With Scott Morrison hit by a seemingly unending series of headline-making problems, his standard techniques for dealing with them are getting easier to detect. He sees them not so much as policy deficiencies to be rectified as political embarrassments to be “managed” away.One technique is to tough it out, hoping the media caravan will soon lose interest and move on. When that doesn’t work you give the appearance of responding...
Tuesday, March 30, 2021
Wednesday, March 24, 2021
More to running the state than keeping a lid on wages and debt
You’d think that, when it came to assessing the performance of a government in power for 10 years, its handling of economic issues would be central. But, in truth, not as central as you’d think. Much that state governments say about their “state economy” is mere boosterism – or another word starting with b.The present NSW Treasurer, Dominic Perrottet, is no slouch in telling us how well the state’s doing economically. Before...
Monday, March 15, 2021
Neglect of aged care more proof of PM's blokey blind spot
Everywhere you look, Scott Morrison and his ministers have a women problem. You see it even as he uses the media focus on allegations of sexual assault as cover for his efforts to convey the aged care royal commission’s damning report to the too-hard basket.When you think about it, aged care is the ultimate women’s issue. Of those receiving aged care, women outnumber men two to one. Who does most of the worrying about how mum...
Friday, March 12, 2021
Unless Morrison does a lot more, the recovery will be weak and slow
I fear we may be changing places with the United States. I fear the economy’s rapid rebound may have misled Scott Morrison into believing we’re home and hosed. I fear the Smaller Government mentality may trip us up again.In response to the global financial crisis of 2008, the Americans and Europeans spent huge sums and ran up big budget deficits and public debt. They had to rescue their teetering banks and get their frozen economies...
Tuesday, March 9, 2021
Stuck with crappy aged care because Morrison won’t ask us to pay
I’m sorry to be so pessimistic but I fear that, in just its first week, the likelihood of the aged care royal commission’s report leading to much better treatment of our elderly has faded.Within a day or two, Scott Morrison and his Treasurer, Josh Frydenberg, made it known they had “little appetite” for the commission’s plan to use an “aged care improvement levy” of 1 per cent of taxable income to cover the considerable cost...
Monday, March 8, 2021
QE is a lobster pot: easy get it, hard to get out unscathed
Since the global financial crisis and more so since the coronacession, the normal way things work in financial markets has been turned on its head. Standard monetary policy (the manipulation of interest rates) has stopped working so, led by the US Federal Reserve, the biggest rich economies have plunged into “quantitative easing” (QE) and other “unconventional policies” which, frankly, are weird and wonderful.Heading our response...
Friday, March 5, 2021
Coronacession: great initial rebound, but recovery yet to come
If you’re not careful, you could get the impression from this week’s national accounts that, after huge budgetary stimulus, the economy is recovering strongly and, at this rate, it won’t be long before our troubles are behind us.The Australian Bureau of Statistics issued figures on Wednesday showing that the economy – real gross domestic product – grew by 3.1 per cent over just the last three months of 2020. This followed growth...
Tuesday, March 2, 2021
Only bipartisanship will let us relieve the squaller of aged care
Despite all the appalling stories of the neglect and even abuse of old people we’ve heard during the two years of the royal commission into aged care, it’s hard to be confident this will be the last time we’ll need an inquiry into what’s going wrong and why.Looking at the eight volumes of the commission’s report – even its executive summary runs to 115 pages – it’s easy to conclude the problem must be hugely complicated. And...
Monday, March 1, 2021
Funding the budget by printing money is closer than you think
Many people are alarmed by “modern monetary theory”, the seemingly radical idea that the government should cover its budget deficit simply by creating money. But in his new book, Reset, Professor Ross Garnaut, one of our most respected economists, has joined the young turks.And that’s not all. Last Monday I wrote about the things Reserve Bank governor Dr Philip Lowe doesn’t feel he can say out loud in this era of unconventional...
Saturday, February 27, 2021
We must stop making excuses and push now for full employment
In his new book, Reset, outlining a plan to get the economy back to top performance, Professor Ross Garnaut makes the radical proposal to keep stimulating the economy until we reach full employment within four years. Excellent idea. But what is full employment? Short answer: economists don’t know.In principle, every economist believes achieving full employment is the supreme goal of economic policy, because it would mean using...
Wednesday, February 24, 2021
Ross Garnaut's new plan to lift us out of mediocrity
If your greatest wish is for the virus to go away as we all get vaccinated, and then for everything to get back to normal, I have bad news. You’ve been beaten into submission – forced to lower your expectations of what life should be bringing us, and our nation’s leaders should be leading us to.Without us noticing, we’ve learnt to live in a world where both sides of politics can field only their B teams. Where our politicians...
Monday, February 22, 2021
Here's the unspeakable truth about the fall in interest rates
In these unprecedented times, Reserve Bank governor Dr Philip Lowe is having trouble explaining his actions and motivations because there are various things someone with his degree of influence feels he can’t admit. But I’m under no such constraint. So let me have a go at giving you the message he won’t.Despite Lowe’s reticence, he’s a fundamentally honest person and if you study what he’s saying – and avoiding saying – you can...
Saturday, February 20, 2021
One problem at a time: jobs first, inflation much later
It had to happen: at a time when inflation is the least of our problems, some have had to start worrying that prices could take off. Funny thing is, it’s not the usual suspects who are concerned.As so often happens, the new concern is starting in America. But since so many people imagine globalisation means our economy is a carbon copy of America’s, don’t be surprised if some people here take up those concerns.The new Biden administration...
Wednesday, February 17, 2021
Water reform report’s big smile hides its big teeth: much more to do
A quick look at the Productivity Commission’s draft report on national water reform reminds me of the repeated judgment from old Mr Grace, the doddering owner of the department store in Are You Being Served? as he headed for the door: “You’ve all done very well!”Its review of the progress of the National Water Initiative signed by the federal and state governments in 2004 – encompassing agreements on the Murray-Darling Basin...
Monday, February 15, 2021
Flogging the monetary-policy horse harder won't help
It didn’t quite hit the headlines, but when Reserve Bank governor Dr Philip Lowe appeared before the House of Reps economics committee a week or so ago, he came under intense questioning from the Parliament’s most highly qualified economist, Labor’s Dr Andrew Leigh.In my never-humble opinion, Leigh had the wrong end of the stick.One criticism was that the board of the Reserve Bank is dominated by “amateurs” – business men and...
Saturday, February 13, 2021
Why we're stuck with low interest rates for a long time
When it comes to interest rates, we’re living in the strangest of times, with rates lower than ever.Savers are getting next to no reward for lending their money. Does this make sense? Not really. But we’re moving through uncharted waters and aren’t sure how we’ll get out of them, nor what happens next.When Reserve Bank governor Dr Philip Lowe appeared before Parliament’s economics committee last Friday, he was asked whether we...
Wednesday, February 10, 2021
Canberra's latest innovation: politics without policy
The most remarkable development since we returned to work this month is Scott Morrison’s barefaced announcement that the government has enough on its plate rolling out the virus vaccine and getting unemployment down, and so there’ll be no attempt to deal with any of our many other problems before the election late this year or early next.There could be no franker admission that we live in an era of leaders who lack the ambition...
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