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We have a right to expect government to do what markets cannot: social and economic protection for all of us

John Falzon comments in The Guardian (2.5.20) about the unequal economic impacts of COVID-19 in Australia, arguing that we must look to government to deliver collective healing and health in a fractured society and a fragmented economy.

'We are all in danger. But some of us are in more danger than others: physically, mentally, socially, economically. Not only from the virus itself but from some of the social and political responses to it.

'From First Nations people experiencing homelessness being issued with move-on notices to asylum seekers in detention, from frontline health workers to frontline retail workers, from casuals and contractors to visa holders, Covid-19, while imposing a common danger upon all of us, heightens the pre-existing contrasts in society, forcing us to focus on the glaring structural inequalities upon which our economy is built.

'The danger we are all in, and the unequal distribution of this danger, means that the ideological fixation on “going it alone” has been blown out of the water. The common danger, and the hyper-danger for some of us within it, poses a singular social question, a social question so all-encompassing that it resonates with the plethora of personal questions each of us has.

'How do we protect ourselves as a society? We cannot depend on a fractured society or a fragmented economy to deliver collective healing and health. Or jobs. Or sustainability. Or social morale. We also know that the bushfire crisis, since it is a symptom of the climate emergency, has not gone away. It is, to use the prime minister’s favoured concept, in hibernation.'

Need growth? Scrap policies that favour rich people and monopolies

Adam Triggs writes in Inside Story (1.6.20) about government's approach to 'restarting' the economy, arguing that breaking self-perpetuating cycles of rising inequality will be key to Australia’s economic recovery.

'The American economy was stuck in a vicious cycle before Covid-19. With highly indebted poorer households spending less, demand was falling and economic growth had been weakened. To stimulate activity, the Federal Reserve cut interest rates to make borrowing cheaper, resulting in even more debt and worry. And so the cycle started over again.

New research from economists Atif Mian, Ludwig Straub and Amir Sufi shows that this cycle is fuelled by inequality. Wealthy people have cornered a greater share of national income, and are saving more. Less well-off people are receiving a smaller share of income, and borrowing more. The resulting decline in interest rates has kept the cycle going.

'It sounds eerily similar to the situation in Australia, and it’s not the only cycle that’s increasing inequality. A lack of competition between firms is having a similar effect: transferring wealth from poor consumers to rich shareholders. Breaking these self-perpetuating cycles will be critical to Australia’s economic recovery.'

 

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