How can the ALP regain control of the message proven by the facts since GFC? (ODT)
The Liberal Party, its ideological ally the IPA and Rupert Murdoch’s News Corp have done a remarkable job of pushing the false narrative of superior Liberal economic management. The Labor Party has invited submissions to its 2019 campaign review. Alan Austin, offers a solution.
THE ECONOMY decides federal elections. Or, to be accurate, perceptions of the economy decide federal elections.
The truth about Labor’s economic management
An impressive global consensus exists that Australia’s Rudd and Gillard Governments generated the best-performed economy the world had ever seen More than 130 economists, other academics and global leaders are on the record affirming Australia handled the global financial crisis (GFC) better than any other administration.
That list includes the 66 who signed an open letter in August 2010 supporting Kevin Rudd’s stimulus program. It does not include finance ministers around the world who in 2011 voted Wayne Swan the world’s best treasurer.
Why voters believe the opposite
As argued elsewhere, three powerful organisations systematically falsify the record on Australia’s economy and have been remarkably successful in duping voters. These are the Liberal Party, the Institute of Public Affairs and Rupert Murdoch’s News Corporation. There are others, but none with the resources and reach of these three.
The Coalition would not have won the 2016 election if voters knew Australia’s economy had deteriorated from world’s best to ranking ninth in the world. They would not have been returned in May if voters knew the economy is now outside the world’s top twenty.
Mr North has calculated there are now close to 1 million Australians on the edge of mortgage stress — defined by Digital Finance Analytics as borrowers who are going further into debt or eating into savings because their expenses are greater than their income.
Given that, it’s understandable that when the big four banks advertise discounted mortgage rates, financially stressed-out households flock to the banks to bag a better deal.
“And then they’re stuck, because suddenly they find that that wonderfully alluring low rate that’s being hung out to them is inaccessible,” Mr North said.
He calls these borrowers “mortgage prisoners” because they go home empty-handed, trapped in a financial squeeze.
It’s true there’s a historical correlation between security, prosperity and growth. Those were the days when “trickle-down” worked. It worked because the trickling down occurred through higher wages and better social services at the insistence of a strong labour movement when our media weren’t just corporate mouthpieces. That’s all changed.
But isn’t GDP still growing? Sure. GDP can grow along with population, even while living standards stagnate. In that case, growth doesn’t help us. In fact, right now, poverty is also increasing in Australia. Shouldn’t that cancel out the boost to GDP from population growth? Something else must be increasing too. What could that be?
Once we adjust for population growth, much of our meagre GDP growth goes with it. If this affected the entire population equally, nobody’s wealth would be increasing. But, in fact, it’s the poor who are bearing the brunt, while the rich get richer. In simple terms, existing wealth is being redistributed upwards. So poverty and inequality are rising.
Neoliberalism currently dominates world politics. This wealth shifting from labour to capital is based on trickle-down theories. By giving more money to the 1% – the so-called wealth creators – there will eventually be more money and jobs for the 99%. The only problem is that the 1% do not create wealth. Their profit, interest, dividends and rent, come from workers.
the bandwagon of economic growth. That bandwagon desperately depends on an ever increasing population. As long as that dependency is there, it will be very hard for governments and the corporate sector to change course Is the World Full Yet?
Polls may look bleak for the government, but it will start getting the credit if things improve on the jobs and wages front
There is a $2.85 billion-a-year shortfall in what employers should be paying their employees in super.
On the issue of economic leadership, if governments set emissions reduction goals they encourage their engineers and scientists to make breakthroughs in things like solar power. Trump is about to deprive the US of an impetus to excel.
Trickledown economics is sometimes summarised as “A rising tide lifts all boats” — an attractive but quite false piece of economic chicanery, writes Frank O’Shea.
The transition from fossil fuels to renewable energy “now appears irreversible” as the cost of green power plunges, according to a new report. In The Transition Takes Hold, Clean Energy Canada said some 6.7 million people were working in the sector worldwide with one out of every 50 new jobs in the US being created by the solar industry alone.
One of my colleagues in the Crawford School at ANU has a sign on his door: Keep Calm – and An Economist has The Answer.
The “free market” has nothing to do with keeping prices down through competition as our Liberal politicians would have us believe. It has nothing to do with Friedman’s idealistic vision of benefit for all. It is about maximising profit for businesses. Maximise income, minimise costs, and avoid taxation. If there was limitless supply then perhaps…
Despite the GFC and ongoing ominous signs of financial doom, economists are eager to return to “business as usual”.
On the second day of the World Economic Forum in Davos,
Over 550 British Jews are applying for German citizenship in a move that would have been unthinkable only a year ago.
How do the conditions in which you are born, grow, live, work and age affect your sleep?
By commondreams.org Corporations are running the world, according to new figures released Monday from the U.K.-based Global Justice Now. The economic and social justice advocacy group discovered (spreadsheet) that the ten largest corporations are wealthier than most countries in the world combined. “Today, of …
The week will be dominated by politics, not economics, which will make it harder to hear the messages coming through about the future of our economy, and indeed that of the wider world. But if you are looking into the UK from the outside, there is one particularly troubling thing to look for. That is what is happening to long-term interest rates.
On the idyllic island of Lindau, in 2014, everything looked fine. But 15 Nobel Laureates warned otherwise.
By Ken Wolff Late in the 1970s Keynesian economics was largely abandoned when it failed to explain the stagflation that had occurred during that decade. Recently, in my piece ‘What economic plan?’, I quoted an Australian analyst with the CBA who suggested that recent national data released by the ABS was showing ‘bizarre’ results, an…
Stuart Andrews discusses the First World’s addiction to “wealth creation” and how long our finite resources can sustain us.
As the U.S. military continues its war against the Islamic State (ISIS or ISIL), the Air Force is reportedly dropping so many bombs that it is struggling to find more. “We’re in the business of killing terrorists and business is good,” Air Force Secretary Deborah Lee James said in statement quoted by USA Today on Thursday.
When the 21st United Nations Climate Change Conference opens in Paris on November 30, annual global emissions of carbon dioxide (CO2) will be about 32 billion metric tons.
If taxes on the rich go up, job creation will go down. It is an argument rarely challenged, but Hanauer insists it’s one that holds the key to the change th
When you scrape below the surface it’s not hard to see that ‘culture’ is the wrong answer to almost every question.
The biggest factor behind the recessionary trend is not the Chinese market, austerity budgets, or even the threat of higher US interest rates this year.
The word ‘revolution’ has throughout history been synonymous with the cry for equality and social change. The French Revolution of 1789, the Russian Revolution of 1917, the Cuban Revolution of 1959 to name a few, all began because the divide between the haves and the have nots became intolerable. In the examples above, social inequality was at historically high levels and getting worse by the day. Something had to happen and it did, much of it violent and bloody.
Revolutions were generally born of peasant unrest, dissatisfaction, a sense of betrayal by once revered heroes who were seduced by their own power and their accumulation of vast wealth. When that peasant dissatisfaction reached a tipping point, revolution became the only recourse.
Today the wealthiest 1% in our society enjoy a lifestyle that much of the 99% could not even imagine. Furthermore, the gap continues to widen such that the line between middle and lower class workers is now blurred, while the gap between middle and upper income levels grows wider and easier to see.
While any high functioning capitalist economy will always have inequality to some degree, the divide as it exists today is so geared toward greater wealth for the fewer that the middle class is in danger of disappearing altogether. The message for all those living in their gated compounds and ivory towers is, it cannot last.
Statistics are not needed to reinforce these claims. They simply confirm what the 99% already know. But, for the record, in 1980 in the USA, the top 1% controlled about 8% of the national income while the bottom 50% shared about 18%. Today, the top 1% share 20% of the national income while the bottom 50% share just 12%.
In Australia, similar comparisons are difficult to find but in measuring wealth by quintiles, the ABS found that in 2011 the top 20% of households owned 62% of the wealth while the bottom 20% held less than 1%. In fact the top 20% held more wealth than the rest combined. The conclusion was that wealth inequality was rising fast.
Free market capitalism in its present form is no longer a recipe for a sustained, prosperous, happy, healthy society. Today, capitalism is synonymous with inequality, unfairness and discrimination. With today’s capitalism we are drifting toward feudalism.
Inequality has grown so dramatically over the past thirty years that our once great egalitarian Australia of the 1960s and ’70s has all but disappeared. And to quote Joseph Stiglitz, “one of the major culprits has been trickle-down economics—the idea that the government can just step back and if the rich get richer and use their talents and resources to create jobs, everyone will benefit. It just doesn’t work; the historical data now proves that.”
If ever world leaders had an opportunity to revolutionise capitalism it was in the aftermath of the Global Financial Crisis (GFC). Just six years on from that incredible opportunity, we can see they have failed and have done so, spectacularly.
Bank bailouts without conditions will be a dark legacy for Barack Obama in an otherwise reasonable presidency and now the opportunity has all but passed. The US stock market has not just recovered but surpassed pre 2008 lows. The rich are richer and the poor are poorer in far greater numbers than before. For the 1%, the plutocrats, it’s business as usual.
The Reagan trickle-down effect is back with a vengeance and is now the hallmark of the present Australian government despite a plethora of information, data, and recent history to demonstrate its failure. They still expect business to lead a national recovery with investment in goods and services. What they don’t get, is that an underutilised workforce cannot afford it. Business knows this. That is why they will not commit.
The government cannot see that a vibrant, active, well-educated workforce is an essential component of a strong, robust economy; a component that creates demand that results in stronger growth, stronger investment and stronger taxes.
Blinded by the advice from bankers, investment houses and those whose fortunes are derived from manipulating stock markets and overvaluing mortgage stocks, Tony Abbott and Joe Hockey are no more than a mouthpiece for the 1%; the plutocrats. They are victims of their own self-serving ideology. While they are in power nothing will change, no improvement for the 99% will ever eventuate.
Any realistic observer can see that this trend is unsustainable and its future unpredictable. While the plutocrats continue to build their wealth, billionaire Nick Hanauer thinks they might inherit pitchforks.
While the 1% enjoy their wealth, blind to the signs of desperation around them, a single act of defiance by someone desperate and destitute enough could mobilise thousands in support and roll across the country like a tidal wave. The 1% could be caught like the frog in the saucepan unaware the water has reached boiling point. But by then, it will be too late.
I don’t think anyone in government, least of all Scott Morrison, anticipated riots leading to murder and self-immolation when he embarked upon his ruthless policy of deprivation detention on Manus Island. That crept up without warning. And now, I don’t think either he or his party foresee all the possible outcomes if they embark upon a policy of reducing welfare at a time of fiscal contraction.
He may not even care but he could well be responsible for creating a new underclass that has no respect for law and order. He could well extend existing poverty further into the realm of the middle class, bringing welfare agencies to their knees trying to cope. This is where that one defiant act could likely emerge.
History is littered with such circumstances and the consequences of doing nothing. The 1% won’t see it coming, but governments should. And they should do something to stop it, or they too will feel the pitchforks. They can plead ignorance but that won’t save them.
They can say their hands were tied but their complicity will be all too obvious. The plutocrats will never change voluntarily. The government is running out of time to do it for them.
Despite the angry bluster from Abbott, Hockey and the mining industry, the ANU’s decision to divest from fossil fuels is not only ethical, but make makes sound economic sense. Lachlan Barker reports.
The decision by the Australian National University (ANU) to divest $16 million of its billion dollar plus portfolio out of fossil fuels has attracted volleys of abuse from the Federal Government, the mining industry and the conservative press.
It’s been a hell of a storm for the ANU and things aren’t over yet.
Indeed, ANU vice-chancellor Ian Young provided the university with an out, saying early last week:
‘Our consultants stand by their assessments, which we have found persuasive, but should new information come to hand, or flaws become evident in the methodology involved, we would naturally reconsider the assessments.’
But as you will see below, the players who provided the advice to the ANU have no doubts.
And unfortunately for carbon fans, it has put divestment on the front page, with other universities now coming under the spotlight to see if they too will divest.
The ANU then made their decision to make a tiny divestment — less than two per cent of its portfolio. At that, the floodgates of abuse were opened.
Well CAER wasn’t having that, and they released a statement in response:
The Centre for Australian Ethical Research (CAER) completely rejects today’s article by Ben Potter in the Australian Financial Review.
CAER categorically stands by the research it supplied to the Australian National University.
The AFR article is factually incorrect and Mr Potter was aware of this prior to publication, but has chosen to publish anyway. CAER will be seeking a retraction from the AFR.
I contacted the AFR and asked if they will be printing a retraction, but have had no response.
Then EIRIS (Empowering Responsible Investment) weighed in.
The current controversy regarding the Australian National University’s (ANU) decision to divest from seven stocks in their investment portfolio has involved some serious misrepresentation of the role of their research provider, CAER.
EIRIS, as a global leader in the provision of environmental, social and governance (ESG) research, stands by CAER, EIRIS’s Australian research partner, and the methodology it has used to provide research to the ANU.
The market begs to differ as well, as it looks like the investors are, at least at the moment, moving out of fossil fuels and mining in general.
Further support for the ANU’s decision to get out of fossil fuels would appear to be the languishing price of thermal coal.
From a recent peak of US$140 in December 2010, the price of this energy generation source has since dropped steadily such that, in July this year, Australia began officially mining thermal coal at a loss.
Production costs for thermal coal in Australia are presently US$74 a tonne. In July 2014 the price dipped below that mark to US$73.66, in August it held steady at $73.86, before September came and the price dropped 4.35% to US$70.65.
Hardly a good investment Tony