A highlight of our trip to New York after Christmas was a visit to the Tenement Museum down on the lower east side, where the movie Gangs of New York was set. It was the area where successive waves of Irish, German and Russian immigrants first settled, crowded into tenements.
We were taken around the corner to see inside a tenement building restored to its original condition.
As we climbed the back stairs, we were shown a row...
Wednesday, March 7, 2018
Monday, March 5, 2018
Retailers affecting the economy in ways we don’t see
As uncomprehending punters complain of the soaring cost of living, and the better-versed ponder the puzzle of exceptionally weak increases in prices and wages, don't forget to allow for the strange things happening in retailing.
It's a point the Reserve Bank's been making for months without it entering our collective consciousness the way it should have.
The debate over the cause of weak price and wage growth has been characterised...
Saturday, March 3, 2018
Free-trade agreements aren't about freer trade
You may think spin-doctoring and economics are worlds apart, but they combine in that relatively modern invention the "free-trade agreement" – the granddaddy of which, the Trans-Pacific Partnership, is presently receiving CPR from the lips of our own heroic lifesaver, Malcolm Turnbull.
It's not surprising many punters assume something called a "free-trade agreement" must be a Good Thing. Economists have been preaching the virtues...
Thursday, March 1, 2018
WHY FISCAL POLICY IS BACK IN FASHION
Comview 2018Why fiscal policy fell out of favourAdvent of “stagflation” in mid-1970sBreakdown of simple Phillips curveMonetarist attack on KeynesianismMonetarists’ slogan: Money matters! Consciousness of “crowding out”Monetary policy’s shorter “implementation lag”MP became primary instrument for fiscal policy from late 1970sHow the float changed form of crowding outOriginal belief was that govt borrowing to cover fiscal...
Wednesday, February 28, 2018
Too many school leavers are off to uni
If you had a youngster leaving school, what would you encourage them to do? Get a job, go to university, or see if there was some trade that might interest them? For a growing number of parents, that's a no-brainer: off to uni with you. But maybe there should be more engaging of brains.
It's widely assumed that, these days, any reasonably secure, decently paid career must start with a university degree.
Don't be so sure. The...
Monday, February 26, 2018
Not even the IMF is worried by our huge foreign debt
In its latest report on Australia, the International Monetary Fund says it isn't worried by our net foreign debt, now just a squeak short of $1 trillion. Just as well, since none of us ever worries about it either.
Still, it's nice to have the fund's judgment that "the external position of Australia in 2017 was assessed to be broadly consistent with medium-term fundamentals and desirable policies".
Australia's negative "net...
Saturday, February 24, 2018
Current account deficit improves without us noticing
They say a watched pot never boils, so maybe it's a good thing we now spend so little time worrying about the current account deficit. While our attention's been elsewhere, it's got a lot smaller.
This news comes courtesy of the International Monetary Fund's latest country report on Australia, issued this week.
Settle back. The nation's "balance of payments" is a statement summarising all the transactions between Australians...
Wednesday, February 21, 2018
Governments only pretending to fix Murray-Darling
Genelle Haldane, my desk calendar tells me, has said that "only until all of mankind lives in harmony with nature can we truly decree ourselves to be an intelligent species". I've no idea who Haldane is or was, but she's right.
And you don't need to be terribly intelligent to realise it. Even most economists get it. It's blindingly obvious that the economy – that is, human production and consumption of goods and services - exists...
Monday, February 19, 2018
Unions play their cards wrong in hopes for higher pay
You don't need to read much between the lines to suspect that Reserve Bank governor Dr Philip Lowe and his offsiders think the workers and their unions should be pushing harder for a decent pay rise.
Why else would he volunteer the opinion, in his testimony to a parliamentary committee on Friday, that average wage growth of 3.5 per cent a year would be no threat to the Reserve's inflation target?
This while employers are crying...
Saturday, February 17, 2018
How our economic prospects turn on wage growth
You know the world's behaving strangely when you hear a heavy from the central bank saying it's expecting more "progress" on the "turnaround in inflation", then realise they're hoping inflation will go higher.
That's just what Dr Luci Ellis, the Reserve Bank's third heaviest heavy, told a bunch of economists at a conference this week.
Why would anyone hope for prices to be rising faster than they are? Not so much because higher...
Wednesday, February 14, 2018
Private health insurance is a con job
You won't believe it, but my birthday was on Tuesday and I got a present from the federal government. I also got a card from my state member, sending his "very best wishes" for reaching such an "important milestone" in my life.
I almost wrote back asking him to alert the Queen to be standing by in 30 years' time. Instead, my ever-sceptical mind told me the pollies have awarded themselves privileged access to the private information...
Monday, February 12, 2018
Economists do little to promote bank competition
The royal commission into banking, whose public hearings start on Monday, won't get a lot of help from the Productivity Commission's report on competition within the sector. It's very limp-wristed.
The report's inability to deny the obvious - that competition in banking is weak, that the big four banks have considerable pricing power, abuse the trust of their customers and are excessively profitable – won it an enthusiastic...
Saturday, February 10, 2018
Indigenous middle class arises despite slow closing of the gap
It's easy for prime ministers to make big promises at some emotion-charge moment of national attention, but a lot harder to keep those promises when the media spotlight (and that prime minister) are long gone.
I could be alluding to the promise Kevin Rudd made that the federal government would never forget the needs of the victims of Victoria's Black Saturday bushfires in 2009, but I'm referring to the promise he made a year...
Wednesday, February 7, 2018
If we had more sense, we'd push early childhood education
Did I tell you that my grandson, fast approaching his second birthday and not many months away from losing his status as our one and only grandchild, is a budding genius?
His educational development is supervised by his father, who, being a doctor, started with identifying parts of the body. My grandson's always being quizzed, and loves showing off how much he knows.
Already he can count – provided you don't test him too closely...
Monday, February 5, 2018
Next election will offer voters more genuine, wider choice
Even if we don't end up having a federal election this year, rest assured, it will feel like a year-long campaign. But whenever it occurs, it's likely to determine the fate of neo-liberalism, aka "bizonomics".
Though the two sides like to paint every election as a clear choice between good (us) and evil (them), many voters have concluded all politicians are the same – liars and cheats.
But that's truer of the way they behave...
Saturday, February 3, 2018
CPI a more accurate measure of living costs than we imagine
Ask any pollie, pollster or punter in the pub and they'll all tell you there are no political issues hotter than the soaring cost of living. But this week the Australian Bureau of Statistics issued its consumer price index for the December quarter.
Oh no. It showed prices rising by 0.6 per cent in the quarter and a mere 1.9 per cent over the year to December.
That's a soaring cost of living? What are these guys smoking? Has...
Wednesday, January 31, 2018
Wage growth the key to lasting economic strength in 2018
So, no train strike in Sydney because unionists were ordered to keep working by the Fair Work Commission. Is that good news or bad? Depends on the point from which you view it – but don't assume you have only one of 'em.
And if your viewpoint's from somewhere in Victoria, don't assume it's a matter of little relevance to your own pay packet.
A 24-hour train strike would have caused great inconvenience to commuters and disruption...
Monday, January 1, 2018
Who’s doing best in the rent-seeking business
Economists joke that, whereas they are taught that any barriers to new firms entering a market are bad, allowing profits to be too high, MBA students are taught that "barriers to entry" are good, and shown ways to raise them.
Economists have no quarrel with businesses making profits. The shareholder-owners who provide the financial capital needed to sustain those firms are entitled to a return on their investment, one that reflects...
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