Tag Archives: GFC

We Need to Move Beyond Free Markets

trickle-downSuddenly our leaders and their lackies are all over the airwaves warning the unwashed hordes of the perils of rejecting the glorious benefits of free markets and free trade, as those ingrates have done in the US and UK.

Their favourite line is “Twenty five years of uninterrupted economic growth.” You hear it almost every day. It represents unparalleled economic success. It is uniquely Australian, because no other country avoided the 2008-9 recession. It’s all because of Australia’s lean, deregulated, open, agile economy, managed brilliantly by [insert current Treasurer].

Except for two little caveats. Australia’s economic performance during the neoliberal era has never matched that in the post-war decades to the early 1970s. And we avoided severe recession in 2008-9 only because the Rudd Government intervened heavily in the economy.

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Following the US into Decline

[The new Australian government, elected in September, has refused to do anything to help to retain car manufacturing in Australia, and all three manufacturers (GM, Ford and Toyota) have now announced they will close within the next 2-3 years.]

trickle-downIt’s amazing the Abbott government can run such a market-fundamentalist industry strategy, to general acquiescence, in the face of so much obvious evidence of the profound damage the same strategy has done to the USA.

The free-trade doctrine has seen US industry hollowed out, and industrial jobs exported en masse, as US corporations moved their plants to countries with cheap labour and few environmental constraints.  The US used to have consistent trade surpluses, but since 1976 it has run enormous trade deficits that free-market policies have done nothing to reduce.  The trade deficit leaves the US indebted to the world, and increasingly dependent on China, which holds the most US debt.

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