The media prepares for a change of government

Of all the worries about Australia’s political future, near the bottom of my list of concerns is Peter van Onselen’s Tony Abbott in danger of being a do-nothing PM. I fear such an opportunity will not be his lot in life but the leftist notion that pervades the article, that a good government is an activist government, is one I do not share.

But even with the issues that Abbott is accused of of buying into, this is really no more than refusing to fix parts of Gillard’s mess. He cites

Supporting a national disability insurance scheme levy via an increase in the Medicare levy blows the top marginal tax rate out to 47 cents in the dollar. That, quite simply, is not internationally competitive.

and

the market challenges Australia faces after years of the unrestricted Fair Work Act require a swifter correction.

That these decisions are Gillard’s is noted but the responsibility and need for a solution in his view belongs to the Coaltion, and more particularly to Tony Abbott.

And what is the only actual policy recommendation he can come up with:

Increased consumption taxes, via a broadening out of the Goods and Services Tax or an increase in its rate.

Some policy, but more money for the government to spend is typically all these people can think of. You can already see the media preparing for an Abbott government, building its list of failings based on not fixing immediately and in its entirety the mess that Labor will leave behind. Cynical, sure, but standard operting procedure as well.

On the train this morning

On the train this morning our driver told a story while we were delayed and waiting to find a berth at Flinders Street.

He said he had been told that the Australian navy is so broke that to raise money it is having to grow and sell oranges. He had thought this was nonsense until this morning but now he sees it’s true since he had just eaten a piece of fruit with a sticker that said “naval orange”.

Not great, although it did make me smile. But what really charmed me was that the incompetence of this Labor Government is now so universally understood – even by those who are going to vote for them – that this is the kind of joke that train drivers tell their passengers. It must be common knowledge which does give me hope. That Labor is utterly bereft of talent, ability and ideas this I knew but my worry was would anyone else notice and even if they did, would they vote to throw them out. My worry always is can the country be bought off. Can there be one more set of fairy tales that will get these people back over the line.

Anyway, Andrew Bolt has the latest poll results:

Essential Media poll yesterday: Labor 45, Coalition 55

Roy Morgan poll today: Labor 42, Coalition 58

I’m a pessimist from way back. That these people won in 2007 and won again in 2010 only reinforced my sense that competence doesn’t matter or at least not as much as it should, and with 80% of the media behind them that maybe they will make it back again or only lose by a small margin. But if train drivers know the ALP is ruining our national defence, they must know a lot more as well about the harm the ALP have done. And if they know it, I can only hope it will influence their vote.

Media bias will be the equaliser in the election to come

Bank accounts in Cyprus were raided by the government because it had run out of money. Our superannuation accounts in Australia are being raided because the government has run out of money. I see a parallel here myself, but others apparently do not. This is from Sunday’s Insiders which has been culled from The Australian‘s “Cut & Paste”. They are talking about Tony Abbott having said that the government’s raid on super was “shades of Cyprus” which the Prime Minister, in her own quiet, understated way, had described as “crazy talk”.

FRAN Kelly: Crazy and dangerous.

Lenore Taylor: And she also went on to call him an economic simpleton, just to, you know, hammer home the point. I do think . . .

Kelly: Normally leaders do try to pull back a bit the domestic . . .

Taylor: No sign of that but I do think saying that the super changes had shades of Cyprus about them was an ill-informed thing to say. There is no shade of Cyprus here. There is no raid on anybody’s nest egg here. If there was any shade of Cyprus going on do we really think the superannuation industry would have called off their ad campaign?

Kelly: Shades of Cyprus? A bridge too far?

George Megalogenis: . . . as for the rhetoric, you don’t really want me to take that literally. Look, it’s close to crazy talk.

Kelly: Thank you. Does the Opposition Leader need to be a little bit more careful?

Michael Stutchbury: . . . this is clearly hyperbole which clearly goes too far.

My only point here is that this is an election not yet won. The incredible incompetence of the government plus the certain barracking for the ALP of virtually the entire journalist brigade in Australia will make this a very tough election.

Simon Crean is not the defacto leader of the opposition

It does get me down to listen to this new proto-Labor meme how Simon Crean is now the defacto leader of the opposition. Simon Crean was one of the architects of the Superannuation Guarantee and so finally drew a line in the sand over this one issue. It may well be true that he cannot stand Julia Gillard but so what. He still votes with her in every Parliamentary division and how he would act if she and the ALP were ahead in the polls you may be sure would be an entirely different matter. As a “leader” of anything he is a washout. His aim in this instance was to save Gillard from a monster level political error that would have dragged Labor even more deeply into the mud. The result on superannuation is an outcome that Labor can take to the election. Had Gillard and Swan’s original intentions been fulfilled, even the densest of Labor supporters would have seen (however dimly) the problems it would have caused (and is still causing) and a few more of them might have drifted away. Instead, disaster averted, they live on to fight another day.

And for Crean, Kelty and Ferguson to go on about Gillard indulging in class war is so ludicrous that it is pathetic that anyone pays the slightest attention to it. Does no one remember the past farther back than the day before yesterday? These are class warriors from the most ancient of days. Unless there has been some kind of conversion, these three former leaders of the ACTU have no love for business other than as a recognised means to wring more money from. It is “the workers”, and only “the workers”, they have ever shown the slightest interest in, however much most of the things they have done make the life of most workers worse than if they had just done nothing at all.

ALP 41 – Libs 59

morgan poll 130404

Could it be? I hardly know anyone who votes Lib but then I work at a university and many of my friends are upper middle class. We are still, however, what we are and not quite over the edge. Let it be just like this unless it tilts this way even more.

What does depress me, however, is how quickly the gap does close after widening to what ought to be an unbridgeable chasm. And if the chart is anything to go by, a cut in interest rates is all it takes. So I will be happier when it happens and she and they are gone for good (or for at least six years and maybe nine).

And this should be the message. The Australian community is not an ALP slush fund. But the only way to drive this home is to drive them from office with the must crushing defeat in Commonwealth history.

A stunningly selfish woman beyond comprehension

I tend to think of socialists as the meanest people I ever meet. It seems to be almost the defining characteristic, an uncharitableness that goes right to the bone. They make up for their personal lack of altruism by a feigned show of concern through various aims at redistribution which typically means taking from the productive to give to those who are not quite as good at earning an income as those with more money. Their middleman’s fees are usually quite a rewarding experience as well.

But Julia Gillard is in a class of her own. There is such a morbid inability to see anyone else’s needs or desires other than her own worthy of consideration that it is almost impossible to believe just how selfish she is. Given the havoc she creates around her, the absence of any evidence of even a touch of self-reflection is unique. She is a monster of self regard and self conceit, never feeling those self doubts that anyone in her shoes might feel. She has ploughed through any and all obstacles on her way to whatever she has wanted without a moment of remorse at any single moment.

She and Obama have a similar mentality. Far far left, the incalculable damage they cause merely a necessity on the road to the better world they will create. I think both are rather dull to normal so far as their level of intelligence may go but are as brazen and willing to lie to any extent necessary to have their way. Destructive but never in retreat.

That two such personalities should rise to the top of the political tree in both countries at the same time requires an explanation. And the best I can come up with is the absence of any seriously strident media criticism. Neither ever receives anything other than a momentary rebuke and never more than the absolute minimum and never sustained.

The kind of ear splitting on-going never-ceasing banshee wailing of the media in attacking anything done by someone on the right that can in any way be portrayed as tainted and less than perfect drives the political atmospherics in just about every democratic community where the remains of a free press makes it almost impossible for right of centre parties to thrive. In Australia, it is only Gillard’s complete incompetence that may in the end make the difference since the media will have to at least acknowledge some of it and the community can see it everywhere they turn even though it is not validated through the commentary in the press.

But at the core of it is a woman whose self-regard is so total that it is hard to imagine her ever owning up to a failing of any kind in any circumstance. Shameless and selfish to an extraordinary degree.

My reply to Russ Roberts on the minimum wage

Here’s my reply to Russ Robert’s query about the Australian minimum wage.

Dear Russ

You may recall that I visited with you about a year ago at George Mason where we discussed, amongst other things, Say’s Law and Keynesian economics. But why I am writing now is because yesterday, when I opened Cafe Hayek as I regularly do, I found your query about the Australian minimum wage which is less of a puzzle to us here than it seems to be elsewhere. I will go into this a bit, but before I do I should just mention that I was the Chief Economist of the Australian Chamber of Commerce and Industry (ACCI) for a quarter of a century which drew me right into the very heart of the Australian industrial relations system. Although this won’t mean much in America, I wrote something like a hundred economic submissions in various test cases on industrial relations issues over the years, about a third of which dealt with the National Wage Case, which is the name given the process of minimum wage adjustment here in Australia. We have a quite unique industrial relations system and while it never appeals to anyone else – it hardly appeals to anyone here – it is a piece of institutional genius which has lasted for more than a century. It’s not perfect but then again nothing is.

Now when I saw your post the first thing I did was post it on our own blog here asking for comments. You can see the posting and the comments here.

What seems to surprise many others about Australia is how well we have fared during the period following the GFC. But there were three aspects of the post-2009 period that made the all important difference. The first was the economic policies of the previous Liberal Government from 1996 through to 2004 in which not only did Australia almost continuously run a surplus but we were the only country in the world that had zero debt. By sometime around 2001, the surplus could not even be used to pay off debt since there was none. So money was placed in a “future fund” which left the finances here in Australia extraordinarily robust when the GFC finally came.

There is then, secondly, our incredibly well managed financial system. Our banks held virtually none of the toxic assets that had weighed down the economies of other developed economies. But beyond that, we have a central bank that was the first to raise interest rates after the GFC and has kept them high every since. There is no easy money rolling around inside Australia. Artificially low interest rates are recognised by our central bank as part of the problem and not part of any sound solution.

Then, thirdly, the Chinese stimulus, whatever it may have done for China, caused a mining boom in Australia that continues. Rather than a disastrous downturn, our downturn was generally mild. Unemployment did shoot up from the low of 3.9% when the GFC began to reach 5.8% at its highest point. Sounds good to others but we did experience the two percentage points rise in the unemployment rate and avoided the official definition of two consecutive quarters of contraction by something like 0.2 percentage points. We had a recession but it did not last very long mostly because of the Chinese demand for resources which allowed Australia to pull forward almost immediately.

We naturally had a Keynesian stimulus which has been a cause of major havoc ever since. Billions entirely wasted. The debt and deficits that have accrued since 2009 have completely overturned the incredible position our Labor Government inherited. Having started with zero debt and no deficit, both are now high and uncontrolled. Our situation only looks good to others because no one appreciates the benchmarks which these outcomes have originated from.

Turning to the minimum wage, it is high on an exchange rate basis but in purchasing power parity terms is not as good as you might think. What $15 will buy you in Australia is about what $8-9 might buy you America. There is also an inflation ripping through the basic elements in our cost of living due to a number of factors, not least of which is the introduction of a carbon tax.

Australia has always had just about the highest minimum wage in the OECD (only France may be higher but it’s been a long time since I looked). The minimum wage is also a lot closer to the median wage than just about anyone else, or at least it was when I was last doing these Wage Case submissions. And while the official unemployment rate may seem low by American standards, the effect of the minimum wage has been detrimental on employment outcomes with the labour market visibly deteriorating for a large number of reasons beyond the minimum wage. Were we to have the same participation rate today as we did in the middle of 2010, the unemployment rate would be something like 6.5%. If one bears in mind that the average unemployment rate from 1945 till around 1970 was 1% (yes, one percent), you can see just how high our present unemployment rate is when looked at in our own terms.

Meanwhile, I have been looking at our latest ACCI economic survey and the trends in every important category are downwards, most notably in regard to employment. We have done rather better than most because where our current government has been unable to influence all aspects of policy – such as with our central bank and with the Chinese demand for minerals – we have done rather better than most. But where they have been able to intrude their policies, such as with fiscal policy, tax, wage outcomes and industrial relations, they have been poison to the economic system with these problems about to come to a head over the next twelve months. We could quite easily be looking at an unemployment rate no different from yours a year from today.

With kind regards

Steve

Product differentiation

What a laughable story that the Greens and Labor have just had a parting of the ways. This is the start of the story in The Australian:

GREENS Leader Christine Milne says Labor has effectively walked away from its minority government alliance with the Greens, and the minor party will operate ‘beyond the agreement’ for the remainder of the current parliament.

Yeah, sure, walked away. Under Gillard, so far as policy has been concerned, the ALP has been blended into the Greens. Gillard is in fact a Green and would have been where Milne now is had things been a bit different in 1995. If there is a difference of any significance on anything, I cannot think what it has been. Global warming, the mining industry, logging, growth, border protection, foreign policy, public spending, taxation, you name it, we have seen our first Green government in Australia. A perfect shambles but that is not the surprise. That no one has recognised who the senior partner has been is the odd part, possibly because most of the journalists who might have been asked to comment are more or less indistinguishable from the Greens themselves.

This separation of convenience in the lead up to the election is necessary for both but particularly for Labor. It must run its own race, be seen to be strong, make faces at Green policies and try to look different. Since some Labor people are actually anti-Green – mining and forestry unions, say – there needs to be a pretence made that for all practical purposes the two are not actually one and the same. It is nothing more than a strategic decision to gather in the highest number of votes for each on their own and for both together.

Of course, some parts of the ALP are so lacking in any appreciation of what just took place that they have actually tried to deny it. From the story:

Climate Change Minister Greg Combet said Senator Milne was only doing a bit of product differentiation.

‘We are the ones who brought in a carbon price successfully and we are the ones who have made major breakthroughs in Tassie forests and the Murray-Darling.’

Exactly so. The ALP are the Greens. Take one, choose the other. Whichever way you go, it’s the same thing, you are picking exactly the right party to ruin this country and darken its future.

Low-information voters

A low-information is someone who fulfills at least one but possibly both the following criteria: ignorant and stupid. If you start stupid at an IQ of 95 or less, and ignorant which begins by encompassing the products of our education system but then moves on to include anyone who never reads a newspaper and gets most of their political news from the TV, then we are looking at a very large part of the voting population. It’s bad news territory for people of the right.

The post I have just been looking at has introduced me to another website called Upworthy which is designed by the American left for the low-information voter in the US, that is, for the ignorant and stupid which by no means excludes the highly educated. The title of this post is “Upworthy — or, How we are losing the internet to lowest of low information young liberals”. Here is the central para in the post but if you are interested in politics and how to affect the future, you need to read the whole thing:

There is this website called Upworthy which is one giant liberal activist social media machine which creates viral social media memes in the cause of liberal political activism.

Unless you are a direct beneficiary of all of the spoils of the socialist apparatus – a bureaucrat somewhere, a member of the “helping professions”, a welfare recipient, an educator or perhaps a journalist of some sort – the main reason anyone is actually on the left is because they are too shallow or too lazy to bother to think things out. The young are typically on the left but it is hardly because they are “idealistic”. It is because they know virtually nothing about how anything works so all they have to base their judgments on is some vague infantile notion of right and wrong. The people at Upworthy understand this perfectly well and are determined with the passage of time to turn these same young fools into middle aged fools and then into older fools after that. Some of these will drop out over time as they see and learn through life, but in the meantime, the very people whose lives are being blighted the the greatest extent by the Obamas and Gillards along with the rest of the unproductive socialist class are being conned into believing how clever and sophisticated they are when I’m afraid they are not.

The reality is: if you vote for a party of the left, you’re not cool, you’re not savvy, you’re not with it. You are a jerk. And not only do I think so, so do the people you are voting for. If you think Obama or Gillard have a high opinion of the people who vote them into office you are a product of one more delusion to go with all of the rest.