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The Highway to Hell, Hockey’s Trickle Down Delusion

In spite of the unprecedented budget backlash the Abbott government remains determined to ape America’s hard right neo-con policy agenda. But when the US government finds that it is unable, (or unwilling), to protect its citizens from the ravages of high unemployment, sub-living wages, homelessness, toxic food, unaffordable healthcare, crippling education costs, rampant crime and wholesale environmental destruction, one has to seriously question whether it is a model worth replicating.

While there are those who are reasonably happy with the US system, they tend to be from the top end of town, and not surprisingly they possess a disproportionate voice in the mainstream media. The story is, by and large, what they say it is. And according to these one percenters they are the job creators, the innovators, the saviors; while the millions Americans on food stamps (who can not afford to eat), and the 1/3 of Detroit households who are having their water supply withdrawn (because they can not afford to pay their bills), are a bunch of lazy whiny socialists who just want to suckle off the government teat.

water cut off

Image by The Washington Post

At least that’s the story peddled by Fox News, and it has convinced a lot of people who are currently fortunate enough not to find themselves living on the edge… But surely not ALL Americans who find themselves struggling are simply too lazy or stupid to get out there and make something of themselves? Do they really expect us to believe that millions of Americans find the idea of work so objectionable that they would rather starve in their own filth than hold down a decent job?

If we take the premise that most people, given the choice, would prefer to be able to afford a home, food, water, healthcare and education, (and would be willing to work to achieve those things); then surely the fact that so many people in the US find themselves unable to afford said things could be an indication that maybe, just maybe… their system is the teensiest bit flawed!

So, if we can take it as given that the US system is broken, it begs the question; why are the LNP so determined that we should follow in their footsteps? Who’s interests are they looking out for?

Whether it’s in the US or here in Australia, the sad reality of modern electioneering is that it costs big money, and increasingly that money is coming from big corporations. It doesn’t take a rocket scientist to figure out that political donations aren’t given merely for fun; they are, in fact, an investment in assuring a favorable legislative agenda.

When it comes to corporate political donations here in Australia the LNP are the undisputed winners, with a war chest so bloated it allowed them to outspend Labor by nearly 4:1 in the final days of the 2013 campaign; a fact that, when coupled with the unbridled support of the Murdoch press, was undoubtedly responsible for the LNP’s 2013 election victory. (I mean let’s face it, if people had actually voted for the current crop of LNP policies then there wouldn’t be the protests, uproar and staggeringly awful polls we are seeing now).

But can a democracy survive the corporate highjacking of it’s legislative agenda and still act in the best interests of it’s citizens? A quick glance at our cousins in the USA would suggest probably not.

For decent minded people it is hard to believe that a government would knowingly, willingly inflict such hardship upon it’s citizenry, and thus some people believe that our government is simply responding to economic factors beyond their control, and that they are genuinely acting in our best interest by trying to balance the books.

There are however many who question the veracity of that story.

Nobel laureate and Columbia University economics professor Joseph Stiglitz for example, says the Abbott government should be looking to spend more rather than making major budget cuts.

“I think there should be some real concern that some of the politics being discussed and promoted by the current government would make things much worse.”

Bill Mitchell, Professor of Economics at Charles Darwin University called the budget ‘irresponsible’, saying the deficit should be increased, not decreased, when the economy is slowing.

So while there remains a consensus of expert opinion outright declaring that:

a). there is no “debt crisis”,

b). the extreme cuts proposed by the Hobbott government are a grave mistake, and

c). a rush to surplus is not only unnecessary, it will disproportionately hurt the poorest among us.

The Government and the Murdoch press keep pushing the spurious argument that we simply can not afford a decent society anymore. Meanwhile billions of dollars in tax revenue have been struck from our balance sheet with the scrapping of the carbon tax; and instead the government plans to GIVE big mining and power our tax dollars under the farce that is the LNP’s “direct action” policy.

And let’s not forget the scheduled abolition of the mining tax… A questionable move given the government’s rhetorical mismatch on the subject… On the one hand we are told “we need structural adjustment in the economy because the investment and construction phase of the mining boom is over and we are now entering the operational phase“, (which is, ironically, when the mining tax is actually supposed to kick in); and on the other hand we are being told “we have to axe the mining tax to keep up investment in the mining sector”…. Ehhhh????…. So let me get this straight; even though we are in the midst of a “budget emergency” we are axing a tax that is just about to start earning for us big time, in order to chase further mining investment, (a ship that has, according to experts, already sailed).

Given the glaring example of how such trickle down policies have worked in the USA, it’s no wonder our government is having trouble selling its “take from the poor and give to the rich” budget.

People instinctively know that strong middle/working class employment and wages are the drivers of strong economy, and if you continually take money out of peoples pockets they spend less, and things naturally start to contract.

Ever played a game of monopoly? While everyone has a stake the game ticks along quite nicely, but once too much wealth gets concentrated in the hands of a single player the other players fall further and further behind until the game collapses.

Skint-436816

Image by legalweb.net

If we don’t want our game to collapse like our cousins in the USA, then Hockey’s budget agenda is clearly not the way to go. Rather the key to our ongoing prosperity would be to adopt more “middle out” economic policies.

The fundamental premise of “middle out” economics is that a prosperous economy doesn’t revolve around the uber rich 1%, but around a great and growing number of middle-class consumers and small businesspeople; and that it is demand from the middle class, not tax cuts for the wealthy, that drive job growth and prosperity.

Counter to the conventional “trickle down” wisdom, rich businesspeople are not the primary job creators; middle-class customers are. The more the middle class can buy, the more jobs they’ll create.

Middle-out economics is the difference between what is good for society as a whole versus what protects the vested interests of a select group of corporations. Rather than cutting services a middle out model invests in the health, education, infrastructure, and purchasing power of the middle class.

Unlike America we don’t worship the uber rich, we don’t value the dollar above all else… We live in a society first, (not an economy), and in spite of the Murdoch/Abbott drive to bring out the cruel and punitive in us, Australians remain, by and large, a fair minded lot. Most of us don’t want to punish the poor and disenfranchised, and we don’t want to persecute refugees. We want a fair go for all.

If Hockey’s budget furor has taught us anything about ourselves, it’s that Australians want the middle out solution, not trickle down squeeze!

Are you listening Mr Hockey?

 

23 comments

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  1. flohri1754

    Unfortunately, I think that Australia has been sliding in the direction of the U.S. for some time … perhaps (and hopefully) this current “proposed” budget has brought enough people out of their stupor to realize it AND try and reverse the trend. It will take Labor (or a more people oriented party) to get serious about defending the Australian social structure that most people value. AND it will take the country getting serious about raising revenue rather than just almost mindlessly repeating the mantra “cut, cut, cut” …..

  2. Keitha Granville

    Of course Hockey is not listening. We are the uneducated rabble, we know nothing . He and TA are the holders of all knowledge and we just have to do as they say and put up with the consequences. It’s all our own fault for being dole bludgers, pensioners, single income families, casual employees and anyone else who is currently struggling to manage. Some of those voted for them in the vain hope that the Utopia they were promising was real. The rest are all top end of town who benefit hugely from the largess now being bestowed on them for their support.

  3. Jimhaz

    [But when the US government finds that it is unable, (or unwilling), to protect its citizens from the ravages of high unemployment, sub-living wages, homelessness, toxic food, unaffordable healthcare, crippling education costs, rampant crime and wholesale environmental destruction, one has to seriously question whether it is a model worth replicating]

    Here is a demonstration of the outcome of the US model of responsible government care for its citizens.

    http://www.youtube.com/watch?v=JQtg1sxKuAI

  4. Peter F

    The perfect example of the ‘trickle down’ effect is one of the world’s richest women: as her wealth increased it became clear that it did not even trickle down to her children.

  5. John Turner

    The willingness of the USA citizen to work was demonstrated during WW2. From a depression in 1938, over four years the American economy became the greatest productive enterprise the world has ever seen and they did it without worrying where the money came from. The biggest problems the USA Government had was finding the materials they needed for the war effort and managing demand for the luxury goods no longer being produced. If you would like the full story read J D Alt at http://neweconomicperspectives.org/ published in August, 2003. At the end of WW2 the USA used its massive productive capacity to provide an excellent living standard for its citizens while still providing Marshall Aid.
    Australia could move almost immediately to full employment if it declared war on the problems we have just as President Johnston did in the early sixties.

  6. donwreford

    Hockey, has come from the Lebanese, if you can make it to Hockey’s position you may well make it to becoming Prime Minister, He has the right repressive attitude to be another to stuff up the Australian.

  7. CMMC

    Just read somewhere that the U.K. board of directors of a brewery that has Australian operations has told investors of a massive fall in sales, due to the Hockey budget.

  8. Mercurial

    Tones consulted with Chairman Rupe over his PPL in preference to his own party.

  9. Mercurial

    and written rather perfectly, Letitia. 🙂

  10. Mercurial

    I have long believed in middle out economics, I just hadn’t heard that term before now. If you consider the vast majority of the population spending most of the time to be better than 1% of the population spending all of the time for the nation’s economy, it certainly makes sense.

  11. Dissenter

    Everyone who travels to USA sees the HUGE GAP with their own eyes. THey see the poverty and homelessness and the poor and then they see the rich who somehow appear to TREAD all over those who are less well off or NOT SEE them at all.
    It does not matter where you travel in the USA it is there for all to see.
    Australians do NOT want to emulate the USA.
    We are being told that WE SHOULD by vested interests and USA citizens like Murdoch who WANT TO OWN the world and everyone in it.
    Just as Hockey’s Budget emergency is BULLDUST so also is the trickle down and we all know that.
    We VALUE our standard of living and our WAGES structure.

    In the US there has been no real WAGE growth for the average worker for 40 years and when the recession hit people had their houses REPOSSESSED who did not OWE money on the mortgage.

    THat is HOW it is there and HOCKEY and THE MINERS and Murdoch are doing their DAMNED BEST toBUST our wages structure and REVERSE OUR STANDARD of living from middle class to POVO in 3 easy steps. WHY ? So we are all prepared to WORK for much less and that is why the attack is on our young people. THE PLAN is that they will work for nothing or very little.
    The multinational corps want to see Australia with a compatible wages structure to the USA.

  12. Dissenter

    And it is all BASED on LIES.
    There can be no EQUALITY with the US wage structure because our wage structure SURPASSED it in fairness and also in fact.
    Our lower wages should rise in fact in line with the increasing wealth and prosperity of Australia.

    The mining Tax should remain. It is noted that BHP is mining all 4 of its major minerals in Australia at greater levels than ever before and WITH THE mining TAX Australia is Only ranked 2nd in the world to Canada as the best place to mine.
    THE MINING tax is AUSTRALIA’s FUTURE AND PRESENT WEALTH fund and it should be retained to Fund increases to out Federal budget as it was originally calculated to do.

    Any repeal of the MINING tax is INSANE and STUPIDITY and not in Australia’s best interests and ONLY in the interests of multinational corps WHO DO NOT WANT TO PAY Tax and Australia should tell them to go to HELL if they do not want to SUPPORT Australia’s growth and future wealth and prosperity.
    Any Independent or party who supports the REPEAL of the MINING TAX IS PISSING AWAY MILLIONS from the Federal Treasury as it is ONLY NOW THAT THE TAX should start to pay REAL BILLIONS.

  13. John Turner

    I basically agree with Dissenter. Norway has a massive tax for those exploiting its North Sea oil and gas fields and is spending that the way all capital replacement taxes should be spent, buying overseas assets that will allow Norway to continue to be prosperous once the oil fields are depleted

  14. Peter Anson

    “when the US government finds that it is unable, (or unwilling), to protect its citizens”…There you have it. Having created the conditions of poverty and an underclass it is unlikely that any Government would recognise or protect these people.

  15. cartoonmick

    Penalising the lower end of our socio/eco society is not the way to go in a considerate community.

    This bad budget has been tailor-made to benefit the top end of town to the detriment of everybody else.

    This bad budget is based on illusions and misleading opinions, all put together by spin-doctors from the office of Smoke and Mirrors with a cast of thousands.

    I think this cartoon sums it up . . . . .

    http://cartoonmick.wordpress.com/editorial-political/#jp-carousel-859

    Cheers (and tears)
    Mick

  16. A

    carttonmick, that cartoon is pretty accurate, sadly.

  17. Michael Taylor

    That was quite a good cartoon.

  18. Dissenter

    Fantastic cartoon Mick. As someone who recently spent 3 months trying to perfect a cartoon style and gave up the hard effort on it even though it is on the backburner, I know how hard it is to distill an idea to its simplest form and turn it into an eyedear. Terribly hard.
    Keep up the great work.

  19. vanders2014

    Why are the rich so lacking in social conscience in proportion to how rich they are. They begrudge others a fair go, loose their humanity and lock people up in boats. The so called religeous right become evil. It’s a pity they are able to persuade others to go along on their nasty trips for more money. Temper tantrums when they are questioned on their motives for pushing people to homelessness.If by chance they answer a question it will be a lie. Secret squirrel business protecting operational matters. Another word for cruelty to member of the same human race.

  20. Win jeavons

    A nation that cannot afford to look after its poorer members cannot afford to have greedy rich members . I paid more tax decades ago as a part time teacher than Millionnaires do today, even the honest ones..

  21. Hamish Maccormick

    Thanks Letitia, nailed it as usual.

  22. Jeanette

    Have had this sitting in my inbox, sadly, life of a retiree is as busy as when working. Great article. So sick of hearing the mantra “trickle down effect”. The truth is that this is a fallacy & just brain washing by the rich right. First of all, top 10% marry each other, to keep the wealth contained AND certainly not trickled down to ‘others’ regardless of the movie ‘Pretty Woman”(sexist title as well). Rich people don’t ‘shop’, they deal, ie purchases of any high regard would be written off some way as a tax deduction. Cars leased, tax deduction, caviar flown in on private plane, trip, business tax deduction, etc. There’s no tricle down effect. Rather you’re right it’s the family businesses etc. that do all the heavy lifting of employing others and who I might add are the ones working the longest hours trying to keep up with the mounds of govt. paperwork. When the GST came in, a small business operator, I closed up 2 staff went, I used to spend 1 whole day just for paperwork, which doesn’t make you money. Before retiring I worked as a supervisor, went home, put my feet up.

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