A world in economic crisis

Fallout

Posted in Australia, Cap and Tax by Aussie on July 4, 2011

The disastrous Juliar-the Marxist-Gillard government continues to teeter and to topple Australian industry. The most severely hit at the moment is the rural industry involved in the live export of cattle to Indonesia. The latest information is that Indonesia has decided to slap on a ban for imports which affects more than just Australia. It goes to show that when an amateurish decision from an amateurish government is taken, and that decision is taken without adequate consultation, the result is an absolute disaster. The cost to the rural industry is more than $60 million.

However, it is not just the cattlemen who are suffering as a result of this arrogant cabinet decision that was taken when Kevin Rudd the Foreign Minister was in another country at a meeting. It also affects a very large trucking business that has millions of dollars worth of rigs and road trains in the north. This means that the jobs of the drivers of the road trains are on the line as well.  This will impoverish a lot of people, not just the cattlemen.

However, wait…. there is more…. the distastrous and unnecessary carbon tax that is being foisted upon us at the insistence of the greens is going to cause enormous hardship upon the population. The reasoning of the greens is so bad that it is truly amazing that people have fallen for their particular style of spin. One very big issue is the fact that such a tax is going to affect the price at the pump… or is it? According to Juliar-the Marxist-Gillard, petrol is to be exempt. However, the well-known Watermelon Bob Brown says differently and the Watermelons claim that the exemption will have to be lifted. In their airy fairy world of pot smoking and other drug taking, the Watermelons cling to the idea that if the petrol prices are so high that people cannot afford to pay to put petrol in their cars then this will reduce the number of cars on the road, thus reducing emissions. This ideas sounds like someone only attended Economics A at university but forgot to attend the rest of the courses.

Let me explain just a little bit, and again I will use the experience of the 1970s to put it in perspective. The oil industry is an oligopoly. It means that there is a tight group that controls the means of production – OPEC. This group determines the output that will bring the best price for fuel. During the 1970s when we had both the first and second oil shocks, the price of petrol began to rise. The economic theory is that when a commodity, such as oil, is inelastic, and there is a shift in the price of the commodity, there will be a temporary shift downwards in demand for the product. Since there are few suppliers and the market is not one where thousands of new suppliers will enter the market then there is actually little change in supply and demand for the commodity.  However, what we have seen is that there was a shift in the type of product for cars to both diesel and LPG… but the shift was very small. During that initial period people moved into smaller more fuel efficient cars, but gradually there was a shift back to the 6-cylinder cars.

The illogic of the watermelons is that the price rise which they are demanding will affect the driving habits of the general population, who will then choose other forms of transport over driving cars. They have this airy fairy idea that people will be prepared to shift to electric cars (which are very inefficient with regard to transport). The other expected shift will be a move to use public transport over the use of a car.

Let’s break this down to the micro family level, to see how the thinking of the watermelons remains in Fantasyland. Take for example, a military family, where the husband has family in one state (Newcastle, NSW) and the wife has family in another state (Melbourne, Victoria), and they have three children. As a military family they can get posted anywhere in Australia, including Townsville.  Some of the areas where they are posted do not have public transport, and that means that there is a dependence upon the use of a car. It is not possible to fit baby seats etc. into the back of a small car, so out of necessity, the family has a larger car to carry the family. Now imagine for a moment that the family is posted to Richmond, NSW. What is the cheapest method for visiting the family of either husband or wife? Considering the location, as well as fares to and from the actual locations, as well as family size, the obvious answer is that it is cheaper for the family to travel by car. The travelling time from Richmond to Melbourne was as much as 10 hours but this has been cut significantly due to the building of better roads – the better roads actually means better fuel efficiency on the open road. The travelling time from Richmond to Newcastle was approximately 2 hours, but this has also been reduced due to the building of better roads. The awkwardness of the location means that it is not viable for the family to fly to and from Newcastle, and ditto for the train services. Also, the cost of using the public transport makes this kind of alternative prohibitive, as does the luggage limitations that are imposed by airlines and other forms of transport.  Another point to make here is that in the Richmond-Windsor district the transport system was rather abysmal, and buses were pretty useless when it comes to toting around a pram because of children. On top of that it is not possible to cart one’s groceries on public transport and taxis are an expensive alternative.

Now imagine that the family is posted to Melbourne, and they find a house in Sth. Oakleigh, followed by a move to Mt. Waverley. Both locations also suffer from a lack of good transport, which is ok if the weather is fine, but limiting when it comes to being able to visit family. A car in this situation is absolutely essential especially when shopping centres are not close at hand, and there is no logical way to bring home the groceries. Now imagine that in this situation, the husband learns that a family member is dying from cancer. Once again the costs of travel for the whole family are prohibitive if they have to choose to fly between Melbourne and Newcastle. It is also a bit complicated to make the tripe that way, and the car is the best alternative for the transport of the family.

My point here is that on this micro level, decisions have to be made about the best means of getting around, and the car is often the best way because of the prohibitive costs of moving a whole family from one part of Australia to another part, sometimes at short notice, as was the case when a family member was dying of cancer, and the word came that the end was close (the call came on the Saturday). This was true in other situations where the trip being made was between Sydney and Melbourne (to attend another funeral or two, or three). There are many reasons why, for example, flying is not always the best alternative to move from one place to another.

The watermelons, on the other hand, are not capable of understanding the scenarios that I have set out, because they have never experienced those situations. They live in their own little worlds. They even think that it is possible to ride bicycles everywhere… again that is a bit of a joke… what if due to an accident (like slipping down the stairs and fracturing one’s coccyx) means that one is unable to sit upon the bicycle saddle? How many people understand what it is like when it hurts to sit down, especially on a little bicycle saddle? The watermelons seem incapable of thinking things through, to the point that they are a total embarrassment with their ideas.

On top of that the push towards electric cars is nothing more than sheer fantasy as well. The electric cars are inefficient. They can only go short distances. They require electricity to recharge the batteries. The electricity is based upon the coal industry. However, the watermelons want to push us towards even more inefficient methods for producing electricity such as windpower – they want those ugly wind turbines with their noise etc. to pop up everywhere. Again, they have no idea because they do not live near the locations. They do not understand the actual harm to the wildlife in the environment that is caused by those wind turbines. This is not clean energy!! If they wanted clean energy then they would look to other alternatives such as nuclear and hydro-electrictiy. However, they refuse to contemplate the nuclear industry and they are attempting to shut down the hydro-electric schemes as well!! 

The obvious consequences of following the wet dreams of watermelons is that everything will become more expensive, and on top of that the watermelons are determined that there will be no exemption at the petrol pump from the carbon tax that they want to see introduced. The long term effect of their stupidity will be higher prices for every product – groceries, clothing, transport, etc. etc.  This will mean a lot of hardship for families that are already struggling to survive.

I have concentrated on the car aspect of the policies, but there are other aspects because so many products actually use the other bits of the oil production e.g. nylon and other synthetic materials are based upon oil. Also, things like soap and shampoos use oils as part of their ingredients. This affects almost everything that is produced in one way or another. We need to think hard about the long-term consequences of this short-sightedness, because this policy will help to propel us towards one very deep recession, which will be much worse than just the consequences of the stagflation that is almost upon us.

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