Market fundamentalism and something too good to be true

Just having a look through at the latest scheme cooked up by the party in charge today – promise stuff whilst not raising taxes and balancing the budget. The latest grand scheme that the National Party has, besides their privatising off of state houses to charitable organisations (the big ones have turned it down because the scope of what needs to be provided cannot be done not to mention the lack of specific skills in said organisations to manage such a large property portfolio). I can’t help but feel as though this is a situation of “if it is too good to be true then it most likely is” as with the latest scheme called ‘social bonds’ where it appears the government is trying to deliver services on the cheap in the belief that some how, through the miracle of divine intervention and the pixie dust of the free market, that the government can deliver on all their promises without having to raise taxes or increase borrowing. So I ask, “what is the catch” because I’ll guarantee you that there is a catch, there is some fine print down at the bottom that’ll come back to bite us (society) in the ass when long after John Key is gone there will be a gotcha clause but by then he’ll be long gone in a comfortable diplomatic posting. I can’t help but feel as though politicians just don’t have the guts to front up to the public that if you want more ‘stuff’ then it’ll cost more money – that you cannot magically make things appear without it costing money and that part of being a civilised society is actually paying taxes to ensure that the most vulnerable within society are taken care of so we don’t end up being like the US – a model on how a society shouldn’t function.

I’ve been watching and reading a lot of content of a political nature over the three weeks and it astounds me as to the irrational reverence, almost cult like worshipping of the free market, as if it were an academic discipline whilst ignoring that as far back as I remember taking economics you learn about market failures, the role of government, merit goods, demerit goods etc. where market failures you learn about goods that society need such as healthcare and the role of government to intervene directly in the market such as a single payer healthcare system where all citizens get access to it regardless of their income level. Such ideas aren’t ‘radical’ or ‘socialist’ but basic economics that you learn from the moment you start taking economics at high school. Friedrich Hayek even writes about how best natural monopolies should be regulated – that a natural monopoly exists because the capital expenditure for initial start up is so high that it acts as a barrier for competitors to enter the market and the period of return on investment is so low that it would be impractical to have illusion of competition that ultimately ends up hurting the consumer with higher prices – a natural monopoly with regulation is the better option (something that the United States did for make decades where AT&T was given a monopoly status but in return it was heavily regulated so that it made a modest return of the shareholders whilst ensuring the consumer wasn’t ripped off – the net result was also it allowed them to invest into breakthrough ideas at their Bell labs that led to the development of ADSL technology on which many rely upon for high speed internet).

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