Exposing the Affordability Con

Whenever people are made to think society cannot afford to support what is important, but accept costly policies that mainly benefit the wealthy elite, the ‘affordability con’ is on.

Ever since irresponsible bankers utilised the vastly expanded scope handed to them by reckless deregulation to gamble away billions of their savers’ money, the public have been told one simple story. Money is in short supply. Therefore, ‘everything’ has to be cut back – help for people who cannot get a job, support for workers whose job does not pay them enough to live on, funding for the health service, for tackling homelessness, for education at every level, and the list goes on. And whenever anyone points to the desperate need to finance these services better, there will be those who faithfully repeat the mantra, “but we can’t afford it”.

So why is it that we can afford to hand billions over to bankers, despite the atrocious problems they have caused? Moreover, that money is given to them with no strings attached. They can pay themselves vast bonuses regardless of whether or not they are now lending more responsibly. And the deregulated financial system remains in place for them to exploit.

That is not the end of it. If billions are to be spent on sending bombers and missiles to attack a foreign country, that will go ahead without even a public debate in Parliament or Congress. Is there a serious threat to the lives of Britons or Americans if such costly action is not taken? No, if anything, it would just add fuel to the flame of twisted resentment against the West and raise the level of terrorist threats. It certainly does not compare with the threats and violence unleashed on ordinary people in the UK and the US as a result of growing economic insecurity and rising levels of hate crime. Yet domestic protection is unreservedly scaled back by the Conservative Government’s cuts to policing numbers in the UK, and the US Republican President’s de-prioritisation of all threats other than ‘Islamist’ terrorism.

What about the argument that money is needed elsewhere? Perhaps there are vital actions that have to be paid for to help society as a whole. So what do those cautious custodians, who tirelessly warn us about the need for austerity and deficit reduction, think our precious money should be put aside for? In the UK, the Conservative Government’s priority was to prevent losing votes to UKIP, and while both David Cameron and Theresa May (successive Tory Prime Ministers) had been unequivocal that they believed the UK was better off in the European Union, they would hold a referendum on the issue, and when that was lost, their government would spend endless amount to push ahead with Brexit even though it would make trade, jobs, standards of living, all worse off for the vast majority of Britons. In the US, the Republicans’ priority was to reward their superrich donors and friends. The federal deficit would be escalated to around a trillion dollars to pay for tax cuts that would overwhelmingly benefit the wealthiest few.

To compensate for such drastic losses to the public purse, the Conservative Government in the UK has taken an even more resolute stance on cutting back on expenditure in other areas, for example, by reducing the staffing level of the HMRC (Her Majesty’s Revenue & Customs) team tasked with tackling tax evasion by those with most to gain from evasion.

Finally, on the point about there being no money, it should be noted that a defining feature of any sovereign government is its power to oversee the flow of money in the economy. If it deems it necessary, it can issue more money. Under the guise of ‘quantitative easing’, a lot of extra money has been injected into the economy in the UK and the US. But it was not designed to help people in need. Indeed it is widely acknowledged that by far the biggest beneficiaries of quantitative easing have been the wealthiest who own shares and assets, and of course the bankers, for whom, affordability is always someone else’s problem.

The Political Wing of Bad Business

Think of those businesses which make their money from activities that are harmful to millions of people. If governments were left to develop policies to serve the public interest, these inherently anti-social corporations would be tightly regulated, and their callous profit-making would be much curtailed. To make sure that does not happen, many of them have adopted the strategy of ‘donating’ funds to those politicians who would prioritise their profiteering over the protection of the common good.

The political wing of these corporate marauders is then positioned as the party of the ‘free market’. In the name of promoting ‘economic prosperity’, it will do all it can to keep any unhelpful legislation off the table, and bring in changes that will make it even easier for irresponsible companies to ride roughshod over ordinary citizens.

Is this an unfair exaggeration? Let us look at the political parties in the US and the UK that have historically obtained a larger share of the contributions from big businesses. And for both the Republicans in the US and the Conservatives in the UK, their leading backers come from four notable sectors:

• Finance: the largest donations overall come from the sector that gamble with their savers’ money (while counting on public bailouts if they end up losing), and also includes hedge fund management, insurance, payday lending, and distressed-debt acquisitions (these last two particularly rely on minimising regulatory protection of people living under precarious social and economic circumstances).

• Fossil fuel industry: for those whose profits come from the sourcing or utilisation of fossil fuel, it is vital that protection of the public from local environmental degradation and wider climate change damages be minimised. Fracking in the UK, for example, was supported by changes in the law that were opposed almost unanimously by the public.

• Private healthcare businesses: in the US, any attempt to improve public healthcare provision that may reduce the profit margins of private health insurance providers is strenuously opposed; in the UK, the demand is for handing over much more NHS money to private healthcare companies; and in both countries, pharmaceutical companies want public funding support with research but private autonomy to push up profit margins.

• Property developers: public investment in infrastructure is sought, but private profiteering must trump requests for housing that is affordable or development that enhances rather than destroys local jobs and enterprises. One US developer indeed described affordable housing quota as “immoral”.

Two additional sectors feature in the US, namely, casinos and information technology. Any business model that relies on people gambling when the odds are against them needs lawmakers to stand aside as much as possible, and the casino moguls have built their empires with the support of ‘free market’ champions. As for information technology, the capturing, passing on, and exploitation of personal data have been seen increasingly as a key threat to privacy and democracy, but tech companies’ mantra remains fixed on wanting to be left alone to do what they regard as ‘beneficial’ (and profitable).

Perhaps it is time responsible business leaders join forces to curb the dubious financing of the political wing of their not-so-responsible counterparts. There can be no level playing field when the unscrupulous few can keep bending the rules to suit themselves. The only way to end what by any name is blatant corruption, is for the majority to take a stand.

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Notes:

For more on how to tackle the undermining of democracy, see my book, Time to Save Democracy: how to govern ourselves in the age of anti-politics, from Policy Press in the UK: https://policypress.co.uk/time-to-save-democracy , or Amazon in the US: https://www.amazon.com/Time-Save-Democracy-Ourselves-Anti-Politics/dp/1447338243

For more information on the donations referred to above, see:

Bloom, D. (2018) ‘Revealed, how a third of Tory donations come from a tiny group of rich men who enjoy lavish dinners with Theresa May’, Mirror: https://www.mirror.co.uk/news/politics/revealed-how-third-tory-donations-11798246
Cahill, H. (2017) ‘Party donors: Here are the biggest names bank-rolling the Conservative campaign’, City A.M.: http://www.cityam.com/264987/party-donors-biggest-names-bank-rolling-conservative
Pilkington, E. & Swaine, J. (2017) ‘The seven Republican super-donors who keep money in tax havens’, The Guardian: https://www.theguardian.com/news/2017/nov/07/us-republican-donors-offshore-paradise-papers
Reeves, J. (2016) ‘Top 10 list of corporate donors to political parties reads like a most-hated-companies ranking’, MarketWatch: https://www.marketwatch.com/story/these-10-companies-could-influence-the-presidential-election-again-2016-06-16