Australian Labor leadership election

The ballot papers that rank-and-file members of the Australian Labor Party will receive this week are for the most important vote they will ever have as a member. For the first time, rank-and-file members will vote for the Federal Parliamentary Labor Party leader.

For a party that was often a pioneer amongst social democratic and labour parties, it seems odd that Australian Labor was the last major centre-left party in an English-speaking Westminster democracy to embrace the direct election of the leader.

A lot of that is due to the experience of the Australian Democrats, a socially liberal third party. The Democrats were a successful minor party for three decades, holding the balance of power in the Australian Senate and having representation in state parliaments. The party imploded after the membership of the party elected a federal leader that were not supported by the caucus room. The party now has no parliamentary representation and has been overtaken by the Greens. The Democrats have been cited by many opponents of the direct election of leader.

Continue reading “Australian Labor leadership election”

Marriage equality – lobbying tips

Labour activist Tony Milne, who was involved in the successful Civil Unions campaign, has pulled together this quick list of lobbying tips for those who want to make a difference in the campaign for marriage equality.

Respect the way in which an MP has decided to make a decision (there are multiple ways MPs are influenced or could come to their decision, and multiple factors they are taking into account when making a decision – some of which may have nothing to do with the bill itself).

Discuss, don’t lecture.

Share your view and experience, don’t bully, hector, or harass (makes you feel better, but doesn’t help persuade – in fact, does the opposite).

Pick up on the signals in any response to inform future responses. For example: if an MP says they will be guided by their electorate (incredibly valuable information for an MP to share!), organise locally to encourage locals to explain from a personal perspective what it will mean to them the day the law passes. Or organise a petition of locals to demonstrate local support.

Never attack an MP you’re trying to persuade.

An undecided MP (even a “no”) who has been treated with respect, dignity, compassion and understanding, is more likely to become a “yes”.

Let’s not repeat the mistakes of our opponents whose poor tactics and lack of lobbying skills have helped our victories in the past.

Guest post: Chris Trotter doesn’t like modern social democracy

This is a guest post by Josie Pagani.
In replying to my criticism of his post, Chris Trotter reveals he doesn’t like modern social democracy.

He’s entitled to be disappointed by every social democratic party in every developed liberal democracy if he wants – but he shouldn’t pretend that they are all selling out, or abandoning their principles.

He says talk of “hard work and personal betterment” is the language of Labour’s opponents. In this he is wrong. Since it was formed Labour has fought for the right of working people to have the same opportunities as someone born into money or privilege.

Here’s Julia Gillard:

It is periodically fashionable for there to be outbreaks of existential angst in the Labor Party where the cry goes up ‘we don’t know what we stand for’. Even if Labor isn’t raising the cry, media commentators raise it for us with never ending predictions of our imminent demise. Let me say to you tonight, I am deeply intolerant of this bunkum. I am absolutely clear what Labor stands for, what we aspire to achieve, what our culture is and our role as a party of government. The historic mission of our political party is to ensure the fair distribution of opportunity. From the moment of our inception our mission has been to enable the son of the labourer, the daughter of the cleaner, to have access to the same opportunities in life as the son of the millionaire, the daughter of the lawyer. Creating opportunity and enabling social mobility has required different policies in every age. We have moved beyond the days of big government and big welfare, to opportunity through education and inclusion through participation. But at every stage in our history fair access to opportunity has been our historic mission.

This is the tradition Labour in New Zealand today fits easily into. Trotter implies Gillard is another great disappointment. Every social democrat leader to him is a disappointment. Schroeder, Obama. He even slags off Neil Kinnock as a modernising sell-out.

Well I saw the ferret faced sneers of too many people who said that about Kinnock, and they did more than Murdoch ever did to elect Margaret Thatcher.

(Apologies to Nick Cohen)

If every social democratic government in modern liberal democracy has been a disappointment to him, then that suggests his problem is with modern social democracy, not with its practitioners.

“The British Labour Party wasn’t rendered unelectable by holding fast to its founding principles, it was kept out of office by the deliberate defection of its right-wing MPs,” he claims.


I was there, at party conferences, on picket lines at the coal mines, and Wapping, and branch meetings with Sinn Fein, Arthur Scargill and Ken Livingstone. Someone who had never left NZ at the time should be careful about condescendingly providing a “short historical and psephological lesson for Josie.”

It wasn’t just Militant – it was an entire school of Trotter-like groups who preferred dogma to actually governing for working people. One individual at a conference assured me an election defeat was a good thing because the more working people suffered, the more likely it was that they would rise up and revolt, bringing in the Socialist utopia.

I’ve been suspicious of anyone on the left or the right who talks about utopia ever since.

If he thinks David Owen and Shirley Williams were the reason Labour was kept out of power, then he knows too little of what happened. The counterfactual is not that Labour plus SDP would have beaten the Tories; it would be more accurate to add up the Tories plus SDP to see where Chris Trotter’s wishfulness gets you.

He might not like the kind of social democracy that the Labour party stands for, but he doesn’t get to dismiss it as ‘National-lite’ just because he doesn’t agree with it, nor to hound every modern social democrat as a Rogernome heretic in the wings, waiting to pounce.

Today Kevin Rudd jumped the shark

This is a guest post from an anonymous ALP member.

I first became involved in the Australian Labor Party in 2007 and winning that election elicits some of my fondest memories of my political life. I’ve been heavily involved in the ALP ever since.

Kevin Rudd’s press conference and decision to resign as Australian Foreign Minister is the beginning of the end for his career with Labor. To use a great phase: he’s done a Mark Latham.

Kevin Rudd is a very popular guy with the wider community. He has a great ability to make spin sound like straight talk (sadly contrasted by Julia Gillard’s unenvious ability to make straight talk sound like spin), but the message that comes out of Canberra is that he’s hated internally. As Prime Minister he was the School Principal that the parents loved, but the teachers couldn’t stand. Nothing has changed.

Kevin talked in his press conference today about his concern for the nation. Australia is a country that has coped with some of the most serious economic times that the world has seen in more than fifty years better than any other nation on earth. Our unemployment rate is phenomenally low. We’re officially the richest people in the world. Our government has made amazing progress that should warm the hearts of lefties everywhere: we’ve put a price on carbon, increased the wages of our lowest paid workers. We’ve introduced paid maternity leave and we’re rolling back middle class welfare. We are taxing our billionaire mining magnates who have become rich off resources we all own. We’re investing more in education and health

Kevin can proudly take some of the credit for our achievements of the last four years. So can Julia. Labor’s problem has been that we haven’t been able to sell our achievements. So when Kevin attacked the direction of the nation and the direction of Australia, he said exactly what the disillusioned wanted to hear and exactly the opposite of what the party faithful have been trying to get across since we took office.

It’s now increasingly clear that from the moment Kevin chose not to contest the leadership in 2010 he has been working to destabilise this government; working against Labor and for his own interests.

Aided by the media desperate for blood, Kevin and his tiny band of follows have done chipped away at Gillard. Not because of any policy difference, but purely in the quest for power. Hopefully now it comes to a head.

The feeling I get from my friends and colleges in the party is that he’s done. In an extremely anecdotal fashion the message I got today was almost universal dislike for Rudd’s resignation. Rudd might still be popular with the public, but his ego is too big and his quest for power too great for him ever to be an option again.

He wasn’t rolled in 2010 by “faceless men”. He was rolled by his work colleges, by the elected Labor members of the Australian Federal Parliament. He was rolled because he couldn’t work with them and he still can’t. He proved that today with his calculated dummy spit.

There is no longer a place at the Labor table for Kevin Rudd.

Third way party reform: part 3

The final in a series of guest posts from Hayden Munro. Read part one and part two here.

So now we come to the point of this story, the lessons we should draw from From and Blair’s story. The lesson is an important one and it is this: if progressive Parties weaken the organised forces that push for the interests of working and middle class people, they should not be surprised to find themselves with a political system that does not listen to these people. The out sized political power of the super wealthy is the direct result of decisions to weaken the organisational power of groups representing middle and working class interests. As happened throughout western economies and society, the push for individualised methods of social organization, rather than the collective action that defined the post-war era, weakened the power of ordinary voters to influence the system.

Hacker and Pierson, in their unbelievably highly recommended book Winner Take All Politics explain why organised groups can influence government action where individual voters cannot:

“To influence the exercise of government authority in a modern democracy generally requires a range of formidable capabilities: the capacity to mobilise resources, coordinate actions with others, develop extensive expertise, focus sustained attention, and operate flexibly across multiple domains of activity. These are attributes of organisations, not discrete atomised voters.”

No matter how worthy the cause – it must have organised power behind it if our political system is to respond to it. It’s this fundamental truth, that ordinary people best exert power over their leaders when they organise and band together, that is the foundational assumption of the labour movement. It’s why we have unions and why we have progressive political parties. Sadly, the story of progressive parties for the last 25 years then has been a concerted effort to weaken the ability of working and middle class people to exert organised pressure on their leaders.

It is important to know that this move from effective organised participation to ineffective individualised participation is not the story of all forces in our political system. In fact there is one interest group who has moved in the opposite direction: corporations and the super wealthy. Since the 1970’s business groups have become ever more organised and effective at putting pressure on politicians to take their concerns seriously and to govern in their interests. One way to measure this is the exponential rise in the use of lobbyists by business groups (a rise it should be noted, that can also be seen in New Zealand). The extent of this new organised lobbying effort was dramatised by a recent report by Public Campaign, an American interest group who found that 30 of the US’s biggest corporations paid more in lobbying fees trying to influence public policy than they paid in federal taxes between 2008 and 2011. So while corporations and the super wealthy were finding more and more organised and effective ways to push policy makers to bow to their concerns, progressive parties have spent the last 25 years removing their members ability to effectively organise in their own interests. In the battle over who Government listens to, one side has been unilaterally disarming while the other has been stocking up on ever more effective weapons.

The last few years have shown decisively that the current political-economic arrangement, where the super wealthy have vastly disproportionate power and bend the rules to suit their interests, isn’t working. It is widely accepted within Labour that our party has to change, has to allow more say for our members in everything from leadership to policy formation. The challenge we have is creating a party system in which our members not only have a voice, but the organisational might to make sure their voice is heard. We must remember that any reforms that lessens our members’ ability to organise, be it through a union or sector group or even just a voting bloc, lessons their ability to make the political system respond to their interests. We must make sure we build our new Labour Party on foundations of real, effective representation, rather than top down elite control in the name of “democracy”. Collective action and organisation are the tools by which members of the labour movement have built a better world and a fairer New Zealand for the last hundred years. They are the way through which we will create an economy that once again works for everyone. We must make sure we protect them.

Third way party reform: part 2

The second in a series of guest posts by Hayden Munro. Read part one here.

However as we now know, for all its electoral success, Clinton and Blair’s Third Way failed in some very real ways, ways that would see it summarily rejected by the majority of progressive thinkers and leaders by the turn of the decade. Within ten years, Blair would watch as his successor Gordon Brown re-embraced the Keynesian style demand side stabilisation policies of “Old Labour” in the face of a Great Financial Crisis that Blair never saw coming. Even worse, Blair was forced to watch as his chosen heir David Miliband was defeated in a Labour leadership election by his brother Ed Miliband, who ran on a ticket of opposition to the Iraq War and a “turning the page” on Blair’s legacy. Likewise Bill Clinton could do nothing but smoulder as his wife Hillary was defeated in the 2008 US Democratic Primary by an upstart Senator who promised to move on from the days of “Old Washington” and the small scale incremental change of the Clinton years. The electoral repudiation of the Third Way is the strongest possible evidence that there was something fundamentally unsatisfying with the outcomes of the Third Way project, and a look at Clinton and Blair’s economic record tells us why. Fundamentally, on the key economic challenges facing us today, the Third Way did not offer solutions.

To understand why the Third Way was unable to address these concerns, we must look at how it came to dominate the politics of Labour and the Democrats. It is here that we begin to see answers for why our politics stopped being responsive to the vast majority of our citizens. Because what both From and Blair did was takeover their parties by reforming how their members participated in their parties’ internal democracy. Despite the vast differences between the US and UK political system, and the rules structure of the Democrats and Labour, From and Blair’s strategy was the same: change the rules under which the party operated in a way that weakened the ability of opposing groups to organise against them, by promoting the idea that less organised forms of participation were more “democratic”. The effect of depowering organised groups within the party was always the same: it increased the power of elites and centralised control of the party apparatus and platform in the hands of an elite few. This led to less membership, less organisation and parties governed in an increasingly “top down” way.

Continue reading “Third way party reform: part 2”

Third way party reform: part 1

The first in a series of guest posts from Hayden Munro based on his presentation to Labour’s Summer School.

I promised Patrick I’d write a rundown of the presentation I gave to Labour’s Summer School this year and what I think the implications are for Labour’s ongoing project of party reform. Not just the organisational review, but also any leadership, candidate selection, or constitutional changes. The broad theme is that way in which progressive political parties themselves have become neo-liberalised in the last few decades, and the way in which this has meant they have increasingly been unable to bring about real change when in power.

Al From

The presentation was a recap of the way Al From and the Democratic Leadership Council (DLC) took over the Democratic Party in the USA in the late 80’s and early 90’s and how this takeover inspired and informed much of Tony Blair’s New Labour project in the UK. From was the director of the DLC, the centrist group that eventually elected Bill Clinton. The presentation then linked this takeover to both parties’ inability to effectively respond to the major economic challenges we are facing at the moment, such as wide and growing income inequality, stagnating middle class incomes and an increasing sense that, as Grant Robertson has noted in a few public speeches, a public that increasing feels like politics is not something they do but something done to them.

This is a fairly lengthy subject, so I’ve broken it up into three posts which will be going up over the next few days.

Continue reading “Third way party reform: part 1”

Political blogs, like other party comms, require oversight

A guest post from Jacob Quinn, first posted on his blog, Life and Politics.

What is the point of having a media unit if they cannot filter and influence what messaging makes its way into the public from your organisation? This is a question that political parties need to ask themselves when deciding on how to manage their MP’s media releases, blog posts and media interviews.

It is common practice for media staff, most of whom are ex-journalists or at least have developed understandings of how media works and how issues will likely play out, to coordinate interviews and press releases.  So why would you leave them out of having input to (and more importantly, oversight of) a party political blog, that you’ve set up to communicate political messages and to engage with interested voters and journalists.

Today’s blog post by Labour MP Raymond Huo, and a couple of other noteworthy examples from 2011, are examples of well-meaning but ultimately counterproductive pieces of political communication, that, had they been put under the nose of a press secretary, would have stayed in the drafts column, never to see the light of day.

This is why you pay press secretaries. Even if you are an award-winning writer or a former journalist yourself, you cannot keep your political antennae on 24/7 – especially in the wake of a personal attack or when reacting to something that you feel particularly emotionally charged about.

In the heat of the moment you lose your cool and write something that turns out sounding silly. It hits the press, you are embarrassed, your colleagues are embarrassed, and then your leader has to have a quite stern word with you. Now you wish you’d run it past someone in the media unit.

I am of the view that to minimize the risk of embarrassing or counter-productive communications working their way into the public domain political parties must include their communications staffers in all external political communications, including blog posts. Press officers tend to be available (almost) 24 hours a day, they have smart phones, and the sign-off processes needn’t be overly cumbersome or bureaucratic.

Political party blogs like what Labour and the Greens have are incredible useful communications tools. Conversely, blogs which consists of newsletter links and rehashed press releases are not worth the $25 a year it costs to register the domain name.  Labour and the Greens should be commended for running real blogs, with real opinions on current issues, but they are foolish if they don’t bring these tools within their broader communications strategies and oversight mechanisms.

Guest post: Ports of Auckland dispute

A guest post by Rob Carr

Why are the port workers striking?

The Maritime Union has been in discussions around raising pay and conditions since August. Unions negotiate pay and condition rises regularly otherwise pay would effectively reduce with inflation. The desire for better pay is not what the strike revolves around and the union employees rejected a 10% pay increase which the port company was offering to get change it wanted through.

The Port of Auckland wants to have the employees on a rotating roster. In addition they want to be able to contract out the work they do. Essentially this means they want the freedom to take away hours from the workers or their jobs at any time.

What the workers are striking about is the fact they do not want to lose their jobs.

All for the national interest

Fran O’Sullivan in her Herald piece about the port workers echoed comments others had made about it being in the national interest that the port workers lose so the country can benefit:

Nor has the union been paying attention to the Productivity Commission which estimates exporters and importers spend upwards of $5 billion a year on freight and has forecasted annual trade could be boosted by $1.25 billion if transport costs were shaved by 10 per cent. There is a national interest issue at stake here.

The idea that this is about the national interest or that the union hasn’t been paying attention to the productivity commission is farcical. The only argument being made is actually that they want to cut costs in order to increase profits. There is nothing new or special about the Port of Auckland and their desire to cut costs.

The changing union employees for contractors will not cut 10% off the countries transport costs. It is highly unlikely it would do so in just that port. The figures here are saying a 10% cut in cost will lead to a 25% growth in trade which is certainly a considerable profit but it doesn’t explain why the cut has to be made to these port workers job or why it needs to be done in this way. The transport costs could be cut in numerous ways and the fact that one measure can achieve a cost saving does not justify doing it where it has a disproportionate effect on peoples lives.

There are many cuts you can make to businesses to increase profits. When this comes at the expense of their employees however this is a bad thing. The national interest argument is the same one John Key made in the leaders debates during the election where if one group of people is paid less everyone else can have cheaper muffins. It doesn’t make it fair or a good idea and this is seen easily if you were to project the effect over an entire country where the result would be 80% of people being worse off.

Do they need Labour’s help?

There are several people calling on the Labour Party to make more comment around the port workers strike and come out strongly for them or against them. If you ignore national interest the arguments boil down to Labour should ignore them because they earn $90,000 a year and Labour should support them because Labour supports employees. The reality is the divisions in society are not so simple as the level of income a person earns. The division around who needs Labour is whether someone has a scalable or non-scalable profession.

A scalable profession is one where luck, quality and bargaining power determines your income. This is speculators, sports stars, bankers, CEOs, authors, business owners etc. Their income can become massive quickly due to 1-2 events, there is no effective cap on their level of income. Scalable professions are a product of capitalism and depend on its randomness to survive. Labour Governments can be devastating for those in scalable professions aside from the sports star/author ones as regulation supresses the boom bust cycle potentially destroying their careers.

A non-scalable profession is one where quantity of work determines your income. This is cleaners, teachers, doctors, lawyers etc. These people benefit from left wing government right up to near the top of the category (around $200,000 income currently). They benefit especially from capitalism being regulated as this creates a stable economic environment in which they can consistently continue to earn their income. Boom and bust destroys these people’s lives as they need to work every day to afford to live.

Port workers are a non-scalable profession and generally left wing. At $90,000 they would be pretty well paid for a non-scalable profession. However the base rate of salary for a stevedore is actually 50-60,000 as it is a 26 hour week and the $90,000 figure used by the port company is what they would get if they were to work 17 hours overtime every week so unless there is a truly massive amount of overtime worked it seems their salary is not so high afterall. The issue here is also not pay but stability of work the thing people in non-scalable professions need left wing parties like Labour to ensure for them.

The Labour Party should support them in attempts to defend their quality of life. However given the level of media attention already given to these strikes public support from Labour is not needed. Their endorsement won’t change the outcome of negotiations and Labour should save its press releases for when strikes are getting ignored like the Open Country lockouts were.

What’s behind the Austerity Consensus? New Polling Suggests Income Inequality.

A guest post by Hayden Munro.

One of the most frustrating things for Progressives about the world-wide policy response to the Great Financial Crisis and the Long Slump that we are still in, has been the incredible amnesia with which most policy makers have responded to the crisis. For Progressives, the Great Financial Crisis is nothing new, it’s a crisis brought on by dangerous under-regulation of the financial industry, which created a financial meltdown, a liquidity trap and depressed aggregate demand. In other words, it’s a repeat of the 1929 crash that caused the Great Depression.

This is the central theme of some must read works like “This Time it’s Different” and pretty much Paul Krugman’s entire output since 2008. To progressives, the answer should be simple, the financial crisis has damaged the engine of growth that should be powering our economy, and Government has a role to play in lifting growth and stabilising the economy, putting people back to work and restoring the financial security of the middle class that has been so damaged by years of trickle down economics and the financial crash that followed.

This was the immediate read on the crisis and the thinking that underlay the early response to it, moves such as the bank bailouts in the US, the nationalising of banks in the UK, and the general rounds of economic stimulus all over the world. Since early 2009 however, Progressives have watched as policy makers, having successfully stabilised the financial sector, promptly abandoned any moves aimed at restoring pre-crash levels of growth, instead favouring harsh austerity measures aimed at cutting the deficits run up in the lead up to the crisis, and by the emergency response itself. For Progressives, it boggles the mind at a time when flagging growth is so obviously the most important challenge facing our economies, all of the attention has been on “the debt problem” rather than the “growth problem”

This is evident in the New Zealand context as well: think about Bill English and his zealot like commitment to a “zero budget” when New Zealand actually has very low public debt by global standards, yet worryingly low growth.

Joe Biden”s former chief economic advisor Jared Bernstein sums up the progressive astonishment well here:

Over the last decade, too many households, governments, firms, and banks borrowed recklessly, nudged by financial “innovations,” negligent underwriting, and pure disregard for their ability to meet the liabilities they were taking on. Then, in September 2008, the system snapped. One particularly over-leveraged investment bank, Lehman Brothers, went bankrupt, and the global debt bubble popped. Millions of people lost, and continue to lose, their homes. Unemployment is rampant, and just under half of the unemployed have been jobless for more than half a year. The debt burdens of sovereign nations, Greece in particular, pose existential threats.

And yet policy-makers seem frozen in place, unwilling to take the necessary actions for one basic reason: doing so would mean deficit spending. Indeed, those at the helm in the advanced economies seem intent on shifting into reverse, pursuing austerity measures that, like medieval bleeding, only make the patient sicker. We recently inflicted more wounds on our already injured economy by arguing about whether or not to default on our own sovereign debt. This frustrating and destructive debate would have been a pitiful sideshow had it occurred during a period of full employment. For it to happen in the midst of the worst jobs crisis in decades amounts to malpractice by the policy-makers involved.

UK Labour Leader Ed Miliband is one of the few progressive politicians making this case explicitly. In his 2011 Conference Speech Miliband told voters…

I have a fundamental disagreement with the Government.

They believe Britain can address our problems of debt without addressing our problems of growth.

They are wrong.

Think of how you pay off the credit card bill.

You need to make savings in the household budget.

But if you lose your job and the money stops coming in, you can’t pay off the bill.

People in Britain are losing their jobs.

They aren’t spending.

Government is cutting back.

And the recovery has stalled.

Of course, the world economy is suffering.

But our Government is making it worse.

The argument by people like Bernstein and Miliband is simple: countries like New Zealand, America and the UK have a growth crisis, not a debt crisis, and by focusing exclusively on debt, we are missing the point and prolonging the recession. So this leads us the question: Why? What is causing our policy makers to ignore our growth problems in favour of a laser like focus on deficits? Some new polling and research into how policy makers decide their priorities provides some hints, and for those of us who want to see economic growth atop the political agenda, it’s worrying news.

According to some much publicised research by Martin Gilens, a political scientist at Princeton University, there might be a surprising factor at work here: Income Inequality. More specifically, the way that vast differences in wealth lead to vast and worrying differences in political power. The Washington Post’s Ezra Klein explains:

Gilens has been collecting the results of nearly 2,000 survey questions reaching back to the 1980s, looking for evidence that when opinions change, so too does policy. And he found it—but only for the rich. “Most policy changes with majority support didn’t become law,” Hacker and Pierson write. The exception was “when they were supported by those at the top. When the opinions of the poor diverged from those of the well-off, the opinions of the poor ceased to have any apparent influence: If 90 percent of poor Americans supported a policy change, it was no more likely to happen than if 10 percent did. By contrast, when more of the well-off supported a change, it was substantially more likely to happen.

What Gillens’ research shows us is that, especially in America, widening income inequality has led to massively increased political power for the most well off. And this has meant that those in the top 10% and especially those in the top 1% have a vastly out-sized say in the policy making process, not only dictating what policy answers become law, but also what “questions” policy makers focus on.

Doesn’t this sound a lot like the problem we are trying to understand? To the vast majority of people, especially the middle class who are suffering in the current recession, economic growth seems to be the major problem. Yet our policy makers are focused on something else? So can we find evidence that this is actually what’s going on, and that divergent opinions on the nature of the challenges our policy makers should be addressing might be driving this disconnect?

Over to which tells us that a recent sudy:

Authored by the political scientists Benjamin Page, Fay Lomax Cook, and Rachel Moskowitz and recently released by the Russell Sage Foundation, found that the politics of the very wealthy are strikingly different (from other incomes groups).

Their study, which was part of a larger project called the Study of Economically Successful Americans and the Common Good, involved something unusual: a random sample of the rich. In particular, they interviewed 104 wealthy individuals in the Chicago area between February and June 2011.The sampling frame, constructed from various sources, was essentially the top 1 percent in terms of wealth (not income, as in the Gallup analysis).The response rate among the wealthy individuals they contacted was 37 percent, which may seem low on its face but is quite respectable by contemporary standards. The median wealth of this group was $7.5 million. (Of course, the broader project is surveying wealthy people nationwide, not only in Chicago.)

So this study lets us compare opinions on economic policy issues between the top 1 percent of income earners, and the rest of the population? The findings are exactly that Gilen’s research suggested we would find: a real and substantive disagreement over which policy questions our politicians should be focused on, with the views of the top 1% matching the actions of policy makers:

The 1 percent cares more about deficits than the economy. When asked to name the most important problem facing the country, 32 percent of respondents said the deficit and 11 percent said the economy. By contrast, in an April 2011 CBS News/New York Times poll, 49 percent of Americans said the economy or jobs and only 5 percent said the deficit.”

This polling suggests that the bewildering focus on debt issues at the expense of growth, at a time when economic growth has never been a bigger issue, is more than just a mistake. It is symptomatic of wider power imbalances in our economy, and further proof that massive income inequality is a threat not only to economic stability, but to the fairness and responsiveness of our democracy.

Why this research is so interesting is that it illustrates in a really important way the extent to which our current economic problems are connected to, and caused by, deeper political problems. The sort of trickle down economic policies that the Right told us would lead to greater prosperity, led not only to massive income inequality, they deeply unbalanced the power structure of our politics. By giving more and more wealth and political power to the wealthy, they created a political system that was increasingly tailored to meet the demands of the well-off. And that meant more  more tax cuts for the rich, more financial deregulation. And then when these same policies drove our economy off a cliff, it was the well-off who got to dictate how we responded. And their answer has been uniformally to move away from the policies that history tells us actually solve financial crisis and their ensuring recessions.

So what’s the lesson here? It’s that a progressive response to the financial crisis must be one that not only gets the economy moving again, but one that rebalances the power structure of our politics. We need a politics that puts more power in the hands of the middle class, and that means more wealth in their hands. This adds a new dimension to debates like the need for more progressive taxation and things like a financial transaction tax. It’s why Labour’s proposal for a tax on capital gains is so important, because it will rebalance not only our economy, but our politics. Such moves, which would shift wealth back to the middle classes, and lessen the shocking levels of income inequality in countries like America and New Zealand, would go a long way to solving the political problems that underlie our economic woes.

In my next post: A look at other forces driving the austerity consensus, and an in depth look at how it’s holding back the global economy.