Obama will look with some envy

UNITED States President Barack Obama might well express some envy of Australia’s political, social and economic systems when he visits next week. We have only some of the maladies of the US.

Some worry about our minority government but the US has permanent minority government. No president can ever guarantee getting Bills through Congress. Moreover, the lack of party discipline in the US means that every individual Congress member is susceptible to big money. The votes of Congress members can and are bought with offers of campaign funds or threats of negative advertising.

In Australia big money still works, but it has to work harder. It has to buy a whole party or bombard the whole nation with advertising to change public opinion to attempt to force the Government’s hand.

In Australia, the passing of the legislation to price carbon and the very likely passage of the mining tax, shows that big money does not always easily get its way.

In the US, on the other hand, some hard cash or hard words on just a few Congress members would be enough to defeat measures that affect the rich.

Nonetheless, we have gone some way down the American path – towards greater inequality and its concomitant corrosiveness – albeit at a slower pace. And our polity is getting more divisive. We should be wary.

We are becoming less equal. The top one percent of income earners get nearly 10 per cent of the nation’s income now, compared to just over 8 per cent five years ago.

In 1993 executives in the top 10 companies averaged 17 times average earnings; now it is more than 45 times.

Worse, there is not much protest. Even Qantas’s Alan Joyce bumping his pay to $5 million while driving down his employees’ pay evoked more outrage over the timing than the amount. Similar packages elsewhere have become acceptable.

They can get away with it without the social opprobrium that would have ensued 30 years ago if they had tried to earn 100 times their low-paid workers’ salary.

Further, it is so senseless. What, on earth, is Joyce going to do with so much money?

Perhaps it has nothing to do with the money, but power.

Let’s not make it worse. Let’s not follow the US. Their company executives were where we are in the 1980s. Now many earn more than 400 times their lowest-paid employees.

The share of income of the top one percent of Americans has tripled in the past 30 years to nearly 25 percent of national income. In Australia they have just 10 per cent.

So what? If everyone is getting richer does it matter? Should we worry if Australia goes the American way?

Yes. American author George Packer suggests in the latest edition of Foreign Affairs that inequality in the US has caused a feedback loop.

“The more wealth accumulates in a few hands at the top, the more influence and favor the well-connected rich acquire, which makes it easier for them and their political allies to cast off restraint without paying a social price,” he wrote. “That, in turn, frees them up to amass more money, until cause and effect become impossible to distinguish. Nothing seems to slow this process down—not wars, not technology, not a recession, not an historic election.”

Obama has been powerless to stop it.

As the society gets more unequal, people become separated: in schools, in hospitals, on airlines, even what we eat. As the division becomes wider the wealthy do not share any of the experience, let alone empathise, with the less well-off and they become keener to protect their position.

The billionaire Koch brothers in the US, for example, have thrown a couple of million dollars in seed money to set up databases of rich people to generate a huge advertising fund for an anti-government agenda to dupe people into voting against their economic interests.

Many other wealthy people and large corporations “invest” in campaigns to prevent legislation that helps the poor at the expense of the rich. Given the pay-off, the “investments” make sense – but only in financial isolation.

Overall, lower tax on the wealthy, lower social services, higher imprisonment rates result in unsustainable national debt – especially when combined with two foolish wars.

Further, the middle class go into debt in an attempt to keep up as the wealthy take a higher portion of national income. The society becomes worse to live in no matter how much money you have.

Australia is not immune. The mining industry “invested” $22 million in an attempt to prevent a mining tax which would have cost it billions.

Opinion polls suggested it was at least partly working, despite the obvious merits of the tax.

In the six years to 2010 gross mining profits rose aound 250 percent – from $25 billion to $88 billion. If that happened elsewhere, a $90,000-a-year journalist would now be on $225,000; a $150,000 GP would be on $375,000 and a $45,000 receptionist or check-out person would be on $110,000.

And the miners argue there should be no extra tax and that none of the extra mining wealth should shared among those who own the original resource – us. Indeed Fortescue Metals (one of Australia’s biggest market-value companies) admitted it has never paid company tax.

In the US, big pharm and big medicine have poured millions into preventing sensible universal health and pharmaceutical schemes – with some success. Obama will look with some envy at Australia’s Medicare and PBS, which have now become impossible to unwind. Once the people get experience of good policy they are reluctant to allow politicians to take them away.

Obama will envy some other things.

Tony Abbott may be forceful, negative and obstructionist, but he looks like a sensible moderate compared to nearly all of the Obama’s Republican opponents. It would be hard to imagine an Australian Prime Minister proudly denying evolution or taking pride in authorising the execution of 230 people.

Australian politicians have taken abortion off the agenda.

The Australian media is tempered by the ABC and SBS. Yes, Rupert Murdoch has shifted his Australian newspapers from journalism and reportage to anti-Labor campaigning, as LaTrobe University’s Professor Robert Manne has shown with very detailed research presented this week to the media inquiry.

But Murdoch “journalism” in Australia has sunk to mainly misleading through shifting emphasis — not the outright lies perpetrated by his Foxtel network in the US.

But there is no cause for complacency.

We so often go the way of America and we are drifting that way in some areas now. Spare us the possibility that Tony Abbott becomes seen as the moderate centrist in our political spectrum because that’s where he would be in the US.
CRISPIN HULL
This article first appeared in The Canberra Times on 12 November 2011.