4 thoughts on “Monday Message Board”

  1. Now that the underachievers in Canberra have brought in the federal budget it’s time to look at the real economy. Not from the statistics currently available because that always lags the true situation. The best indicator of economic activity is the consumer spending on food. Not groceries because that tends to be paid for by the debt available from using credit cards. No the food spending I refer to is that obtained from fast food outlets, cafes, sandwich bars, pubs and food vendors. Now the current situation for most of these businesses is grim. Fast food outlets are protected somewhat by the consumer preference for quick and supposedly cheap food. But cafes are feeling the pinch in two ways. The high global price of cocoa beans has increased an essential variable cost. Added to the high overheads impacting all small businesses, like very high rent, this cost pressure is intense. But in a booming economy the cafes could cope by targeting volume sakes. In 2024 this has not been possible. Cafes are fighting to hold on to their established customer base. The discretionary dollar is just not covering multiple cups of coffee from the cafes in most areas of Australia.

    Now what about sandwich bars? These are mainly located in large towns and cities. That means that most of them are busy between 6am and 9 am; and then again from about noon to 2pm. But today one of those usually busy periods is a lot less busy. Of course laziness and sloth maintain the early busy rush. But what about the lunchtime rush? One sandwich shop owner, who had been in business for 35 years, told me that he always knew when a recession was just around the corner. He noticed that his regulars stopped coming in every lunchtime and only bought drinks and chips when they did turn up. Also he noticed a lot more shared meals.Two people would split a bag of hot chips or a sandwich.
    The anecdotal evidence today suggests that Australia is in a phantom recession. Not that you would know that if you visited parliament house in Canberra. But that is just one of the oasis of money that hides the drying up of discretionary spending by most Australians. Go away from areas of higher socioeconomic privilege, and you will notice empty cafes, poorly supported sandwich bars, low activity food outlets and even smaller queues at fast food restaurants during school hours. Pubs seem to buck this trend. But maybe the pub food is not what is bringing in the patrons.

    A phantom recession does not necessarily mean that statistically we are in a recession. Australia has a highly paid professional class, overpaid politicians and consultants. These overpaid income earners pull up averages and index numbers. But the majority of income earners, especially those on fixed incomes, know a recession when they feel it.

    Look around on your walks. How many retail outlets that you pass are now closed down? Are these empty premises been quickly rented out again? How busy is your lunch food shop of choice? Has it been busier? These are indicators that anyone can observe.

    There is an underground recession that all but the high income earners are experiencing now. Don’t be fooled by budget statistics or by any statistics for that measure. We have to live in the real world and NOT in the modelling world of statistics.

  4. Congratulations, James!!

    That is a wonderful print – and very frightening. Appropriately so.

    Just out of curiosity – if you are ever bored – I’d be interested to know your opinion of recent moves by California’s PUC. Is it as horrible as I suspect? Or do I have bad expectations? Or both?

    In the last year or so, they have lowered the benefits of rooftop solar – supposedly because it burdens low income people – and now they are trying to force large monthly fixed charges, under some other complicated cost shifting scheme. (We have private utilities here – just in case that is not a thing in Europe.)

    Meanwhile, I don’t even have solar yet, we have multiple gas appliances that would need to be changed out first, and you can’t even get an electrician to come out anyway. (Not that I will give up. Of course not. Well, there’s no choice to do that anyway.) Maybe because our current jobs are too small. I mean, I don’t blame them. Everyone has to live.

    And in the other meanwhile, I could look into signing up for one of those community choice arrangements.

    It will take me a while to work through your memo. Will it be lawyering that finally gets us off our duffs? I wonder.

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