Tuesday, February 8, 2011

The Neo-Liberal Promise??


 All of the mantras from the Neo-Liberals that have been proved false.

Kicking away the Ladder

"Decreasing tax rates will increase overall tax take".
Only if taxes on middle incomes were excessive and the tax payments were being wasted. Like under Muldoon with social welfare for farmers and business. As we have seen recently decreasing taxes to the wealthy drops the overall tax take.

"Decreasing wages will free up business capital to invest in making business more productive".
In fact investment in productive business in NZ dropped to 1/3. Savvy business people know that low wage earners cannot buy much. SME's have been feeling the pinch every time NZ incomes have dropped.

"Letting the very wealthy keep more of the money will result in wealth trickling down and all of us being better off". Like feeding the cow more grass and hoping for better fertilizer.

"Privatising public services will result in cheaper and better services".
Yeah right. Like the US health system. Our rapidly dropping power prices.

"Running State owned enterprises like corporates will make them more efficient".
See above also refer to ports and railways. Managers are multiplying like fleas as they cut services and staff.

"Labour productivity needs to be increased before wages can increase".
Rob and CV have just covered that one. 82% increase in productivity. Skilled wages have dropped. Average up 18% only. The-productivity-lie

Globalisation and free trade will make everyone better off because of comparative advantage".
Wall street and some multi-national corporates get better off. The world pays through the nose to keep them in riches.

"Pay huge salaries to managers and you get the best".
UK research shows the higher management salaries are in relation to the rest of the staff, the worst performing the company. Germany and Japan get good managers while only paying about 4 times a workers salary.

"Taxes are a drag on the productive economy".
Well actually the USA economy was at its most productive when top tax rates were 91%. The best performing economies at present are the most taxed. Comparative tax rates.

"The State sector is non-productive while the private sector is productive".
So Doctors, Teachers, Universities, public research, Regulators don't contribute to the economy while finance houses, beer advertisers and gamblers in financial derivatives do. Yeah right!

"We will all have to accept austerity and a lower standard of living now for gain later.".
The majority of the population must accept less so the top 0.5% can continue to steal the results of our work from us. Waited 35 years so far.

"Selling income earning assets we already own will make us richer".
New Zealand's rich have spent the money they made from stealing our assets in the 80's and asset stripping. After burgling the share market as well they have proven so inept at adding value they need more public assets to play with.

"Tax cuts to the richest stimulate the economy."
No. extra income to the low paid and beneficiaries does because they spend it locally.

"Beneficiaries are a drag on the rest of us".
Beneficiaries are us. They are us one prolonged illness or some bad luck away. Cheap income insurance. Beneficiary income comes straight back as business income , taxes and wages.
Unlike 1.7 billion payments to insider traders in finance companies. Unlike tax cuts to the already wealthy which goes into US derivatives gambling.

Lunacy is expecting doing the same thing again and again to have a different result.

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