89 thoughts on “Weekend reflections

  1. In this weekend’s AFR, Tony Abbott has an article. In which he states:

    “… should the Coalition win the election. Along with scrapping the carbon tax and the mining tax, stopping the boats and gettiiig the budget back into the black; along with boosting our competitiveness by cutting red tape and slimming the bureaucracy; along with building the infrastructure that a first world economy in the 21st century needs, fostering community-controlled public schools and hospitals and turning a passive welfare system into a more active one, and along with giving our foreign policy a Jakarta rather than a Geneva focus, I want a new engagement with Aboriginal people to be one of the hallmarks of a Coalition government – and this will start from day one.”

    So, can we assume this implies:
    1. Remove Carbon Price
    2. Remove Mining Super Profits Tax
    3. Attack Asylum Seekers
    4. Fiscal Austerity
    5. Corporate Responsibility Compliance reduction
    6. Public Service reduction
    7. “Infrastructure” Building
    8. Community Controlled Public Schools
    9. Community Controlled Public Hospitals
    10. “Active” Welfare System
    11. Jakarta style Foreign Policy
    12. Aboriginal “Engagement”

    In particular, his claims of Fiscal Austerity and Public Service reduction seem very naive as methods for maintaining a deeply prosperous economy (i.e. long-term widespread prosperity and wellbeing). Why is he not able to see alternative and intelligent methods???

  2. Professor Quiggin has closed the discussion on sandpit, before I had a chance to respond to Mel’s tirade against me and my web-site, candobetter. I think this is unfortunate, both for me and other site visitors. Those wishing to read my response to Mel, including links to other resources including a very popular article, which includes video broadcasts of a recent public meeting of Syrian Australians for Peace in Syria at the Melbourne Unitarian Church can read it here.

  3. @malthusista

    If I waited until everyone had the last word before closing off, i would be waiting a long time. As your response indicates, this discussion can be carried on better at your own site.

  4. I appreciate your concern, Professor Quiggin.

    Thank you for having provided informative and interesting articles and a forum for discussion for all this time.

    Site visitors are most welcome to act on Professor Quiggin’s suggestion and post their comments to our web site. Just conceivably, although this hasn’t happened yet, if we were to judge the contributed material to be too repetitive or too verbose, we might also ask that it be published elsewhere, but we would always allow such material to be linked to from candobetter.

  5. What Abbott is signalling there GC#1 is an Australian recession the likes of which we have not seen for decades. That level of Federal Austerity on top of the already State Austerity, and coupled with freer corporate profit taking on the one hand and a 1.5% business tax to pay for pregnancy leavers on the other, is a potent mix of messages for an already confused economy.

  6. You don’t consider the policies of the current UK and Australian governments to increase our population through immigration, ‘baby bonuses’, 457 visas and selling university places overseas, when we are faced with inflated education costs, hyper-inflated housing costs, grid-locked peak hour traffic traffic, water shortages, the destruction of bushland and wildlife to be ‘extreme’, Jim Rose (@ #7) ?

  7. Let’s hope my predictions are wrong. I predict;

    (a) A Tony Abbott / Liberal federal election victory.
    (b) Harsh budeget austerity measures.
    (c) Stalling of all attempts to deal with environmental and resource depletion problems.
    (d) A final pillaging of the remaining natural capital of the country.
    (e) Harsh financial measures on the unemployed, single parents and basic wage earners.
    (f) Wage restraint but no profit restraint.
    (g) Little infarastructure spending of value.
    (h) Crumbling of the public education system.
    (i) Crumbling of the economy over the next decade.
    (j) Descent of basic wage workers and lower middle class into poverty (joining the unemployed)
    (k) Steady reduction of the environment’s ability to properly sustain future projected populations for Australia.

    T.A. will need only 3 terms and maybe even only 2 to bring all this about. He will probably get them. Labor have destroyed themselves and the values they once stood for so there is no hope there.

  8. Ikonoclast (@#9)

    If we had real democracy or Direct Democracy in our constitution, as Switzerland has, that would not be possible. Any proposal for a new law or to repeal an existing law must be put to a nationwide referendum, if more than 100,000 signatures are gathered nationally, or a canton-wide referendum if a commensurate number of signatures are gathered in the canton. There is no way that Howard, Keating, Howard, Bligh, Greiner, Kennett or Newman in recent decades could have so harmed our interests, if we had had the protection given to Swiss citizens.

    On another matter, referred to above, a good antidote to cornucopian idiocy is Sheila Newman’s new book:

    Book Launch SPAVicTas 23 March 2013 of Sheila Newman’s “Demography, Territory, Law: Rules …”

    BOOK LAUNCH & DISCUSSION, Balwyn Library 2pm: Sustainable Population Australia, Victorian and Tasmanian branch

    At this meeting we are proud to launch an exciting new book, published in December 2012, Demography, territory and law: rules of animal and human populations by population sociologist and SPA member, Sheila Newman.

  9. @malthusista

    It’s interesting. A lot of people on the social democratic left deride Direct Democracy. They seem to see it as a libertarian or front or fifth column that will allow democracy to be highjacked. I am not quite sure why social democrats are so suspicious of direct democracy. Perhaps some social democrats here (Prof. J.Q. for one IIRC) can state why they are so opposed to any version of Direct Democracy.

    It’s pretty clear that our current representative democracy in Australia is only very imperfectly representative of mass democratic opinion. A majority of Australians opposed involvement in the Gulf War 2 (Iraq and Afghanistan) and yet we got it. A majority of voters in all states, so far as I can tell, oppose sell-offs of crucial government infrastructure assets. And it keeps happening bit by bit. It is also pretty clear that our major political parties are bought and suborned by capital in general and mining capital in particular. They are also subservient and servile to the US government.

    Some sort of reform to re-make our democracy as responsive to popular opinion needs to occur. The arrogant know-all, plunder-all elites have control and taking us into total disaster.

  10. @Ikonoclast

    A lot of people on the social democratic left deride Direct Democracy.

    For the record, my preferred governance model incorporates elements of direct democracy (but is mainly based on an amalgam between deliberative voting and sortition) with direct democracy for the big picture components.

    I’d also like to see better resort to direct democracy making use of electronic voting channels.

  11. Classic capitalist crisis phenomena are appearing everywhere and the internet is filling up with concerns over a possible global depression.

    Here is the situation for individual insolvencies in England and Wales (fig 2, Quarterly short run, fig 5, annual long-run)

    see: Insolvencies

    In this context, and due to the impact of around 100 trillion of world stimulus, I do not think that skyrocketing stockmarkets are to be taken seriously.

  12. 100 trillion in stimulus spending?????? That would mean that half the states in the world would have had to have access to a trillion dollars to put up. Two short words to describe the probability of that Chris W.

  13. I predict as follows:-

    1. Abbott wins the election.
    2. Per capita real government spending continues to grow.
    3. Per capita real government tax revenue continues to grow.
    4. A few pro market reforms.
    5. A few anti market reforms.
    6. Same as the ALP on same sex marriage.
    7. Same as the ALP on drug reform.
    8. No meaningful labor market reform.
    9. Continuation of the NBN but a change of design.

    Boring, boring, boring.

  14. @Chris Warren

    “The global credit stock has already doubled in recent years, from $57 trillion to $109 trillion between 2000 and 2009, according to the report.”

    That is almost double in 9 years. Using the rough “rule of 72” to work out compound growth that means about 8% minus 1% (because it wasn’t quite a doubling) = 7% annual growth average. Since world GDP grew at about an average of 3.5% over that time (and this may be generous) then this means global credit stock is growing at about twice the rate of global GDP. Given that we started at high levels of debt (ramped up from 1970 to 2000) this doubling from 2000 t0 2009 despite the GFC correction looks ominous and unsustainable. Capitalism exhibits another unsustainable trend due to end in disaster.

  15. Regarding democratic reform. I would appoint our senators via sortition. And I would have a citizens veto mechanism where by a citizens initative could repeal any law. I’d also like an act of parliament that makes all regulations by government agencies subject to a ten year sunset clause.

  16. I wish I could disagree with you on #17, Terje :-/ Not sure about 9, I think there’s a fair chance they’ll kill it unintentionally or at least recklessly

  17. @TerjeP

    It has started. The Financial Crisis of 2007-2008 (Great Recession) was the first round. Europe has not really recovered with (measured) unemployment over 10% and under-employment likely to be double that. Greece, Spain, Portugal, Cyprus, Ireland and possibly soon Italy are in a depression. Greece and Spain face 50% youth unemployment. Cyprus is obviously a basket case. The whole of MENA (Middle East and North Africa) is beyond basket case status. The USA is experiencing a dead cat bounce before its next crash. China’s path is totally unsustainable both from the resources supply and pollution perspectives.

    A slow motion crisis is difficult to perceive in the first 10 years. By 2020 or maybe 2025 at the latest you will be looking back and thinking, gee that fruitcake Ikon was right after all.

    What can we do? Frankly, I think fatalism is the only option now. Events and financial conditions will be so chaotic that there is almost no predicting safe strategies, personal or financial. But I would rather be in Australia than almost any other country. Being a long way from most of the rest of the world may now be our best asset.

  18. @Chris Warren

    I had to check it wasn’t the 1st of April! Cyprus has signed its own economic death warrant by this action. Its economy will implode. Capital flight, residential flight, an unstoppable bank run and a catastrophic collapse in aggregate demand.

    Usually, a draconian, one-off, unannounced, unmandated (not an election issue) tax surcharge of 10% on savings over a set amount (to bail out rich bankers no less) would be totally beyond the pale. The level set would pull in many middle class savers and quite a few workers for that matter.

    Interesting thing though is that Cyprus is (or was?) a tax haven. Thus, is it poetic justice? All those expat tax avoiders who were too cheap to pay tax in their own country are now getting stung. Maybe they deserve it. I can’t say I feel much sympathy for tax haven users. Maybe other tax havens are now at risk too. Certainly, tax havens are risky places to have your money in the current climate. Anything can and probably will happen now.

  19. @Ikonoclast
    What’s your view on the Citizens Electoral Council (part of the crazy La Rouche party) which has been pushing this stuff for many years (Citizen Initiated Referendums)?

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