And here’s something else to remember: the Reserve has begun warning that we won’t get back to meaningful real wage growth until we get back to full employment.There’s no excuse, we need full employment now
Frydenberg will be remembered as the inventor of the two-class tax cut.Budget 2020: Josh Frydenberg’s two-class tax cut is like no other we’ve seen
And you see that this “Liberal values” business-directed, tax-reducing approach to fiscal stimulus explains why the budget didn’t include the two measures economists most wanted to see because they’d do most to boost consumer spending and jobs: a big spend on social housing (a no-no under the rules of Smaller Government) and a permanent increase in unemployment benefits (almost every cent of which would have been spent). The risk with Frydenberg’s politically correct stimulus is that too much of it will be saved. He needs to bone up on Keynes’ warning about the “paradox of thrift”.Frydenberg has changed his tune in a very Liberal way
By sanctifying selfishness, it has undermined community-mindedness and the role of co-operation in advancing our mutual interests. Voting has become a simple matter of “what’s in it for me and mine”, while businesses and industries have been licensed to lobby for preferment at the expense of everyone else. “In recent decades the balance between these instincts [of competition and co-operation] has become dangerously skewed: mutuality has been undermined by an extreme individualism which has weakened co-operation and polarised our politics,”
Since the late 1970s, however, Americans have talked less about the common good and more about self-aggrandisement; less “we’re all in it together” and more “you’re on your own”. There’s been “growing cynicism and distrust toward all the basic institutions of American society – governments, the media, corporations” and more.Thinking economists are grappling with why their profession has made our lives worse
At the parliamentary hearing, he said: “From my perspective, creating jobs for people is much more important than preserving the credit ratings. I have no concerns at all about the state governments being able to borrow more money at low interest rates. The Reserve Bank is making sure that’s the case.” At one level, this is a sign of the momentous times we live in. Governments around the world are borrowing massively as the only way they can think of to overcome the coronacession. With interest rates on long-term government borrowing at unprecedented lows, what have they go to fear?Coronavirus: Pandemic could kill off governments’ credit rating bogeyman
Wage growth has recorded its lowest growth since records were kept. Illustration: Greg NewingtonCredit:
Wage growth is the key to recovery because wages are the greatest single driver of economic activity and employment. But rather than thinking of ways to get wages up, both sides are working on ways to slow them further.
Not that private sector employers will need any help. They always skip pay rises during recessions because, afraid of losing their jobs, workers know they’re in no position to argue.
But, while as individuals, firms benefit from cutting the real value of the wages they pay, especially when all of them do it at the same time, they all suffer because the nation’s households have less money to spend on the products of the nation’s businesses.
Robbing Peter to pay Paul ain’t stimulus
Since 2002, Quinn showed, the most productive Australian firms (the top 5 per cent) had not kept pace with the most productive firms globally. In fact, Australia’s ‘productivity frontier’ has slipped back by about one-third. The best of ‘Made in Australia’ hasn’t kept pace with the best of ‘Made in Germany’, ‘Made in the Netherlands’ or even ‘Made in America’.”
And then there’s the other 95 per cent. In the past two decades, their output per hour worked has barely risen. So 19 out of 20 Australian firms don’t produce much more per hour than they did when Sydney hosted the Olympics.
A Productivity Commission study has found that half the slowdown in productivity improvement in the market economy in recent years is accounted for by manufacturing. A separate survey of management practices in manufacturing firms found that Australia’s managers rank below those in Canada, Sweden, Japan, Germany and the US.
The drop we’ve experienced is “not the fault of employees: there are simply fewer good opportunities available. According to Treasury’s analysis, much of the drop in job-switching is because workers are less likely to transition from mature firms to young firms. With fewer start-up firms, it stands to reason that there are fewer start-up jobs.”
When Ross Gittens offers Morrison a narrative against perception(ODT)
“Entitlement: When the Rich and Powerful feel it’s their Right” (ODT)
It’s an important, though sensitive, question for economists since their simple “neo-classical” model of markets predicts firms won’t mistreat their customers because, if they did, they’d lose them to a competitor.
Sims offers seven reasons for this evident “market failure” – a term economists use to acknowledge when real world markets fail to deliver the benefits the textbook model promises.
This is what ultra-Conservatives rail against and want our universities to be rid off HASS Humanities and Social Science degrees. They were poison to the Nazis as well the Catholic Church which banned Catholics from studying or reading Sociology it’s too dangerous for them the Curch that is. In fact the social sciences can cause individuals to break down. Sociology likens social life of men as sitting on a mop bucket and caught by the balls. When trying to stand putting ones foot on the pedal each time trapped. By revealing the mop buckets of our social life social science has the ability to set one free and that for conservatives is dangerous. (ODT)
It makes no sense. As Senator Arthur Sinodinos said while minister for industry, innovation and science, “the advancement of the Australian economy relies on robust research from physical science and social science alike.
Not being ones to boast, the social scientists would like you to know their former students pretty much run the world. They’ve produced the majority of ASX-listed chief executives. Probably just as true of the public service and politicians.
Add the arts and humanities, and most of the tertiary-educated workers in Australia have HASS degrees. Almost three-quarters of university students are in HASS courses. Most of the overseas students paying full freight for their degrees – and now constituting one of our top export earners – do HASS courses, particularly business courses.
But while we’re deflating the government’s triumphalism, its critics also need taking down a peg. They like to remind us that the official unemployment rate understates the true extent of worklessness. Specifically, it fails to take account of under-employment – people with part-time jobs who’d like to work more hours.
All that’s true. But when you correct the unemployment rate (for May) of 5.4 per cent by adding the underemployment rate of 8.5 per cent to give a broader measure of labour “underutilisation” of 13.9 per cent (as, admittedly, the bureau encourages you to do), you’ve gone from understating the problem to overstating it.
Much of this rapid return to “the old normal” rests on the government’s forecast that the past four or five years of exceptionally weak growth in wages will end next month. Wage rises will be a lot higher in 2018-19, higher again the following year and still higher, at 3.5 per cent a year, in the following two years and for the remaining years out to 2028-29.
I think this is the basic explanation for the budget’s forecasts and projections, prepared by that well-known Italian economist, Rosie Scenario.
Amid all the reluctant truth-telling at the banking royal commission, one big lie has yet to be apprehended: shame-faced witnesses keep admitting they put their shareholders’ interests ahead of their customers’. Don’t believe it.
When the consumer price index is dissected, the real problem is the rate of increases.
You can see it overseas in the electoral popularity of Bernie Sanders and Jeremy Corbyn, and the anti-establishment revolts in the Brexit vote and the election of Donald Trump.