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Everything Old is New Again
There is something strange going on at the moment. For the first time in my lifetime, the USA is on the brink of being forced into Marxism. I am not going to beat around the bush, and I will name the beast as Marxism. What is so strange is that this is like deja vu, but only as it relates to Australian politics. The issue is precisely the same one that was controversial in Australia in 1973 – universal health cover. There were other issues, such as the out of control spending of the Whitlam government, that also seem to be reflected in everything that is going down in the USA. Or so it seems, because it is like “everything old is new again”, just like in that song…..
As I continue my topics, I hope to be able to find information off the Internet that will shed light on the Whitlam years in Australia, and I hope without the hysterics that surround some of the situations that arose at the time. I remember the Whitlam government because I was on the brink of adulthood and I was studying economics and related subjects during the Whitlam years. I remember the whirlwind of spending – health, welfare, education, regional development… and the list goes on. I remember the scandals that erupted, and the final one – the Kemlanhi affair – that in the end helped to bring down the Whitlam government. I remember the fuss when the Opposition parties in the Senate withheld Supply, which brought on the last crisis that culminated in the sacking of the Whitlam Government by the Governor General. I remember the public servants getting their knickers in a twist with all of their protests over the “sacking”. In fact, who can forget when each year the ABC gets its lather going by remembering this “incident” with their rose coloured glasses firmly planted on the face.
From the political point of view, the one thing that is overlooked by the Australian lame stream media is that the people did speak, and give their view at the ballot box. Gough Whitlam was defeated in the election that followed the sacking by the Governor General. Malcolm Fraser had formed a caretaker government until the ballot could be held, and “we the people” spoke, with a resounding landslide victory against Gough Whitlam and his government.What the ABC and cronies do not tell however, is that in some areas of Australia the news was not greeted with anger, but with joy. In fact when I heard the news I was “dancing in the streets”, happy in the knowledge that Whitlam had been sacked and was no longer causing havoc as far as the Australian economy was concerned. Most of my neighbours were equally happy with the news, and so despite what the Australian lame stream media continues to portray about these events, there is another untold side to the story on the sacking of the Whitlam Government. We did get rid of the closest thing we had to a Marxist takeover in Australia since the second world war.
Even though we managed to get rid of Gough Whitlam, it would seem that people soon forget the kind of devastation that comes from these Marxist policies. Also, younger people who have had no knowledge of what really took place are on the voting rolls. They only have the version of events as depicted by the Australian lame stream media. They are unaware of what in fact took place, and why it was that the majority of the voters kicked Whitlam out. As a result, we find ourselves in a similar predicament today. Kevin Rudd seems to be intent upon having a reputation as a big spender that is far worse than that of Gough Whitlam. He has spent unnecessarily on a “stimulus”, providing money for pork projects and schemes that are both foolish and wasteful. (these projects include the insulation debacle, as well as the solar panel debacle that is still brewing and about to blow up). Under Malcolm Fraser, Bob Hawke, Paul Keating and John Howard Australia had prospered. Yes we had some hard times, especially in the 1980s, but with the introduction of the GST the Australian budget went into surplus – then the Rudd Government was elected and the surplus very quickly disappeared due to the wasteful policies that have been implemented.
From the analytical point of view there is much study to be done. One of the things that marked the Whitlam years, and also the Fraser years (a lag effect) was stagflation. We had high unemployment, high interest rates and high inflation. The stagflation was prolonged (which explains why it affected the Fraser years) which meant that it took Australia a long time to recover from the excesses of the Whitlam government. Some of the measures taken by the Fraser government and then again by the Hawke-Keating governments were painful at the time. We had very high interest rates. During that period we could get a high interest yielding term deposit account for something like 17% p.a. It also meant that the mortgage interest rates were high. By 1986 we saw interest rates reaching more than 19% p.a. which was extremely painful for new homeowners (we purchased our first home just before the interest rates rose steeply but after the period where some homeowners had their interest rates frozen, so yes we got hit by the high interest rates).
For the first time since the failure of the Whitlam Government Australia has a government that could be described as Marxist. This time the policy pursuits include the attempt to foist cap n tax (or crap and tax) upon us. The thing is that initiating legislation that will set up hedge funds for the selling of greenhouse licenses is going to do zip for pollution. On top of that AGW has already been proven as a fraudulent theory, but Rudd will not give in and let it go.
During the Whitlam years Australia had its battle over healthcare legislation and health insurance takeover. You could say that the doctors did have a minor win on the subject because a complete takeover did not happen. However, what we have is in my view disgusting. We do not need government determining how much can be paid to doctors for their fees. The artificial fee that is imposed actually makes it more expensive to see a doctor or get a medical service than if the government had no say in the subject. It really is a joke, and yes the out of pocket expenses are quite high, especially when the government refuses to recognize a procedure such as the thin prep which is better than the Pap smear for detecting cancer.
Spain’s economic stagnation: and why Zapatero Socialism is to blame
Spain’s economic stagnation: The zapping of Zapatero | The Economist
Spain is in economic trouble and aides to the Socialist Prime Minister of Spain are claiming that Spain is the victim of a speculative attack and of a plot by the Anglo-Saxon press to destroy the euro. What rubbish!!
The Economist points out that Spain did not have to bail out its banks like the UK and the rest of Europe, as well as the USA. At the same time, fears of financial contagion have in fact made the market volatile. The reasons that the investors are feeling nervous about Spain make sense:
- it has the highest unemployment rate in Europe;
- it is an economy still in recession;
- it has a fiscal deficit that jumped to 11.4% of GDP last year, as recession cut tax revenues and forced up spending on the unemployed.
- the lack of growth will lead to a public debt that is unsustainable.
Zapatero is out of his depth (now that really sounds familiar), he was a popular leader in the good times, but he failed to see the bust coming. He misdiagnosed the problem within the economy as an imported recession that he could safely wait out. Just like a typical socialist he:
- carried on doling out public money
- raising public pensions
- raising public-sector wages
whilst shunning reform.
On the other hand the markets have recognized that if Zapatero continues on this course of action then Spain is on the road to ruin. They are one step ahead of a moribund government, which has reacted with fumbling confusion which has launched an austerity plan and a vague scheme for labour-market reform, only to withdraw bits of both at the first sign of a protest.
Spain has become a high-cost, low-productivity economy. Wage indexation has made businesses uncompetitive. Generous severance arrangements discourage firms from hiring workers and have created a two-tier labour market and mass unemployment.
It would seem that the only way forward for Spain is to recognize that it has fallen into stagflation and then look at the appropriate measures that need to be taken, even if they cause pain to the unions. Spain managed this in the 1970s when Felipe Gonzalez was Prime Minister, but it seems that Zapatero does not have the capability carry out the necessary reforms that are required to lift Spain out of its moribund condition.
Bank of England retains low interest rates
Bank of England suspends quantitative easing scheme and holds rates at 0.5% | Mail Online
The Bank of England has chosen to retain interest rates at 0.5% which is really very, very low. At the same time the bank has halted its $200billion programme of injecting money into the economy, predicting a gradual recovery.
What could go wrong? At this point in time there is a real possibility that there will be a double dip recession. The “recovery” seems to be quite weak, which is not a good sign anyway. However, based upon government interventions in the past, the question to be asked is whether this action of pumping money into the economy was justified in the first place. The problem, as I see it, is that the real situation being faced is similar to that which was faced in the 1970s when the world suffered from stagflation.
If this is a period of stagflation, rather than just a recession, then it could be argued that the steps being taken are in fact wrong, and as a result there is a real risk of the economy in the UK and elsewhere that a “stimulus” has been applied being moribund for a longer period of time.
In this particular case the Keynesian type prescription simply does not work because there is high inflation plus high unemployment., and it would certainly seem to be the case since the CPI in the UK jumped to 2.9%. Keeping interest rates low is not really going to help. The mortgage defaulting will continue, especially if the mortgagees have not been putting money into the payment of their loans during a period when the interest rates have been low.
One reason that the economy in the UK has continued to be slow to bounce back could be a result of carbon credit trading. During last year a large steel plant was closed because of the advantage associated with the carbon offset licenses rather than the profitability of the company.
