The government and the economy: myths or facts?
Nov 4th, 2007 by ninglun
Since in the last weeks of the election the big thrust of the Howard TEAM will be that they alone can be TRUSTED with the ECONOMY, I am all in favour of those who question this gospel.
Take this site, for example:
Per Capita.org
Especially see this entry: Prosperity and Fairness - An evening with Andrew Charlton.
On 30 August, Per Capita was joined by Andrew Charlton at the Hero of Waterloo in Sydney to discuss his latest book, Ozonomics. Andrew is a former Rhodes Scholar, currently at the London School of Economics, who co-wrote his first book, Fair Trade for All, with Nobel Prize winner Joseph Stiglitz at the age of 26.
Andrew embarked on the Ozonomics project out of frustration with the quality of financial reporting in Australia. He felt that gold prices and dollar exchange rates shed little light on the country’s real economic dynamics and set out to explore the inner workings of the Australian economy and unpack our prevailing economic myths.
The recipe for a strong, sustainable economy can be boiled down to three ingredients, Andrew argued: the holy trinity of jobs, productivity and equality. More people in work, each producing more output, make the pie bigger. An equitable distribution of the pie, which doesn’t undermine individual incentives, delivers social justice and sustains stable economic structures.
Andrew challenged the central economic claims of the current Federal government: that reforms undertaken by Howard and Costello were directly responsible for the existing boom, and that their economic management skills are critical to the economy’s future health. This argument may be a successful exercise in political salesmanship, but it lacks any real foundation in economics.
From interest rates to the surplus to workplace reform, Andrew argued the influence of Coalition policy on economic performance has been greatly overstated. In a direct comparison of reforms undertaken by Hawke/Keating versus those of Howard/Costello, Andrew argued the former were more significant in both volume and substance.
With globalisation wreaking ever more rapid change, Andrew argued that the next major economic challenge will be the threat to Australian middle-class jobs presented by the rise of educated workforces in China and India. These jobs are no longer immune from competition, Andrew claimed, and the challenge extends far beyond call centres - right now, an accountant somewhere in India is building his expertise in Australian tax law.
When pressed on the outlook for economic policy reform in Australia, Andrew explained that he could see three separate camps emerging. First, the sandbaggers who still believed that industrial protection is the only way to save jobs. Second, the sink-or-swim crowd who believe we should deregulate labour markets to compete in a race to the bottom. And finally, the progressive globalists who recognise the opportunities as well as the challenges, and believe Australia should specialise in high value-add areas of competitive advantage…
I don’t usually lift so much of a post, but I hope the people of Per Capita will forgive me. I just think it is a message worth spreading. I have mentioned Ozonomics before.