Monday, April 23, 2012


You know what is crazy? On the question "who has the best ideas to
improve the economy?" Mittens leads Obama 40-34. Now for sure, Obama
does not have any good ideas on the economy. His JOBS Act is another
terrible corporate giveaway. But Mittens has not actually expressed
any ideas! He hasn't said anything about what he would actually do.

In 25 debates, nothing that I know of. Worse, he endorsed Ryan's
budget. Which certainly wouldn't improve the economy. If the
Republicans were taken at face value, and the policies they have urged
pursued (no stimulus, massive spending cuts, tax cuts for the rich),
the US would be in a depression that would make the 1930s look like
party time.

The worst thing about this world is how small it is. You can't escape
the insanity. I think they are literally insane here. I'm not kidding.
Our chancellor wants to run a surplus to increase confidence in the
bond markets. WTF? Why are we running our economy for the sake of
fixed-income parasites anyway? We don't even need to issue bonds. We
are monetarily sovereign.

His counterpart, the noisome Joe Hockey, appeared in the media telling
us that we have to stop being an "entitlement society". But at the
same time he wants to pursue neoliberal economic policies that require
high unemployment to discipline inflation.

Who cares about inflation? People with money. I don't have a cent, so
as long as I get payrises from time to time, I could care less about
inflation. Modest inflation does not hurt the working people at all.
It's the wealthy who care about inflation. It erodes the value of
their money. So we have governments that pursue policies designed to
keep at least one in ten of us out of work and at the same time tell
us we are spongers because we can't get jobs.

Next year, Labor are going to get turfed out here. The odious Tony
Abbott will be our premier. He will do damage to our safety net, as
much as he's capable of. He will make our jobs less secure and punish
us when his own policies lose us those jobs. Labor may or may not
achieve a surplus. They are gambling that they can and can sell
themselves as responsible stewards of the economy. Wayne Swan hopes
that the RBA can be pressured into rate cuts, and people will see
their lower mortgage costs and rejoice. He understands that most
Australians are completely uninterested in the economy and won't be
aware how things actually stand. Swan probably also believes that the
rate cut will spur economic activity (because he's advised by
neoclassical economists whose model bears very little resemblance to
reality and is resistant to facts).

Australia's growth is below trend, and the economy did not add a
single job last year. Part of the reason for that is that a chunk of
that growth is an artefact of the commodities boom, which means we
flog a lot of iron ore and copper to China and that's counted in our
GDP (but does little for us, because the money mostly finds its way
into Gina Rinehart's offshore accounts rather than the economy). We
could easily see a recession here next year -- the major cities have
been recessed for a couple of years, and our insane levels of private
debt, outcomes of wage suppression and a housing bubble that we are
all praying does not burst but only mildly deflates, are likely to
suppress private spending for some time to come -- this is economics
that anyone can understand, btw: if your mortgage is a third of your
income, rather than the quarter that it used to be, you have less to
spend, and the entity that gains the difference does not itself spend
it on goods and services, so demand in the economy is lowered (a bad
thing -- if no one wants to buy cars, patios, swimming pools and steak
dinners, no one is employed to make them).

What should Labor have done? They should have said fuck this Tory
nonsense, run bigger stimulus for longer, getting the whole country
back to work, and surfed the consequent boom to another term. Instead,
they've tried to out-Tory the Tories, and that, as their English
counterparts have found, is a game that you can only play for so long.


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