Fantastic!! The Pope and the Productivity Commission have stirred two of Australia’s respected and seasoned political/economic commentators.

I read much of what Alan Kohler and Paul Sheehan produce. Not always, but more often than not, I find their writings right on the money. Today both have produced columns that are really important. These two have far more capacity to influence community and political thinking than most of us, so let’s take a look …

First, Alan Kohler

His column opened with this :

“”Until exclusion and inequality in society and between peoples are reversed, it will be impossible to eliminate violence.”

– Pope Francis, in last week’s “Apostolic Exhortation”.”

(The underlying causes of the current escalating violence in Ukraine and Thailand are, of course, just this week’s cases that exemplify exactly this.)

But let’s go back to Kohler:

“On the final Inside Business program yesterday, strategist Gerard Minack showed this chart:

Forty years ago the average wealth of the top 1 per cent [in the USA] was exactly 10 times the average of the rest. Now it’s 29 times, and rising, while the wealth of the rest is flat. His point was that inequality is likely to be the next great challenge for the world economy.”

Got that? Despite all the development in the last 40 years, the inflation adjusted income ($44,000) of the bottom 99% of Americans has gone precisely nowhere. All the benefit has gone to the 1%: a high proportion of them in the finance sector.

It’s small wonder that fast food chain workers – typically paid maybe $300 or so a week -are starting to mount widespread protest/strike action this week.

This is unsustainable. Through the long arc of history these sorts of outcomes have produced revolutions (France) and societal collapse (Rome).

Kohler goes on :

Inequality, I would argue, is not caused by capitalism but by its lapses – that is, by vested interests that distort the system for their own purposes and capture more than their share.

… inequality results when elite vested interests succeed in distorting society to their own ends, and the two great vested interests of the modern world are American bankers and the Chinese Communist Party.

He goes on to amplify his thoughts on bankers and the Chinese. Read the full article here.

Paul Sheehan takes up a different theme

His articulate rant in the Herald attacks the deep entitlement attitude that has become part of the modern landscape. Consumers (baby boomers) wanted more. When they ran out of current income to pay for more, they borrowed. The banks obliged, and have grown corpulent.

In the bid to win votes, Governments of all stripes have done much the same. Now we are all careering towards the wall, and no-one wants to face it. Here’s Sheehan …

The collective record of the baby boomers in the wealthy economies is alarming. Boomers … have been running the world for a decade. In that time, the European Union has collectively accumulated a public debt of more than 90 per cent of gross domestic product. Japan has a public debt of more than 200 per cent GDP. The US has seen the growth of absurd disparities in wealth, a hollowing out of the middle class, an economy floating on massive money-printing and a federal debt now more than 100 per cent of GDP.

This is the defining challenge facing the Abbott government, yet only a small fraction of the political reporting is even looking at the challenge. Instead there is a din about spending, with a clamour about more, more more. Where is the money for Gonski? For the National Disability Insurance Scheme? For the infrastructure to deal with 240,000 immigrants a year? For cutting carbon emissions? For health? Indigenous disadvantage? Asylum seekers?

The one question rarely asked is the one that really matters: where is the money going to come from?

Reality: Australia cannot afford the Gonski spend, plus the NDIS spend, plus the carbon reduction spend, plus the paid parental leave spend, plus the infrastructure surge, plus the promised increase in defence spending, plus the cost of unfunded retiring boomers, plus reducing indigenous disadvantage, plus $1 billion a year for asylum seekers. The revenue is simply not there.

Fixing this is not just about “getting the budget to surplus”. That’s a huge ask. Even harder is paying off the debts.

More fundamentally it is about educating a deluded populace: changing what have become deep seated attitudes in the community. Attitudes to entitlements. Attitudes to self-reliance. Attitudes to consumption and saving. Attitudes to tax and tax avoidance. Even things like attitudes to end of life health costs, and redefining the social safety net to cover just those in genuine need.

Are democratically elected politicians up to it?