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Neoliberalism: The Economy, Banking & Asset Markets



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I've probably been having too many economic discussions within football threads and although some is relevant, much of it is no longer. I thought we could use this thread to continue the discussion outside of the football main board.

The discussion around whether neoliberalism (privatisation, deregulation, austerity, globalisation, free trade and surpluses) is coming to an end is an interesting point to start on.

@Grr-owl mentioned that "the neo-liberal era will end in with a great deleveraging, triggered by events undeniably attributable to the effects of anthropomorphic climate change. I'd take a bet that a bunch of big insurance companies, and the reinsurers, go broke from the cumulative disasters..... and take out the banks as they go.

I reckon AF might think the above was plausible, but the question of when is the really salient one: I think the neo-liberal bubble has one more great big blow to go. As we come out of Covid, the world will boom 4-5 years and then BOOM! After that it's a depression, realignment and restructuring, and a low growth future (which I'm fine with). I expect AF won't agree with that timing, but I'm interested to knock the idea around."

I think 4-5 years is certainly a very realistic timeframe for the end of neoliberalism, particularly as countries like the US will try to desperately cling to neoliberalism. Biden is already sounding like a Republican candidate and has stacked his transition team with neoliberals. Trump's voice will have a distinct appeal to many working voters across the next 4 years. America may well be in trouble, because without a shift in the fiscal rhetoric and a pivot away from big capital to working people, America is going to be at the mercy of more extreme elements. 

Emma Dawson, the former advisor of Senator Stephen Conroy, now head of Per Capita (think tank) wrote an article in the Financial Review the other day stating that given America is so divided, a centrist like Biden will be perfect to heal their divisions. I couldn't disagree more. The disparity between big capital and working people in America is so vast at the moment that believe in nothing, corporate pandering centrism is precisely what led to Trump and will lead to others like him. The 99% need to be put front and centre of mind and the extreme wealth held by the 1% needs to be redistributed in the coming years. When that many people who want to work have no work, the capitalist system becomes unstable and there is nothing robust about neoliberal capitalism, or as Minsky called it, money manager capitalism. 

But let's try and keep this discussion to Australia as much as possible.

Here are a couple of points for our discussion.

Our private debt burden which crossed a staggering 200% between gross household debt and after tax income in 2016, is the second highest private debt burden in the world. This will have an impact.

Further deregulated private bank lending, which former LNP leader John Hewson has called irresponsible. This will increase the private debt burden.

Both major parties are wedged on climate issues. I can see both major parties collapsing in the next decade. The Coalition always seem to be near implosion because you've got this unhappy marriage between the free market Liberals who couldn't give a stuff about the regional areas that are being so impacted by climate change and the Nationals who seem to intensely dislike metropolitan folk telling them what to do. While the ALP really are the LNP from the 1980s. You've got the fiscally and socially conservative Labor Right faction who constantly clash with the fiscally conservative but socially progressive Labor Left faction. So you've got the moderates on Labor Left and the conservatives on Labor Right. It really does resemble the Hewson-lead LNP.

Anyway, there's a lot to cover, and really, discuss whatever you want. (nice rambling AF)

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1 hour ago, A F said:

without a shift in the fiscal rhetoric and a pivot away from big capital to working people, America is going to be at the mercy of more extreme elements. 

Absolutely. I think this is Biden's ace in the hole, though. If he can invest in American jobs rather than tax breaks for the 1% and propping up asset prices, he's on a winner. If not, that's it. Either way, the debt burden on neo-liberal era is already too much and the deleveraging will occur, but if they can invest in the meantime, there is light at the end of the tunnel. 

And there is great potential in new tech that plays into the US's hands, rather than say some Asian cultures... De-centralisaiton of energy production, de-centralisation of manufacturing, de-carbonisation ... big structural changes underway that reconfigure things in favor of independently-minded anti-govt thinking such as that so central to the Red states of America.

1 hour ago, A F said:

Our private debt burden which crossed a staggering 200% between gross household debt and after tax income in 2016, is the second highest private debt burden in the world. This will have an impact.

Aussies really need to stop thinking that the most important thing in life is a gigantic mortgage. Disaster. As an aside, my grandad refused in any way to borrow money from anyone for anything. He considered it shameful. Bought a house in Camberwell with cash way back when. Now, he has great-grandkids about to graduate form university with a mountain of debt... What would he have said?

 

2 hours ago, A F said:

I can see both major parties collapsing in the next decade. T

I think we've entered a bizarre in-between period where the old system doesn't work and the new one hasn't arisen. Dangerous times, but we will emerge and, possibly, stronger for the reset. If that entails a less-prosperous future, I'm not so bothered, given that any household with an income above AUD$75,000 is among the world's richest 2%. In other words, most of us could be a lot poorer and still be very well off, relatively.

It depends what we deem important. If there are less Ferrari's in the world, I won't shed a tear. If healthcare and education are poor, that's something to worry about. If government and culture is oppressive, I'm out.

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33 minutes ago, Grr-owl said:

Absolutely. I think this is Biden's ace in the hole, though. If he can invest in American jobs rather than tax breaks for the 1% and propping up asset prices, he's on a winner. If not, that's it. Either way, the debt burden on neo-liberal era is already too much and the deleveraging will occur, but if they can invest in the meantime, there is light at the end of the tunnel. 

And there is great potential in new tech that plays into the US's hands, rather than say some Asian cultures... De-centralisaiton of energy production, de-centralisation of manufacturing, de-carbonisation ... big structural changes underway that reconfigure things in favor of independently-minded anti-govt thinking such as that so central to the Red states of America.

America definitely have a number of powerful advantages. The USD being the global reserve currency definitely helps them as well.

I've just started reading Australian/British economist Dr Steven Hail's book 'Economics for Sustainable Prosperity' and there's lots in there that we can use as tools to ensure we can have a prosperous future, and our children and grandchildren can have the same.

The more certain people become radicalised, the harder it is to change their minds in the future. I think it's a really big problem for big capital. They've managed to convince many that someone like Trump (who represents the 1%) is for them and that these billionaires like Musk and co are heroes. But the harder life gets, the harder it is to put food on the table, the more something has to give. Scary times ahead I fear. 

33 minutes ago, Grr-owl said:

Aussies really need to stop thinking that the most important thing in life is a gigantic mortgage. Disaster. As an aside, my grandad refused in any way to borrow money from anyone for anything. He considered it shameful. Bought a house in Camberwell with cash way back when. Now, he has great-grandkids about to graduate form university with a mountain of debt... What would he have said?

It's a hard one, because with interest rates so low, people are paying just as much in rent as they would be if they bought an apartment or a small unit. Why service someone else's loan, when you could be servicing your own? That's always been my thing. As long as you service the debt, it's fine, but the 5% floor is ridiculous and dangerous, because people will jump in and have so little equity that it becomes an uphill battle. Particularly, with the economic uncertainty. 

Unfortunately, most of that $5 billion social housing money from the Victorian State Government is going to private developers, so the housing problem is a massive issue, but the biggest issue is the lack of investment in the country and its people. If you don't spend, you don't allow people to save and then service their debts. You push them towards unsustainable credit and a cycle of constantly paying of debt, rather than having true equity.

33 minutes ago, Grr-owl said:

I think we've entered a bizarre in-between period where the old system doesn't work and the new one hasn't arisen. Dangerous times, but we will emerge and, possibly, stronger for the reset. If that entails a less-prosperous future, I'm not so bothered, given that any household with an income above AUD$75,000 is among the world's richest 2%. In other words, most of us could be a lot poorer and still be very well off, relatively.

It depends what we deem important. If there are less Ferrari's in the world, I won't shed a tear. If healthcare and education are poor, that's something to worry about. If government and culture is oppressive, I'm out.

I do think we should be looking at a blend of the past. A version of the so-called managerial welfare state capitalism that Menzies led is the answer to our problems and a greater understanding of the economy and how it operates. Chifley and then Menzies used very similar economics, fiscal deficits and full employment. But they were operating on the fixed exchange system, so when the OPEC oil shocks hit, the Keynesians had no answer for what was happening. We've been floating since 1983 and our fiscal capacity is so much greater. Economics is where the reset should come from. It tough times, usually there is that paradigm shift (as per the 1970s OPEC oil shocks).

I think prosperity is completely within our reach. When you have billionaires and such wealth inequality, that's less prosperity and more a shambles. I think there are certain industries that shouldn't be run as markets (healthcare/aged care) and others that need to be mixed between government and private sector (like energy). We have answers to our problems. The majority of the politicians just haven't seen those answers yet or are too stubborn to see them.

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5 hours ago, A F said:

the biggest issue is the lack of investment in the country and its people. If you don't spend, you don't allow people to save and then service their debts. You push them towards unsustainable credit and a cycle of constantly paying of debt, rather than having true equity.

This seems to me to be the biggest con of the neo-con era. They say they're all about getting out there and developing and building things and productivity, but they don't want to invest in anything. 

But there needs to be a role for government, as you say. Education and healthcare and energy are too important to leave to the market. The universities have become degree mills (well, not quite), and the students are customers. Standards have plummeted. Unis have become harbours for mediocrity. Just on that.... I took part in the entrance examinations for the uni I work at - one that is racing to embrace the modern western fee-paying model. In the training, it was made clear that nobody - NOBODY - was to fail, and that if someone did, it would be on us. I wasn't involved in any teaching; this was simply observing the behavior of the students in the exam and picking up on any attempts to cheat, then grading two short answer questions. Every customer was to be allowed into the store...  

5 hours ago, A F said:

The more certain people become radicalised, the harder it is to change their minds in the future.

There has to be a middle ground. I think what we need is a disaster. I don't wish it upon us, but there's nothing like a disaster to unite people. Stories of the Blitz are fascinating in this regard. The joy of sharing a tomato with someone in an underground tunnel while your house is blown to bits above.... and then once the war was over, back to the same old grasping. We need to realize that we're in this together. I can't see another way to unite people other than to collectively confront a common threat.

In the 80's the banks were de-regulated. Do we need to go back on that to manage debt creation, and if so, to what extent?

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17 hours ago, Grr-owl said:

This seems to me to be the biggest con of the neo-con era. They say they're all about getting out there and developing and building things and productivity, but they don't want to invest in anything. 

This is indeed one of the bigger cons about the neolib period, as is the idea of smaller government and less government interference. Who do the IMF, WTO and the World Bank represent if it's not the US Government? Neoliberalism just allows undemocratic decision making being outsourced to unelected technocrats.

17 hours ago, Grr-owl said:

But there needs to be a role for government, as you say. Education and healthcare and energy are too important to leave to the market. The universities have become degree mills (well, not quite), and the students are customers. Standards have plummeted. Unis have become harbours for mediocrity. Just on that.... I took part in the entrance examinations for the uni I work at - one that is racing to embrace the modern western fee-paying model. In the training, it was made clear that nobody - NOBODY - was to fail, and that if someone did, it would be on us. I wasn't involved in any teaching; this was simply observing the behavior of the students in the exam and picking up on any attempts to cheat, then grading two short answer questions. Every customer was to be allowed into the store...  

I remember you saying you worked in one of the international Unis. This is definitely another marker of neoliberalism. Austerity in education and it's why education is slipping massively in the OECD (there's another neolib organisation btw). The South Australian State ALP have announced they'll consolidate SAs three biggest Unis if they beat the Marshall Government at the next state election. The Brazillian Government is doing similar to its education system. The Powell Manifesto is the root of all of this.

17 hours ago, Grr-owl said:

There has to be a middle ground. I think what we need is a disaster. I don't wish it upon us, but there's nothing like a disaster to unite people. Stories of the Blitz are fascinating in this regard. The joy of sharing a tomato with someone in an underground tunnel while your house is blown to bits above.... and then once the war was over, back to the same old grasping. We need to realize that we're in this together. I can't see another way to unite people other than to collectively confront a common threat.

In the 80's the banks were de-regulated. Do we need to go back on that to manage debt creation, and if so, to what extent?

I'm fine with private enterprise, we just can't have the profit motive in certain industries, because we can't expect businesses not to cut costs during inevitable downturns. Just look at aged care. Businesses cut costs and it cost people their lives. 

Keating's deregulations have been a disaster. The financial sector needs to be reformed. There's so little transactions that represent any public good. I always go back to this idea of the golden age of capitalism. That was a robust form of capitalism that was highly regulated to protect society. This is why neoliberal doctrine attacks ideas of society and pushes individualism. It's a dangerous doctrine that is based on fundamentally fantasy economics and it really isn't good for anyone other than the top 1%. 

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On 11/20/2020 at 9:42 AM, A F said:

Neoliberalism just allows undemocratic decision making being outsourced to unelected technocrats.

I’d never thought about this quite as clearly as you put it, and it has crystalised some thoughts re Trump for me. No wonder so many of his supporters feel alienated; they really have lost their political power. Course, the greater problem is that Trump is a conman: he can’t deliver what his supporters think he can. But that’s another point.

 

On 11/20/2020 at 9:42 AM, A F said:

The Powell Manifesto is the root of all of this.

Interesting read. I was struck initially by the timing, 1971. I might as well take the opportunity to briefly lay out my version of recent economic history and see if it chimes with yours:

The postwar boom ended in the late sixties. The US went off the gold standard in response, but what followed was the stagnation of the 70’s.

Reagan and Thatcher couldn’t accept that the post-war boom had ended, and so deregulated the banks and busted the unions and ushered in the era of debt-as-the-answer-to-every-problem and Hawke, Keating and Jeff and most of the rest of the West and some others followed along with their ‘service-based economies.’ Then, despite it proving itself to be a fatally flawed idea, the western democracies have just kept delaying the inevitable by responding to every debt-induced criss with yet more debt.

In other words, we’ve just kept on borrowing from a future that never arrives. Can’t say it hasn’t been good; as Pinker notes, things have never been better. Certainly, if you like your coffee fancy (as I do), there are no shortage of places to get one, and the world is awash with supercars and other luxury goods. Problem is, the debt-driven model isn’t sustainable, and all there’s no way around that fact.

But back to Powell. I sense a kind of paranoia there. Were these enemies of capitalism really enemies, or merely educated folk who acknowledged capitalism’s faults? The difference in perception is pivotal.

Surely, he identifies some real enemies in Marxists. Brutally ironic that the West is the only place where Marxism still has credence. I think of Marxism loosely as an ideology which defines society in terms of groups pitted against each other in a struggle for domination, which I think is bollocks to begin with, and which history has proven is very dangerous. Turned out that tens of millions in USSR and China turned out to have belonged to the wrong group, and in Kampuchea, it included anyone with soft hands or glasses.

In fact, as the Gulag Archipelgo makes plain, anyone could belong to the doomed group. All it took was someone who knew your name have their testicles stood on by a GRU man. Everyone spoke up then. It wasn’t difficult to fill the quotas. One of the few to escape that hell, Nadezdha Mandelstam summed up it up best:

“We all belonged to the same category marked down for absolute destruction. The astonishing thing is not that so many of us went to concentration camps or died there, but that some of us survived. Caution did not help. Only chance could save you.” —Hope Abandoned

Chilling.

Interesting how Powell’s ideas about the universities have just backfired spectacularly. Rather than neutering opposition to capitalism, privatisation has empowered it by lowering standards that have allowed mediocre intellects to thrive. There were good reasons that universities were for intellectual elites. Now they’re staffed by people who can’t see past race and gender and financial resources to see the human.

I, of course, belong to the worst group of all: middle-class, white, educated males. Me and my brethren of the Patriarchy. We’ve been dominant, though apparently the positives of modern western society have come about not because of the efforts of dead white men, but in spite of it. Couldn’t have been very dominant then, I would have thought, but then rationality has been one of the major casualties of the identity wars.

My reading of history lays the responsibility for the prosperity of the last 200 years largely at the feet of humanists who emerged from Protestantism eschewing the metaphysical claptrap of Christianity, but with the work ethic and concern for people intact. They harnessed rationality to achieve objectivity (science) and used it to better people’s lives the best way they could. If you’re interested, Tom Holland’s Dominion, and Niall Ferguson’s The Square and the Tower and Civilisation: The West and the Rest give good accounts of how it worked.

But then, if the Enlightenment and Industrial Revolution and Classical Liberalism were driven by ideas that were essentially Christian, why is it that so many neo-liberals are Evangelicals? Why has christian thought turned so hard to the right? Why is the left the harbour of orthordoxy and dogma in the name of caring for the oppressed, formerly the place of Christianity? Why do both sides think that massive debt is the way forward?

Why are the rationalist humanists centrists classical liberals so powerless to attract widespread support? How can they change this?

Oh…. just noted that Biden wants Janet Yellen as Sec of Treasury. Seems the debt ceiling will be raised any day now….

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4 hours ago, Wrecker45 said:

AF and Grr-owl make a lovely couple. Same poster?

Whichever one (does it matter) said Trump represents the 1% must have missed the 70 million votes he got in the election.

Absolutely. 70 million people are sick of the establishment and rightly so. But take a look at the people Trump gave powerful positions to who weren't his family, they are all party hacks. He hasn't drained the swamp. He used the Republicans to increase his wealth and the Republicans used him to pass the legislation they wanted. Quid pro quo. Standard business back scratching.

You're kidding yourself if you think he really cares about anyone but himself. He's a narcissist that came at the right time and articulated the voicelessness of these people and he's an excellent entertainer.

I think he did the occasional good thing, but the majority is a ****show.

For the record, I think the Republicans will get straight back in. The Democrats are believe in nothing corporate centrists, like the Federal ALP. I'd respect a true conservative before a centrist, because although I'm not a conservative, at least conservatives believe in something. Centrists just sit in the middle and try and appease, and accumulate wealth and power. It doesn’t work as a political tool, because instead of everyone meeting in the middle, it hollows out the balance of left and right in politics. There is no left anymore. Even the [censored] French Socialists under Mitterrand were neoliberals. And see what they did to the EU. It's like super. It might be a nice idea, but it's a disaster.

The vast majority of disaffected Trump voters are working people who have been left behind by the Democrat establishment, who have done a grave disservice to their country IMV. 

Edited by A F
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2 minutes ago, A F said:

Absolutely. 70 million people are sick of the establishment and rightly so. But take a look at the people Trump gave powerful positions to who weren't his family, they are all party hacks. He hasn't drained the swamp. He used the Republicans to increase his wealth and the Republicans used him to pass the legislation they wanted. Quid pro quo. Standard business back scratching.

You're kidding yourself if you think he really cares about anyone but himself. He's a narcissist that came at the right time and articulated the voicelessness of these people and he's an excellent entertainer.

I think he did the occasional good thing, but the majority is a ****show.

For the record, I think the Republicans will get straight back in. The Democrats are believe in nothing corporate centrists, like the Federal ALP. I'd respect a true conservative before a centrist, because although I'm not a conservative, at least conservatives believe in something. Centrists just sit in the middle and try and appease, and accumulate wealth and power. It doesn’t work a political tool, because instead of everyone meeting in the middle, it hollows out the balance of left and right in politics. There is no left anymore. Even the [censored] French Socialists under Mitterrand were neoliberals. And see what they did to the EU. It's like super. It might be a nice idea, but it's a disaster.

The vast majority of disaffected Trump voters are working people who have been left behind by the Democrat establishment, who have done a grave disservice to their country IMV. 

It's hard to take a look at the people Trump surrounds himself with because they mostly quit or get fired.

I would have liked Trump to drain more of the swamp when he could. At the moment I don't know if Eric Coomer fixed the election or just more fake news. Twitter and Facebook are either giving him a free ride or the screen shots of his posts are fake. 

 

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26 minutes ago, Wrecker45 said:

It's hard to take a look at the people Trump surrounds himself with because they mostly quit or get fired.

I would have liked Trump to drain more of the swamp when he could. At the moment I don't know if Eric Coomer fixed the election or just more fake news. Twitter and Facebook are either giving him a free ride or the screen shots of his posts are fake. 

 

Trump's a con man and always has been. He's a symptom of the unrest, not an answer to it.

Globalisation (one of neoliberals great centre pieces) has been used to off shore jobs (in search of big capital's profits via cheaper labour), threaten sovereign governments by holding them to ransom over local jobs and has seen real wages plummet. 

The core lie at the heart of neoliberalism is that free markets are best without government intervention, but these supposed free markets only exist because the government has allowed them to and deregulated. And as we've seen since the 1980s in Australia, the government is actually a massive player in the markets. Look at QE inflating asset prices. No inflation, it just goes to wealth creation. Neoliberalism uses the state or the government to transfer wealth to the top 1-10%, leaving Trump's base without a job and without wealth. It's a disgrace.

And these people are desperate. I completely get it. They need to put food on the table, so when Trump does a tokenistic move and shows the true power of the state and its ability to keep jobs (see the Ford plant from Mexico to the US), he's hailed as a legend. Trump has just shown how neoliberal the Democrats have become.

Before Keating came and ruined this country and Costello/Howard put it on steroids, we had robust capital controls that kept jobs here and balanced the economy. Markets exist due to the state and in 5,000 years of anthropological evidence, they've always been entwined with the state issuing the currency. Japan has capital controls and has one of the most robust economies in the world and every year, the private debt levels go down. The Japanese Government could pay off its public debt, but then its private sector would have no safe assets, like securities or bonds to store their wealth. 

I'd also say the centrism from the Democrats (and Obama for example would have been on the hard right of the Liberal Party - these politicians are not progressives) has pushed the Republicans to the hard right, so when the centre looks like the centre-left, the true centre-left looks radical. But universal healthcare (like Medicare) is not radical. We have it. It's a basic human right. And the Liberal Party almost lost the 2016 election with Labor's Mediscare campaign. These ideas appear hard left when the Democrats are really sitting in the centre or a centre-right position. 

But I just come back to economics, because the right economics have the power to change our societies for the better.

Edited by A F
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AF - you have put alot of thought into your post which I appreciate. Not many do.

I think history will look kindly on the Hawke / Keating and Howard / Costello governments. They went outwords at the appropriate time and embraced globalisation.

Like footy game plans, things change over time. Globalisation is no longer the best game plan. Despite his obvious faults Trump recognised this.

Where we disagree is I think the media has had a massive shift to the left where you think the democrats have moved to the right.

Neo liberalism isn't a concern of mine. I think we have greater things to worry about.

 

 

 

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5 hours ago, Wrecker45 said:

AF and Grr-owl make a lovely couple. Same poster?

Whichever one (does it matter) said Trump represents the 1% must have missed the 70 million votes he got in the election.

Well, I didn't say it. But he doesn't represent the 70 million who voted for him, either. That's his con.

I get why people support him. It can be easily divined in this piece in from the BBC today: https://www.bbc.com/news/election-us-2020-55081852

Take a look at the responses by Republicans toward the bottom of the page. Trump supporters, white working people in the main, are simply sick of having the finger pointed at them and told that they are racists, and that the disparities suffered by people who aren't white are down to their bigotry. And here, even though the evidence is plain, in article about Hispanics voting for Trump, that race really doesn't have much to do with it, even a man as intelligent and accomplished as Barack Obama doesn't get that.

So who is going to step forward and bring the sides together? If Biden wants to do that, he'll simply need to find a way to give jobs to people, many of whom will be white.

I think it can be done with investment in de-centralised energy production, de-centralised manufacturing (3D printing), distributed work practices and policies that drive up the cost of transportation.  But there's the rub: the neo-liberals don't want to invest in anything.

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43 minutes ago, Wrecker45 said:

AF - you have put alot of thought into your post which I appreciate. Not many do.

I think history will look kindly on the Hawke / Keating and Howard / Costello governments. They went outwords at the appropriate time and embraced globalisation.

Like footy game plans, things change over time. Globalisation is no longer the best game plan. Despite his obvious faults Trump recognised this.

Where we disagree is I think the media has had a massive shift to the left where you think the democrats have moved to the right.

Neo liberalism isn't a concern of mine. I think we have greater things to worry about.

 

 

 

That the media, in general, has moved is not in question, but I think it's mischaracterized to say it has moved to the left. Where it has moved is toward emotion, away from rationality. I don't mean fringe press, but stalwarts like the NY Times and the BBC. 

Edited by Grr-owl
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6 hours ago, Wrecker45 said:

AF and Grr-owl make a lovely couple. Same poster?

Whichever one (does it matter) said Trump represents the 1% must have missed the 70 million votes he got in the election.

I've been dying to write this somewhere, so I think here may as well do:

Imagine you're on a packed plane at 35,000 feet. The captain comes on the PA and says, "Well, folks, there's a bomb on the plane. We don't know if it's in the baggage compartments or under someone's seat or maybe in an engine, but we know it's somewhere and we're going to find it."

What would the reaction be?

After a few minutes of panic, the captain comes back on and says, "Well, we're looking hard for the bomb, and if you'd like to contribute to the bomb-finding fund, get your credits cards out and the stewards will help you donate."

Of course, many people give funds to this cause, about which they care passionately. 

There's one thing about it, however, that isn't right. The Captain is lying. He knows there is no bomb. What kind of man would do that? 

That's a good analogy for Trump's behavior since the election. He can't drain the swamp; he IS the swamp. That's his con. He can't give his supporters what they think he can, and he knows it. 

HIs supporters are good people with legitimate grievances. But Trump is taking advantage of them, not helping them. What they need is a govt that supports their greatest need: jobs. Neo-liberals aren't going to do that.... so its time for that to go....

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2 minutes ago, Grr-owl said:

I've been dying to write this somewhere, so I think here may as well do:

Imagine you're on a packed plane at 35,000 feet. The captain comes on the PA and says, "Well, folks, there's a bomb on the plane. We don't know if it's in the baggage compartments or under someone's seat or maybe in an engine, but we know it's somewhere and we're going to find it."

What would the reaction be?

After a few minutes of panic, the captain comes back on and says, "Well, we're looking hard for the bomb, and if you'd like to contribute to the bomb-finding fund, get your credits cards out and the stewards will help you donate."

Of course, many people give funds to this cause, about which they care passionately. 

There's one thing about it, however, that isn't right. The Captain is lying. He knows there is no bomb. What kind of man would do that? 

That's a good analogy for Trump's behavior since the election. He can't drain the swamp; he IS the swamp. That's his con. He can't give his supporters what they think he can, and he knows it. 

HIs supporters are good people with legitimate grievances. But Trump is taking advantage of them, not helping them. What they need is a govt that supports their greatest need: jobs. Neo-liberals aren't going to do that.... so its time for that to go....

I normally like a good analogy but I'm not paying that one.

Trump has tried to drain the swamp but fallen well short. The swamp has drained Trump. Google Eric Coomer.

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9 minutes ago, Wrecker45 said:

I'm not paying that one

Why not? Let me know where it fails; it is a work in progress...

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17 hours ago, Grr-owl said:

I’d never thought about this quite as clearly as you put it, and it has crystalised some thoughts re Trump for me. No wonder so many of his supporters feel alienated; they really have lost their political power. Course, the greater problem is that Trump is a conman: he can’t deliver what his supporters think he can. But that’s another point.

Absolutely. Neoliberalism is rendering the masses powerless. It's very deliberate. The problem is there is always a point where there are more people than say 20% getting [censored] over. In actuality of course it's closer to 90%, but I think we're getting nearer to the point where almost 50% realise it's rigged and they'll agitate for something else. I mean, that is essentially what Trump represented to America. I think it could happen here in the next year or two because private debt levels and stagnant wages are too much.

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Interesting read. I was struck initially by the timing, 1971. I might as well take the opportunity to briefly lay out my version of recent economic history and see if it chimes with yours:

The postwar boom ended in the late sixties. The US went off the gold standard in response, but what followed was the stagnation of the 70’s.

Reagan and Thatcher couldn’t accept that the post-war boom had ended, and so deregulated the banks and busted the unions and ushered in the era of debt-as-the-answer-to-every-problem and Hawke, Keating and Jeff and most of the rest of the West and some others followed along with their ‘service-based economies.’ Then, despite it proving itself to be a fatally flawed idea, the western democracies have just kept delaying the inevitable by responding to every debt-induced criss with yet more debt.

In other words, we’ve just kept on borrowing from a future that never arrives. Can’t say it hasn’t been good; as Pinker notes, things have never been better. Certainly, if you like your coffee fancy (as I do), there are no shortage of places to get one, and the world is awash with supercars and other luxury goods. Problem is, the debt-driven model isn’t sustainable, and all there’s no way around that fact.

But back to Powell. I sense a kind of paranoia there. Were these enemies of capitalism really enemies, or merely educated folk who acknowledged capitalism’s faults? The difference in perception is pivotal.

Surely, he identifies some real enemies in Marxists. Brutally ironic that the West is the only place where Marxism still has credence. I think of Marxism loosely as an ideology which defines society in terms of groups pitted against each other in a struggle for domination, which I think is bollocks to begin with, and which history has proven is very dangerous. Turned out that tens of millions in USSR and China turned out to have belonged to the wrong group, and in Kampuchea, it included anyone with soft hands or glasses.

In fact, as the Gulag Archipelgo makes plain, anyone could belong to the doomed group. All it took was someone who knew your name have their testicles stood on by a GRU man. Everyone spoke up then. It wasn’t difficult to fill the quotas. One of the few to escape that hell, Nadezdha Mandelstam summed up it up best:

“We all belonged to the same category marked down for absolute destruction. The astonishing thing is not that so many of us went to concentration camps or died there, but that some of us survived. Caution did not help. Only chance could save you.” —Hope Abandoned

Chilling.

Interesting how Powell’s ideas about the universities have just backfired spectacularly. Rather than neutering opposition to capitalism, privatisation has empowered it by lowering standards that have allowed mediocre intellects to thrive. There were good reasons that universities were for intellectual elites. Now they’re staffed by people who can’t see past race and gender and financial resources to see the human.

I, of course, belong to the worst group of all: middle-class, white, educated males. Me and my brethren of the Patriarchy. We’ve been dominant, though apparently the positives of modern western society have come about not because of the efforts of dead white men, but in spite of it. Couldn’t have been very dominant then, I would have thought, but then rationality has been one of the major casualties of the identity wars.

My reading of history lays the responsibility for the prosperity of the last 200 years largely at the feet of humanists who emerged from Protestantism eschewing the metaphysical claptrap of Christianity, but with the work ethic and concern for people intact. They harnessed rationality to achieve objectivity (science) and used it to better people’s lives the best way they could. If you’re interested, Tom Holland’s Dominion, and Niall Ferguson’s The Square and the Tower and Civilisation: The West and the Rest give good accounts of how it worked.

But then, if the Enlightenment and Industrial Revolution and Classical Liberalism were driven by ideas that were essentially Christian, why is it that so many neo-liberals are Evangelicals? Why has christian thought turned so hard to the right? Why is the left the harbour of orthordoxy and dogma in the name of caring for the oppressed, formerly the place of Christianity? Why do both sides think that massive debt is the way forward?

Why are the rationalist humanists centrists classical liberals so powerless to attract widespread support? How can they change this?

Oh…. just noted that Biden wants Janet Yellen as Sec of Treasury. Seems the debt ceiling will be raised any day now….

Marxism to me always seems like a ridiculous pursuit, each to their own, but the idea of an society society of workers controlling the means of production is based in a very similar fantasy to neoliberalism and that is, it forgets the power of the state. Besides, the monetarists (some of the hard core conservatives and their right wing think tanks) used Marx's natural rate of unemployment and used it to enable governments to shift profits from workers wages to corporate profits. Anyway, that's all I'll say on that front.

I agree with a lot of what you've written there. I find the disaffected Christians a really interesting group. There's clearly a similar yearning for the past amongst more evangelical Christians. If you look at the Labor Right faction, their fundamentalist approach to Catholicism has shown them to be essentially small l Liberals. 

My grandfather was a lay preacher. He'd be rolling in his grave the way some modern Christians treat others, particularly the vulnerable. 

But I think neoliberalism simply comes down to greed, not any one group, except those with big capital in the first place. 

One of the world's most important economists you may never have heard of, is Melbourne Demons-supporting Bill Mitchell. His book Reclaiming the State is a must read and explores the left's surrender to neoliberalism. Fascinating stuff.

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1 hour ago, Grr-owl said:

Well, I didn't say it. But he doesn't represent the 70 million who voted for him, either. That's his con.

I get why people support him. It can be easily divined in this piece in from the BBC today: https://www.bbc.com/news/election-us-2020-55081852

Take a look at the responses by Republicans toward the bottom of the page. Trump supporters, white working people in the main, are simply sick of having the finger pointed at them and told that they are racists, and that the disparities suffered by people who aren't white are down to their bigotry. And here, even though the evidence is plain, in article about Hispanics voting for Trump, that race really doesn't have much to do with it, even a man as intelligent and accomplished as Barack Obama doesn't get that.

So who is going to step forward and bring the sides together? If Biden wants to do that, he'll simply need to find a way to give jobs to people, many of whom will be white.

I think it can be done with investment in de-centralised energy production, de-centralised manufacturing (3D printing), distributed work practices and policies that drive up the cost of transportation.  But there's the rub: the neo-liberals don't want to invest in anything.

This is the thing. It's unemployment. The mainstream (ie the two major party establishment) think 5% of the working population should be kept unemployed to prevent against inflation (NAIRU - https://www.rba.gov.au/publications/bulletin/2017/jun/2.html). What sort of [censored] up mind would come up with that plan for price stability?

As I said, Marx had those sort of ideas, but so did the monetarists and now the neoliberals. This is why the Federal Job Guarantee is a far better bufferstock and helps everyone. The people that would otherwise be unemployed, businesses and wider society. And the RBA are mandated (via the RBA Act 1959) to maintain full employment, price stability and prosperity for Australians.

The Federal Job Guarantee should replace NAIRU in the macro structure and it will improve price stability, will achieve tight full employment (with price stability), aggregate demand and our economy will boom (sustainably - when the government spends into the private sector, it allows the private sector to save, rather than lean on debt) as a result. 

Biden has just appointed Yellen as you mentioned, so expect the debt conversation to go on and on. She's a massive neolib. America will not get change with her, unless she's suddenly learnt new lessons.

I'd also say that while decentralising the jobs is a great idea, I think we need to renationalise some sectors or at the very least semi nationalise certain sectors. We can't expect the private sector to be able to provide all the jobs, and also have liveable wages. 

The financial sector, of which my old man was apart, needs to be completely reformed to serve the public purpose and ensure price stability and capitalist stability. We don't agree on a lot of politics, but he'd agree with me on that one. 

Then you've got the energy sector. That needs to have a government player as a price lever (privatised energy prices have not led to better outcomes for consumers, we are being ripped off). The aged care sector and healthcare as a whole needs to be completely renationalised. You cannot expect businesses to run at a loss in aged care, so you remove the profit motive from care altogether. There's plenty of other realms business can partner with government to achieve profits and equitable wage share for workers.

If you look at how some of the big tech giants in the US started, they were financed through R&D grants from the US Government. The US Government (like our federal government) is not financially constrained, so can crowd-in investment and support the private sector as it tries to find the next big thing. But that requires money, so R&D is a big thing I'd be investing in and sciences. Australia could be a powerhouse in the sciences. We have incredible minds.

Instead of looking outside of Australia, I'd be empowering businesses through these grants to hire Australians. It's all no brainer sort of stuff with the right economics.

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1 hour ago, Grr-owl said:

That the media, in general, has moved is not in question, but I think it's mischaracterized to say it has moved to the left. Where it has moved is toward emotion, away from rationality. I don't mean fringe press, but stalwarts like the NY Times and the BBC. 

I'd say it's moved to the neoliberal centre, but that's just my opinion.

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59 minutes ago, Wrecker45 said:

I normally like a good analogy but I'm not paying that one.

Trump has tried to drain the swamp but fallen well short. The swamp has drained Trump. Google Eric Coomer.

I tried googling Eric and nothing really comes up. I assume this is an algorithm thing...

Can you explain who he is and what he's done?

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20 minutes ago, A F said:

I tried googling Eric and nothing really comes up. I assume this is an algorithm thing...

Can you explain who he is and what he's done?

He was Vice President and leading share holder of Dominion voting systems until twitter, Facebook and LinkedIn made him vanish. A prominent antifa member.

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29 minutes ago, Wrecker45 said:

He was Vice President and leading share holder of Dominion voting systems until twitter, Facebook and LinkedIn made him vanish. A prominent antifa member.

Right. Because antifa is a decentralised movement. Much like Black Lives Matter. It's not organised like the KKK or other white supremacist organisations. It's another Trump furphy. And as for anti fascist, I genuinely can't believe anyone would be pro-fascist given what the fascists did to Italy, Germany and the rest of Europe not that long ago. 

Anyway, Twitter, Facebook and LinkedIn are all owned by the mega structures that prop up the the two party establishment. I've always found it funny that the tech giants are being demonised (don't get me wrong, they're a massive problem), but certain billionaires are being lauded. Trump being one of them. Musk another. They're billionaires that have increased their wealth, while working people are [censored] upon. While in the case of Facebook, they're linked with not doing enough to stop genocides in various African nations. They all need to be regulated. It's tricky, but possible.

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I've always argued that the Murdoch press should be free to argue whatever they want and the ABC should follow their charter. People pay to read the Murdoch press by choice but all tax payers fund the ABC like it or not

It would be hypocritical of me to say big tech shouldn't get to publish what they like as private companies. I don't agree with them censoring Trump and Eric Coomer but that is there right 

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5 hours ago, Wrecker45 said:

I've always argued that the Murdoch press should be free to argue whatever they want and the ABC should follow their charter. People pay to read the Murdoch press by choice but all tax payers fund the ABC like it or not

It would be hypocritical of me to say big tech shouldn't get to publish what they like as private companies. I don't agree with them censoring Trump and Eric Coomer but that is there right 

There's a difference between censorship and warnings re lack of facts. Trump simply lies; that deserves to be flagged. 

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