Future Dated Legislation is no Guarantee
Posted by Mike Kaaks01 September 2020
Those of you in my generation (I’m 71 and whilst that labels me a baby boomer I am much happier just being my age) will remember the Popeye cartoons we watched after the arrival of television. Shows like this always have signature moves. In this case it was Popeye’s laugh, and in lesser light Wimpy’s line “I’ll gladly pay you Tuesday for a hamburger today”. The moral lesson for us was that he was never given the hamburger. Here I am sixty years later wondering at the loss of that lesson. I’m talking about politics, and the payback at some future moment for a vote today. It’s always been the case that politicians promise us policies and actions at election time but today we live with a much more tangible example of what I guess the market calls futures.
My point is that we must buy back the present, and let the future take place through its own present. No more vote for me today for what I’ll give you tomorrow. If you want my support, do it now. Start building the infrastructure NOW, put caring mechanisms in place NOW, act in the interest of all of us NOW. Many of our systems of governance need a tune up but they are not broken. It’s the operators who are wrong for the job, and us who buy their futures.
In 2012 the government legislated staged future increases in the rate of the Super Guarantee. We were told it’s not a promise, look its legislated. All of which is fine until we get to 2020, it could be any future moment of course, and legislators want to pass new bills that take away those rock solid guarantees. The problem here isn’t so much that our government wants to change its mind, its that we are suckers to have let Wimpy have his hamburger. We banked a future benefit that is always rocky in a system where one party might giveth and the other feels entitled when in power to taketh away.
As clear as the Super example is, there is a bigger game. Look at the narrative of Budget surpluses. Back when Wimpy was trading for his hamburger the budget was a one year thing and as time went by the estimates supporting it have been stretched. The money has become more important that the people. Those long horizon forecasts are spoken of by our pollles as a stone cold certainty. Like any modelling of the future, it is all based on assumptions. What growth rates, how much will inflation be, what will be the exchange rates, what will our trade partners be doing and so on.Get one to two of those wrong and the forecast is of a different story. But we keep buying it. The value is not out there somewhere, it lies in whatever action is taken NOW.
All of us regular citizens would be better off working this way, only paying for the hamburgers we get in our hands. Which led me to think about how we got here, to this future based deal with politics and who might argue against my proposition. Who places higher value on a future time than today’s reality. I think there are a few:
1 the Markets
2 The lobbyists
3 The political parties
4 The big consultancies
As that list emerged it struck me that there is a strong theme running through it - naked self interest. The political parties would argue against that but my counter would be that since the emergence of binary ideologically driven politics of today they can no longer claim to be doing their thing in our interest. A simple example is the lack of collaboration in dealing with the pandemic where the further we go the more bitter are the politics. What’s good for us is lost. We should not be bought.