of science for short-sighted profit motives, the last two budgets even if 2014 was more transparently serving wealth, the profligacy of the Howard government in good times (take OECDs word for this, not mine; too much here on matters of economy: evidence disproves that the Libs are the better economic managers, certainly not in recent years) and arguments against expenditure on the rebound. I could go on, but my purpose is other.

I heard Wayne Swan speaking at Politics in the Pub. WS was the class war bette noir for the conservatives. BTW, he was also the treasurer that guided Australia successfully through the greatest economic turndown since the Depression and a winner of international award for this very feat (Finance Minister of the Year 2011 / Euromoney magazine; previously won by Keating; on the other hand, the IMF found Costello was the most profligate treasurer for 60 years). Why did WS win the medal? Because he had the wit to follow Treasury Secretary Ken Henry's classic Keynesian advice "go early, go hard, go household". How he was ridiculed for it, and what a joke now with the shoe on the other foot and the budget deficit doubled in less than 2 years. So what did Swannie say? Inequality is the biggest international issue. The current government's approach is a combination of Fightback and Workchoices and this is a classic recipe for US-style economy. This at a time other UK and US (admittedly from the Center for American Progress) are seeking to emulate our model that shared benefits relatively well over the last 30 years. Budget 2015 has a "few bells and whistles" but is an "elaborate comb-over" (nice one!): the "stench of unfairness" remains ($80b cuts to states for education and health are still there as are deregulated degrees and family benefits cuts) and it "fails the growth test too". Labor kept unemployment at 5.n%; the budget is predicting 6.n% under optimistic growth predictions of 2.5% prepared by the Treasurer's office, not by Treasury (a political giveaway). They "bungled economic transition from mining to non-mining". They are "enthralled by trickle-down" so "all deficit or debt is bad" even when IMF is promoting borrowing for effective infrastructure at historically low interest rates. There was a passing mention of Larry Summers and his "secular stagnation thesis". I have long argued that the Right have taken on the radical position that the Left held in early-mid 1900s. Their issue is the role of government, not the economy: government should be minimal; the fittest will survive. Our Right is being Americanised: the plutocracy with its Tea Party rump is flexing its moneyed muscle. WS said the replacement of Workchoices with the Fair Work Act radicalised the Right ("just payback for Workchoices"): "their enduring solution is to tip the balanced between labour and capital in Australia". Howard had a RET and ETS and it was accepted by business but climate change is now a "proxy issue" along with the rest. And a certain media plays its role as "dangerous class warrior".

There were questions. Yes, carbon pricing and the rest was working and it was mostly dismantled, but "big reforms need to be done 2 or 3 times", viz. Medicare, tertiary education. This government may be the worst one in 50 years (the questioner called Abbott "the destroyer"; I have fretted over how easy it is to demolish and how difficult to build and Abbott has certainly demolished*). But Swannie reminded that it's hard to change first term governments, that long-term commitment is required ("hang on in there for a while") and argued that the Left, more idealistic and passionate, can be its own enemy by attacking its own side for smaller failures (recollections of the Old Left, here). He cited constant attacks from environmentalists despite the success on carbon pricing: "until we learn to compromise, we will always be out". Similarly, Labor was attacked from its own side on cuts to foreign aid, but now we see the real destruction. Amusingly, the next comment, that Shorten is not persuasive, was just an immediate example of Swannie's thesis. This government is "brutalising and dictating to the APS like never before". One proof is that the Treasurer's Office, not Treasury, did the forecasts for the last budget (!), and that Medical Research Fund investments will be decided directly by the minister's office (!!! consider this, given the scientific illiteracy and obstinacy of this government over climate change). Why doesn't some business break ranks? There are plenty of good people in business in Australia but the economy is essentially dominated by just a few mega-corporates: 4 banks, ~6 miners, 2 retailers, insurance and one media company. For this, read Clout or Libs as the "Billionaire's Party". Democracy can overcome but it's difficult when the richest can buy the biggest megaphones. China/US is the "biggest strategic challenge in a long time" and of greatest concern to China's neighbours. Why is a budget surplus such a big issue? Swannie didn't sound such a mad commie on budget management: "there's no magic pudding"; "build up reserves in good times"; "need to grow the economy to do good things". On the other hand, the conservative mantra is in denial, using a "starve the beast strategy" to shrink government and flatten taxation [and I reckon, talking in an echo chamber so they believe their own imaginings]. Perhaps the saddest thing for me is how counterproductive so much of this is, as we waste wealth and energy and time dismantling and rebuilding, while it's getting hotter, the rich are getting richer, our privacy and respect for government is being eroded and the rest. This rabid ideological and cultural war is pretty dumb and uninformed. After all, it's not as if the Labor party hasn't already moved well to the right of Menzies. Enough is never enough for the ideologues on either side, and at least at the moment the ideologues are on the Right.

Wayne Swan spoke at the UniPub for Politics in the Pub for the Australia Institute.

  • *Cumulative list of actions of the Abbott Government
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