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	Trickle-down economics is the greatest broken promise of our lifetime by Alex Andreou, Larry Elliott Guardian News   Jan 2014   Trickle-down economics is the greatest broken promise of our lifetime, by Alex Andreou.   The richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world"s entire population – put together. This is the stark headline of a report from Oxfam ahead of the World Economic Forum at Davos. Is there a reason why the world"s powerful, gathering at the exclusive resort to sip cognac and eat blinis, should care? Well, yes.   If one subscribes to the charitable view that neoliberal philosophy was simply naive or misguided in thinking that "trickle down" would work infinitely, then evidence that it doesn"t, should be cause for concern. It is a fundamental building block of supply-side economic theory – the tool of choice these past few decades for those in charge to make adjustments. The realisation that governments have been pulling at economic levers which, for some time, have been attached to nothing, should be a wake-up call to the deepest sleepers.   Even if one subscribes to the cynical view that the elite knew what they were doing all along, observing that the "rising tide" is lifting fewer and fewer boats and leaving more and more to rot in the sediment – both at a personal and national level – must make most wonder "am I in the right boat and is it big enough?" Concentration is rampant. Credit Suisse estimates that the world will have 11 trillionaires within two generations.   It is not so much that the supply-side principle "if you build it, they will come" is no longer true. It is more that we appear to have passed a tipping point, where so much wealth has been concentrated at the top, they no longer need bother to "build" anything. In short, it has become more economically efficient to buy countries economic policy than to create value in order to sell it on. If one can control government to favour the richest, while raising barriers for new entrants, thus increasing their share of the pie exponentially, what is the incentive to grow the pie?   This applies to both companies and individuals. Small business gets clobbered by taxes and business rates, while big business turns around and says to the state: "This is how much tax I fancy paying this year, take it or leave it". The rich no longer create jobs, through a process of consolidation, takeover and merger, they actually destroy them. Zero-hours contracts are the way of the future; in a society that is hungry, desperate and devoid of political engagement or unionism, why would anyone offer terms and conditions that give individual workers any standing?   And yet, the realisation must dawn soon – one hopes – that this model is unsustainable because its effects are uncontrollable. The more unequal we become as a society, the faster the top"s earnings diverge from the bottom"s. "When so much of the purchasing power, so much of the economic gain, goes to the very top," Bill Clinton"s former labour secretary Robert Reich explains in the film Inequality For All.   "There"s simply not enough purchasing power in the rest of the economy." Wealth inequality in the US was at its highest levels, historically, in 1928 and 2007, one year before its two biggest financial crises, notes Reich. The base of the pyramid atrophies and begins to crumble.   Then why are most governments continuing to fiddle with supply-side levers in order to revive the economy, when it is abundantly clear it does not work? The simple answer is in two parts. First part: habit.   The second was perfectly expressed by the creator of The Wire, David Simon: "That may be the ultimate tragedy of capitalism in our time, that it has achieved its dominance without regard to a social compact, without being connected to any other metric for human progress."   We have come to measure, to an increasing extent, individuals success by their wealth, spending power and other assorted trappings. We do the same with the economic success of governments; measure it by an aggregated data set that fails to take into account wealth distribution, educational achievement, innovation, or even the welfare and health of the population they claim to represent. We must shift this perspective. It will be the hardest, simplest thing we have ever had to do as a species.   Davos invites the tax avoiders, by Larry Elliott.   The rich and powerful at the World Economic Forum are not really as worried about the gap between rich and poor as they claim to be.   As the rich and powerful make their way up the magic mountain, they claim they want the message to be sent out that they understand about inequality.   The evidence for the "Davos gets it" line comes from the annual risk report compiled by the WEF. It asks 700 of its members what they think will be the most pressing threats to the global economy over the coming decade. Inequality is seen as the most likely risk. Capitalism cannot survive if income and wealth become concentrated in too few hands. For much of the 20th century, the more far-sighted business leaders realised this. They understood that their workers needed reasonable wages so that they could buy the goods and services they were making. They grasped the idea that a market system in its rawest form was incompatible with democracy and so acquiesced while some of the rough edges were knocked off via progressive taxation, welfare states and curbs on capital. Deep down, they feared that the Russian revolution would provide a template for disaffected workers in the west.   Attitudes have changed in the past 30 years. The so-called Great Compression of incomes seen from the 1930s to the 1970s went into reverse, with the top 1% grabbing the fruits of growth. The rich used their money and their influence to ensure that governments did their bidding. After the Berlin Wall came down, there was no rival model and less need to show restraint. With the arrival of a unipolar world came a return to a more aggressive form of market economics that had not been seen since the early days of industrialisation.   A paper released this week by Oxfam makes the same point, noting that the richest 85 people in the world have the same amount of wealth – $1.7tn – as the bottom half of the Earth"s population. That"s quite a staggering figure. You could get these 85 people on a London double-decker bus (not that they would ever be seen on a bus) and they would be as wealthy as 3.5 billion people.   Three of the topics that will feature on the Davos agenda this year: the durability of economic recovery, climate change, and the gap between rich and poor. In the run-up to the crisis of 2007-09, rising inequality was compatible with expansion only because of ever-higher levels of personal debt. Since the crisis, the show has been kept on the road thanks to unprecedented stimulus from central banks.   One concern is that the sustained squeeze on real wages – an intensification of the trend of the past quarter-century.   The second big question, which has lain dormant since the crisis, is whether the current global growth model is consistent with preventing the planet from frying. Recessions always push environmental issues down the agenda, and this has been a particularly deep and painful recession. The lack of global co-ordination and the (misguided) belief that fracking is the answer to the world"s energy needs have not helped matters.   Finally, there"s inclusivity. The recession has been particularly brutal on the young, many of whom are either unemployed or doing jobs for which they are overqualified. In many emerging market countries, populations are weighted towards the under-25s, the group most likely to migrate or cause social unrest at home. Modern media makes the skewed distribution of wealth, power and opportunity all too apparent.   As the Oxfam report put it: "When wealth captures government policymaking, the rules bend to favour the rich, often to the detriment of everyone else. The consequences include the erosion of democratic governance, the pulling apart of social cohesion, and the vanishing of equal opportunities for all. Unless bold political solutions are instituted to curb the influence of wealth on politics, governments will work for the interests of the rich."   Eyebrows will be raised and hands will be wrung at some of the more striking findings of the Oxfam report, such as that in the US, the wealthiest 1% have captured 95% of post-financial crisis growth since 2009 while the bottom 90% have got poorer.   But don"t expect much support for any of Oxfam"s suggested remedies for inequality: that corporations should stop using offshore boltholes to avoid tax; that business leaders should support progressive taxation, universal provision of health and education, and a living wage in all the companies they control. Memo to self: things to pack for Davos this year – boots, woolly hat, gloves, sick bag. Visit the related web page
	Former governor-general calls on Australians to have more compassion for asylum seekers by Fairfax Media Australia   December 2013   Former governor-general William Deane has called on Australians to have more understanding and compassion for asylum seekers who risk their lives to come to Australia.   In an address at Parliament House, William Deane told the story of how his forebears had come to Australia, fleeing famine on a wooden boat in 1851, which saw people die of disease and drownings along the way.   "We Australians should have understanding and compassion for the actions of those who subject themselves and their families to serious risk of disaster at sea to escape from violence or terror or unbearable hardship," he said.   Launching a collection of essays to provoke a different national conversation around refugees and asylum seekers, Sir William also argued that Australia was capable to dealing with the issue with justice and compassion.   "It"s well to remember that other countries are facing much greater challenges as regards refugees than we are," he said.   Pointing to a recent UN Refugee Commission report that slammed Australia"s offshore detention system, the former High Court Justice William Deane said "one cannot but fear that at least some of the findings are justified".   He said that if criticisms were fair, the report diminishes Australia"s international reputation as a respecter of human rights and dignity.   "They give rise to questions relating to our decency and sense of fairness and justice," Sir William said.   The contributors to the essay collection include Catholic academic Frank Brennan.   Father Brennan, who was a confidant of Kevin Rudd, he did not hold back in his criticism of the former prime minister"s Papua New Guinea resettlement solution.   In its last months, the Labor government "dropped the bar too low" when it came to the treatment of asylum seekers, he said.   Contributor and academic Jane McAdam said she thought that in years to come, Australia might see a national apology to asylum seekers for the way they have been treated.   My children ask me every day, when are we getting out of this prison, by Sarah Hanson-Young.   There are no signs to guide you to Australia"s detention centre on Nauru. You instead have to follow the signs that lead to the island"s "rubbish dump" and eventually they take you straight to the detention centre"s entrance. That alone explains a lot about how Australia is dealing with these refugees who, tragically, include women and children.   When you enter the secure compound, the first thing you notice is the stifling heat that hangs heavy over the camp. The tents have no air-conditioning, fans are in brutally short supply, the humidity is unbelievable and shade is sparse. The second thing you notice is the desperation in the eyes of the people who are being held there.   There should be no doubt in anyone"s mind that it is inhumane for adults to be held in the Nauru camp"s conditions, but the fact that children are being held there is truly unacceptable. There is no playground in the compound, there aren"t any toys, and all the children have to play in is the bright white gravel that blankets the entire camp. Those white stones are there because the detention centre is right in the middle of a quarry that was once a central part of the island"s ailing phosphate mine.   There are 765 people locked in the Nauru detention centre right now. The camp is divided into different sections with single adult men held in one area and families, including mothers, babies and unaccompanied children, on the other side of the centre. It is the family compound where the desperation is at its most heart-wrenchingly intense and it is the pregnant women who are the most afraid of what the future will hold.   Every refugee I spoke to referred to the camp as a "jail" and many wanted to know what they had done to warrant their imprisonment. A widowed father of two told me, as his eyes filled with tears, "My children ask me every day, when are we getting out of this prison? Every day I lie to them, but now I have no lies left."   Among the adults that I spoke to there were many highly skilled, highly educated people. I spoke to doctors, nurses, teachers, engineers, a psychologist and a journalist. These people want to contribute to Australian society but, instead, we are destroying them, mentally and emotionally.   In conditions as harsh as those on Nauru it is often the small things, the day-to-day things, which weigh heaviest on people"s minds. While I was in the family compound, distraught children repeatedly came to me and begged for new shoes because theirs had worn through and the hot gravel was hurting their feet. They said that when they asked the detention centre staff for shoes their pleas were ignored and that their parents couldn"t do anything to ease their pain.   One child said to me, "Sometimes I think we are treated like animals, but then I realise animals have a better life than we do in this place." It is beyond question that this government"s policies are creating the next generation of damaged children.   There is a battle of wills taking place on Nauru right now. The Australian government is trying to break the spirit of these vulnerable people in the hope that they"ll return to the countries from which they have fled. This indignity and the lack of control that the refugees have over their own lives is being carried out methodically, with the aim of dehumanising those who have been locked up.   The conditions are designed to break people and it"s sickening that young boys and girls are being abused like this. Children are forced to line up for their meals, often spending hours in the beating sun every day just to get food. One morning when I arrived at the camp I saw a group of children lining up for lunch and then, when I left at the end of the day, those same children were lining up for dinner. I asked what they had done during the day and they looked at me, confused, and shrugged. "Lining up for lunch, lining up for dinner," one of the children said, and left it at that.   History has shown us that more than 90 per cent of the people that we"ve locked up in the white-hot compound on Nauru will be found to be genuine refugees. In the future we"re going to have to explain to our grandchildren how this all came about; how human beings were left in appalling conditions, in between the rubbish dump and the phosphate mine on Nauru, because of the form of transport that they used to flee from war and persecution in their homelands.   http://www.refugeecouncil.org.au/ http://www.theguardian.com/world/interactive/2014/jan/06/manus-detention-reports-four-months http://www.chilout.org/ http://www.ajustaustralia.com/ http://idcoalition.org/children/ http://www.un.org/apps/news/story.asp?NewsID=46596&Cr=Asylum&Cr1=
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