Economics | The Dog's Bollocks

November 3, 2009 • 12:21 pm 1

Won’t you think of the children?

The ACCC’s Unit Man has certainly pressed some buttons for the IPA‘s, Chris Berg – paternalistic nanny statism through to a damning indictment of our school system! It is Cup Day, after all, so it’s a slow news day, I guess.

No, the government doesn’t decide Australians aren’t smart enough to figure out the cheapest way to buy cereal – it decides that duopolistic supermarket chains engaged in price gouging Australian consumers should make it clear how much they are paying for each unit they purchase.

If I go to the supermarket to shop for a family of four and purchase say 50 items, there will be at least 6 choices for every single item – so that’s 300 mental arithmetic calculations for every shopping trip. Yes, I can do them with ease, but it’s much simpler and a more efficient use of my time to read the unit price on each shelf label. And try doing it with toddlers in tow. Let’s face it, even within brands there are size and quantity variations designed for different consumer needs, with opportunities for extra profit margins arising from the confusion.

I’m sure the supermarket duopoly can handle this – the unit prices no doubt ship through the supply chain labelling software so it’s no big deal – they have to print labels anyway. What’s a few extra lines of program code? Or must we protect the rights of supermarkets to confuse customers about pricing?

Perhaps in a future article, Berg could cover the anti-competetive practices of the supermarket duopoly – from manipulating prices paid to suppliers and growers through to restrictive leasing arrangements in shopping malls and precincts.

Good to see Berg back in form and thinking of the supermarkets. I was worried after being in full agreement with him last week on his realistic and reasoned assessment of the asylum seeker issue. There’s a first for time for everything.

Filed under: Ass Hattery, Economics, Politics, ACCC, Chris Berg, Unit Man

August 13, 2009 • 9:44 pm 0

The Commercialisation of Childhood

Another triumph for de-regulated free-market capitalism. A must view for all those who believe that the pinnacle of human existence is an economy based on consumerism.

Consuming Kids: The Commercialisation Of Childhood

With virtually no government oversight or public outcry, the multi-billion dollar youth marketing industry in America has been able to use the latest advances in psychology, anthropology and neuroscience to transform American children into one of the most powerful and profitable consumer demographics in the world.

The irony is that moral crusaders like Tony Abbott support this very industry which is warping the psychological well-being of our children in ways that undermine the very values they desire to instill. Or maybe they’re just hypocrites.

Powerful and scary stuff. And you thought teachers were to blame!

Filed under: Big Picture, Economics, Education, Media, Advertising

May 16, 2009 • 8:42 am 2

Malcolm in a muddle IV – Budget Edition

truffles Leader of the Opposition Malcolm Turnbull had an opportunity to score some political points on the Rudd Government’s 2009 Budget but decided to do a Nelson instead by announcing a tobaco tax policy stunt without consulting the Party room. Consequently, the media attention has been shifted from the Government to the Opposition, but not in a good way.

Bronwyn Bishop immediately declares that the tobacco tax is not a good idea. And it wasn’t a good idea, for it raised the contradiction in Turnbull’s stance of blocking the alcopop tax – a revenue-raising strategy that also discourages teenage binge drinking while reducing the cost on public health in the long term. Turnbull is offering a tax on the poor (the majority of tobacco users) to subsidise private health insurance for the wealthy. He then spent the day after his Budget Reply defending his tobacco tax, fending off questions about increasing tax on all alcohol products and his commitment to maintaining Medicare after suggesting that every Australian should have private health insurance! Way to put pressure on the Government Budget Big Spending!

On the other hand, maybe the whole thing was an elaborate strategy to enable Turnbull to back-flip on the alcopops tax and thus reduce the risk of a double dissolution, which no doubt has many back benchers gravely concerned for their parliamentary future. Brilliant! But it leaves the Opposition looking weak, divided, hypocritical and the electorate still confused about what they actually stand for.

Enter the cavalry! The only Liberal giving any idea what the Opposition stands for is former PM John Howard – Work Choices, a payroll tax holiday, more money to the States and less to individuals (well at least the non-wealthy ones). Well that’s cleared that up, then.

This is what happens when a party is internally divided and can’t come up with a policy platform – and ‘we would be tougher’ is not a policy – it’s an attitude that many interpret as screwing the less well off.

Well done Malcolm on a great week, and good luck with winning government in 2010!

The Force may not be with you.

Filed under: Economics, Howardians, Humour, Politics, Malcolm Turnbull

March 5, 2009 • 10:35 pm 0

Keating & Costello, compare and contrast

Paul Keating is talking more economic sense than any of our current crop of pollies. He gets better with age.

Former prime minister and treasurer Paul Keating says fiscal stimulus is reaching its limits and even advanced nations are at risk of debt default if they continue to amass huge budget deficits and borrowings to rescue their economies.”There is a limit to what fiscal policy can do simply because there is a limit to fiscal policy,” Mr Keating told a Lowy Institute gathering in Sydney on Thursday.

ABC News – Top Stories – Breaking news from Australia and the world
Well worth a read and some great comments. From ArgusTufft:

Interesting the comment about Keating being a “neo-liberal” for in the true meaning of liberal this is the philosophy of the current Labor Govt and certainly was of Keating’s Govt.

The real problem is that our Aust Liberal Party has been not following “liberal” policies and philosophy for many decades, especially under Howard & Costello (& most certainly Abbott). They should really be named “The Tory Party” or “Conservatives” or “Imperialist Party” – something along those lines. But …

There is some hope under both Turnbull and to give him his due, the previous leader Brendan Nelson, that the Liberals could live up to their “Liberal” name further down the track. No hope for Joe Hockey however or Julie Bishop, they are tarred in indellible “Tory” paint.

Meanwhile, elsewhere on the planet, poor old Pete is still fighting the last war, back when he was the World’s Greatest Treasurer and Australia was the best little whorehouse in Texas.

Filed under: Big Picture, Economics, Politics, Fiscal Stimulus, PaulKeating, Peter Costello

January 30, 2009 • 10:50 pm 1

Bloody Powercorp – owed to economic rationalism

Hundreds of people were evacuated from Melbourne's Arts Centre. (ABC: Kathy Lord)

As I began to prepare dinner tonight it was our turn to do without power for two hours so that other folk could get a turn at watching the Plasma TV with the AC on. It reminded me of a similar evening back when Jeff Kennett came to power and he embraced Hawke and Keating’s privatisation agenda and flogged off public transport and the power grid to foreign corporations.

The power failed as I was preparing a family meal one hot evening. I was really pissed off about Economic Rationalism*, Tatcherism, Reaganism, Friedmanism Free Marketism – all I am saying is give public a chance. It was a crock from the start. Sure, there’s a mercantile market, and so there should be, but those assets essential to civil infrastructure are best provided by government on behalf of the public, not given as playthings to greedy, fearful, and oh so fallible market traders.

To all those free market acolytes – thanks a lot!

And another thing. The Rudd government needs to mandate flat-tariff prices for all alternative energy fed back into the national grid. This would encourage individuals to invest in energy generating capacity, if for no other reason than to avoid being at the complete mercy of Powercor. We need distributed energy systems – a bit like an electric internet – flexible, localised energy hubs reducing the burden on centralised generation. Let’s just get on with it. How else is everyone on the planet going to be able to watch a Plasma TV? Might have to cut back on the AC ‘though!

* Here’s the ditty I wrote in the style of a Christie Moore ballad. It sang better than it scans in print. but hey, I wasn’t as musically adept back then. It has been a while. I was older then but I’m younger that that now.

Owed to Economic Rationalism

I was in the kitchen late the other night
Off went the power, and out went the light
Right in the middle of my culinary chores
I tried to ring our private Powercor

There wasn’t a single living soul to be found
A recorded message went round and round
Staff are downsized, from blackouts preserve us
For profits have replaced customer service

Where the bloody hell is the rhyme or the reason
To this so-called economic rationalism
People’s well-being, homes and careers
All sacrificed to the free marketeers

Wealthy men of power, self-interest and greed
Are busy trying to tell us just what we need
We must work harder, there’s no time to relax
To increase their profits and decrease their tax!

Feasting on crumbs from the rich man’s table
Thin men will get fat is the modern day fable
Yet the thin get thinner while the fat get fatter
And a decent job for all no longer seems to matter

Survival of the fittest, is now the daily creed
No more sacrificing for a common need
Now it’s user pays and we must privatise
As public assets vanish before your very eyes

Our factories are told they have to compete
On the global market or we’ll surely face defeat
We must do our best to make a level playing field
Costs must be lowered ‘though unemployment builds

For the common people there is little concern
As long as the wealthy have money to burn
Government policy is more concerned now
With the FT100, the Hang Seng and Dow

For ratings and resources now we must compete
And as in days of old the wealthy are elite
The poor and disadvantaged no longer have a voice
As equity’s replaced by efficiency and ‘choice’

If you need a doctor because you’re feeling ill
You better be sure you can afford the bill
Or you’ll be placed on the waiting list instead
And before you get better you may well be dead

No more public housing can we afford
With private landlords the homeless can board!
And if the rent and the bond you struggle to meet
There’s plenty of room out on the street

Where it will end is anybody’s guess
How long before the politicians confess
That their policies have caused so much sorrow and distress
And left us an economic, irrational bloody mess

I guess if one day the power just doesn’t come back on, all bets are off.

This is my 300th Bollocks post!

Filed under: Economics, Ideology, Politics

January 29, 2009 • 10:21 pm 1

How hot is it?

Sure is hot!

One story you won’t be reading about this week’s record-breaking heatwave engulfing South Eastern Australia, is Jennifer Marohasy claiming it’s evidence of climate change – and she’d be right. When Europe experienced a cold snap in October, Marohasy’s band of merrymen, claimed it was nudge-nudge evidence wink-wink of global cooling. It’s scientific nonsense to use short term fluctuations to predict long-term trends like climate change. Indicative time intervals are measured in decades, not weeks, or even years. Jennifer knows that, of course, but it’s never really been about the science, has it? The wonks may argue hockey-sticks and solar forcings, but your average mug punter understands extremes of unprecedented weather events ro be climate change and wants something done about it.

Really hot!

Meanwhile Victorian rail and power grids are melting and buckling under the heat. Thank you very much Jeff Kennett and Allan Stockdale! Fadishly following European fashion, these guys flogged off our public transport and energy utilities to global corporations like Connex in the name of competition and economic rationalism. We were told they would run more efficiently and more economically. The hell they do. It seems as though maintenance and investment is premised on 90% of it working 90% of the time. Victoria’s powergird was running hot at about 97% capacity today. 100,000s of people in homes, schools, police stations, businesses and offices (assuming you could actually get to work on a broken rail network, that is) were without power for much of the day in rolling blackouts while the guys on the levers try to prevent the whole thing from blowing up.

The energy utilities blame the consumers for wanting to avoid the heat by watching the plasma TV with the AC unit on full chill. I blame Harvey Norman.

Awesomely hot! Photo: Michael Clayton-Jones

Oh yeah, Neil Young at the Sidney Myer Music Bowl was one magic benefit of the heat wave. Balmy as all hell, everyone happy, excited and laid back all at the same time. Mr Young was in fine form. My second eldest, who has seen many performances of famous acts, reckons Neil is untouchable. A true rock and roll legend who tells it how it is.

Filed under: Economics, Jeff Kennett, Jennifer Marohasy, Neil Young, Sidney Myer Music Bowl, Weather

January 12, 2009 • 9:38 am 0

OECD regulation call

OECD regulation call trumps Rudd

Filed under: Big Picture, Economics, Cartoons, Humor, OECD

November 15, 2008 • 4:03 pm 1

The global economy needs global regulation

Only fools and faith-driven free-market ideologues accept the notion that banks and financial markets should be unfettered by regulation. We have accepted the ‘inevitability’ of a global economy, so it is reasonable and logical to have an efficient and effective global regulatory framework.

This is the enormous challenge facing the G20 summit. Of course, achieving such a framework will be the hard part, but hopefully we will see the recognition that an effective global regulatory framework is the way forward.

Filed under: Big Picture, Economics, G20

November 10, 2008 • 1:03 pm 5

Free Market Fundamentalism

From The Age today:

“THE belief that markets tend towards equilibrium has given rise to policies which seek to give financial markets free rein; I call these policies market fundamentalism, and I contend that market fundamentalism is no better than Marxist dogma,” declares billionaire George Soros, in his book The New Paradigm for Financial Markets.

Part of the new paradigm, Mr Soros writes, is that “instead of always being right, financial markets are always wrong”. That is, investors and regulators are acting on an imperfect understanding of what is really happening in the market. Those imperfect understandings have paved the way for the current crisis.

Years ago, the rationale for the growth in new types of derivatives and credit swaps was that they would help spread or hedge against risks. Mr Soros dismisses the possibility.

“The idea that risk management can be left to the participants was an aberration,” Mr Soros writes. And only ideology, one as rigid and oversimplified as market fundamentalism, could support the notion that markets can self-regulate.

At the centre of our financial troubles is the mistaken belief that markets tend towards an equilibrium, an article of faith among free market economists.

Markets don’t tend towards equilibrium, Mr Soros writes. Instead they cannon from one unique historical event to the next. Market activity gets caught up in an initially self-reinforcing but eventually self-defeating process, which almost invariably leads to crises, he writes.

“Boom-bust processes arise out of a reflexive interaction between a prevailing trend and a prevailing misconception,” the billionaire philanthropist writes. He believes the “reflexivity” stems from the fact “people’s understanding is inherently imperfect because they are part of reality and a part cannot fully comprehend the whole”.

Another prevailing misconception is that the economics of markets are a science, he writes.

“In order to establish and protect the status of economics as a science, economists have gone to great lengths to eliminate reflexivity from their subject matter … it was a mistake to model economics on Newtonian physics.”

For markets and regulators, the certainty of economics has actually slowed effective responses to crises over the past three decades.

Ya think? Who would have imagined such heresy was possible even one year ago. How times change!

Love this quote “Another prevailing misconception is that the economics of markets are a science.” Judging by local freemarket enthusiasts I would have thought it was more a religious thing – God’s Natural Law.

Filed under: Big Picture, Economics, FreeMarket Fundamentalism, George Soros, The New Paradigm for Financial Markets

November 5, 2008 • 8:45 pm 3

Bye Bye Bushites!

ABC Onine

Praise the Lord and pass the whiskey! The election of Barrack Obama to President of the United States marks the end of the toxic neocon dream – we don’t react to reality – we create reality. The Bush Administration has been the most grotesque in US history. The foxes had finally taken over the hen-house. It was bound to end in tears, and so it has. To use some Bushite vernacular – it has been the mother of all clusterfucks.

I cannot recall a single redeeming feature of the Bush Administration, let alone three. The littany of policy disasters is mind boggling both in extent and all-encompassing range. Begun by stealing the 2000 election, to the cronyism of putting Monsanto in charge of the EPA and Halliburton in charge of the administration. Deficit creating tax cuts for the uber-wealthy – the golden boys and girls of the ponzi financial schemes and scams. Two ill-advised and botched invasions which have done nothing but breed support for Al Q’aida and run up trillion dollar budget deficits. Hurricane Katrina. The failure to plan for energy efficiency, preferring instead to wage war on oil rich dictatorships under the guise of spreading democracy and liberation, all the while enriching the coffers of Halliburton and Bush’s oil cronies. The cultivation of Christian Fundamentalists within the Administration and lobby industry while undermining the fundamental principles of the US constitution in the name of an apocalyptic Never-Ending War on Terror.

All finished off with the mother of all financial distasters when the ponzi schemes collapsed – products of the great freemarket experiment allowing the proliferation of unregulated financial systems that no-one really understood. The undoing of which almost resulted in a global meltdown, narrowly averted only by massive injections of liquidity from the public purse.

No doubt the challenges facing the Obama administration are monumental and no doubt Obama will fall short of people’s expectations. But as one commentator put it, there has been a change in chemsitry – too subtle to measure on any grid, but with profound long term effect. I think he will have a steadying and restorative influence. He possesses a noble demeanour – a refreshing change from the arrogance, ignorance and ignominy of the last eight years.

Yet, at this moment, I welcome the death of the neocon fantasy. Game over. That creaking sound you hear is the prevailing paradigm from the time of Ronald Reagan shifting to a neo Keynesian era.

Nor do I shed tears for the Bushites and their local acolytes. Rupert Murdoch and his tame tabloid attack dogs, Howard and the Howardians, the obsequious punditariat and countless other spotted Herberts who looked the other way in return for prestige and easy money leached from the blood sweat and tears of world’s less fortunate.

Good riddance.

God bless America!

Filed under: Big Picture, Economics, Politics, Barrack Obama, Bushites, Neo Keynesian

The Dog’s Bollocks

Won’t you think of the children?

The Commercialisation of Childhood

Malcolm in a muddle IV – Budget Edition

Keating & Costello, compare and contrast

Bloody Powercorp – owed to economic rationalism

How hot is it?

OECD regulation call

The global economy needs global regulation

Free Market Fundamentalism

Bye Bye Bushites!

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