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Envy or greed? – follow the money.

Written By: - Date published: 10:42 pm, August 15th, 2011 - 23 comments
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Two things stood out for me about the National Party conference, both on the Friday – John Key once again saying his Labour opponents were driven by the “politics of envy”, and Peter Goodfellow telling delegates National had more money for this campaign than ever before. Envy is one of the seven deadly sins. So is greed.

Key’s meme follows Farrar, Slater, Herald editorialists and political commentator John Armstrong. Paradoxically it reflects a vulnerability, evidenced by National’s surfeit of money. That’s why they want to change the subject from money to morality.

There are two issues worth examining about too much money in politics and the economy. First, while there is no shortage of money in the economy, there is some evidence that “long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises”. Those with more money than they need look for even higher rates of return, so push those with just enough to borrow more, and the result is  bubble-and-crash. In “Leveraging Inequality”, IMF economists Kumhof and Ranciere compare the 1930 depressions and the 2008 recession:

When—as appears to have happened in the long run-up to both crises—the rich lend a large part of their added income to the poor and middle class, and when income inequality grows for several decades, debt-to-income ratios increase sufficiently to raise the risk of a major crisis.

The second is that the pernicious influence of money in politics is growing across the democracies. We are increasingly seeing government of the rich, by the rich, for the rich. It’s as though those with much more than they need have decided that the way to hang on to what they have is to take over government for themselves.

It is no accident that as right-wing parties have come into government they have moved swiftly to change the law on political donations. One of the first things on Steven Harper’s Conservative government agenda in Canada was to move to change the law to remove their public subsidy on election expenses. The first thing the Tea-party Republican-controlled House of Representatives did after the 2010 election was to repeal the law to provide public funding for elections.

Rick Perry is the latest Republican candidate into the crowded field. Money will be no obstacle for him according to the New York Times. There are no restrictions on campaign contributions in Texas. Too much money in American politics – $3billion in donations in 2000 to $5billion in 2008 – and its pernicious influence on economic decision-making has led Howard Schulz, the chairman and chief executive of Starbucks to propose a campaign to boycott all political donations. It’s a desperate move but symptomatic of the beginnings of a shift away from excess.

Asset sales policy is a critical area where money does matter and Labour and National have very different approaches. I have no doubt that part of the reason why National’s coffers are bulging is because of their policy to sell publicly-owned assets, and will do another post or two on the connections between political donations and asset sales. Those with more than they need are greedy for more – investments with a secure cash-flow such as utilities are perfect in times like these. Forget the convenient cover of the mums and dads; they’ll never see a penny. Wanting to keep assets in public ownership for the benefit of all is absolutely not about envy.

 

23 comments on “Envy or greed? – follow the money. ”

  1. SHG 1

    If we’re talking Deadly Sins… jebus, did any of you guys read Parekura Horomia’s credit card bills? It was just food, food, food, petrol, food, food, food, motel, food, food, food. We could have the country back in surplus overnight if Fat Boy got one of the proposed food cards instead of a visa.

  2. Galeandra 2

    Wrong site, SHG. Back to the sewer,now. Off you go.

  3. Afewknowthetruth 3

    Dysfunctional: functioning in such as way as to produce an undesirable or bad result.

    Fascism: the melding of corporate, government and military interests.

    Oligarchy: a form of government with power concentrated in the hands of a few people.

    Opportunist: someone who takes advantage of a situation for personal gain.

    Propaganda: misinformation put out [usually by governments] to deceive people and persuade them to follow a particular line of thinking.

    Psychotic: having a mental illness which impairs the ability to connect with reality.

    Rort: slang for an illegal or semi-legal money-making scheme based on insider knowledge, manipulation of contracts, cartels etc.

    Sociopath: a person who is unable to relate to others, and exhibits antisocial attitudes and behaviours.

    Tragedy of the Commons: the hijacking or over-exploitation of common property by a person or group, such that they acquire additional benefits whilst the majority end up worse off.

    Vested interest: the situation arising after someone has put time, money or energy into a project, building, business or investment and wants a return.

    • Colonial Viper 3.1

      Good list. Please allow me to add:

      Plutocracy: Rule by the rich, for the rich.

      Kleptocracy: Rule by the rich, for the rich, but where the wealth obtained by them has been gained by theft from the many.

      Neofeudalism: Society where a rich and influential elite lord it over the classes of wage-serfs, debt-serfs and welfare-serfs. Frequently requires a figurehead leader like King John.

      • Bored 3.1.1

        The second is that the pernicious influence of money in politics is growing across the democracies.. Whilst on a feudal note I quote St Francis, “I come to rebuild a church”.

        Francis understood the corruption of his days church. He took a popular stand, but he came from outside the established order. There may be a lesson in that.

    • RedLogix 3.2

      the hijacking or over-exploitation of common property by a person or group, such that they acquire additional benefits whilst the majority end up worse off.

      Interestingly the ‘commons’ existed for tens of thousands of years, and where it was necessary people managed them just fine. In a society where everything anyone does is open and transparent, where social initimacy forces accountability with you neigbours via shame or peer pressure, then sustainably managing the ‘commons’ is plausible and achievable.

      It is only where a small privileged minority distance themselves with power and money that this system breaks down.

  4. Jenny 4

    Autocracy: rule by a minority elite, the opposite of democracy.

    Democracy: the counter to all of the above

  5. billy fish 5

    Idiocracy: Playing to the non thinking vote

    • Colonial Viper 5.1

      lol

      May also describe the requirements for promotion to the National front benches 🙂

  6. Bill 6

    A problem with asset sales is that no tangible connection exists for the citizens who currently ‘own’ them. And so the debate becomes solely guided by political ideology.

    If they are sold, then dividends would be paid to shareholders. Obviously, that is the attraction for those wanting their mits on them…dividend payments and building up their number of shares for the sake of trading them off etc..

    So why not apportion a %age of the net profit to paid as a dividend to each and every tax payer within NZ? That way, the SOEs stay ‘owned’ by us and we get some (perhaps nominal) payout every year. The payout would (I guess) be less than what might be realised through trading on speculative values, but would give us a tangible stake in them and kill off any talk of privatisation once and for all.

    • mik e 6.1

      Berlusconi must be practicing the politics of envy these days he closing lopholes on tax dodgers increasing tax by 10% on the wealthy 7.5% on shares divs and interest. Don’t let the National party find out they might change their spin dog whistling

      • Colonial Viper 6.1.1

        Max Keiser has a few things to say about David Carmeron

        Cameron having suggested that primary school children who loot should face jail time.

        • Bill 6.1.1.1

          Interesting. That was almost an expression of impotent rage towards the end. Where he threw words of some force propelled by self defeating rhetorical questioning, the kids propelled bricks. Now if only he had articulated a political agenda….. 🙂

    • @Bill. Because allocating individual shares continues to promote individual interests which can be harnessed in the future as actual tradable shares when such ownership becomes expressed as personal greed. Its going down the drain of Fonterra.
      Far better than personal ownership would be personal involvement in management. All SOEs should be put under workers management so that the profit motive is kicked into the grandstand. We would all elect delegates onto boards of management and keep them on a short leash.

      • Bill 6.2.1

        I’m all for genuine worker control. But for the moment, a tangible stake in what is theoretically already ours is a step in a better direction, no? I’m not suggesting it would lead to worker control. It wouldn’t. It embeds bureacratic control which I’m generally opposed to. But given the current state of play, better that than some utterly unaccountable CEO and his cronies.

        I’m not suggesting that every SOE becomes a Fonterra. Quite the opposite. Far better if Fonterra was nationalised (became a SOE) and made cash payments to all tax payers…not ‘producer partners’ or whatever the label for farmers mired in debt and utterly dependent upon Fonterra payouts is.

        Alongside all other present and future SOE’s.

  7. prism 7

    Funny that National are dissing money, and aspirations for more of it, their favourite thing.

    “long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises”. Those with more money than they need look for even higher rates of return, so push those with just enough to borrow more, and the result is bubble-and-crash
    You could call it bubble-and-squeak.

    • mik e 7.1

      Here their called loan sharks, But in the high finance world they are role models and leaders tall poppies.Their envious of one man one vote thats why they try and undermine it at every opportunity.

  8. KJT 8

    The politics of envy. “the rich are so envious of what little the rest of us have left, they want to take that too”.

  9. Locus 9

    Why is the politics of fairness and equal opportunity seen as envy?! Why do so many rightwingers think it’s a weakness to try to understand another person’s circumstances, point of view, thoughts, and feelings? And to give people a chance?
    Politics of envy? Good grief… why do these people so often accuse others of failings they don’t want to admit in themselves?

    • Colonial Viper 9.1

      Yep. It’s a professionally supplied marketing and PR framing that they use. It gives a veneer of self righteous rationale to their followers, confirming for them in their own minds, their moral superiority over the masses.

  10. The Baron 10

    I almost choked on my cup of tea. Mike, you have the gall to comment on electoral finance after Labour illegally overspent by how much in 2005?
    At least the right write the law before they spend the cash, rather than the other way around.
    Hang your shameful head, you fucking hypocrite.

  11. Bored 11

    Almost choked: take a note Mike, try harder.

    By the way: Baron or Barren?

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