Free market capitalism at risk as discontent is exploited — Maurice Newman, The Australian

It doesn’t get any better than this as Maurice Newman holds the institutions of both political parties, crony capitalism, the power of trade unions proportionate “to their dwindling numbers” and GetUp, up to the light.

The one category that doesn’t get a mention that I could see, is that of the lobbyist.

Cut and paste and full column below—

“…For decades government, trade unions, and crony capitalists have actively colluded to create an effective mutually reinforcing cartel resulting in economic power being concentrated in fewer hands. To outsiders, democracy no longer means government of the people and by the people but is seen as a means of the self-aggrandisement and advancement of elites. They miss the social mobility they enjoyed with competitive capitalism. They think politics today is about replacing what works best with what sounds good or works well for the collective.

Truth is, the political class has corrupted the market system by offering to strategic ­industries the benefits of bigger government and taxpayer subsidies. Many business leaders have become consummate political ­players.

Lately, some privileges conferred on rent-seekers are becoming headaches for governments. The legislated lack of competition has created economic distortions that are painful to correct. For example, AGL Energy’s gaming of a system that encourages renewable energy at the expense of fossil fuels leaves the government considering drastic Band-Aid solutions normally reserved for times of war.

It’s the same with banks. Having created a “too big to fail” status, many bankers exploited their exalted position. In response the government hit them with a tax and a royal commission. Now it’s dealing with scared bankers and the unintended consequences of a looming credit crisis.

After decades of misallocated resources and the embedded rigidities that follow protection policies, these consequences may be unintended, but they were always predictable. The political and economic costs of dismantling them are near prohibitive. But so too are the risks of doing nothing.

These agitators are experts at promoting fleeting causes celebre that leave society feeling bruised and divided.

Groups such as GetUp may appear benign, but their intent is to exploit community discontent by persuading voters that Western social institutions and values no longer serve them well. That using ever more concentrated power will enslave the rich and enrich the poor.

And pigs may fly…”

READ ON —

It should be of concern to all who value personal freedoms that more and more ordinary folk are losing confidence in democracy, for which also read competitive capitalism.

According to a recent Ipsos poll, fewer than 41 per cent of Australian citizens are satisfied with the way democracy works, down from 86 per cent in 2007. Public satisfaction has fallen particularly sharply since 2013, when 72 per cent were satisfied. Generation X is least satisfied at 31 per cent, while baby boomers are agnostic at 50 per cent.

If this poll is accurate, it is disturbing. Perhaps Australia’s revolving prime ministerial door is partly to blame. And maybe gen X’s response can be explained as the result of ­almost 40 years of neo-Marxist indoctrination by teachers and academics who want freedom for themselves but not anyone else. However, the baby boomer view is especially concerning. It is an expression of discontent with a system many believe is increasingly stacked against them. And they have reason to feel that way.

For decades government, trade unions, and crony capitalists have actively colluded to create an effective mutually reinforcing cartel resulting in economic power being concentrated in fewer hands. To outsiders, democracy no longer means government of the people and by the people but is seen as a means of the self-aggrandisement and advancement of elites. They miss the social mobility they enjoyed with competitive capitalism. They think politics today is about replacing what works best with what sounds good or works well for the collective.

Truth is, the political class has corrupted the market system by offering to strategic ­industries the benefits of bigger government and taxpayer subsidies. Many business leaders have become consummate political ­players.

Unlike non-aligned business, the trade union movement treats the Australian Labor Party as its political arm. It actively funds it and shamelessly provides in-kind support for ALP campaigns. A number of former trade unionists, including Bill Shorten, are now Labor members of parliament. Through them, organised labour enjoys a privileged position and exerts a workplace influence quite disproportionate to its shrinking ­membership.

Before the global financial crisis, during the Howard-Costello years, Australia re-­established its grip on fiscal and monetary policy. But, using the GFC for cover, successive Labor prime ministers squandered their no-net-debt inheritance. Following a brief interruption under prime minister Tony ­Abbott, the Turnbull government resumed Labor’s profligate ways, doubling net debt in just four years.

Now the world is facing yet another synchronised slowdown, this one potentially more painful than the last.

Even China, long heralded as the “new way” by the UN and other totalitarians, is scrambling to minimise the cost of bad central planning and the market’s retribution. From their secure and lofty positions, China’s President Xi Jinping along with former King Canutes such as Turnbull and Barack Obama can watch the advancing tide as it overwhelms those less fortunate and for whom they have left little beach on which to find safety. The masses may not understand the esoterics of all this but they can recognise monumental policy failure when they see it.

To quote Ayn Rand, they have watched “money flowing to those who deal not in goods but in favours”, and they feel disempowered by a system where men “get richer by graft and pull than by work”.

Lately, some privileges conferred on rent-seekers are becoming headaches for governments. The legislated lack of competition has created economic distortions that are painful to correct. For example, AGL Energy’s gaming of a system that encourages renewable energy at the expense of fossil fuels leaves the government considering drastic Band-Aid solutions normally reserved for times of war.

It’s the same with banks. Having created a “too big to fail” status, many bankers exploited their exalted position. In response the government hit them with a tax and a royal commission. Now it’s dealing with scared bankers and the unintended consequences of a looming credit crisis.

After decades of misallocated resources and the embedded rigidities that follow protection policies, these consequences may be unintended, but they were always predictable. The political and economic costs of dismantling them are near prohibitive. But so too are the risks of doing nothing.

It is a global phenomenon. Indeed, never in peacetime have national economies, outside of recession and with full employment, managed to generate such recklessly high deficits and extreme levels of debt. The world has built a house of cards that is now in danger of collapse.

So, for the second time in a decade, the burden of these failed fiscal and monetary experiments is starting to hit Australians already struggling with low wage growth and rising costs. Is it any wonder they feel disenfranchised and are easy targets for agent provocateurs such as GetUp that claim these people are victims of the “hard Right”?

These agitators are experts at promoting fleeting causes celebre that leave society feeling bruised and divided. GetUp’s latest claim is that the hard Right is holding up progress on the issues that matter most. These issues are climate change and evacuating the centres on Manus and Nauru. Really? These are issues that matter most to the majority of hardworking, financially strapped Australian families? Where might providing a roof over their heads and putting food on the table rank?

Groups such as GetUp may appear benign, but their intent is to exploit community discontent by persuading voters that Western social institutions and values no longer serve them well. That using ever more concentrated power will enslave the rich and enrich the poor.

And pigs may fly.

But we are getting closer to a tipping point where a rewind becomes politically impossible. Before we reach it, ordinary folk should be aware that once passed, their lives will be subject to increasing direction and that in their growing poverty and misery, free market capitalism will become a fond but fading memory…”