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THIS weeks Productivity Commission Five-Year Productivity Review contains page after page of sensible, mostly obvious, recommendations for change that would improve Australians living standards with one glaring omission.
The review delves into seemingly intractable problems of congestion, urban sprawl, development entanglements, renewing and adding to infrastructure, and so on, suggesting all sorts of better processes, incentives and disincentives.
Dont get me wrong. The suggestions are all well-thought-out and attempt to weed out the worst sort of rent-seeking and political machinations. But they are all curative of problems without mentioning one of the major underlying causes of many of them rapid population growth.
It is astonishing that one of the most respected economic institutions in the country can do a five-year review of productivity in Australia without some detailed discussion of population policy and what effect the ramping up of immigration since the Howard years, including Kevin Rudds Big Australia, has had and what it will do in the future.
In the year to March 2017, Australias population grew by 384,000. Of that, 217,000 (about 60 per cent) was net overseas migration.
This means that Australia has to build the equivalent of a city like Canberra every year to accommodate this growth.
So what is the point of delivering an immensely detailed five-year productivity report if all of its recommendations are compromised by a population non-policy under which every year the Government plucks a figure from the air with precious little concern about long-term economic effects.
It is completely negligent for bodies like the Productivity Commission, nearly every federal and state politician and a raft of greedy special-interest lobbyists to couch the issue as, What do we do to accommodate this population growth? instead of How can we reduce the population growth?
For example, the Productivity Commission says we should impose road-use charges, the equivalent of a congestion tax, to deal with road congestion and the huge economic costs of it. And state governments build more expensive roads in a futile attempt to catch up.
This band-aid, treat-the-symptoms approach is not just negligent, it is outright dangerous.
The danger lies in opportunist political figures like Pauline Hanson linking the ills of over-population (congestion, hospital waiting times, housing prices, stalled wages growth and the like) to Muslim immigration.
The more people who profit from high population growth and do not suffer the consequences (business, lobbyists and the politicians they fund) blithely ignore the infrastructure and other stresses caused by it, the more c...
So, weve wasted $100 million on a postal survey that wont decide anything. Its already evident that, even with a thumping majority for Yes, the bigots on the LNP backbench will fight all the way to protect the right to be a bigot. They are, in my view, playing a dangerous game here. The existing law gives lots of special privileges to religious organizations that are justified only on the basis that we all need to get along tolerantly. If that rationale ceases to apply, all those privileges are open to question.
Meanwhile, all the fine words about letting the people decide have gone out the window when it comes to indigenous recognition. Even though Abbott has gone along with Turnbull on the decision, I think, if he were still PM. he might have done better on this issue.
In any case, this confirms me in the view that Turnbull is the weakest Prime Minister in living memory. I thought that Billy McMahon was a strong competitor until I discovered that he took the decision to kill off Australias foray into nuclear power (theyd actually excavated the site at Jervis Bay) over the opposition of the redoubtable Sir Phillip Baxter who saw the project as a step towards an atomic weapons capability. The cancellation of this project was a bigger achievement than Turnbull can claim in his 20-odd years in public life, encompassing the Republic referendum, the Murray-Darling fiasco, the downgrade of the NBN and his two years as Prime Minister.
Back on 18 September, your Daily Reckoning service told you to keep an eye on bank CYBG [ASX:CYB]. Its listed here in Australia but operates in Britain.
Its up about 9% since.
I said something similar to Small Cap Alpha readers in August with regard to a US bank ETF.
Its up about 8% since then.
This indicates to me that the outlook for interest rates is upwards, and that the market is pricing in credit growth in the US and the UK.
This looks bullish for the economies of both, overall. When banks expand, the economy does too, all things being equal.
Ive mentioned non-bank lender Pepper Group [ASX:PEP] a few times this year too.
US private equity firm KKR is about to take it over. That means it will stop trading on the stock exchange.
But Im still finding it useful to track. Heres why
When the big three fire together
The Australian Financial Review reports this morning that KKR wants to raise $200 million to drive Pepper further into improving European property markets.
It needs more money to make this happen.
KKR and Pepper are both skilled credit analysts. Thats their business.
If they see opportunity in Europe, I pay attention to that. It suggests they see Europe as a source of business growth, and not a stagnant region mired in low interest rates and bad demographics, as it can be made out to be.
Its also interesting considering a couple of scares that have come out of credit markets in Europe over the last couple of years.
Italys backlog of bad debts and weak banks, for example, is a common one.
The Financial Times suggested recently that Italys employment figures are the best theyve been since before 2008.
So, I still think theres a case to be made for 2018 to surprise to the upside economically from the US, China and the EU firing together at the same time.
Now that would be something.
Perhaps we should throw India into the mix as well?
The untapped potential of millions
This could prove to be very important. Bloomberg reports that the Indian government is going to inject the equivalent of US$32 billion into state banks over the next two years.
The government is trying to revive bank lending with this. Apparently, its at a 25-year low.
Heres a warning: My knowledge of India is pretty limited. But t...
Thomas Fazi and I recently published an Op Ed in Social Europe
(October 20, 2017) Everything
You Know About Neoliberalism Is Wrong, which is a precis of the
main arguments in our new book Reclaiming
the State: A Progressive Vision of Sovereignty for a
Post-Neoliberal World (Pluto Books, 2017). It seems that our
message resonates with a lot of people. And, inasmuch as it is
deeply critical of the extant Left position on internationalism who
continually seem to live in terror of those amorphous financial
markets just waiting for a chance to send a nation state bankrupt,
it seems to have also upset some who I consider to be the lost
mainstream Left. One such critic accuses us of using a presumptuous
title but he is seemingly unable to capture the pop
culture irony that is inherent in the choice. Just a bit of fun
Andrew. Since when is comedy presumptuous? But failing to grasp the
subtlety of the title is just the start. Things go downhill from
Among those who liked the article (and then presumably will like our book) were Dani Rodrik, who Tweeted (October 20, 2017):
It appears that Dani missed the irony in the title too.
And Wolfgang Mnchau, in his excellent Eurointelligence Briefings (October 23, 2017) wrote in his introduction to his comment:
Bill Mitchell and Thomas Fazi provide a very useful insight into why the European Left is no longer betting on supra-national institutions like the EU, and why it is seeking national solutions instead. If you want to understand the success of Jeremy Corbyn in the UK, this is a piece worth reading.
Wolfgang Mnchau continued you can read the rest if interested.
These two among others who have received the arguments in a positive manner are clearly not...
Sheesh! If you think Australias construction boom is something, check out the latest news from the Middle East. Bloomberg says the Saudi Crown Prince wants to spend US$500 billion to throw up a new city.
Yep thats billion with a b.
Not only that, the city will be more liberal than traditional Saudi society and operate under separate laws.
Will action follow the talk? Who knows? Theres definitely some sort of shift coming out of Saudi Arabia, or the Crown Prince at least.
The sceptic will wonder if Saudi Arabia will actually follow through on this. One thing nobody doubts is whether it will have the money do it if the public float of part of Saudi Aramco the national oil company goes ahead.
That would allow the country to spend $500 billion and have change left over.
Theres some serious money washing around the world. This makes me bullish
The fantasy of low inflation will be shattered
Even Australias $130 billion Future Fund has 18% of its portfolio in cash.
I dont envy their task of trying to find somewhere to put it. The bigger you are, the less nimble.
And the bond market the traditional hunting ground for a fund like that yields nothing over most of the world.
The central bank says theres low inflation. Of course, anyone living pay cheque to pay cheque knows thats complete BS.
Ask any prospective homebuyer in Melbourne, for example. Land values rose 20% in the last year alone.
Theres also the major problem of the natural resource market right in front of us.
Commodity prices are going to go a lot higher. Inflation is going to unleash on the worlds fixed income market like the proverbial fox in the hen house.
Since taking over The Daily Reckoning in April, Ive made the case that theres a second mining boom coming.
Everything Ive seen since has confirmed this. But research out of Goldman Sachs might have even taken it up a notch
The team there says theres another super cycle up ahead. It doesnt take Albert Einstein to see why.
Spending on exploration has touched a 30-year low. Thats going to become a problem when the existing mining operations are old and rundown.
Apparently, 60% of the worlds top 100 mines were built last century.
Those reserves have been run down for a long time now. Goldman Sachs had a nifty way of summing this up actually. The last mining...
October 26, 2017: US Trade Representative Robert Lighthizer said publicly last week that the US wants to opt out of ISDS in NAFTA, because of the risk and costs of US governments being sued by foreign corporations, and despite corporate lobby groups pushing to retain ISDS.
Speaking in a press conference, he said Ive had people come in and say, literally, to me: Oh, but you cant do this: you cant change ISDS. You cant do that because we wouldnt have made the investment otherwise. Im thinking, Well, then why is it a good policy of the United States government to encourage investment in Mexico? The bottom line is, business says: We want to make decisions and have markets decide. But! We would like to have political risk insurance paid for by the United States government. And to me thats absurd. You either are in the market, or youre not in the market.
This week rejection of ISDS was reinforced across the political spectrum from the US National Conference of State Legislatures and state attorneys general to small business organizations and unions to hundreds of the nations leading legal and economics professors, who released a letter calling on the administration to remove ISDS from NAFTA. Stark criticism of ISDS has come from voices as disparate as U.S. Supreme Court Chief Justice John Roberts and pro-free trade think tanks such as the Cato Institute to U.S. Senator Elizabeth Warren (D-Mass.),......
i stumbled into this interview two nights ago..a few things interested me..
the name calling..which didnt bring the rapturous applause she was craving no matter how many times she said nazi..
then the kicker..the host gasps at how clooney told them he had no idea what harvey was doing..griffen snuffs that out straight away and the looks on the rest of the panels faces is priceless..she then goes on to bash most of hollywood..but..and you will hear her say it..she claims all the middle aged, white heads of hollywood do this..she forgot one extra word..can you name the word?
October 26, 2017: MSF (Doctors without Borders) has called for India and other countries to block RCEP proposals from Japan and South Korea that would allow pharmaceutical companies to have stronger monopolies, prevent competition and keep medicine prices high. They added that it was time to end the push for ever-higher levels of monopoly control of medicines through free trade agreements . RCEP negotiators are meeting in Incheon, South Korea this week.
The Wire reports that a spokesperson for the Indian government has responded that this is a 'red line' for India and some other countries, and they would not agree to any proposals that would prevent competition and threaten Indias ability to continue to be a supplier of cheap generic medicines.
Other major disagreements are reported on tariff levels, investor rights to sue governments, electronic commerce, trade in services and government procurement.
Marc Faber, Freedom of Speech & Capitalism Author Jayant Bhandari Acting Man Political Correctness Hampers Honest Debate What would the world be like today had Europeans never colonized Americas, Africa, the Middle East, Australia, New Zealand, and South Asia? ...
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