That’s what I’m calling a class of nonsense policies designed specifically to not address a social problem, but to rake profits from those facing the problem. They disguise a grab for economic rents as a solution. But when you actually think about them as solutions for a specific problem, you meet irreconcilable logical errors that reveal their true nature.
We know that in terms of real goods and services, private compulsory retirement accounts are useless. We also know that $20 billion per year is creamed off in fees and charges on superannuation accounts. And yet, this bullshit continues.
Error: Buying shares and bonds with superannuation is good, yet buying property with superannuation saving is bad because it inflates prices.
Why: Both are bad. They funnel money into a set of asset markets that would mostly be used instead to buy goods and services and make new investments. The economy is no larger and no more able to support consumption by retirees.
If you want more housing, your build it. Instead, governments tweak the funding settings for social housing, tweak rules about town planning, buy equity in homes, and provide cash gifts to homebuyers.
Imagine running the military. You want more helicopters. Do you give out helicopter production permits to manufacturers, provide a government guaranteed line of credit to manufacturers of helicopters, buy equity in helicopter hire companies, and give cash grants to people who are buying existing helicopters from each other? No. Because it's bullshit.
Error: Rezoning land to allow greater density is good. Forcing rezoned landowners to actually build homes is bad.
Why: Because these policies are not about supplying more housing. They are bullshit financialisation.
This one is a little more US centric. Instead of simply providing health care, they are proposing to get the government to match payments into individual healthcare savings accounts. It’s bullshit. It’s not an insurance program because insurance only works when you have a diverse pool of participants – you can’t self-insure against catastrophic events, which is sort of the point.
In Australia, money is funnelled into private health insurance using tax system incentives to the tune of $5 billion a year. For every dollar given by the public to the private hospital system, it provides only 40 cents worth of equivalent care compared to the public hospital system. From a health perspective, it's 60% wasted money. So why do it?
Error: People don’t have enough money to pay for healthcare, so to solve that we get people to pay for their own healthcare. Or, we don't have enough money to boost the public health system, so we instead pay $1 of tax money for 40 cents worth of health care in the private system.
Why: Because these policies are not about healthcare, but scraping exorbitant fees for ‘managing’ the money in savings accounts and health insurance accounts.
Privatisation and public-private partnerships (PPPs)
Privatisation, and partial privatisation in the form of PPPs, is about nothing more than removing both debts and assets from the government books, then lying to the public by only talking about the debt side of the equation.
Error: Government has no money, so it sells its assets to pay off debts, leaving it with no money.
Why: Because these policies are about putting monopoly enterprises in the hands of the private sector so that they can make stupidly high profits.
This is just a taste of the bullshit financialisation in the economy. It is likely to get worse before it gets better.