(Originally published on ABC news site, The Drum 10/08/11)
By Aaron Flanagan
Demand to deregulate financial institutions and ease the burden on wealthy individuals and companies is astonishingly widespread less than 24 months after deregulated banking practises nearly bankrupted the world.
Matt Taibbi, editor at large for Rolling Stone, described the deregulated culture financial behemoth Goldman Sachs operated in during the original global financial crisis as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
And yet allowing Taibbi’s nightmarish squid more freedom to again jam its funnel into its preferred food is precisely what a growing number of free marketers and liberals are advocating.
Barack Obama tried to cut through this befuddling dose of amnesia during last week’s debt raising amendment crisis in America, repeatedly using blunt terms like ‘billionaire bankers,’ ‘private jet buyers’ and ‘yacht owners’ to describe those who are pleading for a loosening of restrictions on behaviour that only recently robbed the world blind.
Rather than observe the latest global jitters as evidence of financial hubris, Australian shadow treasurer Joe Hockey is instead blaming things like the government’s climate policy as a cause of the global economic crisis rather than unfettered cash lending by institutions such as Goldman Sachs.
“The government must act immediately to boost confidence by repealing the flood levy and cancelling the introduction of the mining tax and carbon tax,” he says.
“The government must cut wasteful spending and start to live within its means.”
This ties into the tactics of American Tea Party republicans in stymieing the smooth passage of reforms needed to assist America’s financial woes for political purpose.
This style of demagoguery, Taibbi says, wrongly assumes “an overbearing, interventionist government that seeks to control, tax and regulate everything it can get its hands on – operates the same everywhere.”
It’s a quarrel deliberately couched in a recognisable grassroots perspective, he says, as a ploy to link perceptions of government meddling with personal frustration that points to evidence of federal reformist incompetence.
Harping about cost of living pressures is deviously posited as evidence that macroeconomic national reforms are a hex on productivity and wealth generation. Increasing petrol or electricity costs are an indication, they say, that government is putting a needless handbrake on business and damming up money and opportunity.
Deregulation, be it tax cuts for big business, scaling down government size or slashing regulatory funding is a foundation of trickle down economic rationale; a utopian concept where capitalist endeavour is allowed freedom to better lube the way to future financial joy for all.
Creating a subsidised home insulation program – pink batts – is a recent example of utopian farce here in Australia.
Failure to regulate the installation of foil and batts into roofs led to wide-scale opportunistic installation chicanery with tragically fatal consequences.
Incredulously those most vehemently critical of this are now proposing we embark on another and start slashing the influence of government in the financial affairs of the most powerful corporations.
Well-intentioned utopian naivety is one thing. Hypocrisy is another.
The federal opposition in Australia and its economic policy champions, such as institutions like the IPA says doing this will make things easier, ‘grease the wheels,’ is how Hockey describes it.
Hockey pronounced support for deregulatory utopia by vociferously pronouncing an intention to fire 12,000 public servants employed to regulate the government’s carbon reduction policy on last Wednesday’s Lateline.
What didn’t sound as good was the concurrent necessity to hire 15,000 to regulate their own direct action policy. Lessening government influence to the tune of 12,000 fewer bureaucrats sounds great to the punter angry at paying eight bucks for a punnet of strawberries. Increasing them by 3,000 not so good.
Reducing the size of government means transferring power from Canberra, where government dithering can be quickly noticed and publically flayed on the nightly news, to an anonymous unelected board of directors sitting around a mahogany table in Sydney.
Adherents to deregulated utopia believe these directors, away from the interference of public scrutiny, will find ways to let money, grocery discounts, better jobs and the rest of it trickle down. Unfortunately these are the same mob that only a few years ago turned the world’s financial system into a casino.
Trickle down economics is like doing away with the walls at the lion enclosure at the zoo. We could let the kiddies pat the cute animals and tickle them under the chin except for the nightmare of increasing dramatically the prospect of their livers being eaten in front of our eyes. Therefore it’s better to have the walls up.
