Monthly Archives: September 2013

Vacancy rates at an all time high

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Perhaps there is no real need to pile on the ads at this stage since the evidence of Labor failure is everywhere. After my comment the other day about the depressing trek through my local shopping district and then along Swanston Street, Julie Novak sent me this link to an article in The Age which begins:

Almost one in six shops stands empty in one of Melbourne’s premium shopping strips as tough retail conditions continue to hurt suburban streets.

Vacancy rates across 11 prime suburban streets reached an all-time high in August, up to 7 per cent, according to Knight Frank research. [My bolding]

I know this may seem like going over old ground to many, but the textbooks still teach that public spending and deficits are a cure for unemployment and slow growth. The evidence before their eyes ought to be just a tad unsettling but never seems to be. And the recovery that will follow the return to stricter budget control ought to be even more unsettling but won’t be either.

I used to say during the Costello years that when they were over no one will understand what they had lived through, and I think that is largely right. We sailed through the Asian Financial Crisis using cuts to public spending and a balanced budget to pave the way but how can those who teach this dead-end macroeconomic theory found in our schools and texts explain what they personally witnessed.

Entering the conversation on jobs

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I have a posting up at The Conversation into which I was very happy to join. It’s been titled, Rudd’s Job Plan Misses the Mark which pretty well says what it says. I have received two emails from possibly the only two people who have read it which I will reprint here, the first very nice, the second not so. But let me start with the more positive of the two. He begins with a quote from the article:

“There was a time when the idea of a job was related to some piece of work that someone wanted done. A job was not a thing in itself but related to the creation of value within some enterprise. One therefore didn’t create jobs as such. What one did was create an economic environment in which one of the limits on production was the amount of labour available.” Correct. And such a time shall come again: this Saturday.

I think that myself. A long hard slog but the repair will begin almost immediately on Saturday night. But then there was another email, not as positive and upbeat as the first.

You have to wonder what happens to the well-studied and diligent Keynesian-leaning student at the RMIT economics department. I think perhaps they are aiming for the ‘Melbourne’ school to take a bronze medal behind Austria and Chicago. The problem is the quality of their ‘research’ versus the aggressive muscularity of their conclusions. We seem to go from assertion to conclusion without the need for any messy, you know, tested hypotheses. Today’s instalment is case in point – lots of assertions without any empirical evidence that a slightly higher uptick in unemployment has anything to do with industrial relations policy. Of course business wants more skilled workers at a lower cost, but when have they not wanted this? For years we have heard dire warnings from the Melbourne Austrians – stagflation, hyperinflation and economic depression. A strike out on all 3. I have said it before – a fund manager investing on the basis of their predictions would be in the street selling pencils from a cup about now. And for all their failures, we continually hear their platitudes as if it’s the dernier cri – not as proven and miserable failures.

A Keynesian-leaning student in my hands, if they understood the theory, would get an A, if they also understood the rest. We do not indoctrinate unlike those who are part of the C+I+G faith-based community. But I must say that anyone who can still think Keynesian economics has anything to offer in the current environment really is not into evidence-based policy making it would seem to me. The point I have made all along is that given the way we have tried to engineer an upturn through deficits and higher public spending, the labour market will never gel and recovery will never become self-sustaining. But he at least did think we were the bronze medal holder after Austria and Chicago. I’d take that.

But as for selling pencils on the street, my walk to work takes me past my own high street and then along Swanston Street. The empty shops for rent make a dismal sight and we have had a continuing increase in public spending and debt since our present government took office. None of this is a surprise to me although I find it deeply depressing. I wonder if it’s a surprise to my correspondent and the rest of the Keynesian brigade who make up 90% of the economics profession, or do they not even notice how badly their economic advice has turned out to be.

Another Comment: And now there is this:

This article seems to assume we are a manufacturing economy, which we aren’t. In fact, only about 8.6% of people are employed in manufacturing, and we are basically an importing economy and we export raw materials. If everyone’s wages were cut, it is unlikely to increase manufacturing job numbers much at all, although it might reduce consumption per person. In terms of overall consumption, we are basically consuming ourselves to death by growing our population through immigration.

Did I say cut wages? It was the farthest thing from my mind. What I wanted was unregulated wages so that no one was ever priced out of a job because of some arbitrary minimum imposed on the labour market. We have a minimum wage of something like $35,000 a year. Really, how insane is that! It cuts out of the job market all of those people who could be productive at say $30,000 who if they were working would add to our output and make the economy stronger as well as themselves somewhat better off. On those immigrants, however, if they are coming in and absorbing our productivity without contributing anything back, then he has a point although to say we are consuming ourselves to death is going too far. But that immigrants without workplace skills who contribute less than they consume are a drain on our wealth, this is obviously true almost by definition. Only a Keynesian who thought that their adding to demand without adding to supply promotes growth could believe such nonsense, but there are no end of such people and you find them everywhere.

And one last one and we’ll stop here: My impression is that he thinks I am not all that reliable a commentator but at least he is spreading the message around. Very nice to see I am being read.

This is rather tame stuff from Dr Kates. However people who enjoy this article may enjoy Catallaxy Files where he supplies his readers with more red meat.

“The interview with Tony Abbott on Andrew Bolt brought out just what I admire about Tony Abbott so much” http://catallaxyfiles.com/2013/08/25/a-philosopher-pm/

“Who does this remind me of?: Eleven signs you are dating a sociopath ” [The answer is Rudd I believe] http://catallaxyfiles.com/2013/08/29/who-does-this-remind-me-of/

“The real question is who are these 49% that the polls say still intend to vote for Labor? Unimaginable really. But I do have an article at Quadrant Online that looks at the election as we enter into our first full day. And what I discuss is the nature of the ballot with the natural constituency of a Labor party made up of those who live by the words they use rather than the goods they produce, those who work for governments at every level (including those crony capitalists) and those who live off the plundering of incomes by the state.” http://catallaxyfiles.com/2013/08/06/the-49/ – It appears plunderers of the states doesn’t include university lecturers, just people like nurses and police and other such leeches. [Wonder why he thinks these people vote Labor.]

Kates on Makeup-Gate: “It is impossible to imagine just how abrasive a personality Kevin Rudd must actually be if you have not experienced it yourself. But here is the testimony of someone who has:” http://catallaxyfiles.com/2013/08/22/it-aint-over-till-its-over/

Come on Dr Kates, tell us what you really think – it is so much more entertaining.

These people lack a sense of irony and of shame.

Where’s the outrage?

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I am probably myself seldom anywhere near where I might see an election ad but I sometimes am and what has struck me is the absence of any evidence of a hardline Coalition advertising campaign. I had thought that the blitz was coming in the last two weeks but we are now down to less than a week and I haven’t seen it yet. What I have seen is some very nice positive stuff about how Tony Abbott will do this and that. But what I haven’t seen is what I really want which are attacks on Labor for giving us the six worst years of government in our history.

For myself, I don’t need any convincing but mine isn’t the marginal vote. But it’s not even the vote gathering that worries me so much as the kind of perspective this seems to portray. There may be some kind of Mr Nice Guy no negative advertising notion running around but if there is, it is the highest kind of folly. Political advertising is by nature at least half and probably upwards of three-quarters negative. We’ll do this and this – that’s the postive side – but the other guys are so incompetent you wouldn’t want them to tie your shoes.

The negative ads have a real reason for existence and that is to ingrain just how terrible the other side is, how bad their judgment is, how useless their ideas are, how off the wall their policies have been and if re-elected are certain to be again. It builds up not just a constituency to get over the line on the day itself but goes further in creating a post-election atmosphere in which changes can be made because everyone understands how important it is to make those changes.

I don’t often watch Q&A since I cannot take the migraine that normally follows, but I do follow the Catallaxy thread. And the most important comment I thought was from someone who went onto some leftist site and found they were all high fiving at what a genius Kevin was and how the election was about to be turned around. They were high level decisions not to have Tony appear, a decision that carries some pretty obvious risks. But the absence of ads that tap into the outrage that some of us feel about the last six years, and an absence of an attempt to transmit some of that anger so others can see what we mean, seems to be missing an important part of a normal election beat.

It may just be that I haven’t come across the really angry ads, the ones that tear strips for the deficits, the boats, the waste, the NBN, the economic and social mess we must try now to deal with. The absence of ads that feature the dysfunction of the Labor Party, the hatreds they each feel for each other and the contempt they have for us. It may be there and I haven’t seen it. But if it’s not there it has been a big mistake not to have made this a feature of the campaign and even if it is a bit late, it’s still not too late to make a start.

Alinsky and his rules for radicals

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Alinsky’s Rules for Radicals are the playbook of the left. Alinsky, largely a nihilist himself, put together a set of rules on how to win power that contained not an ounce of policy. With the world not a perfect place and envy the single most powerful social force, he constructed guidelines on how to present a critique of others that have proven to be formidable in the midst of political debate.

What Alinsky would never have imagined is that the left would join forces with the media so that almost nothing said by a politician of the left is ever challenged in the popular press or network TV. For the left, it’s almost become too easy. The nature of the political battle for those with a more centralist and conservative perspective is now a minefield of potential explosives. If you are from a party of the centre or the right, these are rules you must know yourself, recognise and carefully think through how they can be dealt with since they will with certainty be used against you. In summary here are Alinsky’s rules but you should also read his book:

1) “Power is not only what you have, but what the enemy thinks you have.”

2) “Never go outside the expertise of your people.”

3) “Whenever possible, go outside the expertise of the enemy.”

4) “Make the enemy live up to its own book of rules.”

5) “Ridicule is man’s most potent weapon.”

6) “A good tactic is one your people enjoy.”

7) “A tactic that drags on too long becomes a drag.”

8) “Keep the pressure on. Never let up.”

9) “The threat is usually more terrifying than the thing itself.”

10) “The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.”

11) “If you push a negative hard enough, it will push through and become a positive.”

12) “The price of a successful attack is a constructive alternative.”

13) “Pick the target, freeze it, personalize it, and polarize it.”

I have an article at Quadrant Online that looks at these rules in relation to Rupert Murdoch who is the great villain of the left for no other reason than that he can be effectively used as part of the last of the rules on personalising a target. Rudd has not a constructive thing to say in this election, representing a party with no runs on the board. Every major aspect of policy has deteriorated over the past six years and there is no reason to think they would get better if he were re-elected. The economy is worse, social cohesion has deteriorated, our borders are a sieve, living standards are falling and a series moonbat ideas in a host of areas have been endorsed. Yet what do we hear time and again, that this criticism is evidence of a press conspiracy by the Murdoch papers to see this government thrown out. Forgotten and seen as irrelevant is that these same papers, disastrously, sought to install Rudd in the first place in 2007.

How to deal with this rules-based criticisms is difficult but the first thing is for everyone to know these rules when they see them in action so that they can say, there they go again, using that same old tired Alinsky rhetoric. They bring up Murdoch, you bring up policy. Put the question straight, are you trying to change the subject from these policy failures of yours to the irrelevancy of who sells the most newspapers. Point out that they are trying to change the subject because sticking to the subject will only point up just how little they offer, how empty their policies are.

And let me just finish with a bit of context. In thinking about Alinsky and his rules, it is worth remembering this:

Hillary Rodham as a student at Wellesley in 1969, interviewed Saul Alinsky and wrote her thesis on Alinsky’s theories and methods. She concludes her thesis by writing,

‘Alinsky is regarded by many as the proponent of a dangerous socio/political philosophy. As such he has been feared, just as Eugene Debs or Walt Whitman or Martin Luther King has been feared, because each embraced the most radical of political faiths, ‘democracy.”‘

Alinsky offered Hillary a job upon graduation from Wellesley but she decided to attend Yale Law School where she met her husband Bill Clinton.

And then there’s this from that same source:

Obama taught workshops on Alinsky’s theories and methods for years and in 1985, he started working as a community organizer for an Alinskyite group called, ‘Developing Community Projects.’ While building coalitions of black churches in Chicago, Obama was criticized for not attending church and decided to become an instant Christian. He then helped fund the Alinsky Academy. Obama was a paid director of the Woods Fund, which is a non-profit organization used to provide start-up funding and operating capital for Midwest Academy, which teaches the Alinsky tactics of community organization. Obama sat on the Woods Fund Board with William Ayers, the founder of the, ‘Weather Underground,’ a domestic terrorist organization.

The fact is that irrespective of which side of politics you are on, you are not in the game unless you have made a study of Alinsky’s rules, understand its tactics and if you are on the conservative side of politics, thought through how you will deal with these tactics when they inevitably are brought into play by the other side.