Overseas economic experts are often amazed at the pessimism that Australians express towards their economy. Part of the story is our national affection for some drama. Partly it is just the lunacy of the far right in trying to exaggerate the perils our economy faces to advance their political and Newscorp-style journalistic objectives. I like [...]
You don’t have to pay newspapers to have the views of your political opponents demolished. You do however need the support of the newspaper proprietor. Paul Sheenan provides some specific motivations for Rupert Murdoch’s recent stance.
Kevin Rudd has cost Australia $250b according to Henry Ergas and Judith Sloan.
An amazing rant that takes the [...]
I meant to comment on the updated ACSI report on chief executive salaries for the top 100 ASX companies in Australia, It was released a few days ago. Over the ten year period to 2010:
Executives increased their annual salaries 131% to $4.322m. The median executive bonus increased 190%. The ASX increased in value 30.1%. [...]
Tony Abbott is the most opportunistic and morally bankrupt Liberal politician in a generation. He has no values, no ideals and will do or say almost anything to gain power. But his ambivalent musings on the case for thinking about a policy for addressing the problems faced by Australian manufacturing do raise concerns. I am [...]
I saw the outcome of the election on the English language TV news service in Beijing. It got lengthy coverage here followed by an interview with an academic who discussed the consequences for Australia-China relations – generally they were seen as very positive. (Incidentally I am interested to see the Australian ‘All Ordinaries’ among the [...]
A boring budget that should help Labor regain some votes. Labor didn’t have much money to throw around so that – making a virtue of necessity – not much will be thrown around – at least immediately. Watch for the big promises as the election approaches – particularly if rudd’s popularity continues to wane in [...]
I haven’t been posting as trying to prepare for my teaching year – research and golf had high priorities this summer and the procrastination finally caught up with me. Also I am heading off to New Zealand tomorrow for a few days for the annual Economic Theory Workshop at Massey University in Auckland.
To two things [...]
I liked this article by Henry Ergas on the likely ineffectiveness of the $42 billion fiscal package introduced by the Rudd Government as it accords with my own macroeconomic priors. For a small open economy like Australia fiscal actions make sense in a standard Mundell-Fleming macroeconomic context if the exchange rate is fixed. Monetary policy then does [...]
The Treasury isn’t adding much by saying that it supports Kevin Rudd’s package and rejects that of Malcolm Turnbull. It would have designed the Rudd package and so, in essence, is saying that it stands by its design. In essence this means supporting a large package rather than a smaller one. The claim by Ken [...]
Rudd’s critique of neo-liberalism of course goes too far. His plan is probably to convert the global crisis into a historic failure of Liberal Party philosophy and its allegedly pro-market ideas. That’s a useful output for Rudd from a few hastily drawn-together conclusions that are vague enough to be reversed tomorrow and, even if this [...]
As unemployment in Australia looks ominously set to soar the mindless are at it again endorsing preservation of real wages in the face of the most serious threat to employment Australia has faced since the Whitlam and Keating years. The reason they claim – keeping wages high will stimulate aggregate demand and the role of [...]
The Whitlam-inspired wage breakout in the 1980s drove unemployment to 10.4%. Another Labor-driven wage breakout in the 1990s exacerbated the recession we ‘had to have’. This was Labor’s economic legacy. I remember my left-wing mates at the time telling me that 30% wage increases given to metal workers would boost purchasing power and stimulate the [...]
In hindsight the RBA overreacted to inflation in making interest rate hikes up to March 5 this year when rates peaked at 7.25%. After being cut by 100 basis points last month they were cut by another 75 points today to be 5.25%. Global deflationary forces have removed the risk of inflation and the clear, substantial [...]
One of the refreshing incidental features of the current financial crisis is that many economists are displaying uncharacteristic humility. They don’t know what is happening and they know that they don’t know. Humble pie is also being eaten by supporters of theories that our real savings performance has been boosted by capital gains on the [...]
Kevin Rudd’s $10 billion fiscal expansion package makes some degree of sense as a preemptive way of offsetting the impending effects of a (likely) impending international recession on the Australian economy. This move will complement the recent interest rate cut and the dramatic decline of the Australian dollar as a means of stimulating the economy.
Equity markets around the world have fallen dramatically over the past week as fear of the next financial disaster or just fear of the pure unknown has taken hold. I have no idea what will happen or how long the current crisis will prevail – indeed I am unconvinced anyone does – but I have [...]
Swan implements Turnbulls’s policy. Yes, the Australian government will buy home mortgages – an amazing backflip involving $4b. OK, so no-one really knows what they are doing in the current volatile situation but sometimes the low-brows in the government’s benches might consider opposition suggestions.
Anyway imitation is the sincerest form of flattery. After criticising [...]
I’ve been busy and found it difficult to assign time to assessing the budget. Clearly the Labor Party has inherited a fabulously prosperous economy – that the terms of trade is due to increase by so much over the next year is astounding and should dominate our impressions of where the Australian economy is going.
I posted recently on the booming market in Thai exports of health services. Americans and Europeans are travelling in droves to Thailand to take advantage of lower costs of health services there. I sent a copy of the post to a well-known Australian trade theorist and his immediate response was – why doesn’t Australia get [...]
I posted last week on the teachers’ pay decision in Victoria and the dangerous potential for flow on effects that will drive high inflation and create a much larger pool of unemployed. I indicated that I hoped to be wrong on this issue – I lived through the misery of high cost-push inflation and high [...]