A big moment for Labor (and again journos misunderstand)
Shorten used a speech on Friday to set Labor’s economic agenda for the next Labor government. This agenda states clearly that inequality is hurting the economy, and that anything you do to reduce inequality is good for the economy. This is not just an economic announcement. It is a social one too. And it is a huge step in the right direction for Labor.
I saw this agenda coming as it’s been clear for many months that Shorten, and his Labor colleagues, have been united in their appraisal of the problem of inequality. Just to get things straight – it’s a very big moment for Australia to have our major progressive party outline how they will respond to the problem of growing inequality, and to say loudly and clearly that the answer looks nothing like neoliberal-trickle-down ‘let the market decide’ ideology. I am amongst many left-wingers who have been supporting Labor in this direction for years and so I couldn’t be happier that Labor is putting the ills of inequality at the heart of its pitch to win the next election.
But, I am both unsurprised and disappointed that the mainstream political media have not only completely missed the significance of Shorten’s agenda, but have also missed the key point. Perhaps Shorten needs to make this point more forcefully, repeat it more often, or explain to the journalists exactly why the moment is so huge. Perhaps they will get there eventually. Let’s hope so. Because otherwise what hope do voters have of understanding what Labor is saying, if the journalists don’t understand it for themselves?
Before I give examples of the failings of the political media’s coverage of Shorten’s announcement, I will make clear why Shorten’s inequality agenda is such a big deal. For my whole lifetime, Labor has been arguing against Liberal economic ideology using the same frame as the Liberals: that government intervention in the market is bad for economic growth, even when it is socially responsible. This neoliberal consensus, which is shared by the vast majority of political journalists, has meant that government spending, debt and deficit, taxation and ‘government intervention’ has become the villain. Conversely, reducing taxes, reducing spending, even when it hurts people, is congratulated as the economically responsible and heroic thing to do. So, with this frame as the context for all political discussions, politicians are assumed to be doing the ‘right thing by the economy’ and to be ‘good economic managers’ when they are slashing and burning. And they are ‘a hand-break on growth’ when they do anything but, such as introducing new taxes, regulations, social programs, spending on health and education, and anything else in the Labor Party stable. It therefore follows that the Liberals are assumed to be better economic managers, following the neoliberal playbook, whereas Labor are assumed to be bad economic managers, as they push back against the neoliberal playbook, whilst still accepting they have been playing within the rules of this playbook, and having everything they do reported from this perspective by the media. Therefore, the Liberals, Labor and the media have been reinforcing the neoliberal economic frame within the culture of Australian political commentary for a very long time. Finally Shorten has changed this. The significance of this moment can’t be overstated.
Shorten has proclaimed that trickle-down economics is bad for the economy. This means, rather than deserving the praise of being better economic managers, the Liberals are, and always have been, hurting the economy by supporting cuts to wages, by giving tax cuts only to high income earners and leaving middle and lower income earners with less money to spend in the economy. Cuts to health care, cuts to education, cuts to any social program which increases inequality, whether that be wealth inequality generally, or gender, race, disability, access to services, regional versus cities, digital connectivity, infrastructure, access to secure employment, is bad for the economy. Pretty much every element of an Australian’s life leaves them open to having to compete on a less-even playing field because of inequality. This is because the market, the neoliberal God-like decider, is terrible at distributing wealth in an equal way. Government intervention, however, can help fix this problem.
We live in a capitalist society, sure, but what Labor is saying is that big-government is not a dirty word. Government can make sure infrastructure programs are targeted to areas where employment is most needed. Government can defend wages, such as not cancelling penalty rates, and ensuring industrial laws don’t lock unions out of their representative role for workers. Government policies can ensure lower income earners have access to a comfortable and secure standard of living. Government can make sure quality education and healthcare is available to everyone, no matter their bank balance, to give every child the chance to meet their potential, rather than relying on privilege buying life outcomes, where only those who can afford to get their children ahead are entitled to climb the ladder of life-success.
There are, of course, very simple ways to help the public understand the difference between Labor’s economic argument, and the Liberals’ neoliberal agenda. Take the example of a young man who does an apprenticeship and then gets a job as a carpenter. He gets work on a construction site. His income allows him to secure a mortgage to build his family a home. He can then afford to furnish that home, so he brings income to the local furniture store. The furniture store owner gets more business, and can possibly hire a retail assistant to take over her work on weekends. That retail assistant puts money in the pocket of the local car yard by buying her first car, and she eventually moves out of home. And so on and so forth. This is how consumer demand works – not by giving the furniture store owner, and the car yard conglomerate a tax cut, which takes money out of the economy, but by growing demand in the economy through people having money to spend. Then they have money to spend and save, they can make plans in their lives, they can build homes, and be confident to live a little, to go out to cafes and restaurants, and use annual leave to go on holidays. They only feel confident to do this when they have secure, stable employment, and their effort at work is compensated with wages reflecting their contribution to the success of the business. This compact is the story Labor is now telling. It’s important to note that the carpenter needed the apprenticeship in order to kick-start this equation, and yet the Liberals have been gutting vocational education and TAFE. Repeat this breaking of the compact throughout the Liberal’s terms in government and it’s obvious why Liberal ideology is so bad for the economy and why Labor now needs to mend much of what they have broken.
So, how have journalists misunderstood this story? Predictably, News Ltd got it most wrong with the Herald Sun’s Tom Minear writing ‘Shorten has ratcheted up class-warfare rhetoric’. So it’s all spin and it’s pitting the rich against the poor? This is on a different planet level of wrong-wrong-wrong. Barrie Cassidy, in his interview with Shorten on Insiders, wasn’t far from calling the equality agenda shallow-election-spin. Or worse, ripping-off populist strategy from Corbyn and Sanders. Eye-roll. Mark Kenny’s SMH analysis wasn’t quite as narrow, but he still fell into the old frame of describing the Labor ‘heart’ battle versus the Liberal ‘head’ message, which means Labor is addressing inequality not because it’s hard-headed and good for the economy (because Liberals own that ground), but because they have a heart – they want to be nice to people. This is wrong, and Labor should correct the record on such an obvious misunderstanding of their policy platform.
The closest I’ve seen a writer get to showing they see the significance, and understand the economic thinking behind the story, is The Guardian’s Greg Jericho, who wrote: ‘The economic debate for too long was based in the old canard that there is a trade off between growth and equality’. As I’ve written recently, the old neoliberal frame which the ‘establishment’ have been using for decades – politicians and journalists alike – is that there is a choice between economic growth and social spending. No. There is not a choice. Or, as Jericho calls it, a trade-off between growth and equality. In fact it’s simpler than that. You can’t have growth without tackling inequality. This is where the heart of Labor’s story lies, and why Labor deserves congratulations not just for doing what is kind, or right, or caring, or fair. But for also doing what is economically responsible – what is best for the economy AND the people who make up that economy. I guess Shorten just needs to keep saying it until they all catch up.
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Return to home pageIt is only class warfare if you think you belong to a class others don’t deserve or anyone questioning should never be admited to.
The only thing that I disagree with Victoria is her impression ( or perhaps she has been very diplomatic) that the media does not understand Bill Shorten message.
They have not missed the key point, journalists have not misunderstood this story, for the next weeks and months they are going to cover it up, distort it, make sure of telling the electorate that Labor are going to trash the economy to a point of not return.
The war started by the media against the Labor and only if the Labor politicians, union officials and ALP activist start making meetings on the shop floors, on the universities, pubs, cafes and any place where they can talk to people they will be able to win.
The Coalition and the ALP for many years been repeating that balancing the budget it is a must, that a AAA rate is a must and now that will work against the ALP.
Congratulations on a splendid.stirring analysis and call to action. ”Class warfare” is just a foolish slogan, used by many to fool the public.
You have hit the nail on the head (again) Victoria. I felt quite frustrated this morning watching Insiders. It seems more important for Journalists to try to pin Shorten into either ‘Class Warfare’ ‘Hating the Wealthy’ or ‘Copying Corbyn and Sanders’ Journalists surely haven’t paid too much attention to the 100 policies and a great big freaking bus that promoted them last election.
I have tried to point out to people for quite a while now, that Labor has been shifting left under Shorten. Only to be met with the same old same old “He’s a Right Winger, we Need Albo” Often from non-Labor or Greens voters. We have had, the aggressive, misogynistic Dr. No. We have had Mr. Bombastic Harbourside Mansion, now it is time for the Tenacious Nerd Who Gets Real Life Changing Stuff Done In the Background.
Brilliant as always, Victoria.
Until Shorten & the ALP understand this… Money Myth 1: The purpose of taxes is to raise funds for government spending.
http://itsthepeoplesmoney.blogspot.com.au/2014/03/money-myths.html?m=1
Watch this video too: https://youtu.be/cXR8UUQDJjc
Taxation DOES NOT fund Federal Government spending, it’s purpose is to control inflation and maintain market stability… tax takes money out of the economy that the Government as the sole creator & issuer of the AUD puts into the economy via spending and purchases… tax in essence destroys money.
Dr Bill Mitchell – Professor of Economics Taxpayers do not fund anything
http://bilbo.economicoutlook.net/blog/?p=9281
http://m.huffpost.com/uk/entry/17452090
They are still neo-liberalists… when they move away from taxation funds spending rhetoric then I might be interested in what they have to say.
Perhaps. But I find it a useful concept when describing how capitalist societies actually operate.
The concept of CLASS is in general use across the ideological spectrum – and has been for many decades. Indeed, class is now not a contentious concept in any shape or form. What is more contentious is the notion of warfare – whether different classes (groups of people) have different, conflicting, opposing aims and orientations. Whether those who possess capital operate in their interest or in the common interest. Whether there is CONFLICT or not between groups.
Perhaps you have a different view? If so – then fire away.
PK1765, Chris Bowen still convinced on budget repairs and do what ever it is necessary to keep the AAA rate.
I am not optimistic in a change as along as he is in charge of the economy directions in the ALP
Agree with it. Things have gone way past a joke. They are despicable people running the country at the moment.
Re MMT and Shorten, Bowen, Chalmers et al. They are politicians intent on winning government. Accordingly, they must work with some givens – with an existing common sense. To suggest that they become modern day messiahs is fanciful. Why, even most economists don’t subscribe to MMT. Indeed, most economists are dismissive.
Politicians try to win government. That’s their speciality. Economists try to convince others of their theoretical superiority. Over time, there are winners and there are losers. Modern monetary theorists are yet to be winners and until they are … Politicians will do what they do best.
I suspect Bill’s taking some cues from Jeremy Corbin. Corbin has been made an object of ridicule in some of the UK media and even in his own party but what he says is resonating with a lot of people. Likewise, Canada and France have resisted the lurch further to the Right and are more focussed on fairness and equality.
It’s about time somebody stood up for the downtrodden instead of blaming them for their own fate.
Meanwhile those who seek to take away working conditions and cut pay rates continue to grant themselves pay rises and tax cuts for themselves and their financial sponsors.
It’s been happening for a long time and despite their usual arguments, the wealth never seems to trickle down does it?
Good article, thanks.
Class warfare has never stopped from the time Menzies created the Liberal Party it has always been employer v employee the class war has raged ever since with global capital getting the best of global labour for at least three decades over the recent past. Shorten was correct to highlight the inequality be it far too late, but better late than never. The dimwitted people who imagine themselves to be ‘middle class’ amuse me they are in fact working class but don’t want to be seen as such because they believe they are ‘better than that’ well they are not. Everyone who must get up out of bed to go to work is “working class” whether they be labourer or doctor, if they don’t ‘work’ they don’t live.
Great article articulating what many of us think! I keep coming back to the same question at the source of the inequality – why is 99% of society run on a merits based system where hard work and good results determine someones level of social and economic responsibility, except running countries? Why are politicians not accountable for their actions and decisions whilst the rest of us must live and die by them? The true solution to the problem lies in decision based democracy where we vote on workable choices and not deceptive personalities. For example, the minister in charge of education should have at least some type of degree in education and be promoted to leading position based on merits as determined by equally qualified peers. They come up with options and choices, we vote on them, and then they administer the actions.
Don’t concern yourself to much about MSM. They lost all credibility when the highly respected Greg Sheridan informed us that Tony Abbott would be seen as the best PM Australia ever had!
Thats the same day i cancelled my Oz. Subscription.
No misunderstanding by the MSM. It’s more Labor bashing by the MSM,all done on purpose.
The COALition are the one’s doing the class warfare.Going after the less well off,while continuing with the hand outs for themselves,and their well off mates eg: no changes to negative gearing.
“Class warfare is going on,and it’s by the wealthy,and they are winning”.
Great article, Victoria. I agree with Freethinker in that the journalists are actively working to ridicule Labor’s ideas and direction. I’d like to see Labor pollies go on the attack in any interview. Turn it back on the journalists. Ask them where they get their economic “information” from. Don’t be rude…just forceful. In fact, a bit of a stoush could be good for Labor. Journos see this as ‘colourful’ and may give Labor more air time instead of pandering to those simpering, lying bastards that seem to fill the news and current affairs programs each night.
Indeed James. Labor for far too long accept the MSM’s LIES as facts eg: That the COALition are superior economic managers – They are NOT. Labor pollies must point out everytime a MSM hack is wrong.
Good to hear a more sensible approach from Bill Shorten but I share the concerns about ‘balanced budgets and AAA credit rating’ Chris Bowen and others in the ALP. More taxes on the wealthy, cutting tax evasion and all the concessions that overwhelmingly benefit the wealthiest, although beneficial will however NOT BE ABLE TO ENSURE FULL EMPLOYMENT. Only increasing the money supply through fiscal stimulus and a well designed Job Guarantee Program can do that as the MMT economists understand very well. Tackling global warming concurrently and aggressively is also mandatory for our survival. Good industrial and trade policy that provides moderate trade protection or the equivalent in support measures for key industries and ensuring value for money for all government services are also vitally important.
PK1765 I also accept the explanations by the MMT economists of how macroeconomics actually works and also the important insights that follow from this that full employment is attainable and also that a fair social safety net and a universal healthcare system for example are also easily attainable. I however share Matters Not’s concerns about the politics of selling the message that taxes don’t fund federal government spending.
The fact that most economists don’t agree with the MMT economists is just an outcome of 30+ years of neoliberal indoctrination and deliberate pressure by the wealthy elites to unwind the mixed economy social democratic model. Most economists believe in trickle down or monetarism which has failed 95% of citizens abysmally. The neo-Keynesians also fall short in that they falsely believe that the federal government’s budgets must balance over the cycle and that deficits must be funded by borrowings and thus our federal government credit ratings are important when none of this is true. Only the MMT economists get the whole package right.
To emphasise that taxes do not fund federal government spending, although true, does tend to go against ‘common sense’ and would be politically dangerous in our current political and media environment where ignorance rules. It is a circular argument anyway as taxes at close to the current levels would probably be in place even if the MMT economists preferred levels of fiscal stimulus and a Job Guarantee Program were in place and that these taxes are essential to create economic space for the needed levels of government spending so as to avoid any inflationary pressures as well as for economically beneficial wealth redistribution purposes.
Bernie Sanders had MMT economists Stephanie Kelton and Pavlina Tcherneva (they have plenty of good videos on YouTube) as macroeconomic advisors but he promoted the practical benefits that flowed from this and not the economic details. For example he promised affordable universal healthcare, free education, aggressively tackling global warming, repairing America’s decaying infrastructure, fighting poverty and inequality and similar. He did talk about increasing taxes on the wealthy and did not mention that taxes do not fund spending.
If the Conservatives are claiming a Class war, then they are the threatened “Upper” class, You never here of Poor people calling for a Class war, do you? but…..We are coming for you!
MMT adherents claim they are simply describing what actually happens . At its core, MMT is a description of reality. In much the same way, Marxists (and others) claim that class warfare is just a description of the reality in capitalist society – class warfare doesn’t have to be declared because it already underpins such societies and always will. It’s inherent to capitalism. It’s in the very nature of the capitalist beast.
(Unfortunately the word warfare in often, only equated with physical violence and because the ‘physical’ is rarely on display therefore people shy away from the concept. It’s not ‘useful’ for many people. It’s not accurate. That it’s simply the ongoing exploitation of one class (group) by another group gets lost.) A pity.
[Only the MMT economists get the whole package right]
lol. The MMters are far more irritating to me than other find Harbeques consistency to be.
Of course taxpayers fund government expenditure and always will. We have a budgetary system accepted internationally and that is the paradigm in which taxation is the prime agent required to fund expenditure. It is just they have other options for the supply of money in the short term, such as simply creating it.
With MMT a combination of three things would occur:
We would end up with hyperinflation within 10-20 years
The value of the Oz dollar would drop making imports more expensive
Taxation rates would rise
The main problem with MMT is that we will never have responsible government. With MMT the left would go ape with increased recurrent expenditure that would swiftly become irresponsible to ensure they are voted back in. The right would probably install a flat tax or allow even more loopholes so the rich rip off even more.
I think this Forbes article has it right.
https://www.forbes.com/sites/timworstall/2015/01/12/watch-out-mmts-about-as-bernie-sanders-hires-stephanie-kelton/#6af3bb121a55
Labor was “coming after you”
The bombarding of raps, as expected already started and The Guardian leads with it:
Scott Morrison claims inequality in Australia is not getting worse, but better
“For Bill Shorten now it’s all about how he carves it up, not how he grows the economy,” Morrison said.
“He is playing heavily into this idea of envy and he’s saying quite bluntly to Australians that he doesn’t have any plans to grow the economy and he just wants to have a discussion about how it is divvied up.”
Journalists fully understand where Labor is winning on voter appeal, What they are directed to do by their employers is continue the all out attack on any change to the status quo. Labor is behind the ball to the next election and after because of our media monopolies. Murdochs rags have set the political agenda since Menzies, now the unrelenting attack on Labor and union power is hurt by ABCC regulation, the LNP and right wing media hacks.. Any change to the tax structure, pensions, jobless , healthcare, energy regulation or free universities is class warfare because it threatens the rich. The ABC is hamstrung by the LNP board/Guthrie team while the News Corpse monopoly and its cheer squad try to direct and control the political and social agenda. Yes many people have wised up but they face a dominating right wing media. We have largely lost independent investigative journalism in radio, TV and print because media cartels cut metro, regional and rural journalism jobs. Where are the real journalists who put the blowtorch to the LNP apart from Aunty? They dont work for Rupert. Social media will remain labors key tool this election to ensure its voice is heard, Shorten especially is not going to get any positive coverage from Rupe after the $30 million LNP donation.
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