Finance Finance News The only way to defeat Trump, Hanson and Farage

The only way to defeat Trump, Hanson and Farage

(L-R) Donald Trump, Pauline Hanson and Nigel Farage. Photo: Composite/TND
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There is a growing consensus that the only way to push back against the rage machine of Donald Trump, Pauline Hanson and Nigel Farage is government action on inequality.

The cause of the global trend towards racism, isolationism and generalised, ill-defined anger is undisputed. Workers in the low and middle classes are suffering. The spoils of globalisation have been divvied up unfairly.

The fix is increasingly undisputed too.

Both the World Bank and the International Monetary Fund agree that the rage is a backlash against the unequal distribution of the benefits of free trade, free capital and open markets.

After the annual meetings of the World Bank and the IMF in the US over the weekend, an IMF advisory panel – chaired by the Mexican central bank governor – issued a statement outlining how the world can “maintain economic openness and reinvigorate global trade”.

“We commit to design and implement policies to address the concerns of those who have been left behind and to ensure that everyone has the opportunity to benefit from globalisation and technological change,” the committee wrote.

This matches recent comments from Martin Parkinson, head of the Department of Prime Minister and Cabinet. He said last week the government must consider “redistributive” policies (including cash payments to struggling workers) in order to shield open markets and trade liberalisation from attack.

It is debatable whether global trade liberalisation, led in Australia by the right wing of the Labor Party under Bob Hawke and Paul Keating in the 1980s, has been a help or a hindrance. The economic orthodoxy says it was essential.

Prime Minister Malcolm Turnbull speaks to the Secretary of Prime Minister and Cabinet Martin Parkinson
Secretary of Prime Minister and Cabinet Martin Parkinson (R) chats with Prime Minister Malcolm Turnbull. Photo: AAP

Many economists defend globalisation by arguing that the developing world, especially south-east Asia, would never have been pulled out of abject poverty so quickly without liberalised trade.

What is not at question is that many workers in the West have suffered. Wage growth and living standards have stagnated, after the post-WWII boom.

This has dealt a crippling blow to popular support for the economic orthodoxy. Without concessions to the workers losing out, the system will collapse, many experts now agree.

Thomas Picketty, world-famous French economist and author of Capital in the Twenty-First Century, told Fairfax Media on Monday that the Australian government should increase property taxes to fight rising inequality.

Jim Kim
World Bank president Dr Jim Kim. Photo: AP

World Bank boss Dr Jim Kim said last week that governments should invest in “more robust social security programmes” and in upskilling programs for workers.

The Guardian economics commentator Greg Jericho made a similar point in recent days.

“In this present crisis, government is the solution. Those who suggest otherwise will be doomed to find themselves standing side by side with racists and justifying it by saying at least they can agree that government debt is bad. And then – too late – they’ll find they don’t even agree on that,” he wrote.

The message from experts is clear: we defeat Trump by paying away the anger of his supporters, or we all suffer.

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