Andy Blunden February 2009

Aggregate Demand

One word you never hear these days, with everyone under the blazing sun having their say about fixing the financial system, and that’s “Aggregate Demand.” If you take a billion dollars out of the government coffers by cutting public spending, and distribute it in cash hand outs to private individuals, how much is added to aggregate demand? Nothing. And how exactly do tax cuts create aggregate demand? And then they’re surprised that the so-called stimulus package has no effect! Better than building silly old infrastructure, which was after all just an election promise. Of course, governments have made themselves into such small players, there is really very still they can do however they shift money around; unless governments use their legislative power, they have nothing.

While the financial system is falling around their feet and the corporate gluttons are stuffing their pockets as fast as they can in preparation for making their getaway with as much of their ill-gotten gains as possible, the Rudd government declares that it shouldn’t interfere with the internal affairs of corporations. If they want to pay themselves more than the company creates, that’s their business. Trades Hall should send some consultants into these companies to set the pay of the ordinary employees. If there are any ordinary workers left that is. With the majority of Howard’s anti-union laws still in place, I guess that would be the time that Rudd decides it’s time to interfere.

And what about carbon trading? How clever of this government to devise a scheme for cutting down on greenhouse gases that actually manages to demobilise the population and generate a new domain for financial speculation to boot! But of course, that’s what a neo-liberal government is all about isn’t it? “incentivise” the companies and beat down the social movements. And has anyone mentioned how much carbon these fires put into the atmosphere? Least of our problems just now I admit, but what about this business of encouraging people to sell their carbon to build forests? Will they have to repay the money and the carbon when the forest burns down and puts all the carbon back into the atmosphere? And all this extra money I’ve been paying for Green electricity? Do I now get it back with a discount instead?

The problem with this generation of social democrats is that they love consulting everyone, but the whole social layer that they consult is utterly engrossed by the market and know of no other way of living ... until it all comes tumbling down.