Japanese economy suffers slow down
This year Japan suffered the devastating effects of the earthquake an tsunami. The economic impact of those natural disasters was worth billions of dollars to the Japanese economy. Now it seems that Japan is facing a new crisis in regards to exports to other nations. The BBC News reports that Japan’s exports have been hit by a slowdown of demand. You can probably pin this slow down on the current conditions in Europe.
I think it might be fair to blame this situation on the push to go Green in Europe. Watermelons have no regard for economic prosperity. It seems that in some European countries there has been an increased push towards technologies that are in fact an utter failure. As a result of this push, Japan is one of many countries beginning to suffer the consequences of Watermelon foolishness.
Time for a lesson in economics
For several months the LSM has been pre-occupied with the astroturf movement known as Occupy Wall Street. What the LSM is not telling is that the movement is grounded in Marxism. What the LSM is also not explaining is that those behind the Occubaggers are the usual suspects that have been known since the 1960s: William Ayers and Bernadine Dorhn of the terrorist organization the Weather Underground, Van Jones (a well known watermelon and Marxist) as well as the incarnation of ACORN. The question that should be uppermost is: Who is sponsoring this astroturf movement? One name springs forth – George Soros.
The purpose of OWS is one that is extremely conflicted, but it is that way in order to get approval from those who were for example opposed to Wall Street merchant banks getting bail outs. The aims sounded so noble, and their notions seemed to be quite catchy, especially the meme “we are the 99%”. However, such memes are in themselves a lie. The movement is one that is based upon envy, which is as bad as any greed that one might see amongst traders at the New York Stock Exchange, or amongst those who spend money with hedge funds.
At the same time the whole OWS movement is nothing more than a diversionary tactic that is meant to drag people into their way of thinking as a result of some of their populist arguments. For example, they rage about economic inequality. Wait a minute, who says that we should have economic equality?
The arguments regarding income inequality are extremely false. It is all about supply and demand stupid!! The latest meme has been that the wealthy do not supply jobs, and again this is a false meme. It is all about savings and investment, stupid!!
For a moment, let’s go back in time in order to illustrate why these are false memes. In this case I will travel to 1491-92 to the court of Queen Isabella of Spain. In this scenario a young Italian sailor came to Queen Isabella to get her patronage for a voyage. The purpose of the voyage was to discover a new route for the supply of Indian spices. The sailor’s name was Christopher Columbus. As a result of obtaining that patronage Christopher Columbus set off with 3 ships and crew and despite thinking that he had reached India, he ended up discovering a new continent – the Americas. This is an illustration of how a wealthy individual invested in a sea voyage, and that investment gave employment to those who went on that voyage with Christopher Columbus. There are many examples of the wealthy and their patronage of various business and other ventures in the past.
This illustration could be repeated when looking at things like the invention of the steam engine, the invention of the cotton gin, and a whole variety of goods and services. In order to invent such things and bring them to the “market”, there was a need for investors. You could say that was a first step in supply and demand. My illustration is not that great but it serves to point out that the economic illiterates who are a part of the OWS occubagger movement do not understand how markets work.
However, let me move on to the issue of income inequality, whatever that means. These days there is talk of “wage justice” and it is normal to hear the bleatings about how women are paid less than men. The problem is that you need to have a look at occupations which involves also looking at the qualifications or otherwise required for those occupations. First off, there are unskilled jobs such as street sweeper, taxi driver, building janitor, shop assistant, farm labourer, where there are no formal requirements to do the job. It is because there are no formal education requirements that such jobs normally do not pay all that well. At the same time there is usually an oversupply of job market entrants willing to do these jobs for the lower pay. Second, there are the professional jobs such as accountant, lawyer, doctor, dentist etc that require formal qualifications attained from an institution of higher learning. It should be pointed out that for some of these positions there are restrictions upon entry into the field and that these restrictions actually affect the level of supply for those professions. These are extreme examples.
One example that is usually pointed when the subject of income inequality is raised is that of a doctor versus that of a nurse. In some ways it is comparing apples and oranges. However, this comparison is changing since nurses have begun to gain further educational qualifications. I could use a more absurd example of my engineer husband who has the capacity to earn at least 3 times what I have earned when I was working. We are both degree qualified, yet I earned a fraction of his income. It boiled down to the type of work where I was directed, and had nothing to do with my degree qualification. In other words a comparison of our earning potential is false.
On the other hand, I can point out that supply and demand in the labour market does in fact affect employment opportunities. What usually happens is the following:
1. there is a demand for aeronautical engineers that suddenly increases but there is a shortage of these engineers in the labour market place. Since demand outstrips supply the price for that labour is high.
2. The increased demand for these engineers causes two things to happen: (a) immigration of skilled workers who can meet the demand (2) students choose to undertake undergraduate courses in order to obtain jobs within that industry.
3. As a result of these two factors, the number of entrants in the market increases which leads gradually to an oversupply for aeronautical engineers, which in turn leads to decreases in salaries offered for the available jobs in the market.
This can be applied more appropriately to professions such as law and accountancy where there is presently an oversupply, thus lawyers and accountants are a dime a dozen. It can also be applied to watermelon science. In other words, what can happen is that students will often graduate only to discover that there are either no available jobs, or that the incomes that they thought that they would get once they hit the job market have been reduced.
Basically, the pay for a given job is determined by market factors, including skill levels required, as well as education required, and experience required. The CEO of a big business is expected to have a high level of expertise which is one reason why CEOs are often paid at a salary level which we tend to think is bloated. Sometimes, thanks to the interference of unions, the pay levels for occupations that are at the bottom to mid-range are inflated, but the expectations of the employer are over-inflated. A good example of this is the salary levels of teachers. Most of them get really good pay considering the hours that they work and the amount of leave that they get during the year, yet they are greedy with their constant demands for higher pay.
Europe in crisis – Hungary
The BBC is reporting that Moody’s has downgraded Hungary to junk status. The reasons given by Moody’s are the following:
1. high levels of debt;
2. weak prospects;
3. uncertainty as to whether the government can achieve its goals.
Hungary is the latest country to suffer from a downgrade. This is not good news because what it means that there are extra pressures because of higher interest rates required for any new investment bonds.
The Hungarian government obviously disagrees with Moody’s and on top of that Standard and Poors have taken an opposite approach, leaving Hungry to communicate with the IMF and the EU.
Since I know very little about what is happening in Hungary I cannot comment too much on the situation at present. However, I am noticing a particular trend relating to the European Union. It seems that the Eurozone is getting closer and closer to collapse with each of these downgradings.
What I do not know about Hungary are things like :
1. the welfare state
2. the level of investment in wasteful “green” projects
3. the level of unemployment
4. the rate of inflation
The only thing that I picked up from the article is that Moody’s considers the Hungarian economy to be weak and therefore they should be downgraded.
Healthcare – why socialist funding fails
I live in Australia where we have a socialist part-government funded healthcare. This is slightly different from the debacle in the UK but we are not far behind when it comes to ending up with a total disaster.
The current system is known as Medicare. The way that this is funded is through a levy on income tax. Everyone who is earning any income pays the medicare levy. The reality of the system depends upon the State where one is living, and my own experiences are within Victoria, Queensland, New South Wales and the ACT. In the UK the doctors are employed by an area health service called a Trust. You do not have a choice of doctor, or at least that is my understanding. On top of that, in the UK you can end up being banned from a practice for no particular reason. That kind of thing does not apply in Australia, but if Gough Whitlam had his way when he introduced this debacle in the first place, then yes it could have ended up that bad. In recent years I have read a lot of stories regarding the problems with the UK Health System, and there are many problems, especially associated with the care of the elderly. This is also outside of my experience.
In the current Australian system I can go to my GP of choice. However, what I cannot do is choose to opt for direct payment via Medicare. My current GP charges $60 per 10 minutes in a visit. Go over that 10 minutes and it is even more expensive. At least in Sydney my GP accepted just the Medicare only payment, which suited my particular circumstances. The real problem as far as I am concerned is the scheduled fee which is determined by public servant who has no real experience of what it costs to run a private practice. The scheduled fee is something like $34.90. If I was attending a specialist, where the fees range from $110 to more than $240 I am expected to pay that money and then claim from Medicare. In my latest example, the fee is $240 for the initial visit, and the scheduled fee is $70. I will get back 85% of the scheduled fee. Something does not compute!!
On top of this, even with private health insurance, these costs are not covered, and the reason that it is not covered is in fact due to the government and its legislation. Private health funds are not allowed to insure for the difference between what the doctor charges and the scheduled fee. This leaves a patient with chronic illness very much out of pocket. Until the legislation is changed there is nothing that can be done about the situation.
There are other costs not covered by the government – physiotherapy is a prime example of something that is not covered under Medicare. To this you can add the cost of seeing a podiatrist and purchasing orthotics, the cost of visiting a dentist, and other associated costs, dietician, pyschologist etc. (although I think psychology now gets some cover). People with weight problems and who are Diabetic need to see a dietician but the cost is not covered. The health funds will only cover up to about 50% of the fee in some of these cases.
Prior to the interference by Gough Whitlam our system was not that bad, and it was not broken. People from the lower income brackets could still afford to see a doctor, and they were not turned away from the public hospitals. Here in Australia we have State run public hospitals such as the Victorian Women’s Hospital, or a more recent example of the Monash Medical Centre, and then there are the private hospitals. No one gets turned away from these hospitals. However, if one goes in as a private patient to a hospital, the bills will stack up!!! Over time government payments to the hospitals have been reduced leaving them quite often in crisis and unable to pay their bills on time. Some hospitals are good with their payments but others have a really bad history when it comes to paying suppliers. The situation has been getting worse and worse.
Why is this the case? First of all, when it comes to the hospital system, accident and emergency is overused for non-urgent cases. Yes, it is true, I have gone to the local hospital, on the weekends when my doctor is not available!! I have had legitimate reasons to seek that help when I have gone to the accident and emergency department of the local hospital. So yes, I plead guilty. However, this is not the case for people who turn up when they have colds or similar minor complaints. These people need to be seen in a different context – they need to be removed from the Accident and Emergency Departments of the hospital system. Perhaps they also need to pay a small fee for the visit, I do not know the right answer for this problem. Second, we have an ageing population requiring more in the way of what is considered “non urgent” operations and procedures. Third, we have an increasing number of women seeking expensive IVF treatments.
Let me address this last point: I do not believe that women should be entitled to receive IVF at public expense. It is not because I do not have sympathy for someone who has difficulty in getting pregnant, it is because in a number of cases, the women think that they have some right to this procedure even though they are: single, Lesbians, or mature-aged. Yet, this is so very wrong. A woman is only fertile for a certain length of time and then the ovaries and the eggs start to disintegrate or putting it another way, our hormone levels change over time so that we are no longer as fertile as we were when we are in the prime age (between 16 and 30) for giving birth. Over time we start producing fewer eggs. As women mature there is a greater propensity to have a baby with birth defects, especially Down’s Syndrome. However, more than that, giving birth at an age when most women have gone through menopause, means that any children who are born under such circumstances are less likely to have a mother as they mature into adulthood. Given these reasons, I certainly think that the public purse should not be used for such indulgences. IVF is an expensive procedure, and since the Medical budget is finite, not infinite, then this is taking money away from other areas, including taking away resources for cancer treatments.
The Socialist response, that is universal healthcare is not the panacea as claimed by its proponents. In fact it is a very flawed system, and it means that in the long run choices have to be made about rationing resources. Inevitably, this means that when rationing is applied, older people will miss out on necessary treatment for their ailments.
A look at the Occubagger movement
The Occubagger movement has spread throughout the world. These anarchist left-wing communist, watermelon individuals are to be found in lots of cities around the world, and the USA has more than its fair share of violence associated with the movement. There are plenty of blogs dealing with the filthy things that these individuals have been doing and there is no need to repeat the disgusting habits of occubaggers.
Instead, I want to look at some other aspects of the movement, including some of their motivations, as well as in the way that they have been hijacking the Scriptures to try and give themselves legitimacy. Specifically, I want to look at the nonsense being claimed by members of the hierarchy of the Church of England in London, but they most definitely have lost the plot.
First of all, I want to explode any myth about “my brother’s keeper”. Since I am a person who is Bible literate, I can say with some certainty that I know of no Scripture passage that states that anyone must be “my brother’s keeper”. The only time that this phrase is used is in Genesis, after Cain has murdered Abel, and is challenged by God. It is Cain who exclaims: “Am I my brother’s keeper”. The Beattitudes that are found in Matthew’s Gospel do not expound upon the theme of being “my brother’s keeper”. This is mythology from the left wing of politics. It is an attempt to hijack the Scripture and to dish up what is not written for those who are quite frankly, illiterate.
Second, Jesus did not condemn the use of money as some who are trying to bring down capitalism are claiming. On the contrary, Jesus was railing against the “love of money” which is simply not the same thing. Jesus spoke of choosing between God and mammon (money and wealth) but it must be remembered that Jesus had some very wealthy benefactors who helped him during his three year public ministry.
Third, much of what is written in the Scripture is about individual responsibility. Isaiah for instance spoke out against those who neglected the widows and orphans. It has to be remembered that in those ancient Biblical times, there was a family hierarchy and it was the responsibility of the family to care for family members who were less well off; the fact is that nothing changes in the human condition except of course that families have tried to shift their responsibility to government, or putting it another government has taken over the role of “charity” for the widows and orphans. The problem is that government has not performed well in such a role.
Fourth, let me talk for a moment about ENVY. Yes, it is quite a nasty word, but the truth is that the Occubagger movement is one that is based upon envy, rather than any true altruistic notions of doing what is right for all people. The underlying themes of the movement is Selfishness, Greed, Sloth, and a whole lot more. It is true, that ENVY, not some sense of charity has been the motivation behind the movement. This is despite the fact that there are good reasons to be uptight about some of the bonuses etc. received by CEOs of various companies. There is that illusion of rich vs. poor, and the agitators try to make out like the “rich” are getting richer at the expense of the poor.
This last point is one that can have merit depending upon how we interpret these matters. Take for example the situation at QANTAS airlines in Australia. Last weekend the CEO announced that he was locking out staff and he grounded the fleet. The travelling public were extremely inconvenienced. The CEO, an arrogant Irishman by the name of Alan Joyce, had just received a 71% increase in his salary package. Since he has been CEO of QANTAS several thousand employees have been tapped on the shoulder and have been made redundant. No one has been saved from the horrible policy that was implemented after this particular weasel took up the job of CEO. The man who was overlooked though, is laughing because Virgin Airlines now have the advantage with the travelling public (and he maintains a good relationship with airline staff). The facts here are that the contracts for union employees are up for negotiation. The unions decided to “screw” QANTAS or at least that is what we are being told. There are several issues to be resolved including the fact that Joyce, this Irish upstart, wants to establish QANTAS in Asia and take the airline offshore – he cannot do that. What is not being told by some members of the press is that the amount of disruption due to the “negotiations” had been quite minimal when the lockout was pulled, but the Irish weasel insists that QANTAS had no other choice. It is BS. The fact remains that QANTAS management has been refusing to negotiate with the unions. The issue of stability is a very real one. What looks bad, however, is that Joyce is doing a song and dance about what the unions wanted, yet he asks for and receives a 71% increase in his salary package which is at the expense of QANTAS employees. This type of story in fact bolsters the arguments of the Occubaggers, and yes there is some GREED involved.
However, can one judge the actions of individuals and then blame everyone? In the UK the CofE has decided to take on the bankers, calling them greedy. However, if people are not paying their mortgage payments on time, then they have to bear the consequences. They, after all took out those mortgages in order to purchase their homes.
None of this accounts for the present crisis in Europe, let alone address what could be a new round of businesses in the banking sector going broke. (Think Jon Corzine). What we are seeing is the fallout from what Greece did several years ago, with the help of Goldman Sachs. People take risks, and Jon Corzine took unnecessary risks. There are others just like him who took risks and they lost… big time. It does not mean that they are greedy. With regard to Corzine, though I see him being found guilty of various crimes and ending up in prison. His risks did not pay off, but he had a duty of care with regard to client money and he breached that duty. Bank of America is not evil, neither are any of the banks. The troubles stem from having to give loans to people who were never able to pay them back.
Greed and Envy, these are the things that are causing the most angst in our society today. The Occubaggers, as well as emitting large doses of noxious gas, really do have a problem when it comes to envy. The bankers and other professionals have a problem with greed.
The Greek crisis and the world crisis to come
When I have a moment I will do an update on this subject. Greece has learned nothing and the saga continues. Now there is a report that says Japan will join in the bail out efforts. This sounds rather weird to me considering that Japan has its own financial woes. A quick check of the news report indicates that the Nikkei index seems to be in a bit of a free fall.
The Australian Prime Minister, who is an economic illiterate, seems to think that Australia will be shielded from any new global crisis. The problem is that the woman, being an economic illiterate is dreaming. In 2008 when the last crisis took place, Australia was well placed because of the work done by the former Australian Treasurer Peter Costello. The Coalition left the budget in surplus. It look Wayne the goose, Swan 12 months to fritter away that large surplus which did nothing to stimulate the economy.
Australia is starting to go through the death throes of an economy in trouble from the stagflation that is on the way. The comparison to the 1970s when Gough Whitlam was in charge is at this stage even more obvious than what it was 12 months ago. The government spending has been accelerating at a very fast pace. There has been an increase in demands for higher wages. On top of this we find that the rise in the cost of groceries over the past 10 years has been phenomenal (I suspect that the increase has been more phenomenal over the past 2-3 years than the previous 7 years). Utility costs such as water, gas and electricity have sky-rocketed thanks to the dumb climate policies that have been adopted because of watermelon stupidity. These are indicators that do not suggest good fundamentals as claimed by the economic illiterate Juliar Dullard.
Will the UK turnaround faster than elsewhere?
The BBC reports that there has been a very big drop in Government borrowings in the present year. The financial position is being helped by two things: (1) the levy on bank balance sheets and (2) a significant drop in public sector borrowings.
It is my contention (and yes it is just theory not necessarily fact), that when the Public Sector have the lion’s share of the investment dollar, that the private sector suffers. This is because the Investment pie is limited, which means any increase in Public Sector borrowings reduces the amount of investment dollars available for the private sector. When the private sector is not able to borrow money to expand this leads to a contraction of the economy as the private sector will not be able to employ more people, or it has to let staff go in order to meet other debt requirements.
In other words, what I am contending is that Government Stimulus action does not work because it takes investment money out of the private sector, which means that the economy is disrputed. What I am arguing here is that the “stimulus” money does not come from tax receipts but from further public sector borrowing. In other words, Government action does not impact in a favourable way within the economy and it actually makes matters worse, not better.
My theory is not based upon the current experience, but upon the experience of the late 1960s, early to mid 1970s when there was global stagflation. Most economists address the stagflation by referring to the oil price shocks, however, I see this as a miniscule reason for the stagflation. There were two price shocks, one around or prior to 1972 and other during the Iran Revolution. In recent years we have experienced more oil shocks for a variety of reasons, but Saudi Arabia has actually pumped out more oil to keep the market smooth. The price of oil is really not as important as some believe, because we do not have any real control over the prices that the cartel (an oligopoly) agree to charge for their output.
One thing that was common in that period, in Australia, the USA and in the UK was that each country had a government that was into prolifigate spending. In the USA it started under LBJ, and Nixon had to try and rein in the spending, followed by Carter, another profligate spendder. In Australia it started at the end of the 1960s when McMahon was Prime Minister, followed by the prolifigate spending of the Whitlam era. In the UK it was the Wilson years of profligate spending. It is my view that the stagflation arose because of the difficulty of providing investment dollars to the private sector because the money available for investment was being swallowed up by the public sector.
During that same period, especially here in Australia, we had rising inflation, strikes and demands for higher wages which were granted because the ALP were in charge, followed by a further rise in inflation. Even though this looks simplistic, by 1974 the stagflation was actually quite evident, and these factors explain why it was a wage-price inflation which was fuelling the problems within the economy. By the end of 1975, and beginning of 1976, here in Australia most jobs had dried up, especially with regard to the requirement for newcomers in the field of accountancy (there were no jobs available for the majority of graduates). This was the point where we had the beginning of the Fraser government which also led to a wages freeze being implemented. (Nixon also imposed a wages freeze).
The turnaround in Australia occurred only when public sector borrowings began to drop and the budget was balanced or was turned into a surplus. Here in Australia this was a gradual process because we went from the Fraser government to the Hawke-Keating government when public sector borrowing got out of hand once again. Note: under Keating as Treasurer there were extremely high interest rates which were very, very painful for mortgagees. We got through those extremely high interest rates, which were greater than 17% before they began to fall again. Credit card borrowing interest rates were above 20%. Under the Howard government the Federal Budget went from deficit to surplus, but that has been frittered away by the KRUDD-Dullard governments.
So long as the rise in wages is kept under control, that is, it is related to a shortage of skills and not from some annual or bi-annual increases, then inflation itself is more or less kept under control. The way in which the Reserve Bank has been handling any inflation has been to increase interest rates, but in the present conditions the policy of the Reserve Bank which is to operate through interest rates alone can be quite harmful. The uncertainty that exists today has led to consumers holding off their major and minor purchases as long as possible.
We are yet to see the impact of the proposed carbon-dioxide tax. I have no doubt that the imposition of such a tax will have devastating consequences upon the economy. It will not bring about prosperity. It will cause massive increases in some commodities (which the government model has not predicted), and this is because a number of unknown factors have not been included in any modelling. Take for example the cost of refrigerant for supermarkets. This is something that will be taxed. Can you see how the price of frozen items will rise? Can you see how that will impact upon the cost of meat and dairy products?
As we continue to head towards stagflation, the last thing we need is this particular tax which will cause a massive downturn in the economy. (again this is theory, but so is any model that claims an opposite scenario).
Public sector borrowing eats into the investment dollars, which in turn leads to a decrease in private sector borrowing and expansion within the private sector. The end result of this cycle is that business is not in a postion to continue to hire. At the same time taxes on employment also hold back businesses from permanent hiring. Most businesses have to keep below a certain staff level in order to avoid the higher taxation costs. A reduction or the dropping of such taxes would increase the levels of employment.
AAA rating down the tubes
As noted by CNN, Standard and Poor have downgraded the credit rating for the USA from its AAA rating that has been enjoyed since 1917. This downgrade impacts upon the cost of borrowing.
After reading through the reasons given for the downgrade I feel quite bothered, because it would seem that the ratings agency has taken into consideration a few things that are none of its business, or at least poorly understood, or more likely is based upon the leftist viewpoint of the person doing the assessment.
A list of the reasons for the downgrade are:
1. the kabuki theatre regarding the raising of the debt ceiling re the fact that it took to the last minute to get it raised. The political brinkmanship has proved harmful.
2. the fact that the tax scales for upper income individuals remained rather than allowing them to lapse. The claim that this could have raised $950 billion in revenue might in fact be a little bit on the bloated side.
However, I question this evaluation, at least in the short term. The reason that I question the evaluation is that it seems to be very political with regard to the assessment. For example the comment about the debt ceiling being raised in the past. Is that totally relevant, especially when the raising of the debt ceiling is not going to do anything to help cut the GDP ratio? Also, where is the analysis that the tax measures in question would have seen a rise in the tax revenues collected? The argument that was used smacks of left-wing politics, and it actually smacks of a left-wing assessment that is intent upon blaming conservative Republicans for the downgrade.
This article will be updated as more information from other sources becomes available.
What would J.M. Keynes recommend?
I am posing this question, not because I consider J.M.Keynes to have had the answers, but because the alleged followers of Keynes are not paying attention to what Keynes actually wrote!!
First of all, it is necessary to be very clear that the application of Keynesian theory had failed by the late 1960s. I have always maintained that the Keynsian solutions for unemployment were only useful in the short term, not the long term and I look to the way in which Australia applied the levers to the economy prior to the election of Gough Whitlam in 1972. The pattern prior to 1972 was: inflation, credit squeeze and stable employment. The goal had been full employment and for the most part after the second world war the Australian economy had been relatively stable. Then the electorate, who had no idea about a number of issues that had torn the ALP apart in the 1950s decided that there was a need for a change. What a mistake.
Second, my theory is that when government takes “initiative” and “stimulates” the economy when it is not necessary, this actually has an adverse affect on the private sector. In the long term the result of such measures in inevitably the drying up of available investment dollars for the private sector. When investment dollars for the private sector dries up, this ultimately leads to an increase in unemployment, but at the same time it also leads to a lack of consumer confidence because workers begin to fear losing their jobs. Ultimately the lack of consumer confidence leads to a lack of spending for goods and services, which then leads to the necessity of more lay-offs, thus increasing the number of unemployed.
Third, individuals who claim to be Keynesians, such as Dick Krugman, do not in fact expound Keynesian theory. Instead what they offer is like a Prius – it is hybrid Keynes, with a large dollop of Marxism added into the mix. Keynes actually wrote that he thought that his theory worked best in a Communist style economy, but he never advocated that western economies such as the UK, Australia, New Zealand, Canada and the United States should in fact become Communist or Marxist. Keynes was in reality a capitalist. His proposals for unemployment via government assistance were only meant to be implemented in the short term, not the long term. Keynes was not responsible for the measures undertaken by Roosevelt, neither is he responsible for the twit ideas of Krugman and co who have been advising the worst President ever in the United States.
The world has been watching the kabuki theatre that took place in Washington D.C. To be honest, from an outsider point of view, this debt ceiling and the way in which a “budget” is determined is very foreign. Here in Australia, because our Parliamentary system is based upon the Westminster system, it is the Government, that is the party with the majority that must produce a budget. This happens once a year. For a very long time the budget was announced in August, but this was changed to about May each year. The budget is actually prepared by the Public Servants who run Treasury, with some input from the governing politicians.
For the most part the budget gets passed by both houses of the Parliament. The one time in my memory where there was a refusal by the Senate to pass the budget was in 1975 and the drama was all a part of the dismissal of the Whitlam Government – the majority of Australians gave their verdict on December 2 1975 when Malcolm Fraser was returned with a landslide victory. The reason that this happened was to do with the various scandals that had erupted at the time, and in particular the Khemlani affair.
The whole process in D.C. seemed to not make a lot of sense and for a variety of reasons. Østupid has been pushing for tax increases, but my question here is: what would J.M. Keynes recommend? Keynes had advocated that in a time of war taxes needed to be increased to pay for wartime equipment and the increase in defence personnel, and at other times taxes should be lowered. What Keynes had not factored into his economic theory was the Welfare State. There was no real welfare state when Keynes was alive. He did recommend that the government needed to provide short term assistance for the unemployed, but he did not factor in for long term unemployment. The truth is: a country cannot support or sustain the welfare state unless there is full employment. I think that this is something that has been neglected by the Socialist governments everywhere. They see workers, especially the middle class as some kind of cash cow to be squeezed, but they never seem to see the full picture.
The absurdity of the kabuki theatre in D.C. would have to be Østupid lecturing Americans about “living beyond their means”, when in fact the national debt is not about what the general public borrows and spends, but is about what government is spending which is well beyond the level of the taxes that are being collected. There are many issues involved. Probably the most important that arose in 2009 was the ramming through of the health insurance Abominablecare bill. Health insurance should be a matter for the individual, not government. If government wants to provide assistance for the less well off, then that should be done through the programs already in existence – Medicare and Medicaid. Here in Australia we have had the same kind of thing, and quite frankly the government interference has led to a product that is not affordable for many people. On top of that the quality of the service provided has deteriorated whilst there are people who think that they should get assistance for things like IVF. Paying out for these expensive IVF treatments, and at the same time paying for abortions (in my view this seems to be hypocrisy) ultimately means that fewer dollars are available to treat cancer patients or patients with other diseases. It is a vicious cycle.
Australia is facing yet another form of kabuki theatre – the proposed tax on the air that we breathe in the belief that this will somehow change the climate – which has had the ultimate effect of reducing consumer confidence. The reduced consumer confidence has led to a decrease in sales, which in turn has led to job losses, which has led to a decrease in tax revenue collected. Ultimately if the tax is implemented, the effect will be prices going through the roof. I have no doubt that this will lead to the double digit inflation that we have not seen since the 1970s.
The conditions for stagflation are: high interest rates, high unemployment and high inflation. The governors of the Reserve Bank are keeping a lid on the high interest rates by their decision to not increase those interest rates in response to the changes in the consumer price index. However, what will they decide once this tax is implemented? If they decide to try and stop the inflation by raising interest rates then we will have a return to the 1970s which we have been avoiding. Any rise in interest rates will in turn hurt small business owners in Australia with many making the decision to leave the market place due to the rising costs caused by price increases in utilities such as electricity.
So again, in these circumstances, what would Keynes recommend? Would Keynes agree with the appalling government decisions that have allowed government debt as a percentage of GDP to get out of hand? Would Keynes recommend a tax on the very air that we breathe? Would Keynes go along with the “green economists” who advocate for such a tax? Would Keynes advocate something like the ETS scheme? Or would Keynes have seen through this kind of scam, and have been one of the economists who speaks up against it? Would Keynes have recommended going off the gold standard?
If Juliar ran Trade Tools
This company gets it!! The Brisbane Sunday Mail ran an advert from the company Trade Tools. It is one of the best and funniest ads that I have seen in a very long time. Considering the serious blunder of the announced carbon tax (taxing the air that we breathe), Trade Tools has come up with an advert that highlights the very incompetence of those who continue to push the lie of Socialism and Communism. I am not going to beat about the bush. Julia Gillard is a Marxist. Her ideology has not changed. She is one of the many who have used the ALP as a means of gaining power in order to push the Communist agenda. It had been tried in the past and it always failed. Just ask Doc Evatt about his Communist ideology and the split that it caused to the ALP during the 1950s that led to the birth of the DLP.
Without repeating the contents of the ad I am not sure that I can do justice to the delcious comments and scenarios. I will try to give a synopis of each point without their elaboration. I honestly suggest reading it for yourself. Some of you might prefer to substitute the name from Julia Gillard and use B Østupid instead. You will get the same idea.
If Julia Gillard took over Trade Tools you would get:
1. More staff with rostered days off and a 9 day fortnight.
2.The increase in staff will lead to Julia increasing the price of the tools.
3. She would respond to someone killing his dog with a jigsaw by banning the sale of the jigsaw. (the logic in this one is a beauty). This would lead to the use of alternative more dangerous equipment and a glut of jigsaws.
4. would increase the price of tools to the mining industry. This would lead to the mining industry sourcing their tools elsewhere.
5. Because she despises the electric companies she would make an alliance with a flaky inventor to come up with solar powered tools (that will not work at night or in a dark area like in a workshop). These tools will cost double that of the tools that use electricity.
6. Julia would promise not to introduce price increases prior to stabbing the former CEO in the back, and then upon becoming CEO decide to increase prices anyway.
7. She would enforce an equal employment policy, complete with creche.
8. She would ban the word “shoplifter” in favour of the word “forgetful customer.
9. Spend much of the week attending worker health and safety classes.
10. She would source the most expensive builders to help build a shed in the car park of Trade Tools for use as a classroom for all those worker health and safety courses.
11. Insist upon the wearing of hard hats in the lunch room.
12. She would find it acceptable to find Trade Tools running at a loss, and be supremely optimistic in predicting a return to profit in two years time.
Please read the whole thing. The points being made are absolutely spot on and it is a great analysis of what is wrong with the current joke of a government that is run by Juliar-the Marxist – Dullard.
