Something very disturbing is happening in the world of politics. People are speaking past each other while the proportion of disaffected voters continues to grow. More to the point there are few signs of a shared reality that is being engaged by the ‘debate’. Certainly amongst the public there is little confidence in what politicians claim. And whatever we are told about the endless growth that characterises Australian history, people still feel their lives deteriorating. But to simply project growth over 10 years as in the Turnbull/Morrison budget based on reducing company tax over a 10-year period and little else – setting Australia apart from all the signs of failing growth in Europe, the United States as well as China – and calling this a PLAN takes us to a new low. It is no more than a back of the hand handout to the corporate sector who have long lost any strong association with ordinary people or place.
If the emptiness of Morrison’s facial gestures means anything, it is that he does not really believe in his ‘plan’ himself. Perhaps it was forced upon him. Turnbull is more likely to believe it because his ego allows him to imagine himself as the one who can see the truth, leapfrogging the inadequacies of those around him, like King Canute unconstrained by objective realities. In any case the claim is shallow and unconvincing.
This kind of unreality could be said to have begun with Joe Hockey when he summoned the hapless Group of 20 nations together to declare that economic growth should be increased by 2%. Heaven knows what those representatives thought about the process but Malcolm Turnbull is carrying on the tradition.
It is true that Turnbull and Morrison are relying on an underlying hope held by much of the public that our economy and political system can return to normal after the difficulties that enveloped the world after the GFC. Perhaps this is why there has been a lift in confidence following the recent reduction in interest rates by the Reserve Bank. By and large people do not know what to make of such a development, but they do recognise its immediate effects – reduced rates in the past have stimulated economies, and hence optimism. And of course they also reduce the strains of family debt. But these effects do not represent anything like the full story. On the contrary there is every reason to see this as a deepening of the crisis in Australia, joining us up with the deflationary times that have hit the United States and Europe since 2008. In this respect we also connect with the volatility of credit in China (still in its early stages) and the sustained crisis of the Japanese credit crunch that first began in the early 1990s and from which there is still no respite, despite the wild efforts of Prime Minister Abe to continue printing money.
The problem is that the 2008 credit crunch was very major indeed. It did not bring on the depth of economic collapse experienced in the 1930s because of the massive levels of money thrown at it by Governments and Reserve Banks, including the printing of money on a grand scale, which continues today. This did help avoid the 30% reduction in GDP experienced in many countries in the 1930s. But the need to de-leverage over-indebtedness remains and this task has a deflating effect on economic prospects. Massive money booms, especially when they are global, have deep deflating consequences over time. There is no reason to think this will not continue to be Australia’s broad reality for many years to come now that the China boom has ended. Ask the Japanese!
The snake-oil solutions proffered by Turnbull & Co. in their attempts to renew growth deserve two kinds of comment. First, that our present problems arise out of transformations associated with the shift to globalisation that took off in the 1980s. Leaders led their nations into a process which was singular and unknown in terms of consequences. It was a process supported by technological change and by and large a matter of the blind leading the blind. Malcolm Turnbull, in the here and now, appears further blinded by his inflated sense of self.
We are now in a globalisation trap. One that will promote the 80/20 society, where 20 per cent of the population will be employed, 80 per cent barely employed. Divisions on this scale are a consequence of the new version of capitalism that has renovated itself through its relation with the techno-sciences, via the transformation of the universities. This is the core of globalisation. But even if growth is achieved, the relation between investment, growth and employment experienced in the period of industrial capitalism no longer holds. Could this emerging division lie behind what people sense when they say that Turnbull lives in another world, not the world of ordinary people? This is not a mere matter of money, it is truly another world that is occupied by Turnbull and those inhabiting the space of the 20 per cent. And he will take us there with dire consequences, and good intentions – smiling as he goes.
Second, growth is not really the main point. What is happening globally breaks up the stable reference points so important for us to experience in-depth social exchanges with others. Lacking local economy, community and family structures with a significant degree of stability, our dissatisfactions relate to the fragmented life that globalisation calls into being. We may say that politicians cannot be blamed for this. Yet it is our political leaders who have led us into this world, and they are reinforcing that decision at every turn.
– John Hinkson