34 thoughts on “Weekend reflections

  1. The weather here in Utah might be making the many, many conservatives here just a little bit more inclined to believe in climate change. It’s 11 C here nearly 1/3rd of the way into December, which is quite unusually warm for winter weather (lucky you down in the Southern Hemisphere where it’s summer!).

  2. Resource shortages are one reason why world economic growth is failing. By “failing” I mean world economic growth is continuing its long downward trend from running at about 5% to 6% per annum in the 1960s to running now at about 2.5% per annum. Indeed, if you average world economic growth for the GFC and the period following you get about 0%.

    The “recovery” since the GFC is not a recovery at all. There is no recovery in Europe and no recovery in Japan. Indeed, these two are going beyond stagnation and falling into apparently permanent de-growth. The US “recovery” is non-existent for about the bottom 4/5ths of the population. Profits accruing to the Finance sector and the very rich are eating up the rest. Financialisation of the US economy proceeds apace just the de-industrialisation of the US continues its decline. The real economy in the US is declining.

    The International Labor Organization (ILO) released a report on December 5, 2014. Text in quotes below is from an analysis by Richard Wolff, a prominent Marxist US Professor.

    “1. Real wage growth slowed again in 2013 (to 2% per year), remaining below pre-crisis rates of wage increase that averaged about 3%.

    2. But even more important, real wage growth in “advanced” economies like those in north America, western Europe and Japan hovered around 1 % since 2006 and fell, in 2012 and 2013, to 0.1 % and 0.2 %.

    3. In sharp contrast, real wages rose in in major emerging countries (China especially) by 6.7% in 2012 and 5.9% in 2013.

    … Economic growth, rising real wages, and rising standards of living are the economic reality of China. Economic crisis, stagnant wages, and deepening inequalities of income and wealth are the economic realities for western Europe, the US, and Japan.”

    We can put this together with the fact that it is now officially reported that China is now the largest economy in the world. See the article It’s Official: America is now No. 2 on MarketWatch.

    “A second key result emerges from the second chart (below) taken from the ILO report. (Not shown in this post.) In the developed countries where real wages stagnated during the crisis since 2007, productivity of workers continued to rise. This means that what workers provide to their bosses (that’s what productivity measures) has kept rising while what bosses pay their workers (that’s what real wages measures) has not. That explains the gross increases in income and wealth inequality in the “advanced” or “developed” economies.”

    “Finally, because real wages are still three times higher in the developed than in the underdeveloped world, the capitalists are getting the higher profits that motivate the relocation out of western Europe, north America and Japan. They share some of those profits with major capitalist corporations of the regions into which they move. It is a kind of payoff needed to facilitate the move. That explains the gross inequalities of income and wealth deepening in those regions too.”

    “The great political question of the day is this: will the working classes of western Europe, north America and Japan consent to the long-term decline in their economic well-being that now serves capitalists’ thirst for higher profits? It is the question even though mainstream politicians, media and academics cannot see it or refuse to discuss it.”

    All text above in quotes is from Richard Wolff. However, the relocation of production from the so-called Triad (Western Europe, north America and Japan) to China and the developing world is only part of the story. There are two even bigger parts of the story. The second part of the story is the stagnation of late-stage capitalism or Financial Monopoly Capitalism which is only partially overcome by relocating production to low wage countries. The third part of the story is the lid being put on global growth by resource shortages.

    The decline in global growth rates from 5% or 6% in the 1960s to about 2.5% currently is now trending to 0% in the near future. This long term trend established itself before resource limits became a limiting factor. This in turn points to the fact that this trend is inherent to Financial Monopoly Capitalism itself.

    It might almost be considered fortuitous that Financial Monopoly Capitalism stultifies itself (in terms of real production not in terms of shifting so-called wealth to itself) at that point in history when the real limits to real growth begin to impact. Soon, we will be directly confronted with the question of what the term “wealth” really means. The financial system is accumulating, moving and speculating in paper wealth. We might almost call it “bit-wealth” as the numbers are stored as bits or computer data. This wealth is concentrating and ballooning in limited hands.

    At the same time, real production is stagnating and will soon go into reverse. Existing methods will have to be used and/or new methods devised to bankrupt people (the lower 99%) and wipe out much of their paper or bit wealth. This will enable the 1% or even the .1% to maintain the purchasing power of their paper wealth. The G20 in Brisbane adopted a global protocol for bail-ins. Just as happened in Cyrpus, the savings of all ordinary people (and a few smalltime crooks as well of course) will likely be raided to stop the Too Big to Fail banks from failing. Of course “Too Big to Fail” equals “Too Lucrative to the One Percent to Fail”.

    What effects will all this have? Well, a lot of paper wealth will be wiped out but it won’t be the paper wealth of the 0.1%. Compulsory market-linked super anyone? One guess what’s going to happen to that.

  3. I have just seen on twitter pictures of Queensland police vehicles with Santos branding on them.

    I just followed it up a bit and apparently this is under the Stay on Track Outback project http://www.stayontrackoutback.qld.gov.au (Santos’ logo is included at the bottom of that page)

    So in other words, Queensland police, who may be called upon to police disputes between citizens, including landholders, and Santos, particularly over fracking, are also allowing Santos’ branding to appear on their vehicles.

    That’s pretty amazing. Sounds like corruption to me.

  4. I see a connection between a fossil fuel company sponsoring the police and growing wealth disparity. Next year when Santos starts exporting LNG from Gladstone the main long term beneficiaries will be shareholders, not the general public. Some builders did OK for a while but that will stop. Australian businesses that could benefit from ongoing cheap gas miss out, a state of affairs now apparently upheld by government enforcers.

    Another corrupt process is that the Tasmanian Liberal government will use funds earmarked for forestry exit packages to help contractors return to the industry. This is while Australia assures the Lima attendees we will protect forests. The forestry exit scheme has already had some double dipping. The hydro was obliged to give the forestry commission a $30m cash ‘equity transfer’ whatever that is. I wonder if we are looking the other way at corrupt deals because we need a quick increase in jobs.

  5. The G20 in Brisbane adopted a global protocol for bail-ins.

    A year or so ago there were stories in the media of the hoarding of $100 notes, with the reasoning being that crime gangs were using them for illicit activity or some social security recipients were trying to hide their wealth. But I suspect that many are hiding their dosh in the mattress because they realise that the banking system in its current form is unstable.

    However the bright sparks have worked out how to stop that.

    1. Make electronic banking mandatory (i.e. remove all cash from circulation and mandate a reduction in the value for any remaining cash by a certain percentage every year until it is worthless).
    2. Civil Forfeiture(John Oliver – Possibly NSFW).

    Bankers win every time. The sooner we regulate these grifters out of existence the better.

  6. Sorry, stuffed up the links.

    Search for “John Oliver Civil Forfeiture” and “Giftopia” if interested.

  7. Our taxidermist treasurer, Joe Hockey, beseeches us to spend like drunken sailors this pre-Xmas period. It begs the question as to why he had so many of us in SA sacked first. Nice one, Joe.
    The ASC.
    The ABS.
    The CSIRO: swingeing 20% cuts in staff numbers, loss of the entire S, M, from STEM, in South Australia. Thanks Tony, thanks Joe.
    The car manufacturers. Thanks Tony, Joe, McCarLane.
    The car component manufacturers.
    The Defence industry.
    The Defence Forces.
    The ABC, including the closure of all local production.
    Destabilisation of a growth industry in renewable energy (SA has > 40% (variable renewable) of total demand, as of June 2014) by fooling around with RET.
    And many more.

    In next year’s Xmas swag, we can look forward to adding budget cuts to universities, while dumping even more of the higher education costs onto students. What other nice surprises await, I wonder. More religious blackmail and exclusion of atheists and agnostics from jobs in public schools, perhaps?

    Anyway, on behalf of South Australia, Merry Xmas Joe. I’d send a Xmas gift, but wot wif unemployment and all, you know how it is. Could you spare me a fiver, Joe?

  8. I think it’s on the cards that in 2015 we will have the miserable trifecta of no economic growth, rising unemployment and increasing emissions. I notice retailers are avoiding tinsel and glitter in their unusually subdued TV advertising, perhaps hoping the Boxing Day sales save the season. I’m buying a $30 present for myself so that’s my contribution. Electricity sector emissions are already up with weak hydro, expected higher gas prices and no carbon tax leading the return to coal.

  9. Elsewhere, people fight on. Over at Gloucester, after months of struggle, the local anti-csg mob attracted a crowd of about 250 people for a march admirably led by the Riffraff marching band. This will turn into a huge boil for the Nationals and the Libs.


    It’s raining.

  10. Donald Oats: That’s what happens when you live beyond your means and the money runs out.
    Our only viable industry is mining and that is going kaput, Anything with a subsidy in front of it is not sustainable and the budget is still $36 billion in deficit.
    Expect more on your list.

  11. @Val

    Not too surprising that Santos is effectively sponsoring the Police.

    The ALP started that particular corrupt practice in Queensland – specifically in service to the CSG industry.

    Arrow Energy paid for the heavy police presence at the Kerry Blockade in early 2012 and QGC also paid police to arrest and prosecute farmers and others under the draconian provisions of the Petroleum Act.

    One definition of fascism involves the corporations and the state working as one, take a bow ALP.

  12. What is going on? I thought the gold standard was a mechanism of the past. Now the Belgians, are following the Dutch, in repatriating gold from the US. Why was it expatriated in the first place? Why now? Is this action consequential for the international monetary system?

  13. Wmmbb, what’s going on? Situation normal is what’s going on. That is, Europe is punching itself in the economic gonads as it has for over half a decade now. Years ago they had a choice between fixing the Euro or getting rid of the Euro and instead they chose the third path which was to continuously punch themselves in the gonads over and over and over. Some countries are getting sick of this and are going to stop soon. Countries such as Germany, Netherlands, France, etc. have to get ready for this so they can blame the countries that stop punching themselves in the gonads first and call them bad names. Europe doesn’t do racism like they used to, but expect “culture” to be brought up a lot. I don’t know what that means, but I guess the beauty of it is it can mean many things, including racism if one is that way inclined. Anyway, the gold isn’t really necessary, what is more important is to have vaults full of new national polymer currency secretly printed in Australia and shipped over ready so when the time is right one can jump out of the good shop gonad punch while blaming it all on whoever stopped punching themselves in the gonads first. The gold? That’s just to make people feel good. It’s not part of any secret plan. Auric Goldfinder has assured me of this.

  14. @chrisl
    I think the problem is that we don’t have much of a say as to what gets the government dollars, and what gets shot full of holes. The ALP weren’t to blame for the GFC, and quick action to stimulate the economy with a cash injection was proven wise, assuming that the goal was to avoid a sudden surge in failing businesses, causing higher unemployment and a consequent increased demand on government services (Centrelink, ED, etc), and causing a loss of tax revenue. Prior to the ALP, the LNP under John Howard chose to give out income tax cuts, baby bonuses, first home owner’s grants, and much much more; these items are sucking down on government revenue, year after year. Clearly Howard thought the structural impact could be absorbed during a mining boom, but whether he appreciated the impact when mining contracts, or not, who knows—it is the next PM’s problem, or the one after that.

    There are plenty of items that could be removed, improving the the budget and getting us closer to a surplus. Making some changes to negative gearing rules affecting residential real estate wouldn’t be a bad start. The current government for its first budget has come up with a list of items which also seem to have some ideological barbs embedded within them; secondly, some of those items actually put further pressure on our ability to return to surplus, making it that much more difficult. Perhaps as time goes by, the situation will improve because of this budget, but I’m extremely sceptical for now.

  15. Donald Oats I agree that we don’t have much of a say on what gets the government dollars. Each side has a grab-bag full of policies, some good ,some bad ,some contradictory. We nut out which side has the better policies but after the election all bets are off! My advice would be to not rely on governments , certainly don’t trust them and don’t be surprised when they are sub-otimal in keeping promises.
    It is every man for himself!

  16. @John Brookes

    Not sure about the rest of Australia but Qld has “Proceeds of Crime” legislation that amounts to the same thing.

    The main difference is that it is the State keeping the money, property etc.. they seize rather than the local police. The citizen has to prove that they got the seized (and frozen – so good luck getting legal representation with no money) assets lawfully and totally free from any criminal activity, if not the State gets to keep it.

  17. There was another community rally on the Gold Coast today against the gifting of public space to corporations by the Qld Government. About 3,000 people turned up.

    The crooks want to give a huge amount of public land around the Broadwater/Spit/Wavebreak Island to developers. The ALP tried this in about 2003-2005 and the people defeated it. Then we chucked them out of government for good measure. The LNP are trying it again.

    The official non-partisan group that has been defending our public space for over a decade is “Save Our Spit” and the official pro-development PR site is “Broadwater Marine Project”.

    Very recently a new group has appeared called “Save Our Broadwater”. As soon as I saw their flyer today my BS antenna yelled out ‘ALP front group’.

    On tonight’s channel 7 news they reported the rally (kudos) and had a brief grab from Judy Spence as a representative of “Save Our Broadwater”. Spence was police minister in the Qld ALP government until their defeat in 2012 and an ALP MP since 1989.

    She now says she is against the development.

    It will be a hot issue in the upcoming state election. But it would be nice if the ALP didn’t always try to use lies and deception to win government and instead just came straight out and swore to stop all development on public land – but of course they can’t do that, so they lie instead. Assholes.

  18. @rog

    The LNP are not the least concerned that this form of privatisation (like most others) will add to consumers’ costs. That is the plan. If consumers pay more for power that means others are making more money. Typically with privatisation these others are shareholders, managers and financiers along with some ancillary beneficiaries like stockbrokers, the advertising industry and so on.

    The full economic ramifications would take a lot of teasing out. We can assume that low income households will find their fixed expenses rising so their discretionary spending would have to fall. So while there are business beneficiaries in this kind of privatisation (those I mentioned above) there will be other businesses who lose out. Local businesses who get the discretionary spending of local households will lose out and their profits will decline. At the same time, they too will be paying more for power.

    In poor areas, the increased money going to pay for utilities leaves the local community and gets concentrated in the monopoly concerns which run large power utilities. The profits go to “The City” (main business CBDs) and on to wealthy shareholders who live in exclusive residential enclaves. Taken far enough, this process must widen the wealth gap, increase inequity and lead to a bifurcation of soceity into poor ghettoes and rich gated communities.

    Over time, we are likely to see households and poor communities unable to afford utilities: households without power and finally without water as happened in Detroit relatively recently when water was turned off to poor households who could not pay rates or water bills. Crime and disease rise markedly in such situations and the real cost to society (law enforcement, remedial health measures if they happen at all, foregone productivity, human and social damage) are likely to be even larger than the wealth transfer itself.

    The only way I can make sense of the neoconservative project is to assume that the 0.01% intend to run a society that below them is about 90% impoverished underclass with about 5% technocrats and technicians and 5% security personnel (police, paramilitary police, secret police, spy agencies, private security and army).

  19. Catallaxy seems to be a rallying ground for Fascsists who are ready to impose the thug rule of Capital.

    When social democracy fails – because of its own stupidity – Fascism is always a possibility.

    A sure sign of nascent Fascism is “Alex Davidson” [November 21] demand that:

    Support for Keynesianism won’t end until we manage to put democracy back in its box.

    see: http://www.archive.is//Nn4dV

    If you do not think Fascism is foreshadowed in the failure of Keynesianism and Social Democracy – talk to your grandparents.

  20. The irony of Catallexy’s motto would be hilarious if it were not so tragic.

    “Be informed, not just opinionated.”

    The comment about “put democracy back in its box” has some irony too. The American Constitution deliberately put democracy in a box right from the start of the USA. It is a rich oligarchs’ constitution through and through.

  21. Ex PM John Howard calls Cate Blanchett’s eulogy at Gough Whitlam’s funeral service “outrageous.” WTF?

    Turns out he disputes her statement that Whitlam made her university education free. Howard reckons that because the last three years of his university education were paid for by a scholarship, he got to go to uni for free.

    In Cate’s case, she went to university during the universally free system initiated by Whitlam in 1973/74; Howard attended university well before that, when the system was fee based, but had merit scholarships available for some students, of which Howard was a recipient.

    Was Cate’s speech outrageous? You decide.

  22. I just saw some coverage of Richard Flanagan receiving the PM’s Literary Award on ABC24.

    In his remarks, Flanagan begins as follows:

    [MY grandparents were illiterate. My books now are read all over the world, for better or worse. The only difference between me and them is two generations of free state education … ]

    In the middle of an Abbott-regime taxpayer-funded propaganda blitz on deregulating tertiary education and raising HECS repayment rates that’s where ABC24 cut the quote.

    I don’t know what Flanagan said next. I haven’t found a transcript but I went searching for similar remarks by him and found this at the Blot blog published in May this year:

    MY grandparents were illiterate. My books now are read all over the world, for better or worse. The only difference between me and them is two generations of free state education and a university education … Would I go to university now when it is being turned into a complete user-pays system … Would my books have ever have happened? Probably not. This is the sort of cost that we’re going to pay.

    I’d like to know what Flanagan said that ABC24 chose to edit out.

  23. I like this quote, Fran:


    This time, as that same PM passed him his award, he said it would all be going to the Indigenous Literacy Foundation.

    “The lesson that my father took from the POW camps was that the measure of any civilised society was its willingness to look after its weakest.

    Money is like shit, my father used to say. Pile it up and it stinks. Spread it around and you can grow things,” he said.

  24. @Fran Barlow I did read the speech somewhere else, can’t remember where, but the redacted bit was minor and inconsequential.

    Richard Flangan writes and speaks well and I doubt he would dump on the PM. You have to read between the lines, he did have a sly dig at him re austerity.

  25. @Fran Barlow

    Go to the ABC Radio National web site and search for “Flanagan”. There’s a podcast from Sunday Extra where he says much the same as you quoted.

  26. Actually, Wmmbb, it has occured to me that a country that is able to forget very basic things such as torture is evil would probably also find it very easy to forget exactly whose gold is whose.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s