It always takes the movie world a while to catch up with real life, but it's finally caught up with the global financial crisis. There's the Oscar-winning documentary Inside Job and a classic Hollywood job, The Company Men. I recommend both.
Inside Job deals with the origins of the crisis on Wall Street; The Company Men deals with consequences on Main Street from the resulting Great Recession. Let's start with the "real economy".
America's...
Monday, March 21, 2011
Saturday, March 19, 2011
When the price is right you're on the right track
if economists wore T-shirts what they'd say is PRICES MAKE THE WORLD GO ROUND. Conventional economists are obsessed by prices. It took me ages to realise that economics isn't actually about the economy. It's about markets. So economists tend to ignore those parts of the economy that don't involve markets, such as the production and consumption of goods and services that go on inside households.
Economic sociologists also study...
Wednesday, March 16, 2011
We are watching our pennies, at last
Not so long ago people used to scandalise over the rate at which we were racking up credit card debt. Not any more. These days a new frugality is gripping us and credit card and other personal debt is growing at a snail's pace.
Starting in the mid-1990s, our return to low inflation caused interest rates to fall sharply and oscillate around a much lower level - remember when the mortgage rate was up at 17 per cent? - and this...
Monday, March 14, 2011
No one's trying to reduce government waste
Government waste is like the weather: everyone disapproves, but no one does anything about it. Oppositions accuse governments of creating it, but governments don't seem to try too hard to eliminate it.
And this doesn't seem to worry you and me too much because our main use for government waste is as an excuse to oppose every suggestion that we pay more tax - and, indeed, to resent the extortionate amount we pay already (always...
Saturday, March 12, 2011
A way to tackle carbon and keep everybody happy
As if we needed any reminding, the latest flare-up of politicking over putting a price on carbon shows just how difficult it will be to gain sufficient community agreement to take effective action against climate change.
With a government lacking the numbers in both houses, the Greens demanding a sackcloth-and-ashes scheme and an opposition determinedly putting short-term partisan advantage ahead of the national interest, how...
Wednesday, March 9, 2011
Money can ease the pain of disability
Did you know there's an expensive policy proposal Tony Abbott isn't opposed to? When it lobbed last week both sides made supportive noises about it so, thanks to the perversity of politics, it slipped past without getting the attention it deserves. It's the Productivity Commission's draft report on the government's desire to establish a national disability insurance scheme.
The scheme would cover people with severe disabilities...
Monday, March 7, 2011
No more ignorant talk of a two-speed economy
The more economists examine it, the more they explode the seemingly self-evident truth that we're living in a two-speed economy.
Why do people keep saying this? I think they're saying that whoever's benefiting from all the talk of a boom, it ain't my state or my industry. In short: I see no evidence of any boom around me and I'm certainly not getting any benefit from it.
If there is a boom, they seem to be saying, it's limited...
Saturday, March 5, 2011
Glimmering lights help dispel the gloom and doom
Peering through the statistical mist, the national accounts we saw this week tell us that, contrary to some messages we have been getting, the economy is on track and growing quite strongly. For the foreseeable future, growth will be coming more from business investment spending than from consumption.
Bureau of Statistics figures show real gross domestic product grew by 0.7 per cent in the December quarter. But Treasury estimates...
Wednesday, March 2, 2011
Bitter pill when politicians swallow big pharma's spin
Politicians always profess great sympathy for people struggling to keep up with the cost of living but often fail to put that sympathy into practice. Economists like to divide the economy into consumers on one side and producers on the other. They believe the economy should be run for the benefit of consumers, not producers. The consumer is supposed to be king.
Ostensibly, pollies think the same. But they're always doing deals...
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