Australian election outcome resonates with the Brexit dynamics

Less than two weeks ago, Britain sent a bombshell into the conservative, neo-liberal policy agenda and the narrative that supports it. I have read a lot of comments that the Referendum result was a reflection of racist attitudes towards minority immigrants. While it is no doubt that the open borders policy that allows firms to batter down wages growth and keep a constant excess supply of labour as a threat was an important part of the debate and vote, that in itself, was a reflection of the underlying tension that people and their communities have with the neo-liberal policy agenda. There would be much less concern about migration if there was full employment. The same sort of tensions that pushed the majority of British voters to support the Leave campaign have been apparent in the Australian Federal election which was held on Saturday (July 2, 2016). Australian voters have rejected a first-term conservative government. It is a rare event for us to reject any first-term regime of either persuasion. The conservatives in Australia are now in tatters without credibility and the unstable situation that has arisen as a result of the political uncertainty provides a great opportunity for the Australian Labor Party, who did very well in the poll on Saturday, to refresh their outlook and reject their neo-liberal tendencies to reflect the big shift in sentiment in the Australian electorate. A similar opportunity exists in Britain and I hope Jeremy Corbyn takes it and expunges the Blairites from his own Party.
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    Posted in Britain, Politics, UK Economy | 17 Comments

    The Weekend Quiz – July 2-3, 2016 – answers and discussion

    Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
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      Posted in Saturday quiz | 2 Comments

      The Weekend Quiz – July 2-3, 2016

      Welcome to The Weekend Quiz, which used to be known as the Saturday Quiz! The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
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        Posted in Saturday quiz | 5 Comments

        We starve the state and public infrastructure development at our peril

        Australia is at the end of a long federal election campaign (albeit not as long as the US) and the vote is on Saturday (July 2). Both major parties – the conservatives (who call themselves liberal but oppose many freedoms) and the Labor Party (who are conservatives in drag these days) – have gone to pains to convince the voters that they will get the fiscal balance back into surplus by 2021. The Labor Party, which was meant to be the political voice of the workers has proposed something like $A71 billion in spending cuts and tax hikes (or scrapping tax cuts promised by the conservatives). But both are content to leave more than 15 per cent of the labour force lying idle and to oversee rising inequality, rising poverty and social alienation, in a nation that is arguable in the top three wealthy nations of the world. Moreover, the obsession with pursuing fiscal surpluses is taking a heavy toll on public infrastructure and social and community assets in Australia. The latest data shows that there is a massive shortfall in expenditure on these assets and that more than 11 per cent of these essential assets are in a poor to very poor condition, which means that the assets are incapable of serving their function including supporting economic growth. As well there is increasing evidence that shows the transformative nature of public investment in innovation and education. We starve the state and public infrastructure development at our peril. That should inform a progressive agenda if nothing else does.
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          Posted in Economics | 17 Comments

          The British Left is usurped and IMF austerity begins 1976

          We left the trail last time with James Callaghan telling the British Labour Party Annual Conference on September 28, 1976 that governments can no longer spend their “way out of a recession” and that the Keynesian approach was an option that “no longer exists”. He even suggested that the Keynesian approach to stabilising economic cycles was never valid. Meanwhile, his Chancellor, Denis Healey, by then convinced that Monetarist had validity, was working behind the scenes at the Conference to duchess or beat his colleagues in submission and accept the TINA approach to bringing in the IMF. They worked hard to construct the situation as a crisis of massive proportions although much of the ‘crisis’ was the result of their extreme reluctance to allow the pound to depreciate, to impose capital controls to stop the non-productive speculative outflows that were causing the currency to drop in value, and to accept that in the Post Bretton Woods era they no longer had to match their fiscal deficits with private debt issuance. But in doing so, the British government effectively created their own ‘funding’ crisis. Things came to a head in November 1976 within the Labour Cabinet, which was still deeply divided over the IMF issue. We finish this analysis of Britain and the IMF today by tracing events at the end of 1976 before providing a general summation of what it was all about.
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            Posted in Britain, Demise of the Left, IMF, UK Economy | 10 Comments

            When journalists allow dangerous economic myths to pervade

            Journalists have a lot to answer for in this modern era of constant media reporting across multiple modes of communication. I have previously argued that the trend has become one where journalists are used as broadcasting tools for press releases – that is, stories that appear to be news commentary are really just precised versions of some corporate press release or a statement from some right wing think tank. The lack of critical scrutiny where one line statements that on the face of it are highly contentious are allowed to ‘go through to the keeper’ is now the model for modern mainstream journalism. An example of this was the Australian Broadcasting Commission’s PM current affairs radio program last night (June 27, 2016) – Investors brace for another wild ride on international markets post-Brexit. The PM program is the ABC’s premier evening news and current affairs program where issues are meant to be taken apart and some so-called experts (from all sides) are meant to be interviewed so as to enlighten the public, who otherwise might be uncertain about the meaning and/or impact of some event. At least that was the intent of the program when it started many years ago. Now, it has become, like most of the ABCs current affairs reporting, a rather pale imitation of its original brief.
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              Posted in Britain, Economics, UK Economy | 18 Comments

              Why the Leave victory is a great outcome

              The class struggle is back! Who would have thought. After years of being told by the likes of John Major and then Tony Blair that “the class war is over” (Blair) and the we now all live in “the classless society” (Major) the working class has fought back, albeit under the motivation of the looney, populist Right rather than a progressive left, who remain a voice for capital. Remember when we were told that the Left-Right continuum was irrelevant now in this global world where nation states had given way to grand communities (like the EU) and that, in this new post-modern world, we could all be entrepreneurs (meaning we sell our labour to a capitalist!). And now we know that class never went away. It might have been hi-jacked by the Right but it is there – and it is powerful. Planet Earth to British Labour – do something about it or wither away and make way for a progressive new organised working class movement.
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                Posted in Britain, UK Economy | 60 Comments

                The Weekend Quiz – June 25-26, 2016 – answers and discussion

                Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
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                  Posted in Saturday quiz | 2 Comments

                  The Weekend Quiz – June 25-26, 2016

                  Welcome to The Weekend Quiz, which used to be known as the Saturday Quiz! The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
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                    Posted in Saturday quiz | 8 Comments

                    Renewables now cheaper than fossil-fuel power generation

                    I do not have much time to write today. But this evening I am heading to a very exciting event in Newcastle run by – Sun Crowd. It is the first energy storage bulk-buy campaign in Australia and Newcastle is the first city to launch this initiative which will see hundreds of households go off the energy grid and rely on our copious supply of free solar energy. The bulk-buy campaign is a cooperative (not for profit) venture which allows many households to team up to achieve low cost purchases of storage batteries, panels (if you haven’t already got them) and receive technical advice to cut through the complexity of the technology. Our household, which already is ‘off the grid’ during daylight hours (thanks to our solar panels) will soon be able to store our excess electricity we generate during daylight hours and use it up at nights instead of exporting it into the national grid at ridiculously low prices (thanks to the power (excuse the pun) that the power companies have over state government policy. So we are off tonight to get a big mutha of a battery at discounted prices (due to the bulk buy) and free ourselves of the high charges the power companies. Our next step might be to set up a local community power company and generate free power co-operatively for all from the sun. So, pretty exciting. Today also marks the publication of Bloomberg’s – New Energy Outlook 2016 – which provides the latest data on the relative costs of solar/wind against coal fired power generation. The numbers are moving firmly in favour of renewables which should see many more households moving off coal-fired power in the next decade or so.
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                      Posted in Economics | 15 Comments