158 thoughts on “Monday Message Board

  1. @Jordan

    This piece did not make much sense to me.

    But quantities matter. Continual borrowing might be sustainable, depending on the amount of new borrowing required, the interest rate on the debt, and the growth rate of borrowers’ incomes. If the interest rate is lower than the growth rate of income to poorer households, then there is room for new borrowing every period while holding debt-to-income ratios constant. Even without much income growth, sufficiently low (and especially negative) interest rates can enable continual new borrowing at constant leverage.

    When has interest rates ever been lower than the growth rate of income to poorer households? What data source underpins this?

    Also I counted around 12 “If”s in this relatively short piece – which generally means it lacked substance.

  2. To evidence his “argument” JR links to an opinion piece (superfluous term, really) from ‘The Australian’.

    Apart from zealots, does anyone take that hateful dirty little loss-making Murdoch soapbox seriously?

  3. @Jim Rose

    One could probably make a pretty good case that Liberal Party circa the Vietnam era was controlled by a foreign power (the USA) threatening to be hostile if the Libs and Australia weren’t an obedient puppet power.

    Then of course there is the issue of CIA involvement in overthrowing the Whitlam Govt.

    Tony Douglas: “The Central Intelligence Agency or CIA was set up in 1947 when the United States Congress passed the National Security Act. Since then the CIA with its large and secret budget has involved itself in the politics of nearly every country in the world. One of its four divisions, innocuously entitled PLANS is responsible for covert actions. Covert Action often means the propping up or overturning of foreign governments. I asked Ralph McGehee, a former CIA agent, as to how many governments the CIA had overthrown.”

    After detailing Iran, Chile and many other attempts at interferring in the internal affairs of other countries comes this exchange.

    Tony Douglas: “Over the years there have been many reports linking CIA activities with the downfall of the Whitlam government. Does Ralph McGehee think they were involved?”

    Ralph McGehee: Well, my views are as though what’s the problem? I mean, we had a whole series of Agency spokesmen said, `oh, yes, there was an Agency role in the overthrow of the Whitlam government’. I just don’t know why Australians can’t accept that. I did just a little bit of research before I came out and you had Ray Cline, a former Deputy Director of the CIA, saying `when Whitlam came to power there was a period of turbulence and the CIA will go so far as to provide information to people who will bring it to the surface in Australia, say a Whitlam error which they were willing to pump into the system so it may be to his damage and we may provide a particular piece of information to the Australian intelligence services so that they make use of it’. And then the CIA National Intelligence Daily said, `some of the most incriminating evidence in that period against the ministers in the Whitlam government may have been fabricated.’ This is about as strong as you get them to say so. It is quite obvious that information was being leaked about ministers Rex O’Connor and Jim Cairns and some of it was being forged which is a standard CIA process. Jim Flynn, who was associated with elements who were involved with the Nugan-Hand bank, he said that he was involved in manufacturing the cables and leaking them to the press. Now he would not be a very credible source except that he worked for Nugan-Hand. Admiral Bobby Inman, former Deputy Director of the National Security Agency and Deputy Director of the CIA, said on two occasions that he expressed deep concern that investigations of Nugan-Hand would lead to disclosure of a range of dirty tricks played against the Whitlam government. You have the statements by Christopher Boyce who was in a relay point for information from the CIA and in his trial he said that `if you think what the Agency did in Chile was bad, in which they spent 80 million dollars overturning the government of Chile there, the Allende government, you should see what they are doing in Australia’. On the Shackley Cable, which was a virtual ultimatum to the head of ASIO to do something about the Whitlam government, it is sort of prima facie evidence of CIA interference in the Whitlam government. This was on November 10. On November 11, Governor-General John Kerr dismissed the Whitlam government on a parliamentary technicality. John Kerr earlier had been the founder of Law Asia, a CIA-front organisation.”

    Excerpts from:
    Transcript of a 5-part radio documentary,
    Watching Brief, Public Radio News Services,
    Melbourne, Australia, October-November 1986.

    So Jim, is it only commies who are the bad guys? Is that the biased, simplistic line you are pushing?

  4. @Jim Rose

    You are mixing up the subversion by CIA agents and Catholics such as Mannix with rather opportunist links between Soviet embassy staff and members of the then Australian communist party.

    You should read David McKnights book “Australia’s spies and their secrets” ch 7, and page 92-93.

    The real subversion in Australia was accomplished by importing millions of dollars through Mannix to set up Catholic Action and linkages with associated entities – Knights of the Southern Cross.

    A contemporary analogy would be a Fundamentalist Muslim party running for elected office while mostly funded by Al Qaeda, whose policies are dictated by Al Qaeda, and whose leaders and some members have aided Al Qaeda via espionage activities.

  5. @Chris Warren
    That describes dynamic system, not a moment in time.
    What it says; increase in savings pushed interest rate down which enabled more borrowing.
    At fixed income, borrowing limit increases with lower interest rate. Lower interst rate means lower monthly payment on the same debt which allows for more borrowing.

    If IR is 3% and income growth is 3.3% then in time it will allow for more borrowing which will keep debt to income ratio at same level.
    Even if income growth is 0%, fall in interest rate from 4% to 3% will allow for more borrowing but monthly payments will be the same (leverage).

    This is decriptions of how IR affects borrowing, it is not saying that IR was lower then income growth. IR is always higher then income growth of poorer households but both were moving down with IR lagging and that is percisely how in 40 years it reached debt ceiling and collapsed once IR reached 0.

  6. Those “if’s” were theoretical descriptions of laws. It says that “if this” then it would be “that” but since it was “this” observed in real world then by conclusion it must be “other that”.
    If A->B it was C not A in real world therefore C->D
    -> are economic laws

  7. Chris & Ike (re:CIA & Whitlam),

    That reminded me of this:

    Laurie Oakes to Leigh Sales on ‘Lateline’ 29/10/2010:

    “But what I learn I should make public, it’s what I’m paid for, what the public trusts me to do and you’re in the same position. I don’t think we can keep secrets because we think that we know better than the voter. We can’t protect the voter from information. That’s anti- journalism.”

    That’s funny. Remember his book ‘Power Plays’ from way back in 2008? In one column on the twentieth anniversary of the sacking of the Whitlam government, Oakes describes having dinner at the home of a US diplomat in October 1975:

    “The other guests were the US labour attaché, who was a senior CIA operative, and a British MI5 agent working in Canberra under diplomatic cover.”

    According to the column, they wanted to know what would happen if the coalition used its Senate numbers to block supply. Oakes wrote, in 1985, that:

    “I told them confidently that if the coalition kept its nerve and Whitlam refused to call an election, there could be only one outcome: Sir John Kerr would dismiss the Labor government.”

    Of course, Oakes kept that information secret from us for 20 years. Well, he didn’t say how long he should wait before he made things public, did he? 20 years isn’t that long to sit on a story. Things moved more slowly back then.

    “That’s anti-journalism”!


  8. Good to see that the basic facts about communist subversion after 1945 and treason from 1939 to 1941 are all begrudgingly agreed.

    The best response was to allege that the Micks and the Masons were at it too.

    The communist party and its sectarian offshoots were conspiratorial cabals that got less votes that the monster raving loony parties.

    p.s. did not the communist party spilt over whether to worship Moscow or Peking?

    See too http://www.bbc.co.uk/worldservice/documentaries/2010/07/100624_doc_useful_idiots_lenin.shtml on those that saw the future and it worked and how Leftists repeat the mistakes of these useful idiots in the 21st century.

  9. @Chris Warren
    Thanks for this Chris. “Capitalist industrialization in Korea” by Clive Hamilton, Westview Press (Boulder), 1986 is a great book about the way a capitalist class was formed there. Clive says in the Intro that he started with the premise that radical dependency theory would explain it, but later rejected externally-driven perspectives (including the orthodox theory of comparative advantage). He moved to seeing the process as the political and economic ascendancy of Korean industrial capital, utilising the strong state to do it: “Korean industrial development under US tutelage was autonomous in the crucial sense that it was undertaken almost entirely by Korean capitalists” p 115. A book of great depth and clarity – cited 117 times says Google Scholar.

    It’s probably not understood in Australia how militant and strong the workers’ movement has become. The coercive Korean state has long been oppressive towards labour: I was going through my notes from when I studied this formally 22 years ago, and found a cover story in the Far Eastern Econ Review of 27 Aug 1987: “Labour strikes out: After years of repression, workers demand more rights.” The article said that the average working week was 57 hours and every single strike at the time was illegal. You would hope that the Right’s obsession with what they call “economic freedom” would include labour market rights, but I fear not.

  10. @Jim Rose

    “did not the communist party spilt over whether to worship Moscow or Peking?”

    LOL. Now Washington and Canberra worship Beijing for its business. Note that Beijing’s version of capitalism (a form of state capitalism and dirigisme with party and corporate capitalism hand in glove and mixed socialist policies at other levels) is currently far more pragmatic and effective than the West’s hardline neoliberalism.

    Note also that Beijing and Washington are both hand in glove with their own oligarchs and that little real freedom exists for the poor of either country.

    Jim, you are getting all your wishes. Capitalism (state-oligarchic-corporate) is now triumphant everywhere. You can sit back and see what a godawful mess it all turns into.

  11. @Ikonoclast Andrei Shleifer in The Age of Milton Friedman found that as the world embraced free markets since 1980, living standards rose sharply, while life expectancy, education and democracy improved and absolute poverty declined.

    XAVIER SALA-I-MARTIN (2006) found that for 138 countries in 2000, poverty rates and head counts were between one-third and one-half of what they were in 1970 There were between 250 and 500 million fewer poor in 2000 than in 1970. All eight indexes of income inequality show reductions in global inequality during the 1980s and 1990s.

    A simple test: visit Asia regularly since the mid-1990s. I was tall when I first visited – looking over the top of the crowd. No longer the case for the young adults in both the cities and rural areas. each Asian generation is head and shoulders taller than the last and they live decades longer.

  12. @Jim Rose

    Point 1 correlation does not necessarily equal causation. Though it may do so I admit. Yes, the historical process of capitalism has raised total wealth. It tends to immiserate the lower classes unless other movements (social democracy, organised labour, religious reformers etc.) wrest some of the wealth and power from the capitalists. So you are eliding quite a bit of history to make your case.

    “Current figures indicate that as much as 44.2 percent of the Mexican population (over 49 million) lives below the poverty line as defined by the country’s National Council of Social Development Policy Evaluation (Spanish: Consejo Nacional de Evaluación de la Política de Desarrollo Social, CONEVAL). In 2008, 33.7% of the population lived in moderate poverty and at least 10.5% suffered from extreme poverty… Carlos Slim, the richest man in Mexico and in the world has a personal fortune equal to 4 to 6 percent of the country’s GDP. In spite of efforts by government officials during the past three administrations; transition to globalization, the NAFTA agreement; Mexico has been unable to create efficient public policies in order to compensate for the distortion of its market and the poor distribution of national income. – Wikipedia.

    It is clearly never capitals’ intention to distribute wealth fairly nor to act to help the poor. Other forces have to do that although the raw power of capitalism can certainly lead to high production.

    Finally, all these faux “achievements” are about to come crashing down as capitalism collapses due to its unsustainability. Capitalism simply made too much of the wrong stuff and squandered too much of our natural endowment of resources on consumer junk of temporary value rather than worthwhile infrastructure of much more enduring and adaptive value.

  13. @Katz
    Perhaps the above answer to Ikonoklast gives a clue. JR’s #11 is exactly the same as his answer at Monday Message Board January 15th, 2013 at 16:12 | #2. Pretty rude IMO.

    Is he just a robotic answering machine like http://www.cleverbot.com ? Maybe there isn’t a formula answer available yet.

  14. Katz, “Which countries and what do you mean by “betray”?” The democracies where communists lived.

    Communists are bound by the rule of law and fidelity to democratic change as per John Rawls. Democratic socialists such as in the labor parties had no difficulty winning many seats and later forming governments.

    As for the meaning of betray, I suggest you borrow Lance Armstrong’s dictionary. He no longer needs it for moral guidance on the meaning of basic words.

    See http://www.nytimes.com/books/first/h/haynes-venona.html

    “By 1948 the accumulating evidence from other decoded Venona cables showed that the Soviets had recruited spies in virtually every major American government agency of military or diplomatic importance.

    American authorities learned that since 1942 the United States had been the target of a Soviet espionage onslaught involving dozens of professional Soviet intelligence officers and hundreds of Americans, many of whom were members of the American Communist party (CPUSA).

    The deciphered cables of the Venona Project identify 349 citizens, immigrants, and permanent residents of the United States who had had a covert relationship with Soviet intelligence agencies”

    American cryptanalysts deciphered only a fraction of the Soviet traffic, so many additional agents must have been discussed in the thousands of unread messages.

    Virtually all of the spies had been members of or were closely associated with the Communist Party – a Party the was a wholly owned subsidiary of Moscow. Check the Comintern archives on this – they were opened to the public in the 1990s.

    The communist party was financed and directed by a hostile foreign power. It recruited spies and it subverted the war effort when Hitler and Stalin were allies. Menzies banned the communist party after the fall of France for this reason.

  15. I notice that you name only the US and Australia. You don’t want to add to that very short list? Were communists who lived in places such as Nazi Germany, Fascist Italy, or Falangist Spain equally bound by the legal systems under which they lived? What about Indian Communists or Black Communists living under Jim Crow? So, I repeat, what countries do you mean?

    I’m well aware of Venona.

    Communist Parties worldwide at the time we are discussing were strictly compartmentalised. A tiny number of members were illegals or were aware of illegal activities. The vast majority of members were utterly unaware of illegal activities.

    So I repeat, what do you mean by “betray”?

  16. @Katz #16

    Perhaps his answer #11 to Ikonoklast #10 gives a clue. JR’s #11 is word for word the same as his answer at Monday Message Board January 15th, 2013 at 16:12 | #2. Pretty rude IMO.

    Maybe there isn’t a formula answer available yet.

  17. katz, The only complaint of communists who lived in Nazi Germany, Fascist Italy, or Falangist Spain was that they were not the dictator.

    Hayek commented in 1944 that the relative ease with which a young communist could be converted into a Nazi or vice versa was well known to the propagandists of each side. Communists and Nazis clashed frequently because they competed for the same type of mind and reserved for each other the hatred for the heretic.

    Hayek also said that while to the Nazi, the communist, and to the communist, the Nazi, and to both, the socialist are potential recruits “made of the right timber”, both knew there can be no compromise between them and those who really believed in freedom.

    See http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300068559 on the recently opened archives of the former Soviet Union:
    • the Soviet Union heavily subsidized the CPUSA;

    • the CPUSA maintained a covert espionage apparatus with direct ties to Soviet intelligence;

    • the testimony of former Communists concerning underground Communist activity can be substantiated;

    • American Communists working in government stole documents and passed them to the CPUSA, which sent them on to Moscow;

    You spend much time defending people who were not committed to democracy in any way. Communists and fascists are cut from the same timber. Neither are ‘liberals in a hurry’.

  18. I’m not defending them politically. But I am defending the vast majority of them juridicially against your irrational and unjudicial charge of treason.

    I trust that you understand the distinction.

  19. Sorry guys, to hark back on to ‘uncertainty’, as discussed in the last sandpit. But since iko asked explicitly about it, here is an important aspect that needs to be considered in that context, namely climate sensitivity. Recently there was quite a bit of attention in the media on a single Norwegian study suggesting that global warming may be “less extreme than feared”. This sounded too good to be true. Don’t get me wrong, I truly wish the 10 odd percent overall ‘uncertainty’ will carry us through unscathed in the end. Thus this study pricket my ears, though as it was only a single study, and the “less extreme than feared “turned out to be 1.9 degrees of warming instead of 2. It was still good, yet unconfirmed news. However, the ever vigilant skepticalscience.com was on to it this morning, confirming my suspicion, as well as highlighted some problems with uncertainty:

    “Another problem can arise if the models overfit short-term noise (natural variability), and there are also significant uncertainties in the overall global energy imbalance and measurements of changes in global heat content, both of which are components of these sensitivity calculations.”
    “Aerosols and clouds are two of the least well-constrained contributors to the global energy imbalance, and thus two of the largest sources of uncertainty in climate sensitivity estimates.”

    As an aside, there is this beauty in the comment section:
    “The following comment posted at The Guardian explains it nicely (H/T JohnM):
    “One other thing: I’m amazed at how many deniers have suddenly found computer models to be accurate, considering how many years they’ve been telling us they are utterly crap. Don’t suppose this epiphany has anything to do with liking the results of some models (“good”) while hating the results from others (“bad”).”


  20. On an other matter, recently I have been commenting on the dodgyness of superfund investment into coal within the Whitehaven hoax discussion. Take the recent PriceWaterhouse Climate Change report’s “unburnable carbon” scenario, as in, “we can only ‘safely’ extract a fifth of known carbon resources to stay within the accepted 2 degrees warming” and prove me wrong that investment into developing these resources is dodgy. In fact today I came across an article in reneweconomy.com, headlined “Unburnable carbon – value of fossil fuel giants at risk”!
    Is carbon going to be the new sub-prime mortgages?

  21. @Katz Educated people denied the Moscow show trials, the great famines and gulags but were not drummed out of the regiment.

    Look at “Political Pilgrims: Western Intellectuals in Search of the Good Society” and “The end of commitment: intellectuals, revolutionaries, and political morality” by Paul Hollander.

    these books are about how famous cultural and religious leaders from the West visited the Soviet Union, China, Cuba, and other communist countries, and told the most appalling lies to flatter their hosts and express their contempt for Western society.

    In spite of massive evidence, these political pilgrims never wavered in their loyalty to failed, left-wing ideals and genocidal utopianism

  22. Oh well JR you talk of the past, I’ll give you a contemporary loyal right-wing idealist, hanging on to this genocidal utopian cornucopianism, while lying through his teeth. The newly appointed chair of the yesterday announced new Business Advisory Council by the LOTO, Australian Business leader Mr Maurice Newman.

    This is Newman’s take in regards to whether human activity is leading to warming of the atmosphere, as he wrote in The Australian on November 5 last year:
    “When Mother Nature decided in 1980 to change gears from cooler to warmer, a new global warming religion was born, replete with its own church (the UN), a papacy, (the Intergovernmental Panel on Climate Change), and a global warming priesthood masquerading as climate scientists.”
    On he goes ..
    “Regrettably for the global warming religion, its predictions have started to appear shaky, and the converts, many of whom have lost their jobs and much of their wealth, are losing faith. Worse, heretic scientists have been giving the lie to many of the prophecies described in the IPCC bible. They could not be silenced.”

    He also rubbishes renewable energy sources, such as wind technology, with totally unsubstantiated claims. And such a person gets promoted into a leading position by our alternative Government, extraordinary.

  23. @Jim Rose

    Of course when Mark Twain saw the lies being told to him by capitalism – he coined the famous phrase: “beautiful lies”.

    American capitalism was built on the most shocking of lies – this gave rise to the famous phrase: “forked tongue”.

    American sport is based on drug lies.

    American invasions are based on official lies.

    American politics is based on lies – socalled “plausible denial”.

    When Khruschev visited the USA he was told a whole bag of lies about capitalism.

    You are the agent of genocide.

  24. Just because we have this nutter – Jim Rose.

    Here is a list of American government funding of Cuban entities.


    GOAL: Promote Rapid, Peaceful Transition to Democracy in Cuba, Helping Develop Civil Society

    OBJECTIVE: Increase Flow of Information on Democracy, Human Rights and Free Enterprise, To, From, and Within Cuba

    NOTE: As a matter of policy, USAID grantees are not authorized to use grant funds to provide cash assistance to any person or organization in Cuba.


    Freedom House: Transitions ($500,000 – completed)
    Center for a Free Cuba ($3,317,479)
    The Institute for Democracy in Cuba ($1,000,000 – completed)
    Cuban Dissidence Task Group ($250,000 – completed)
    International Republican Institute ($2,174,462)
    Freedom House: Cuban Democracy Project ($1,325,000)
    Grupo de Apoyo a la Disidencia ($2,700,000)
    Accion Democratica Cubana ($400,000)


    Cuba Free Press ($280,000 – completed)
    Florida International University: Journalism Training ($890,000)
    CubaNet ($833,000)
    Carta de Cuba ($293,000)


    Partners of the Americas ($172,000 – completed)
    Pan American Development Foundation ($553,500)
    ACDI-VOCA: Independent Agricultural Cooperatives ($265,000 – completed)
    University of Miami: Developing Civil Society ($320,000 – completed)
    Florida International University: NGO Development ($291,749)


    American Center for Int’l Labor Solidarity ($168,575 – completed)
    National Policy Association ($424,000 – completed)


    Cuba On-Line ($2,625,479)
    Sabre Foundation ($85,000 – completed)


    Rutgers University: Planning for Change ($99,000 – completed)
    Int’l Foundation for Election Systems ($136,000 – completed)
    U.S. – Cuba Business Council ($852,000 – completed)
    University of Miami: Cuba Transition Planning ($1,545,000)
    Georgetown University Scholarships ($400,000)


    Univ of Florida: Measuring Public Opinion ($110,000 – completed)
    PriceWaterhouseCoopers: Program Evaluation ($225,000 – completed)

  25. In an interview with Robbert Desaix in the 1990s, Robert Manne remarked that the most important lesson of 20th century communism and fascism was the need to support and defend representative institutions, liberal democratic freedoms and the rule of law.

    Now, if one accepts this, then in certain historical situations one had a duty to unite with the communists against the anti-communists. Apartheid-era South Africa is a case in point. Another is Queensland during the Bjelke-Petersen era. Now Senator George Georges was a terribly naive Tanky when it came to the Soviet Union and its satellites, but in the specific context of Queensland in the 1970s and 1980s there were few who did more to advance the cause of representative institutions, liberal democratic freedoms and the rule of law against the anti-communist Bjelke-Petersen government.

    That Joh mght have been symbolically cheering the goodies and George the baddies in Eastern Europe and the USSR was as meaningful as throwing creampuffs at the Berlin Wall. In the Queensland and Australian context where their positions and actions counted for something, George Georges was unquestionably on the sde of good and BJelke-Petersen on the side of evil.

  26. @Chris Warren

    Evidence does not convince a nutter; they have faith in their system and faith is an awesome thing. That magical invisible hand, and the impressive simplicity of the idea, is scientific enough for people like Jim and the other capitalist tragics.

  27. In fact I would go so far as to say that with a few honourable exceptions like Manne, anti-communism in Australia was a movement to throw creampuffs at the Berlin Wall on the other wise of the world whilst condoning and practicing reaction and repression within Australia, and supporting unjust wars and genocide in our neighbourhood (think East Timor).

  28. @Chris Warren

    Yup, basically all of orthodox American history is a lie.

    Manifest Destiny – A grandiose lie.

    American Exceptionalism – A grandiose lie.

    The US is a democracy – A lie (It’s an oligarchic republic.)

    The US founding fathers were humane democrats (A lie. They were oligarchic slave owners and/or apologists for same.)

    The US War of Independence was about “liberty and equality” for all Americans. (A lie. It was about American oligarchs freeing themselves from the British oligarchy.)

    The US Civil War was about “freeing the slaves”. (A lie. It was about northern industrial capitalism destroying southern landed aristocracy. Again, a new oligarchy superseding an old oligarchy.)

    * * *

    As an amusing aside, I quite enjoy the Paul Verhoeven movie “Starship Troopers”. I read it as a satire fore-grounding US crypto-fascism (and corporate-capital-fascism) and its fight against “bugs”. “Bugs” of course are all other humans (apart from a few puppet allies) that the US is permanently at war with around the world. If this was not intended to be a satire it nevertheless is one. It is so over the top it satirises itself and the system it refers to, whether this in consciously intentional or not.

    No doubt, Richard Heinlein himself did not intend the original novel as a satire. Heinlein was very clearly a crypto-fascist in his attitudes and fictional theses.

  29. Correction to my post above. Starship Troopers clearly is conscious, intentional satire by Paul Verhoeven. Read in this manner, the intent of the film is revolutionary in a very nasty, Machiavellian way. As most US crazies (gun crazies, war hawks, crypto fascists etc.) will enjoy and be encouraged by a movie that looks like war pawn, reeks like war pawn (spelling changed to avoid filter) this will intensify their craziness. What is Verhoeven’s rather amoral method and intent? It’s this. Encourage the US crazies to be as crazy as possible. This way they will reliably destroy themselves in time. I am not sure I agree with such an amoral intent as a lot of innocent parties also get destroyed along the way.

  30. Ikonoclast, if you want a parody of “Starship Troopers”, I recommend Harry Harrison’s “Bill the Galactic Hero”. Better (and funnier) than anything Heinlein ever managed.

  31. Sorry guys, I just can’t get this ‘fascination’ on ye olde left-right fare dished out by a renown troll, all the while we are flooded with burning issues from one end of this continent to the other. Never mind the big league crooks legitimately ripping us off to the degree we, one of the wealthiest nations on this planet, can hardly afford a decent health system. Go figure.

  32. Jim,
    educated people now deny austerity leads to the economy reducing in growth except in good times, deny that there is climate change going on, deny it was the shadow banks responsible for the sub-prime debacle, deny government spending is falling here.

    sound familiar at all?

    Hey this sounds good for an article tomorrow!

  33. @Ootz

    The issue in this arena is that capitalism expends excessive real resources (real resources are what counts) on short term money making projects for the oligarchic capitalists. Thus we get lots of consumerist toys, cars, boats, holidays and junk food produced, holiday accomodation, entertainments and useless food items – useless for good health. Conversely, we get too little infrastucture and what we do get is woefully under-engineered so that it breaks, fails etc after a day or two of heavy rain and 60 to 80 kph winds.* In addition we get too little spending on education, health, welfare, mass transit, research, science etc. etc. etc.

    * Note: I really want to take up this issue. Our infrastructure IS woefully under-engineered and often it is in the wrong place i.e. on flood plains and/or next to bushfire hazard. It is totally unacceptable that our infrastructure can’t handle two days of heavy rain. It does not matter if it is a 1 in 200 year event flood event. Our infrastructure via correct situation and adequate engineeering ought to be able to handle it.

    1. Never build houses and buildings on flood plains unless totally unavoidable. In some regions, as Australia is a very flat country, there may be little good high ground to utilise. In this case, towns should utilise what hills, ridges, outcrops do exist but structures unavoidably on a wide flood plain should be on cross-braced steel stilts, anywhere from 2 to 8 metres high if necessary. Alternatively some slab based structures (not residences) where required should be engineered to be floodable and submeragable. They should be designed for rapid clearing and removal of goods/fixtures and have large all-round doors both manually openable and also automatically opening under flood strain (locking bolts designed to break under a certain strain). An alternative in some cases (not residential buildings nor hospitals) might be flood-bunker buildings built to be sealed and to survive under the flood. Clearly these would not have vertical walls.

    2. All power transmission should be moved undergound except where this is absolutely prohibitively expensive. Above ground tranmission should be over-engineered and all trees cleared.

    3. A general building rule ought to be that no tree can be left where it can fall on any structure anywhere. This won’t obviate blown, broken branches but will reduce incidents.

    4. All new houses, buildings, infsstructure etc. in all parts of Australia should be engineered to withstand category 5 cyclonic weather and catastrophic bushfires. Only designs that can do this ought be permitted.

    We could easily afford this level of “over”-engineering if we ceased to waste enormous resources on vast arrays of relatively short-lived and unecessary consumer toys, a good part of the vast private car fleet being the prime example. A major problem with our culture is its facile consumerist orientation. We are going to have to grow beyond this cultural infantilism if we are going to survive in the hard new world of resource limits and climate change.

    Personally, I stand condemned along with all the rest. My collection of wordly goods is also mostly of this facile consumerist orientation. However, only comprehensive collective change can really address this issue. One cannot seriously live “green” or for sober, sustainable, long-term survival values when the whole system supports only facile short-termism intellectually, culturally and materially.

  34. Cheers Iko for breaking the JR communists under the bed deja vue spell. The issues you are bringing up are fairly broad spread, however as you correctly identify, are connected. Your emphasised concern re our woefully under-engineered and misplaced infrastructure is legitimate. There have been many recommendations, along your lines, made by studies, such as Tropical Cyclone Yasi Structural Damage to Buildings.
    What is lacking is the political will for genuine risk management. More often than not, and I speak from personal experiences, decisions are made on various government levels to override sensible guidelines and even laws to feed the demanding ‘develop at all cost’ moloch.

    I do question though your personal statement, where you say:
    “One cannot seriously live “green” or for sober, sustainable, long-term survival values when the whole system supports only facile short-termism intellectually, culturally and materially. ”
    Call me an idealist, but I do believe that the situation is changing, perhaps too slow, nevertheless it is changing. I am very much encouraged by the social networking phenomena, including new developments such as kickstart and Kiva – loans that change lives. Just that we are able to have this discussion here on this blog is tremendously empowering. There are strong social movements building up and gathering pace, which provide an individual with the necessary social space to develop new ways of living, despite the countervailing or lagging system. If you focus on a half empty glass you never take advantage on the part which is half full. Perhaps it is easier for those of us who consistently refused to be pressed into the mould to hitch a comfortable ride and relished in looking for sustainable alternatives without hitting the hippy trail. Today these skills are propagated by a lose movement which takes as it’s principle resilience. Perhaps Resilience is the new Growth!

  35. Rubbish BilB, English is my third language and my brain is slightly scrambled from my chronic ailment, must have stumbled over this one. However, I am inspired by good company here, particularly since many ex LP commenters have made here to the good Professor’s blog. Perhaps also a sincere thank you goes to our gracious host and the moderators and other support workers in the background carrying this blog.

    I am really interested what others think in relation to the ‘unburnable carbon’ scenario and investment therein, as per my reneweconomy link above and the recent PriceWaterhouse Climate report.

  36. From a must read article in The Conversation today, ‘Planning for floods and fires now the recipe for disaster has changed.’

    Resilience – according to US National Academy of Sciences:

    Resilience is the ability to prepare and plan for, absorb, recover from and more successfully adapt to adverse events. Enhanced resilience allows better anticipation of disasters and better planning to reduce disaster losses — rather than waiting for an event to occur and paying for it afterwards.

    Also, it was interesting to observe haggling on ABC news over the responsibilities and cost, between the flood affected local governments and insurance companies. One Mayor was commenting that they have now the most stringend town planning scheme available (it is another thing to stick to it though) and Insurances claim that Local Governments should bear some of the blame because of lack of mitigation effort. An estimated $ 200m of damage have been claimed sofar.

    BTW be proactive, harden up Queensland http://hardenup.org/be-aware.aspx

  37. BilB :
    You’re a great writer, Ootz.
    “…flooded with burning issues!”
    that is a gem.

    I thought “flooded with burning issues” was a good play on words re our bushfires and floods, both very recent. Well done Ootz, it was clever. At some level you were aware of the word play even if unconsciously.

  38. @Ootz “What is lacking is the political will for genuine risk management.”

    You can file this under regulation/deregulation and business everywhere is banging on about the economic costs of compliance. Never mind that said regulation could be vital and necessary and that when disaster strikes the first bleats are from business complaining of lack of govt action. And also never mind the poor management displayed by much of business.

  39. @nottrampis Australia came out of the Great Depression earlier than most because of the fiscal discipline of the Premiers’ Plan.
    • The premiers’ plan required federal and state governments to cut spending by 20%, including pensions. It was accompanied by tax increases, and reductions in interest on bank deposits and government internal loans.
    • The plan was complementary to a 10 per cent wage cut of January 1931 and the devaluation of the Australian pound.

    The New Zealand government also cut everything that could be cut by 20%. NZ had the most rapid recovery of all countries from the 1930s depression.

    By the mid-1930s, the unemployment rates in Oz and NZ were in mid-to-high single digits similar to the pre-1929 rates.

    As for ‘the shadow banks responsible for the sub-prime debacle’, you mix the Diamond-Dybvig bank run on the repurchase agreements (repo) market with the Kareken and Wallace moral hazard theory of the government guarantees such as in the sub-prime mortgage market.
    • In the Diamond-Dybvig adverse selection model of spontaneous bank panics, a system of deposit insurance completely eliminates the incentive to panic.
    • In the Kareken and Wallace moral hazard theory of bank runs, actual or implicit deposit insurance encourages high-risk lending – a crisis is inevitable. A bank need not fear losing customers by holding a risky portfolio. The deposit insurance pays depositors in the event of asset gambles that go bad.

    The Diamond-Dybvig model of bank runs was influential in 2008 policy responses: Don’t panic, your deposits are safe, so no one panics and runs.

    Policy advice from the Kareken and Wallace moral hazard theory of bank runs is do not let your-self fall into such a deep hole, which is little help with climbing out.

  40. Jim,

    I have written about Asutralia and the great Depression here and that shows you are WRONG, badly wrong.

    budget implemented and the economy goes backwards!

  41. make that Australia. NZ grew strongly after spending increasing by the government hence the discrepancies between the two unemployment rates.

    The best Australia ever got to was 8%. recession levels

  42. Jim,

    I forgot Herr Professor Quiggin has imposed a one comment rule on you so you can make as many as you wish over at mine on this topic or any other!)

  43. @Jim Rose
    Jim, if you have time it would be nice to take a look at this video and hear what “moral hazard theory” really is. Moral hazard means fraud, controll fraud where managers work against clients and the bank they manage in order to get rich and banks are saved by governments. This happened before great Depression and before this GFC.

    Search it at youtube as “Social cost Part 2” with Prasch and Wray.
    Prasch asks a good question: Is society there to serve GDP/economy or is economy supposed to serve and support society?

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