Essential Report

The Fantasy Review Goes Off Into La-La Land

Aug 2, 2012

Why I spoil my appetite — a good lunch salad is a sad thing to waste — by reading drivel is always a mystery. But, if you make the mistake of reading the Fantasy Review — among bankers it’s known as the “Financial Review” — you run that risk. Today, it was Jennifer Hewett’s fault. While we live on the planet of reality, where actual facts matter, Hewett inhabits the world of mystery and alchemy, where things get mixed together and stuff just happens.

Hewett is annoyed, as anyone can tell from her tortured column today, by yesterday’s speech by Wayne Swan, which I previewed yesterday with a modest observation that Swan was simply stating the facts that about Clive Palmer, Gina Rinehart and Andrew Forrest: “One tycoon is using his money to challenge the principle of fair taxation through electioneering; a second is using his money to challenge it through the courts; and a third is using her money to challenge it by undermining independent journalism”.

Hewett is entitled to disagree. But, the problem is that  she — and a whole host of transcribers of press releases (what we formerly used to called “journalists”) — don’t bother to connect with the reality-based world when making arguments. They pretend as if shit just happens, as naturally as the sun rising in the east and setting in the west.

Let’s look at a few examples from the column (subscription to the Fantasy Review is required). First:

It is true that manufacturing jobs in both countries have been in long-term decline and are being hit particularly hard now. Those changes are partly due to a changing global economy and the rise of Asian manufacturing, partly due to the excesses of a debt-fuelled consumer and banking binge in the US and Europe.

Aha. “The changing global economy”. Well, wait a minute. The”global economy” changes because rules change. It isn’t a natural phenomena, nor magic. Those rules that were changed, mostly via so-called “free trade” agreements, set up a new regime based on one thing, and one thing only: where could companies find workers who could be exploited by paying them the lowest wage and forcing them to work in the least regulated, most dangerous conditions. The decline, then, was in wage standards, which, then, triggered the “rise” of Asian manufacturing.

Then, Hewett goes on:

Adapting to this inexorable shift and being able to ride the waves of change without falling off is the hard part for any country, any government, any company.

“Inexorable shift”. What utter nonsense –it isn’t a natural phenomena. It’s only inexorable, ironically, precisely because of the point Swan made, which Hewett hates: tycoons set the rules. Their rules say: we reap the money, we set the terms, we drive wages as low as possible.

Well, of course, like all good “free market” idealogues, you knew this one was coming: when all else fails, blame Europe:

Nor does he reflect on the rather elusive economic benefits of that model of government intervention – high taxation and economic and political paralysis in Europe. That’s equality of a different sort.

It’s almost boring to have to point out that the austerity destroying millions of jobs and the livelihoods of millions of workers, impoverishing generations of people and threatening the stability of at least Greece and Spain, has almost nothing to do with taxation — actually, that’s not exactly true since part of the crisis has to do with rich people refusing to pay higher taxes — but actually the problem is that the financial implosion created by greedy bankers wiped away trillions of dollars in wealth, triggering an economic meltdown.

Lastly, and this is Hewett’s dumbest point:

Yet this Treasurer is not at all taken, for example, by America’s extraordinary capacity for innovation in a range of industries, its economic flexibility and its ability to generate new sources of growth.

If this country wants to adapt the American Disease, which has killed the middle class, diverting 30 years of wealth growth from the people who created the value into the hands of the few so that more people live in poverty in the US – 46 million – than at any time in the half-century the US government has measured that figure, well, fine. But, deal with the facts of what the American model accomplished — not some fantasy version of what you’d like to happen.

Why bother with this? A fair point. The problem is that too many people have bought this idea of the “free market” and the notion that de-regulation is the way to happiness. Except the facts don’t support that fantasy.


We Can’t Eat Austerity

Jul 25, 2012

We are in a world where people are being taken out and economically shot, executed by the terror of the balance sheet. Turn to Europe and you’ll see the plan: a troika — the International Monetary Fund, European Central Bank and European Commission — keep thinking that the path to a stable world is by making their balance sheets work, no matter how many people must suffer.

Sharan Burrow, the General Secretary of the International Trade Union Confederation (ITUC), has it exactly right, when she led a delegation to meet with the Greek labour minister and called out the Troika for pursuing mindless austerity:

The Troika needs to start by looking at the incomes of working people and unemployed.   If you have more than 20% of the workforce unemployed and 50% young people excluded from secure jobs and livelihoods, and a minimum wage that has been cut by up to 32%, people will not be able to survive.

It takes a union leader to understand what is up and what is down, what is reality for people:

There is a lack of sanity of the part of these institutions. You can’t keep putting money into the bond markets and the banks, but have countries where people can’t eat, feed their children or pay their bills.  This is an economic model that is not creating jobs, protecting livelihoods or providing the social protection that people need to stabalise the economy.

Burrow’s final point sums up the world we live in:

People are being discarded, as the interests of banks and bond markets come before families.

Now, we could say, and we would be right, that these policies are insane, immoral and economically dubious. Except that the Troika, and the institutions representing the bond holders and banks don’t operate in a moral world — meaning, a world where economic policy is built around bringing prosperity to the people. If that were the case, bankers would be in jail, the richest among us would pay far higher taxes and, rather than impose austerity on people who had no hand in creating the current crisis, we’d be spending trillions of dollars to make sure people had jobs — and a way to put food on the table.

Pause on that final point. We aren’t talking about fur coats and mansions. As Burrow says, this is about people being able to eat.


Awareness of European Economic Crisis

Jul 9, 2012

Q. Have you heard or read a lot, a fair amount, just a little or almost nothing about the financial and economic crisis in some European countries such as Greece and Spain?



Vote Labor

Vote Lib/Nat

Vote Greens

A lot





A fair amount





A little





Almost nothing





Can’t say





54% said they had heard a lot or a fair amount about the financial and economic crisis in Europe.

Those who had heard or read most were men (62% a lot/fair amount), aged 55+ (67%), and income $1,600+ pw (63%).


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