Snapshot of the FIRE economy this week: NZ & Europe

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fireeconomy.com

Opinion/Analysis by Carolyn Skelton.

Whatever the government, and some of the most optimistic mainstream statisticians and economists tell us, there is something very wrong in countries where the least well off cannot afford adequate housing and/or other necessities.

Bryan Bruce speech

This report by Olexander Barnes on a Bryan Bruce talk, outlines the shift from an inhumane society with no security in the UK, to the rise and fall of the welfare state.

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He started his lecture talking about his parents and grandparents. Describing their lives of incredible hardship in a society that had no safety net to catch people who had fallen on hard times, which in that day and age were the poor. He told of his grandfather dying at home of cancer with only his daughter (Bryan’s mother) to care for him, and that his mother would be haunted by the screams of her father for many years after his death.

After leaving Scotland,Bruce and his family came to NZ in the 1950s, where life was tough but fair:

a person could earn enough money from their weekly paycheck, that they could put some of it into savings and within 5 years they could have enough for a deposit on their own home, which was exactly what Bryan’s parents were able to do.

Then Bruce talked about the changes since the 1980s in NZ,

Keynesian economics had dominated Western economic thinking from the end of the Second World War and championed a collective society and the welfare state, but gave way to the current Neo-Liberalist economic thought which promotes individual enterprise and free-market policy.

And this has enabled child poverty and income and wealth inequalities to become entrenched, with the return of (preventable) diseases of poverty such as rheumatic fever.

Jane Kelsey’s The FIRE Economy: Finance, Insurance, Real Estate

Kelsey Fire Economy event finder

 

Also this week, Jane Kelsey’s new book, The FIRE Economy: New Zealand’s reckoning was launched, and promises to provide an in depth analysis of the political, social and economic changes that have led to the disastrous dismantling of the social security state.

A promo for the book explains,

From rising inequality and ballooning household debt to a global financial crisis and fiscal austerity, the neoliberal ‘orthodoxy’ has brought instability and empowered the few. Yet it remains remarkably resilient, even resurgent, in New Zealand and abroad.

But even some of the institutions (such as the IMF) and commentators that once led neoliberal reform are questioning its future, warning that “the current model is unsustainable.”

The FIRE economy favours

… economic policies that give FIRE industries tax, regulatory, and monetary policy advantages over productive industries. The other economy is the Productive Economy that is comprised of businesses that produce value-added goods and services. The Productive Economy grows based on profits from sales of goods and services produced by adding intellectual property and other human value inputs. The FIRE Economy operates by extracting economic rents, such as interest on debt, from the rest of the economy.

[This quote and the featured image are from www.fireeconomy.com]

Another casualty of this debt-driven, rentier dominated system, which has been in focus this week, is the no-win situation for Greece.

Stephen Keen on Greece

In the last couple of weeks I have seen the UK-based, Australian ex-pat economist Stephen Keen on Al Jazeera providing alternative views to most mainstream economists.  He has argued that the underlying problems are with the structure of the Euro system, which is imposing a failing “neoliberal” system of austerity, and it needs to be reformed. see, for instance, Keen on “Inside Story”, 6 July.

Here Keen ponders on the problems for Greece,

I have to admit that I was flummoxed by the political developments in Greece this week. After winning a referendum based on rejecting the Troika’s terms, Tsipras capitulated to those same terms—if anything, to somewhat harsher terms—less than a week later.

He examines some alternatives, and concludes that the best bad option now would be for Greece to exit the Euro. He is worried that, after Syriza’s capitulation to the European powers, Greece will see the rise of right wing parties.

End politics of austerity, revive the social security state: MhairI Black’s maiden speech

Meanwhile this week, in the UK, the young SNP (Scottish National Party) MP delivered her maiden speech and it went viral online:

She also laments the decline of the welfare state, and says:

“We now have one of the most uncaring, uncompromising and out of touch governments that the UK has seen since Thatcher,” she says, after telling the heartbreaking story of a man she befriended while working for a charity that provided food for the poor. “Food banks are not a part of the welfare state, they are a symbol that the welfare state is failing.”

In her rousing speech, she laments the decline of both the welfare state, and the failure of the UK Labour Party to oppose the decline.  She calls for the return to the values of the social security state, and an ending of the politics of austerity.

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Carolyn is committed to economic and social justice. She has researched and taught in film, TV and media studies, sociology and gender studies. Carolyn is actively interested in local history, and its impact on the present and future. Carolyn currently works part time as a research librarian in Auckland Libraries, which is part of Auckland Council. The views, analysis, and opinions she expresses on this site are her own, and not those of Auckland Council.

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